EXECUTIVE SUMMARY
The Committee of 100 is a non-profit organization that seeks to promote the fuller involvement of Chinese Americans in all sectors of the American society as well as better U.S.-China relations. To the latter end, the Committee offers this white paper to U.S. political leaders, business executives and others as its latest contribution in the on-going discussion of the bilateral relationship. As Americans of Chinese descent, we believe that we can offer a unique and bicultural perspective, one that can further the future interests of the United States through a deeper understanding of modern China.

The tragic aftermath of the September 11 terrorist attack on the U.S. has made it amply clear that every nation belongs to the same global community and faces common challenges. No nation can stand alone in dealing with issues affecting its people – whether the subject is terrorism, the economy, military security, crime and drugs or the environment.

Managing relationships between the United States and the rest of the world becomes of paramount importance and key among these is the relationship between the United States, the world’s most powerful nation, and China, the world’s most populous nation.

Our paper offers the following essential points for a policy framework to the Bush Administration and Congressional leaders, as well as to the U.S. business community and civic organizations:

1. It is very much in the United States’ interest to have peaceful relations with China, the world’s largest developing country and a key to a stable and prosperous Asia. We believe it is possible to base the bilateral relationship on common ground, with both parties motivated to resolve differences in order to reap the benefits of cooperation on a broad array of issues -- economic, defense and security, crime and drugs, environmental, scientific and international relations.
   
   
2. The Cold War paradigm for dealing with the Soviet Union does not fit the current U.S.-China relationship and, if used in dealing with China, will only increase bilateral and regional tensions. The slogans, catchwords and clichés with which Americans categorize China tend to obscure our understanding of that complex and evolving nation.
   
   
3. China’s current leadership is focused primarily on domestic concerns. They recognize the need for positive relations with the U.S. as essential to developing economic opportunities for millions of unemployed and underemployed, thus preserving internal stability. U.S. policy should seek to build on this.
   
   
4. The Taiwan issue is potentially the single most divisive issue in U.S.-China relations. U.S. policy should therefore seek to "do no harm" to the Taiwan/China relationship and refrain from altering the balance between the two parties, who should be left to determine their future relationship themselves.
   Given China’s history of internal strife, division and foreign extra-territoriality, the issue is an emotional and political flash point in China. Within Taiwan itself, the issue of relations with China is in a dynamic state of flux, with many evolving views on its relationship with China.
   
   The United States should remain committed to the "One China" policy spelled out in the U.S.-China communiqués of 1972, 1979 and 1982, which acknowledged China’s position on Taiwan, stated the U.S. "interest in peaceful settlement of the Taiwan question by the Chinese themselves" and preserved a vital U.S. role to supply limited defensive armaments for Taiwan.
   
   
5. American leaders should take China’s national sensitivities into consideration when making policy decisions. Popular attitudes towards the United States are those of admiration and aspiration – for its freedoms, lifestyle and success. But not far beneath the surface is also a new spirit of nationalism, particularly among China’s young intelligentsia, the future leaders of China. They take pride in a China which has overcome a history of weakness and is fast developing to stand tall in the world. These attitudes create difficulties for China’s leadership who are sometimes criticized for not being tough enough in standing up for China’s interests in dealing with the U.S.
   
   
6. Chinese leaders cannot afford to be perceived as weak in their engagement with the U.S. Providing "face" for the leaders in their dealings with the U.S. therefore becomes an important consideration. Increasingly, the opinions of its people and the support of different influential factions influence the actions, decisions and policies of China’s leadership.
   
   Cultural differences between the U.S. and China can cause unintended reactions in dealing with each other. Tone and style can be critical, particularly when amplified by the media. Quiet diplomacy when possible is often more effective than direct confrontation in resolving difficult policy conflicts.
   
   
7. Mutual respect as a basis for relations requires mutual understanding. Given the cultural differences between China and the U.S., increased understanding can only come from increased interactions.
   China has radically transformed itself economically, culturally and even politically over the past 20 years. First hand observation and personal interactions are the best way to understand these changes. Those visiting China are surprised by the difference between their expectations of China derived from media and other sources, and the reality they experience first-hand in China.
   
   The WTO and the 2008 Olympics will provide many opportunities for increased interactions that should be encouraged. In addition, exchanges on all fronts should be increased – interaction among government officials, legislators and civic leaders in China and the U.S., military visits, cultural and educational exchanges, media exchanges, scientific collaboration, environmental cooperation, assistance in enhancing the rule of law in China, and people to people exchanges. These activities not only increase mutual understanding but will also help China develop along the lines of world society norms.
   
   Admitting students from China has been and will continue to serve the U.S. interest because these students serve as vital linkages in promoting greater mutual understanding. Americans of Chinese ancestry living in the U.S. also represent a bicultural resource for the purpose of fostering mutual understanding.
   
   
8. A consistent voice on U.S. China policy will help create a more stable relationship with China by clarifying what the U.S. wants in this relationship. Efforts should be made to build a consensus within all sectors of the U.S. government and society on a comprehensive framework for relations with China, combining America’s military, political and economic interests. While such a consistent voice from the U.S. is difficult in our open society with many divergent views, such consensus and consistency should be encouraged by example and by exerting the Administration’s leadership.
   
   
9. In crafting our nation’s long-term policy toward China, we must also consider the interests of our allies in Asia, where non-adversarial U.S.- China relations are viewed as basic to continued prosperity in the Asia-Pacific region.
   
   
10. China will continue to evolve over the next twenty years as it has for the past twenty. How the U.S. deals with China will undoubtedly influence how it evolves – whether it develops as a peaceful, free market participant in the global community or as a geopolitical and economic adversary of the U.S.
    
    Under the principle of "seeking common ground, respecting differences," U.S. China policy should aim for a stable long-term relationship with an economically strong, law abiding, open and peaceful China. The United States as well as the Asia Pacific region and the world will benefit from a strong and stable China.
    
    At the APEC joint press conference in Shanghai, with President Jiang standing by, President Bush said, "We have a common understanding of the magnitude of the threat posed by international terrorism. And I believe that the United States and China can accomplish a lot when we work together to fight terrorism." We hope this becomes a new common ground from which to build a stable and cooperative long-term relationship.

ABOUT THE COMMITTEE OF 100
The Committee of 100 is a New York-based national non-profit organization founded in 1990 to encourage the fuller involvement of Chinese Americans in all sectors of American society and to promote better U.S.-China relations. The Committee’s distinguished members, all U.S. citizens, include cellist Yo-Yo Ma, architect I.M. Pei, financier Oscar Tang, former U.C. Berkeley chancellor Chang-lin Tien, former General Motors executive Shirley Young, and many other outstanding Chinese Americans in government, business, academia and the professions.

Our Mission
As one of its twin goals, the Committee of 100 seeks to be a positive force in U.S.-China relations. The bicultural and bilingual background of our members gives us a unique perspective on the relationship between the United States and China. We thus consistently seek to contribute to this relationship by acting as a bridge and facilitator between policy makers, journalists and business leaders in the two countries.
As Americans, we strongly believe that it is in the fundamental U.S. interest to have a healthy relationship with China, one that is based on mutual interests and mutual respect. We agreed wholeheartedly with President Bush when he recently said of the U.S.-China relationship, "We have different values, yet common interests in the world. ... I will approach our differences in a spirit of respect."

The Committee of 100’s other twin goal – advocacy on behalf of Chinese Americans – is also served by a stable and respectful U.S-China relationship. In cooperation with the Anti-Defamation League, the Committee commissioned a recent private study regarding American attitudes towards China and Chinese Americans. The study revealed that 61% of Americans have an unfavorable impression of the Chinese government and 68% view China as a possible future threat to the U.S. An astounding 25% of the Americans in the study hold strong negative attitudes toward Chinese Americans, with 23% saying that they would be uncomfortable voting for a Chinese American for president (in contrast to only 15% who would be uncomfortable voting for an African American, 14% for a woman and 11% for a Jewish American). Although Chinese Americans are first and foremost Americans, our collective loyalty to the United States was questioned by an astounding 32% of our fellow citizens in this survey.

Without doubt, any continued acrimony and mistrust hovering around the U.S.-China relationship will create a climate for such negative views towards Chinese Americans. Thus, if the U.S. and China can move ahead to deeper and more peaceful interactions, the Committee believes those contacts will also benefit the perception of Chinese Americans among our fellow citizens, thereby allowing Chinese Americans to make their valuable contribution to our common welfare and to enjoy fuller participation in all aspects of our society.

Previous Committee of 100 Publications
The Committee published its first white paper on U.S.-China relations in May 1996 and issued an updated version of that paper in May 1998. These papers outlined the central issues facing the United States in dealing with China and were widely distributed to members of Congress, the White House staff, the media and the American public. The Committee followed up these papers with private and public meetings with government leaders in the United States and in China. A number of the Committee’s key recommendations to improve the bilateral relationship have since become reality, including an uneventful transition of Hong Kong from a British territory to its current status as one of China’s special administration regions, China’s imminent membership in the World Trade Organization (WTO), and the Congressional decision to extend permanent normal trade relations (PNTR) to China once it becomes a WTO member. The Committee’s joint study with the Anti-Defamation League of American attitudes toward China and Chinese Americans was released in April 2001.

ELEMENTS OF A FOREIGN POLICY FRAMEWORK TOWARD CHINA
In view of the complex China-related issues facing the new administration of President George W. Bush, the Committee of 100 believes it is time to offer some fresh suggestions for managing this crucial trans-Pacific relationship. Our recommendations for elements of such a foreign policy framework are intended to keep the Administration and our government leadership focused appropriately on America’s long-term strategic interests in the region, so that we can then manage the periodic adverse incidents that may arise, such as the recent collision between the Chinese jet fighter and the U.S. Navy EP3 surveillance plane near Hainan Island.

The recently rocky U.S. relationship with China appears to have been stabilized thanks to Secretary Colin Powell’s visit to Beijing. Presidents Bush and Jiang have had a special opportunity to develop better mutual understanding at their October 2001 summit meeting in Shanghai. In view of this, we have drawn up for Congress and the White House a brief white paper focusing on six specific elements that can provide a flexible, yet firm, framework within which leaders of both nations can prepare for this historic occasion.

The slogans, catchwords and clichés with which Americans categorize China tend to obscure our understanding of that complex and evolving nation.

As we have seen China evolve from the monolithic communist state of Mao Zedong in the 1950s through the reforms of Deng Xiaoping in the 1970s to the current ferment in China today, we have tended to fall back on a succession of catchy labels ranging from the much-feared "Red China" of the McCarthy era to President Nixon’s "strategic engagement" to President Clinton’s favored term of "strategic partner." As with all such clichés, these terms often say as much or more about their users than the systems or structures they are actually meant to describe.

The Committee acknowledges that all bilateral political dialogue must begin with a frank assessment of our own domestic national interests, but we cannot have a productive interaction with China if we continue to see and characterize China only in our own terms. China clearly exists on its own terms and in its own context, and so U.S. policymakers must also understand those factors. To do otherwise will merely cause our negotiations with the Chinese leadership to come across as parochial, condescending and disrespectful, all of which will only harm our chances to successfully persuade those sympathetic or at least open-minded Chinese officials to align their future plans and policies with those of the United States.

Regardless of the state of U.S.-China relations or how U.S. policymakers may view China, that nation is evolving at a pace that is unprecedented in human history and nearly impossible to fully comprehend, even for those of us within the Committee who were children there and who may return regularly on business or for family visits. Any single label or catchphrase is thus bound to be too static and too limited to capture the vitality, the complexity and the volatility of modern China. What matters in the formation of our nation’s foreign policy toward China today is not the repeated incantation of some formulaic words but the deeper, more subtle appreciation of the many contrasts and contradictions within current Chinese society. It is no more helpful or illuminating for our leaders to consider China as a "strategic adversary" than to call China a "strategic partner" – all such terms are inherently intellectually limiting and politically numbing.

The Cold War paradigm for dealing with the Soviet Union does not fit the current U.S.-China relationship and, if used in dealing with China, will only increase bilateral and regional tensions.
In the United States, there is an increasing and unfortunate tendency among some commentators to view the U.S.-China relationship through a Cold War paradigm, but the Committee contends that this is not a relevant model.

China’s chief aim is not to export communism, as was the Soviet Union’s; indeed, it is vividly apparent that China has reinterpreted communism even for its own national economic model. Moreover, unlike the Soviet Union’s Warsaw Pact or its other efforts in Cuba and in Africa, China has formed no military alliances to counter the U.S. presence anywhere in the world. By contrast, U.S.-China annual bilateral trade has far surpassed $100 billion, making China a major American trading partner, which is a status the Soviets never came close to assuming.

Almost all serious observers of China believe its primary national goals to be domestic, to double the size of its economy in ten years and to transform its state-directed economic system to one built on market principles. Though many Chinese are critical of their government because of corruption, excess government control and other problems, they also take great pride in the rapid economic and social developments made over the past twenty years. Criticism from American leaders that is perceived as bent on the "containment" of China rankle the average Chinese as being unjustified and inconsistent with the general encouragement that Americans generally give to peaceful change and cooperation with all its other trading partners. This is particularly true among the nation’s educated elite, many of whom feel that U.S. criticisms are aimed at a China that no longer exists (if it ever existed) and some of whom now believe that the U.S. government is intentionally trying to keep China from becoming a major world power.

The continued demonization of China among some American politicians may well lead us to create an enemy where none actually exists, thus fulfilling our own negative prophesies. More and more individual Chinese, as well as the Chinese leadership and the Chinese military, can read and see for themselves such open American declarations of hostility and suspicion toward China. The repeated characterization of China as a "strategic threat" to American interests in the Pacific can only engender mistrust and alienation within China, undercutting the efforts of moderate elements in both countries to forge bonds of friendship and peace between the two nations and leading to a poisoning downward spiral in our bilateral relationship.

Because perceptions influence politics in both countries, this gap between perception and reality is inherently dangerous and potentially destabilizing. Portrayals of China have often devolved into simplistic and even racist caricatures, particularly after the recent EP3 plane incident. The Committee believes that Secretary of State Colin Powell expressed it well in his own Senate confirmation hearing, when he said "A strategic partner China is not. But neither is China our inevitable foe and implacable foe." However, although Secretary Powell added, "China is a competitor and a potential regional rival," that remark should not be misinterpreted to mean this is the only way to perceive China. Although China is indeed a complex, rapidly changing nation with an expanding economy, high ambitions and growing international influence, the U.S. relationship with China can be as complementary as it is competitive, and our common regional interests are already far greater than our differences.

In short, China is difficult enough to understand on its own terms, without first being distorted through the outdated lenses of the Cold War. We do not have to shape our new foreign policy towards China following the bipolar model of the U.S.-Soviet schism. We do not have to view China’s growing strength as a new form of zero-sum game in international politics in which every gain by China is somehow seen as a loss by the United States. Indeed, if one looks at the potential chaos in Eastern Europe caused by Russia’s continued weakness and instability today and if one recalls the political vacuum in Asia created by a chronically enfeebled China in the 1920s and 1930s, which eventually led to some of the bloodiest parts of World War II, the United States should welcome, not fear, a stable and self-sufficient China as its neighbor in the Pacific Rim.

China has radically transformed itself economically, culturally and even politically over the past 20 years and, if supported and encouraged properly by the United States and its allies, Chinese leaders and the Chinese people should keep moving toward peace, free market economics, democratic government and the rule of law.

Some of the changes in China during the past two decades are visible for all to see. Many Chinese cities are now filled with modern high-rise office towers. Roads once filled with bicycles are now clogged with cars, and people who just ten years ago had no more than the necessities of life now flock to buy the latest consumer products and designer goods. As recently as 1980, the tallest building in Shanghai was the 24-story Park Hotel, built by the British for foreign occupants in the 1920s. Today, Shanghai’s skyscrapers are too numerous to count and the 88-story Jinmao Building, a striking office complex designed by Chicago architects, is the third tallest structure in the world, with the Grand Hyatt Hotel that occupies its top 28 floors ranking as the world’s highest hotel.

Social change
But the changes in China are far deeper than just infrastructure and income. Indeed, China’s tremendous economic growth, which averaged 8% annually in the 1990’s, has become the basis of profound social change and greatly increased individual freedom.

Propaganda slogans, once sacred, are now the butt of open political jokes, and both citizens and journalists now feel some freedom to reproach the government and party officials for their shortcomings, particularly corruption in the Communist Party. Publishing has opened up, with some 7.3 billion books purchased in 1999 alone. Bestsellers include everything from sexy potboilers such as Zhou Wei Hui’s "Shanghai Baby" to hard-hitting political and social analysis such as He Qinglian’s "China’s Pitfalls."

The Internet is widely used as a form of communication and a source of information, especially by young people. Where there were fewer than a million Chinese Internet users in 1997, there were over 22.5 million at the end of 2000, and some industry forecasts predict that number will pass 100 million by 2004. These Internet users can access more than 265,000 Chinese language websites and communicate with relative freedom in untold numbers of chatrooms. Cable television is also booming, with cable networks enabled by American and European suppliers; today, more than 90 million Chinese households have access to such varied television service.

Where the Chinese were once introverted and introspective, since the 1980’s, when the modern reforms of Deng Xiaoping began, millions of Chinese have now worked, studied and lived in other countries and then returned to China. Thousands of Asian, European and American companies now also have operations in China, employing many millions more Chinese and exposing them to many Western cultural and normative influences.

Developing rule of law
Slowly but surely, the rule of law is gaining ground. Chinese officials openly discuss their desire to move from their historic system of "rule by men" to the rule of law and actively welcome the involvement of American and other international organizations that offer training for judges, arbitration officials and lawyers. The number of lawsuits brought by individual Chinese against local governments, and even against the central government, have ballooned, with people suing for everything from the misapplication of family planning policies to suffering they underwent in the Cultural Revolution.
How to build the legal infrastructure and understanding necessary for a society governed by the rule of law is one of the areas China needs and wants to learn more about. It has welcomed educational and expert support from legal experts and organizations. This is an area where greater involvement by U.S. organizations would be of mutual benefit.

Rise of a middle class
Now that "private property" is once again respected, individual home ownership is up substantially in modern China. Just five years ago, a mortgage was unheard of, but in major cities it is now common for 25-year olds to take out loans to buy their first apartment. College enrollments are expanding nationally. Recognizing that an educated populace is the key to future economic growth, government at all levels in China has greatly expanded access to education. State universities have been permitted to increase their enrollment, by 47.4% in 1999 and another 25% in 2000, while private schools, from elementary to university, are now springing up across the country. Both private home ownership and access to education are increasingly seen not as elite privileges, but as normal (and inherently democratic) aspirations for the growing middle class, as in the United States, Japan and other Western nations.

Many members of this budding middle class are employed in China’s burgeoning private sector, which is now the Chinese economy’s major growth engine. Growth of the private sector has been accompanied by a corresponding decline in the state sector, which just ten years ago accounted for about 65% of economic output but now accounts for only 28%. To recognize the growing influence and power of the private sector in China’s economy, no less a figure than Jiang Zemin, China’s president and general secretary of the Chinese Communist Party, proposed on the 80th anniversary of the Party that private business owners and other historically excluded persons should be considered for Party membership. In essence, the "communist" party will now to be open to "capitalists." President Jiang’s heterodox statement was made in a nationally televised address and signals a potentially massive political shift away from the unitary

Marxist doctrines of the Party
Although few people outside China know this, China’s "non-government" sector is also growing, although it still remains subject to substantial government review and approval. China now has hundreds of thousands of citizens engaged in civic activities such as spousal abuse prevention, environmental protection and literacy.

Increased concern for the environment
China’s environment, given its sizable population and rapid economic development is understandably a source of concern in the world. While little covered in the media, improving the environment is also a major policy initiative of the Chinese government. This is exemplified by the dramatic efforts towards the "greening" of major cities like Shanghai and Beijing where millions of trees and acres of parks have been planted. Also, factories are being dispersed away from the population centers, controls on vehicle emission are being enforced, and everyday, local media are highlighting environmental issues to involve and educate the public. While the environment remains a huge challenge, progress seems to have occurred in recent objective measurements of environmental quality in China, as recently reported in the New York Times. It remains one of many critical areas where a cooperative relationship between China and the U.S. and other developed countries can be of benefit to all.

Deep seated problems remaining
For all of this progress, China remains a "developing nation," still poor by Western standards and burdened with the largest population of any nation on earth. Regional disparities have increased significantly in the past twenty years, and the development gap between urban areas along the coast and rural areas and other less developed parts of interior China is becoming a major social and political problem. Widespread corruption has also corroded the people’s faith in their government. Chinese social critics repeatedly cite the deep, festering resentment of corruption at all levels of their society. Tragically, individual human rights are still violated, notably in cases where Chinese citizens choose to practice religion in a manner that is not condoned by the government. The Communist Party is still resistant to multi-party democratic reforms, although village-level elections involving non-communist candidates have been accepted. Moreover, as noted above, President Jiang has now officially proposed that Communist Party membership be extended to private business owners and others, which may eventually lead to a more broadly based political system.

Finally, it must be remembered that some of the current hardships in China are being brought about by the harsh realities of the economic transformation from a state-directed economy to a market-oriented economy and from WTO-required withdrawal of state support to certain sectors of the Chinese economy. These reforms and the slow implosion of the state sector economy have already led to widespread lay-offs and will certainly cause even more unemployment in the years ahead. Although the private and semi-private economy can and does absorb many of the estimated 9 million young people who enter the Chinese job market each year, it has little need to hire laid-off older employees of state-owned enterprises who have spent their careers working in inefficient and failing factories, and, sadly, such people have few options today with little or no "social safety net" to offer them any shelter.

U.S. policy makers in the Bush Administration must learn to cope with the vastness and complexity of this evolving China, just as the Chinese leadership itself is struggling to deal with these challenges. China is not the monolith that charged across the 38th parallel in Korea in 1950, and China is certainly not the "communist" state that Mao Zedong ever dreamed would exist today. It is perhaps best to characterize modern China as the world’s largest experimental laboratory for economic and political change, and this laboratory is bound to produce both successes and failures by trial and error, as America itself did during its much longer national history. American leaders must be prepared to deal with this current reality.

A new spirit of nationalism is on the rise significantly complicating the task of Chinese leaders who desire good relations with the U.S.

Today, a new nationalism is on the rise in China, particularly among the younger population and among the intelligentsia who are helping to shape China’s new self-image in the post-communist era. Americans tend to forget that China is an ancient nation, one burdened with much history. Because the history of the past 150 years directly affects the manner in which China responds to such events as the unintended bombing by U.S. aircraft of China’s embassy in Belgrade, Yugoslavia in 1999 or the recent accident involving our EP3 surveillance plane, it is worthwhile to briefly consider a few key historic events and the influence they hold over high level Chinese leaders and ordinary Chinese alike.

Legacy of history
As taught in Chinese schools, China’s modern history up until 1949 is one of weakness and decline that was taken advantage of – and exacerbated by other nations, including the United States and Japan. Where American school children learn with pride of the Boston Tea Party as a sign of America’s strength and independence, Chinese school children learn with shame of a similar "party" that had a dramatically different outcome. In 1839, to protect the Chinese people against the devastating opium trade brought by the British, Commissioner Lin Zexu tried to end that trade by confiscating from British traders three million pounds of raw opium, mixing it with lime, salt and water and flushing it out to sea. However, Commissioner Lin’s courageous action only led to the British invasion of China and the creation of quasi-colonial sectors in five so-called "treaty ports," including Canton (Guangzhou) and Shanghai. Further wars over opium led to even more concessions from an impotent China, including the cession to Britain of the island of Hong Kong.

In the years following this forced opening, foreigners moved into China and pursued their own goals, sheltered from Chinese law by the umbrella of "extraterritoriality." Although a few were well-intentioned missionaries who built schools and hospitals and did their best to alleviate the poverty and suffering that they saw around them, many others were there solely to exploit the Chinese people, making vast amounts of money by selling and smuggling opium and running sweatshops in which Chinese laborers worked nearly 14-hour days for a pittance. Until World War II, all such non-Chinese lived outside Chinese law and, far too often, lorded their superiority over the "natives" whom they encountered. In Shanghai, Chinese were treated as such second-class citizens that they were even banned from entering their own city’s public gardens, which were reserved only for non-Chinese, such as the English, French, Germans and Americans.
Japan also forced China to abandon China’s suzerainty over Korea and to cede Taiwan and other areas to Japan in 1895. (Korea was subsequently annexed by Japan in 1910.) In 1931, Japan seized Manchuria from China, and Japan then invaded China proper in 1937, inflicting four bloody years of conquest upon the Chinese people before Pearl Harbor brought the U.S. into the Pacific war. The Chinese people endured countless barbarous acts from the Japanese invaders, including horrific "medical experiments" in which the infamous Unit 731 practiced chemical and biological warfare on innocent Chinese (and on American prisoners of war held by the Japanese) and the sexual enslavement of thousands of "comfort women" for Japanese troops. In the infamous "rape of Nanjing," the Japanese army murdered hundreds of thousands of innocent and helpless Chinese civilians in that city. Even today, there are survivors in China who can testify to these Japanese atrocities.

History’s influence on today
The existence of such a national memory is not an academic point. In it lies the explanation for what many Americans see as China’s "over-reaction" to such incidents as the Chinese embassy bombing in Belgrade, after which the U.S. Embassy in Beijing was attacked by violent mobs, and the surveillance plane accident near Hainan Island, in which the U.S. crewmen were detained. Where we Americans tend to see such occurrences as unfortunate accidents to be regretted, the Chinese generally do not. In China, many view such events as continuing examples of deliberate Western efforts to humiliate, threaten and even subjugate China. While the outbursts of anti-U.S. anger and resentment that followed these incidents may have been abetted by government propaganda and by suppression of relevant factual information, the government did not orchestrate the popular Chinese public reaction. On the contrary, the public anger expressed was genuine and can be traced back directly to this substrate of abiding resentment for past injustices and shame at China’s perceived historic weakness. It is sobering, but significant, to note that President Jiang was harshly criticized during the recent surveillance plane incident in such venues as Chinese Internet chatrooms not for holding the American crew members after the accident, but for "caving in" to "American hegemony" by releasing them so soon and without having received a full U.S. apology.
To most Americans, who often lack any sense of history, even of their own, the imperialist conduct of other nations toward China in the past may seem like so much irrelevant "ancient history." But in China today, the memory of such humiliations remains fresh and vivid. Its legacy is a potentially combustible nationalism, stoked by a combination of insult at the wrongs inflicted on China in the past and an understandable pride in the strides the nation has made since the founding of the People’s Republic in 1949.

Implication of rising nationalism
In formulating our foreign policy approaches to China, we must come to terms with the political dimensions of this growing Chinese nationalism, particularly among the young people and the intelligentsia. Increasingly, the Chinese people are following a path of economic pragmatism and want to avoid the excesses of the communist era; they clearly admire what market economics can bring to their developing country and desire to emulate Western models of economic development. However, even as they follow the that path of economic reform, they also want to assure China in the 21st century will be respected as a sovereign and equal state that cannot be forced into adopting positions contrary to its own will. The United States would ignore those influences (and our own unintentional inflammation of such nationalism) at our own peril and at the peril of regional stability for decades to come.

Bridging the cultural gap
With a fuller understanding of the historic lens through which China views the world, we can better consider how to successfully negotiate the differences our nations will inevitably have. This includes taking account of cultural differences, like those involving such concepts as "face", and the reason why tone and style can often be as important as substance in U.S. dealings with China.

The concept of "face," is essentially an individual’s – or a nation’s – social status. Face is in constant flux and can be given to others, taken away from them, or gained and lost through one’s own actions. Practically speaking, it involves a heightened appreciation for respectful words and treatment and an elevated sensitivity to perceived slights. The importance of face is perhaps increased by the absence in China of an established, transparent legal system to which individuals who feel they have been slandered or otherwise wronged can turn. Where Americans might threaten to sue, Chinese fall back on socio-ethical norms that have been around for thousands of years.

So, when a Chinese leader interacts with leaders of other nations, he is constantly being watched to see if his own actions and his treatment by others lead to an accumulated gain, or loss, of face. Because compromise can easily be construed as a loss of face, Chinese leaders may often find themselves uncomfortably sandwiched between the exigencies of international diplomacy and the requirements of face preservation.

For this reason, quiet diplomacy will often be the preferable path to pursue in our relationship with China. If publicly backed into a corner, particularly with the force of Western media, the Chinese government may behave intransigently on an issue that could be resolved if handled quietly, through diplomatic channels, and away from the scrutiny of the press and public. Of course, the United States system is one based on openness and such quiet diplomacy may not always be possible, but when it is, we are likely to find it more effective.

Naturally, this isn’t a one-way street – just as we Americans need to understand China better, so the Chinese need to understand the U.S. better. Anything we can do to enhance Chinese understanding of our country, be it the U.S. legal system, which protects and shields us, and in which we place great faith; the role of Congress; the role of the press; or the crucial role of interest groups in U.S. politics will ultimately benefit our relationship and us.

The Taiwan issue is potentially the single most divisive issue in U.S.-China relations. Within Taiwan itself, the issue of relations with China is in a dynamic state of flux, with many different views supporting new relations with China emerging for public political debate. U.S. policy should therefore seek to "do no harm" to Taiwan/China relations and refrain from altering the balance between the two parties, who should be left to determine their future relationship themselves. The United States should remain committed to the "One China" policy spelled out in the U.S.-China communiqués of 1972, 1979 and 1982, which acknowledged China’s position on Taiwan, stated the U.S. "interest in peaceful settlement of the Taiwan question by the Chinese themselves" and preserved a vital U.S. role to supply limited defensive armaments for Taiwan to assure such a peaceful settlement.

The birth of the "Taiwan issue"
The "Taiwan issue" first emerged in the early 1950s during the Korean War, when it became clear to the United States that China was willing to engage in direct military confrontations and that the United States would have to "contain" communism in Asia by supporting countries that would align themselves, politically and economically, with the West. The Cold War then perpetuated this posture for more than four decades as the U.S. and its allies engaged in their epic struggle with the Soviet Union and China. The American withdrawal from Vietnam may have made Taiwan an even more crucial symbol of U.S. commitment in the region against what was often termed "communist aggression." The "Taiwan Lobby," consisting of staunch anti-Communists in this country, also encouraged the American domestic perception of China as the remaining Cold War adversary to the United States.

Despite pressure to act otherwise, the U.S. government has always taken a measured approach to the Taiwan issue, viewing it in its full geopolitical context. The U. S. priority in East Asia has been for decades, and remains today, the maintenance of the peaceful status quo in the region, a wise position that has proven successful. The United States wants open markets in all the Asian economies and a cooperative relationship with all the governments in the region so it can advance American interests in commerce, arms control, cultural exchange and the promotion of desired economic, political and social reforms in many of those countries. The United States also has strategic military interests in the region and believes its limited, but still strong, ground and naval forces based in Korea, Japan and elsewhere in the western Pacific are needed for regional stability. The United States does not want a power vacuum to develop in the region or to create destabilizing fears among individual Asian nations that might lead one or another of them to engage in defensive escalation of military expenditures.

The need "to do no harm"
The limited forward military deployment of U.S forces in East Asia is therefore intended not to fight a war but to prevent a war. The United States neither needs nor wants a military confrontation with China--a fact that China must understand and appreciate. To ensure the maintenance of the status quo that has long kept the peace in the Taiwan Strait, American policy makers should perpetuate a policy of "do no harm" to what China and

Taiwan can decide between themselves - that is, it should resist any urge to tilt toward either China or Taiwan on the Taiwan issue, as they have consistently resisted ever since the Shanghai Communiqué of 1972, which paved the way to resumption of full diplomatic relations between the United States and China.

Many Americans have a strong attachment to Taiwan because they respect Taiwan's economic development and, more recently, its political democratization after decades of one-party rule. Some Americans therefore seek to apply the Wilsonian ideal of "self- determination" to Taiwan and believe that the proper American role vis-à-vis Taiwan is to "protect" it from mainland China; a few may even support the full "independence" of Taiwan from China, despite opinion polls in Taiwan that show the majority of Taiwan residents do not themselves desire such independence. However, as noted above, the U.S. government has consistently resisted such well intentioned, but ill-considered ideas, and has thus maintained a balanced policy towards both the mainland and Taiwan in regard to the Taiwan issue.
If emotions regarding the Taiwan issue sometimes run high in the U.S., they run even higher in China. Against the backdrop of decades of internal strife, division and extraterritoriality, the issue of China’s territorial integrity is an emotional as well as political flash point. Indeed, many Americans fail to recognize that there is widespread support among the Chinese people for the Chinese government’s stance towards Taiwan, including its refusal to renounce its right to use force in recovering Taiwan if Taiwan should ever seek to declare its independence unilaterally. Generally speaking, Chinese citizens from all sectors of society, from cab drivers to college students to farmers to officials, uniformly believe that Taiwan is an integral part of China and that no other nation has a right to interfere in mainland-Taiwan affairs. The U.S. government and people need to understand that, on this issue, the Chinese government largely has the support of its citizens.

Whatever defensive assistance may flow from such U.S. arms sales to Taiwan, such sales may also provoke China then to seek more advanced weapons from Russia and Israel and to strengthen its own People’s Liberation Army (PLA). Beijing has recently announced an 18% increase in China’s military budget for 2001. In addition to assessing whether U.S. military sales would aid Taiwan materially (and whether Taiwan could find alternative sources), the United States should also weigh the collateral consequences for inadvertently fueling a local regional arms race between China and Taiwan once new and expensive weapons systems are introduced on the Taiwan side. Selling arms (especially advanced military equipment) to Taiwan, far from providing Taiwan a greater sense of security, may only raise the stakes and exacerbate cross-strait tensions. Given the economic needs in both China and Taiwan, neither party would voluntarily seek an increase in military expenditures unless required by a charge in the military balance between Taiwan and China.

Increased economic and social linkages between Taiwan and China
The fundamental U.S. position for the past three decades has been that, given enough time and enough good will on both sides, the Chinese and the Taiwanese would be able to reach a peaceful resolution of the Taiwan issue by themselves. The record suggests this is already happening, steadily and dramatically, with little fanfare or public attention and largely unappreciated in the United States. Personal and business linkages between Taiwan and the mainland have actually exploded during the last decade and are accelerating daily. A complete understanding of the Taiwan question in 2001 and beyond therefore requires a brief review of economic and cultural changes that have occurred across the Taiwan Strait in recent years.

From May 1949 to August 1987, the Nationalist Party (known as the KMT) imposed island-wide martial law on the entire island of Taiwan, and forbade any of its citizens to travel to the mainland. In November 1987, four months after the historic end of martial law, Taiwan citizens were finally allowed to visit their relatives on the mainland. Since then, liberalized economic regulations in Taiwan have also allowed massive foreign direct investment to occur in China. This boom has occurred even in the absence of direct shipping and airline routes between Taiwan and the mainland. Today, virtually all Taiwanese must still enter China via Hong Kong or Macao.

Although reliable data, official or otherwise, is hard to come by, some estimates indicate that Taiwan’s cumulative direct investment on the mainland now exceeds U.S.$60 billion, ranging from small restaurants to world-class electronics manufacturing plants. On any given day now, over 500,000 professionals and managers from Taiwan are working and living on the mainland in these Taiwan-owned or financed enterprises. Taiwan-financed companies in China now employ about 3% of the mainland’s total workforce and the number continues to increase. Not surprisingly, these massive financial and business ties are reshaping historical behavior and attitudes both in China and in Taiwan. China desires to capture more foreign direct investment to reshape its economy, and the half-million Mandarin-speaking professionals and managers from Taiwan are transforming China’s work force and business culture, bringing about much-needed market reforms. As China's economy improves, so does the standard of living of the Chinese people.

Conversely, the cross-strait relationship also supports Taiwan’s economy via trade. Two-way trade across the strait reached $25 billion in 1999, roughly four to one in favor of exports from Taiwan to the mainland over those from the mainland to Taiwan. In most years since the mid-1990s, Taiwan’s trade surplus with the mainland has more than covered its trade deficit with the rest of the world. As an export driven economy, the trade surplus with the mainland has thus become a vital support for Taiwan’s own economy. Virtually every major corporation in Taiwan has made significant investments on the mainland, and thousands of Taiwanese have even immigrated to China as part of this trend and now call China their "home."

The recent economic slowdown in Taiwan has made it ever more clear that Taiwan’s economic future is dependent on China. China offers inexpensive land, relatively cheap power, a vast pool of affordable and educated labor and a large market in which companies from Taiwan can sell products and services as a virtual "preferred provider" because of common language and cultural factors. Far from agitating for independence, Taiwan’s business leaders have long sought fewer restrictions on business travel and direct air and ferry service to China, which could significantly reduce their cost of doing business with the mainland. Their goal is to eliminate the full day of travel currently required to get from Taiwan to the mainland via Hong Kong in exchange for a quick one to two hour cross-strait commute by air or ship.
In 2000, there were approximately 3.5 million person-trips made from Taiwan to the mainland, in spite of the current travel restrictions requiring transit through Hong Kong or Macao. While many of these are repeat trips by members of the business community, the mainland is now also the favorite tourist destination for most people of Taiwan. According to Taiwan’s own tourism statistics, more than half of all the people leaving the island for a holiday now go to some destination on the mainland. This demand is helping China to develop its own fledgling tourism industry and is clearly creating even more "people-to-people" bonds between the mainland and Taiwan.

Moreover, this heavy tourist traffic implies that the average person in Taiwan neither fears China, nor is a stranger to, the changes occurring in China and feel a significant measure of kinship with his or her brethren on the mainland. Indeed, a June 2001 Taiwanese newspaper poll by the United Daily News of more than 1,000 Taiwanese citizens revealed a dramatic finding: 33% of Taiwanese today would favor reunification with mainland China under the Chinese "One China, Two Systems" formula, as compared with only 5% in a similar poll conducted three years ago. This clearly indicates that more and more Taiwanese can foresee a day when it would be feasible and desirable for Taiwan to be assimilated into China, while preserving Taiwan’s unique economy, political system and legal structure, as has been done in Hong Kong.

New dynamics in Taiwan-China relations
In recognition of the economic, if not political, integration across the straits, President Chen Shui-bian’s multi-party council of 120 economic advisers in August 2001 recommended lifting the cap to investments on the mainland and establishing direct linkages in trade, communication and transport of goods and people. Once allowed, commercial trade and personal interactions across the strait will blossom even further when all political obstacles are finally removed. In line with continued economic integration, Taiwan has also recently proposed allowing investment from China in Taiwan real estate as well as in Taiwan’s state controlled companies in the airline and petroleum industries.

In addition, the leading KMT party leader, Lien Chan, recently floated the idea of confederation between Taiwan and China. While not approved for the party platform, the idea has been publicly raised and will become part of the public debate about Taiwan’s relationship to China.

All of this suggests that the issue of relations between Taiwan and China is in dynamic flux with active involvement by various leaders in Taiwan. The Taiwan legislative elections slated for December 2001 may provide greater indication of the current state of thinking among the people of Taiwan. While results will not likely be definitive enough to create drastic changes in President Chen’s policies, they will undoubtedly reflect an expanded range of options being considered by the people of Taiwan with respect to relations with China.

In sum, Taiwan and the mainland now share strong common economic interests in addition to the preexisting historical and cultural bonds. U.S. foreign policy must therefore remain steady and firmly based on the "One China" policy that has worked so well for the past thirty years. The entire premise of those earlier negotiations among the U.S., China and Taiwan was to "buy time" for the affected parties to work out, gradually and experimentally, means to reunite Taiwan and the mainland without violence. The transfer of Hong Kong to China in 1997 has already provided some evidence that a "One China, Two Systems" formula can be made to work, and, perhaps with more time, Beijing and Taipei can come to an understanding of a different but acceptable formula to suit the unique needs of the Taiwan situation. The U.S. presence is to ensure this continued stable balance to permit the two sides both incentives and opportunities for such on-going dialogue, free from bloodshed.

Stability and trust (or the absence thereof) in the U.S.-China relationship will set the tone for the Pacific region and the entire world in the 21st century.

The strength or weakness of the U.S.-China relationship will determine whether the 21st century will be an era of expanded trade and political engagement or an era of tension and potential friction in the western Pacific region. Maintaining, and even improving, the civility and stability of that relationship is in the fundamental best interest of the United States, China, Japan, the rest of Asia and, indeed, the entire world. The Administration therefore needs to help forge a bipartisan domestic consensus on U.S. policy toward China that will allow the two countries to manage their differences while they increase their cooperation in areas of mutual interest.

The United States and China are already bound together by close, mutually beneficial economic ties, which will further deepen when China finally completes its WTO accession process. Total two-way trade between the two nations reached $94.4 billion in 1999 and over $120 billion in 2000. Although the U.S. does run a significant trade deficit with China in manufactured goods, it runs a surplus in trade in services. China now ranks as one of our fastest growing export markets, with exports tripling between 1990 and 1998. Indeed, American companies now consider China a key market for direct investment such that their projects have made the United States the second largest investor in China, behind only Hong Kong.

Need for more U.S. – China interaction
Despite these substantial and growing economic ties, the U.S. still lacks the stable broad based linkages that would be essential for a productive, long-term relationship with China. Those further linkages will take more – not less – government-to-government contacts between Americans and Chinese, particularly at the diplomatic and military levels. Despite the temporary and understandable chill that has come about due to the EP3 incident, the Committee applauds the resumption of mid- and senior level exchange visits between the two governments and respective militaries, as well as the recent meeting of Presidents Bush and Jiang in Shanghai. The basis of a sound U.S.-China relationship can be built on regular summit meetings and other exchanges, both official and unofficial, especially those that include key military personnel from both countries. In addition, there should be as many contacts as possible between the United States and China, at both the government-to-government and at the non-governmental levels (including business, academic, scientific, cultural and other people-to-people exchange), to build mutual respect and understanding.
It is unavoidable that the U.S. and China may have policy differences from time to time, given the vast differences in their histories and in their political systems, but, despite those differences, experience has shown the United States can still work with China on the issues of common concern. Such vital issues include the environment, global climate change, weapons proliferation, drug and human trafficking and the North Korean problem. If the Administration can lay a cooperative foundation with China on such common issues and can also demonstrate its basic respect for China as an equal sovereign state, U.S. leaders can then move to address other sensitive issues, such as political reform, human rights and the free practice of religion. In general, we should handle our political differences with China in the same way that we deal with them when they occur with other nations (even occasionally with our own allies), namely, through quiet, constructive, respectful dialogue, without resort to demagoguery or public name-calling.
Chinese students in U.S. educational institutions

One positive long-term factor for future U.S.-China relations that should be encouraged is the continuing acceptance of Mainland Chinese students by American educational institutions.

In the past, although some resorted to illegal immigration, most of these Chinese students chose to remain legally in the U.S. as green card holders or U.S. citizens and now contribute to U.S. society as engineers, computer experts and other professionals. Many have served as useful links for U.S. companies in doing business with China.

In the last couple of years, however, increasing numbers of Chinese graduates from U.S. institutions are returning to China after a few years of working experience in the U.S. to take positions as rising leaders in the Chinese business and government sector.
They bring to China an appreciation and admiration for American values of freedom and openness, integrity and the rule of law, entrepreneurship and free markets, and seek to adapt much of what they have admired in America to China.

They will serve as an important bridge of understanding and a positive force for U.S.-China relations in the future. As such, U.S. government should seek to continue and enhance policies that welcome China's best and brightest youth to experience America through its educational system.

Impact on Asia relations
In crafting our nation’s long-term foreign policy toward China, we must also consider the interests of our allies in Asia, where the state of U.S.-China relations are viewed with daily concern. Any regularization of the U.S.-China relationship will provide assurance to our Asian allies and contribute to the confidence necessary for continued prosperity in the Asia-Pacific region. As China’s historic neighbors, other Asian nations can provide invaluable assistance to the United States in better understanding the Chinese perspective on international issues and the collateral ramifications of our bilateral policies toward China. In turn, these other Asian nations may persuade China that a strong, balanced American presence in the Pacific Rim will contribute to peace and stability.

It is difficult to predict how China will evolve over the next twenty years, for who could have predicted the changes of the past twenty years? But how the U.S. deals with China in the interim will undoubtedly influence how it evolves whether it develops as a peaceful, free market participant in the global society or as a military and economic antagonist to the U.S. However it evolves, America can be certain that China, no matter how much we might wish it otherwise, is unlikely ever to become a nation wholly in our own image. The U.S. and China are nations with different histories, demographics and political systems, and we will probably always have some major differences. However, China is plainly not our enemy today, and it is not predestined to become one in the future. America can undoubtedly help to forge a strong, durable relationship with China, for our own sake and for the sake of all nations in the Pacific region.

EPILOGUE
To develop and implement a sound foreign policy toward China, the United States needs to draw upon all the relevant assets at its disposal, including, where appropriate, those Americans of Chinese descent who have the linguistic and cultural skills to help interpret modern China and who can also communicate directly with the Chinese people and Chinese leaders. Today, there are hundreds of thousands of Chinese Americans in all walks of life – military and diplomatic officials, business leaders, attorneys, architects, scientists and engineers, musicians and other artists and academicians – who have a vast amount of insight and experience in China.

The Administration can and should draw upon all such resources, both as government representatives and as private citizens. In this sense, the Committee of 100’s twin missions come together, for the full and trusting inclusion of loyal Chinese American citizens in the governance of the nation and the implementation of its foreign policies will surely lead the United States toward a more stable and enduring relationship between our nation and China in the coming century.