Chapter Two

Chinese Leadership Transition

Bates Gill

Over the course of 2002-2003, the leadership of the Chinese Communist Party (CCP), the state, and the military in the People's Republic of China (PRC) has undergone sweeping change. As is typical of PRC political affairs, many familiar persons--such as Jiang Zemin, Li Peng, and Zhu Rongji--will retain critical behind-the-scenes power because of loyalty networks built over long political careers.

The shang tai process of inducting the new "fourth generation" of leaders began well before it was formalized during the 16th CCP Congress in November 2002, at which new members of the Political Bureau Standing Committee, the Political Bureau, the Central Committee, and the Central Military Commission were selected. At the 10th National People's Congress in March 2003, the leaders of China's government, including the premier, vice premiers, state council members, and heads of government ministries also changed significantly.

Given China's enormous importance as a major regional power, one of the globe's largest economies and trading nations, and the world's most populous country going through a remarkable socioeconomic and political change, U.S. policymakers will need to monitor and gauge the implications of the ongoing leadership shifts in the PRC carefully. There is little that Washington can specifically do with confidence to support the rise or fall of one individual or another--a business that would best be avoided in any event.

However, U.S. policy toward China must first be attuned to the sensitivities and nuances of this leadership change and then be developed with an eye to fostering broad outcomes favorable to American interests if possible. With these thoughts in mind, three major questions are offered for the United States to address in its dealings with China during this period of leadership transition in Beijing:

• Who are some of the new leaders? Brief backgrounds are offered, with a special focus on Hu Jintao and other younger leaders at the top of Chinese political and government circles.
• What will be China's domestic concerns during this period? These include leadership transition; economic restructuring and smooth World Trade Organization (WTO) integration; control of internal unrest and the ills of socioeconomic change; and party reform.
• What will be China's external concerns during this period? Three major interests are the new counterterrorist framework, perceptions of continued U.S. hegemony, and managing relations with Taiwan.

The chapter concludes with brief recommendations of how U.S. China policy might take these issues into account in the context of Chinese leadership change and foster outcomes more favorable to American interests over time.

The New Leaders

Several individuals now on the rise in Chinese politics who likely will play leading roles in the future are well worth noting. Many uncertainties remain, however, and much backroom battling and political infighting is yet to come. The United States would be well served to remember that point as it formulates its policies toward China.

Those discussed below do not represent an exhaustive list, but they are worth watching. The sorry experience of past designated successors--such as Lin Biao, Hua Guofeng, Hu Yaobang, and Zhao Ziyang--must have given pause to Hu Jintao, who was widely touted to be the next "first among equals" in Chinese leadership circles, before he secured his hold on chairmanship of the party and the state presidency. The subjects of discussion were selected for their relative youth (all 60 years of age or younger in 2001), their hold on important posts within party, state, or military apparatuses, and their connections to key elders in the Chinese political system.

These figures and other potential leaders of the fourth generation exhibit some interesting commonalities. First, they joined the Communist Party well after the founding of the People's Republic of China and cannot claim to be part of the revolutionary old guard or founding generation of the "new China." What they know of pre-1949 China, the Chinese civil war, and the struggle and victory of the Chinese Communist Party, they have learned mostly from history texts.

Second, they directly experienced the excruciating political and economic growing pains of the Maoist era, particularly the Cultural Revolution, which swept up and deeply affected almost all members of this generation in their formative years. That they since have pursued advanced scientific studies and succeeded in politics during the reform years after 1978 suggests their understanding of the need for China to follow a more pragmatic and cautious--rather than ideologically determined--course.

Third, most members of the fourth generation, like the generation before them, are technocrats, trained in the sciences and economics, with little or no military experience.

Hu Jintao, born in eastern Anhui Province in December 1942, turned 60 in 2002. Before assuming chairmanship of the CCP, he concurrently held four major positions in the Chinese leadership hierarchy: member of the Standing Committee of the Political Bureau of the 15th Central Committee of the Chinese Communist Party (he was also listed first among members of the Secretariat of the 15th Central Committee); vice chairman of the Central Military Commission; state vice president; and president of the Central Party School. Like most of China's current top leaders, Hu is a technocrat, having studied hydroelectric engineering at Qinghua University.

He joined the party in 1964, and his political career was subsequently marked by his work in some of China's most remote and backward provinces, leadership positions with the Communist Youth League and the All-China Youth Federation, and his comparatively youthful ascent to the top-most leadership of China. He spent much of his early career rising through the ranks of one of China's poorest provinces, Gansu, to which he had been "sent down" during the Cultural Revolution in 1968.

Many credit Hu's rapid rise to power to his keen political instincts. In 1982 at age 39, he was the youngest member of the Party Central Committee. He was the youngest provincial governor in power (at age 42) when he took the party chief position in Guizhou in 1985. In 1988, Hu was appointed to head Tibet, where, in early 1989, he oversaw the violent suppression of Tibetan unrest and then held the lid on during the Tiananmen crisis that spring. He was promoted to the Political Bureau Standing Committee in 1992 and rose to become the fifth most powerful person in China, after Jiang Zemin, Zhu Rongji, Li Peng, and Li Ruihuan.

Hu has traveled abroad often in recent years, including official tours to Asian neighbors, such as Japan, South Korea, and Vietnam, and to the Middle East, Africa, and South America. However, he has not spent an extended period in foreign countries, such as Jiang Zemin (who passed almost a year training at the Stalin Autoworks in Moscow in 1955-1956) and Deng Xiaoping (who spent 6 years as a student in France, 1920-1926). Until late 2001, Hu had not traveled to either the United States or Europe and kept contact with officials from those countries to a minimum. Hu made his first foray to Western countries in a 2-week tour that began October 27, 2001, traveling to Russia, the United Kingdom, Spain, France, and Germany. On this journey, he met many prominent Western leaders, including Vladimir Putin, Tony Blair, Jacques Chirac, Lionel Jospin, and Gerhard Schroeder. He hosted President George W. Bush during his visit to Qinghua University in February 2002, and 2 months later made his first visit to the United States in late April and early May. In addition to meeting with senior officials and members of Congress in Washington, Hu also made stops in Honolulu, New York, and San Francisco.

Li Changchun was born in 1944 in Dalian, Liaoning Province. He joined the party in 1965 while at Harbin Polytechnical University, where he graduated in 1966 with a specialization in electrical engineering. He was elected a member of the 15th Central Committee Political Bureau, his current position, in 1997. Li is also a vice premier under the State Council. Unlike either Wu Bangguo or Wen Jiabao, Li can claim some direct association with the military: He is believed to be first secretary of the Guangdong Military District Army Party Committee, as well as the first political commissar of the Guangdong Military District. As many analysts expected, he rose to the Standing Committee of the Political Bureau in 2002.

Wu Bangguo was born in 1941 in Anhui Province. A party member since 1964, he worked in Shanghai after graduating from Qinghua University with a degree in radio electronics in 1967. He rose through the ranks of Shanghai politics, became close to both Jiang Zemin and Zhu Rongji, and succeeded Jiang to become the municipality party chief in 1991 at age 50. In 1992, he was brought on to the Political Bureau of the Central Committee, a position he still holds today. He is also a vice premier on the State Council, ostensibly working for Zhu Rongji; however, many see him as Jiang's man on that body.

Wen Jiabao was born in 1942 in the east coast city of Tianjin. Wen studied geology at the undergraduate and graduate levels from 1960 to 1968 in Beijing and joined the party while a student in 1965. His subsequent work as a geologist and low-level politician in Gansu Province until about 1981 coincided with time that Hu Jintao spent there. He became a full member of the Political Bureau in 1997 at the 15th Party Congress, a position he holds today. He concurrently holds a position as a vice premier under Zhu Rongji and is the youngest of his colleagues at that post.

Wen's rise was in part due to his association with reform-minded leaders Hu Yaobang and Zhao Ziyang, but he has apparently avoided trouble in the wake of their downfalls in the late 1980s. Some analysts speculate he may take his reformist credentials to the premier post, succeeding Zhu in 2003.

Zeng Qinghong deserves mention, though he is over 60 years old (64 in 2003). He became an alternate member of the Political Bureau in 1997 and is a secretary (seventh among seven in the officially published order) on the Secretariat of the 15th Party Central Committee. He is also director of the Party Central Committee Organization Department, a key position that charges him with overseeing personnel matters within the party.

However, Zeng's potential future power comes more from his association with China's principal leader, Jiang Zemin. He is widely recognized as a close associate of and political strategist for Jiang and is part of the "Shanghai clique," having risen to vice-party chief in Shanghai. Importantly, he has been credited with conceiving the sange daibiao (the "Three Represents"), Jiang Zemin's much-touted contribution to the CCP theoretical canon. Zeng regularly travels with Jiang at home and abroad, and he accompanied the Chinese president to the United States as his chief of staff during the fall 1997 U.S.-China summit.

For these reasons, all eyes have been on Zeng to achieve ever-higher status in the Chinese political leadership. Nevertheless, Jiang has unsuccessfully tried three times--most recently in September 2001--to have Zeng promoted to full membership on the Political Bureau. As long as Jiang Zemin retains his influence, Zeng will remain an important figure to watch given his promotion to a full seat on the Political Bureau in 2002.

Internal Concerns

During its leadership transition over 2002-2003, the overwhelming concern for the party chieftains will remain maintaining the conditions for internal growth and stability on the one hand and for party legitimacy on the other. Simply put, the overriding concern will be to assure continued stable socioeconomic reform and growth--delivering the economic and social goods--that are principal bases for continued Communist Party leadership in China. But this goal must be achieved at a time of increasing fragility and uncertainty both within Chinese leadership circles and within the broader Chinese society. Over the coming 2 to 5 years, an array of social, economic, and political forces will converge in thorny and complicated ways for the Chinese leadership.

At least four prominent issues of internal concern will consume much of Chinese leadership time over the 2002-2003 period: politics of transition; smooth WTO entry and integration; dealing with a host of socioeconomic and political difficulties; and party reform.

Politics of transition. While not readily apparent to most observers, the upper reaches of the Chinese body politic are divided over issues of ideology, party reform, national economic and security strategy, loyalty networks, and the politics of personal self-interest and ambition. Outside observers point to various, often-overlapping factions within the Chinese hierarchy, such as conservatives, reformists, nationalists, internationalists, the Shanghai clique, and leaders with provincial interests. Although these leaders are not elected by popular vote, Chinese party bosses appear increasingly sensitive to the mood of the laobaixing (common man) on the street. All of these interests and more will come into play during the transition process as elders, heirs apparent, and ambitious prospects of the fourth and fifth generations all jockey for legacy-building, opportunity, influence, and power.

Some structural certainties of the transition do bear mentioning. First, the era of collective leadership will likely continue. Even as the 16th Party Congress approached, Jiang struggled in attempts to establish himself as paramount leader in the tradition of Mao or Deng. Hu Jintao or another candidate may be seen as Jiang was--that is, at the core of a collective leadership but not all-powerful, at least in the early years of the succession. As expected, Hu gained the party leadership and the presidency but not the head of the Central Military Commission. What this means in practice is that Hu will need to play consensus politics at the top and will be unable to take bold measures unilaterally.

Second, Jiang Zemin will retain a significant degree of behind-the-scenes influence--particularly in party politics and over foreign policy, two areas in which he has invested significant personal political resources. Indeed, the very diffusion of influence among various new leaders, with no single person able to claim absolute authority, may mean that party elders will need to stay engaged to resolve differences that arise over key decisions. Several of the key likely leaders--such as Li Changchun, Wu Bangguo, and Zeng Qinghong--owe their positions to Jiang, and he will exercise influence through them. Similarly, while he stepped down from his party posts in 2002 and his premiership in 2003, Zhu Rongji will likely maintain his influence through persons in his loyalty network, such as Wen Jiabao and Wang Zhongyu (age 70 in 2003).

But in the near term, Chinese leaders, both current and future, will focus enormous amounts of attention to the political transition process over the coming months. Much of what they do, at home and abroad, will be with an eye to solidifying their preferred outcomes in the political leadership transition. At a minimum, this probably puts a premium on "risk-averse" behavior.

WTO accession and integration. A goal coveted by Jiang Zemin and Zhu Rongji--formal entry into the WTO--was achieved by the end of 2001, but the hard work of integration, implementation, and adherence has begun. Analysts have different views of how well this process will unfold, but almost no one sees it being easy for China.

China's top leaders are counting on the WTO to expand trade and improve the economy further. From the mid-1990s to 2000, China's year-on-year gross domestic product growth rate, while impressive, had steadily declined to about 7 percent in 2000. China's leadership seems to have accepted that WTO entry will help expand trade, bolster the economy, and stimulate the private sector in China, in the process absorbing redundant labor, particularly from the uncompetitive state-owned sector, attracting foreign investment and technology inputs, and forcing much-needed reform and restructuring of the Chinese economy. Most studies foresee a dramatic increase in China's trade numbers overall and suggest the leaders' wager on the WTO will pay off over time.

But the 3 to 5 years following WTO entry will not be all easy ones for the entire Chinese economy. Some sectors--such as producers of textiles, light industrial goods, and toys; telecommunications; and foreign-invested, export-oriented producers in general--that are already engaged and competitive in the international economy will benefit from WTO entry, but others will profit less.

Some harsh light will be thrown on a system in which banks have propped up ailing industries with loans, and state-owned enterprise employees and retirees have come to expect certain social benefits from the state. WTO entry will prompt a surge in agricultural exports to China, especially from the United States, which will easily outmatch China's inefficient agricultural sector. In addition, China's concessions on banking, insurance, financial services, and retail/wholesale distribution services will result in a flood of new, proficient foreign businesses in these sectors. Some of China's "smokestack" industries, especially automobile production, will likely suffer from WTO entry. The global economic decline of 2001-2002 also put added pressures on the Chinese economy as some of its export markets shrunk just as the country entered the WTO.

In addition to potential economic dislocation and its socioeconomic consequences, China's leaders will need to monitor WTO implementation and adherence, which over the longer term may be the more difficult challenge. In particular, a range of barriers to market entry, such as local fees, licenses, and distribution bottlenecks (long a part of doing business in China) probably will persist and slow the expected pace of economic restructuring among inefficient industries.

The bottom line for Chinese leaders is the need to focus on careful management of WTO entry and implementation. This process will absorb their energies for its importance to stimulating the economy, avoiding internal dislocations and external tensions, and continuing to deliver the economic good times to most Chinese. Alternative outcomes could spell serious trouble for the Chinese economy and, ultimately, the Chinese Communist leadership.

Socioeconomic and political ills. Beyond the issues of WTO entry lie far larger domestic policy questions that will be infused into the ongoing political transition. China's remarkable transformation over the past 20 years has presented the leadership with new and difficult socioeconomic challenges. Such problems inevitably would accompany rapid modernization, but questions arise over whether the nature of the Chinese political system permits it to respond adequately to these challenges. Poor leadership response undermines the legitimacy of local and central government officials and further erodes popular confidence in the current crop of CCP leaders. China's leaders seem to have no illusions about this and have tried, with varying degrees of success, to counter some of the egregious ills where they can, such as dealing with corruption within the military and party.

But other problems will prove even more intractable and will have to be the focus of leaders' attention in the coming years. In addition to dealing with rampant corruption within its own ranks, the Chinese leadership has also taken steps--such as the major "go West campaign" for development of China's westernmost regions--to address the yawning gap between rich and poor in China and between the more advanced coastal provinces and the far poorer and more backward regions of the inland provinces. China's industrialization of the past 50 years, coupled with the spectacular growth and modernization of its urban areas, has led to serious environmental problems nationwide, even to the point of potentially constraining economic growth in some areas. Chinese leaders only belatedly offered more honest acknowledgments of their human immunovirus/acquired immune deficiency syndrome (HIV/AIDS) and severe acute respiratory syndrome (SARS) epidemics. These crises reflect both a lack of transparency in public health information and a larger breakdown in China's healthcare system. Many of China's most pressing socioeconomic problems fuel the growth of the country's itinerant floating population, which in turn further exacerbates social ills at the local level.

In recent years, economic and social tensions have led to an increase in the incidence of protests, riots, and other, more aggressive expressions of alienation and discontent in the Chinese population. Local unrest among urban workers and countryside farmers is not uncommon and usually occurs in response to economic slights and local government excesses and corruption. Disaffection and a sense of moral decay have led some to seek spiritual solace in ways banned by the state--in unsanctioned houses of worship or with groups such as the Falun Gong. But China also faces more troublesome unrest in the form of separatist groups--such as in the far western province of Xinjiang--some of which have turned to terrorism as a political tool.

In short, over the 2 years of political transition and beyond, Chinese officials have a raft of domestic problems to address, problems which are both a target and a result of China's modernization plans. Leaders will need to watch vigilantly developments in these troubled and fraying spots in the country's social and political fabric.

Party reform and political change. While addressing these most immediate domestic concerns, which are mostly outside the party, the Chinese leadership will also need to grapple with reform from within. No one but the staunchest ideologues in China today believes that the party has any compelling and cohesive ideological message to offer the people. The party leads not by example but by a mixture of coercion, delivery of economic growth, and the absence of a viable alternative. As a result, the party has struggled to establish a new relevancy in a transformed China before its very successes in the socioeconomic spheres totally undermine what little political legitimacy it still has.

These issues and the problems that they pose form a core set of issues for the leadership to address. In particular, Jiang Zemin and his supporters have worked to reshape the party's ideological image, in many ways rendering it hardly recognizable to the conservative communist old guard. The goal is apparently to find a way to bolster party leadership and legitimacy in new and more complex times, while sloughing off the stale irrelevancies of Marxist-Leninist-Maoist thought.

The party has taken a number of interesting steps to deal with this dilemma. Most prominent in this effort has been Jiang Zemin's promotion of the Three Represents as his principal contribution to the Chinese Communist ideological canon. The thrust of the Three Represents is to call on party members to be more representative of the advanced productive forces of society, of advanced culture in China, and of the fundamental interests of the majority of the Chinese people. Interpretations of this campaign suggest that it is Jiang's effort to make the party more relevant and flexible in changing times.

Another aspect of this effort was Jiang's announcement in July 2001 that henceforth private entrepreneurs (namely, capitalists) would be welcomed into the party. In another interesting move, in 2000, the Central Party School, under the leadership of president Hu Jintao, was tasked with the job of examining how to transform the party from a "revolutionary" one to a "national" or "governing" one.

In short, the Chinese Communist Party is going through a serious identity crisis, the outcome of which remains uncertain. Because it can affect the very legitimacy and survival of the party and its elite, it will be a topic of enormous importance and sensitivity for China's highest leaders in the coming months and years.

External Concerns

While the lengthy and complex menu of domestic challenges noted above will be the main focus of Chinese leaders' energies for the next several years, important external concerns cannot be ignored. To the degree U.S.-China relations will affect the leadership transition, at least two key concerns bear closer scrutiny: balancing counterterrorism and counterhegemony and managing cross-Straits relations.

Counterterrorism vs. counterhegemony. Thus far, China's response to the September 11, 2001, attacks in the United States have been better than expected. China backed the relevant United Nations (UN) Security Council resolutions for the use of force against terrorism by the United States and its coalition partners, sent a delegation of counterterror and intelligence experts to consult with counterparts in Washington, and supported the idea of issuing a declaration condemning terrorism at the Asia Pacific Economic Cooperation summit meeting in Shanghai in October 2001. It may be possible to elicit further cooperation from China, mostly in the form of continued diplomatic and political support. China's voice is important in certain quarters of the international community, such as on the UN Security Council, and among its friends in Central and South Asia, such as Pakistan and Iran. It may also be possible for China to offer more in the way of intelligence sharing, though expectations on this score may be limited.

Obviously, China has its own reasons for supporting the counterterror campaign. First, Beijing is not about to block the groundswell of international support for the effort. Indeed, China has its own problems dealing with radicalized separatists in the Turkic-speaking regions of the country's far northwest province of Xinjiang, where Islamic fundamentalism is making inroads. China too shares the U.S. interest in seeing that Central and South Asia remain stable in this dynamic period for the region's security, perhaps doubly so in the case of Pakistan, a quasi-ally that Beijing has assisted in becoming a nuclear weapons state armed with ballistic missiles. China will bear an enormous responsibility if these weapons fall into terrorist hands. Clearly, China has a stake in the right outcome in its neighbor, Afghanistan, and in the restive Central Asian region more broadly.

But Chinese leaders have reasons for ambivalence as well, and a number of pitfalls may complicate their continued cooperation. For example, many aspects of the U.S.-led effort to combat terrorism are precisely those that in recent years have made China increasingly concerned about its security situation vis-à-vis the United States. Indeed, the antiterror campaign may make Beijing even more nervous. For example, Beijing can only watch with concern as the U.S.-Japanese and U.S.-Australian alliances are revitalized and strengthened to deal with terrorists and the states that harbor them. Likewise, a growing U.S. military presence in Central Asia and improved relations with Moscow strengthen America's global reach and will likely constrain or even reverse years of meticulous Chinese diplomatic efforts with Russia and Central Asia. In addition, as a staunch defender of traditional notions of state sovereignty, Chinese strategists probably will not acquiesce so readily to a more active or expanded interventionist military policy on the part of the U.S.-led coalition following Afghanistan.

In short, the Chinese leadership can do little at the moment but watch as the international counterterror effort unfolds. On the one hand, it spells opportunity for improved U.S.-Chinese relations, an outcome Jiang Zemin and most other Chinese leaders eagerly seek for their own benefit and for that of China. On the other hand, the expansion of the campaign in certain ways will require deft Chinese diplomacy at home and abroad to strike the right balance between attaining Chinese interests and not conceding all the initiative to a hegemonic United States. Finding and sustaining that balance will be a core feature of Chinese foreign policy and its dealings with Washington for the foreseeable future and color the debates over leadership choices in Beijing over 2002-2003.

Managing cross-Strait relations. Of all external issues, none has a greater ability to affect leadership credibility in China than managing the relationship with Taiwan. Stakes are extremely high; there is so much to gain from success and even more to lose from failure. As an issue of constant concern and enormous political sensitivity to the Chinese leadership, management of the Taiwan question will be an important factor in determining who will lead the mainland in the years ahead. As such, little to no political capital is to be gained through conciliatory approaches toward Taiwan. To the degree Taiwan-related issues will affect a fourth-generation candidate's credentials for leadership, a tough or hardheaded view probably will be preferred.

That said, a more nuanced, multifaceted, but still tough Chinese approach toward Taiwan has emerged in recent years that appears to have support among China's leaders and that seems likely to continue through the political transition of 2002-2003. That the Chinese leadership apparently believes it is working is one important vote in its favor. But in the current risk-averse environment of transition politics, the more subtle policy toward Taiwan--favoring political and economic "carrots," while still sharpening the military "stick"--would be preferred to any dramatic shifts of course, either more coercive or more conciliatory. If anything, Chinese leaders may be increasingly willing over the next 2 years to exercise economic and political levers--without abandoning the steady military buildup--to entice and co-opt different Taiwan-based constituencies into sharing a vision of cross-Strait relations that is closer to Beijing.

Recommendations for U.S. China Policy

Having reviewed some of the likely future leaders of China and considered the issues that will occupy their attention over the course of 2002-2003, we can turn to some thoughts of how American policy can best take advantage of the situation to achieve outcomes favorable to U.S. interests.

Connections to the leadership. Given the nature of Chinese leadership transitions, Washington should keep channels open to the retiring elders of Chinese politics, as they will retain considerable authority in the years ahead, especially in the early years of the fourth generation. Jiang Zemin and Zhu Rongji will remain influential, and other third-generation leaders of experience, such as Li Ruihuan and Li Lanqing, may retain their posts on the Political Bureau Standing Committee and exercise important advisory functions.

But further efforts should be made to expand contacts with fourth-generation leaders who are likely to take up key posts. Following the 16th Party Congress in 2002 and the 10th National People's Congress in March 2003, envoys should be dispatched to meet with some of the new leaders. The management of relations with the United States will likely stay in Jiang Zemin's portfolio, so his equities will need to be acknowledged, but he will want to have his protégés gain the experience and favor of increased interaction with American leaders.

China's strategic concern of internal stability. Over 2002-2003, Chinese leaders will be consumed with issues of internal concern: undergoing the political transition, facilitating economic growth and restructuring, dealing with the many socioeconomic downsides of rapid modernization, controlling social and political disgruntlement, including separatist and terrorist activity, and remodeling the party. All of these issues are of fundamental importance not only for the stability of China but also for the legitimacy, viability, and even survival of the party itself. In this sense, China's domestic problems are of a strategic nature to its leaders and are taken very seriously in Beijing.

Washington should more creatively integrate this understanding into the policy calculus toward China. First, a clearer understanding of the enormous domestic challenges that China faces would bring some nuance to the concern with a rising China. U.S. security policy toward China, which focuses primarily on the Taiwan question and Chinese power projection capabilities, needs to be rebalanced in a way that takes greater account of China's domestic challenges and the security implications that may arise from them for the United States.

Second, the U.S. approach toward China should take into account the sense of domestic fragility that will pervade Beijing's thinking over 2002-2003. On the one hand, that should give the United States a good deal of leverage since Chinese leaders will recognize the criticality of a stable relationship with Washington. On the other hand, if Washington is perceived as taking advantage of Beijing's internal difficulties or probing into areas of vulnerability, Chinese leaders would have little choice but to react harshly.

Much could be gained from a policy that openly acknowledges the strategic nature of China's internal challenges and offers various forms of assistance to the Chinese government to help deal with them. These programs will need to be carefully designed to foster the kind of evolutionary change the United States would like to see in China without appearing to target party rule itself. Such assistance could promote:

proper WTO implementation, adherence, and adjudication

expanded opportunities for entrepreneurialism, venture capitalism, and innovative business management practices

support for law schools, lawyer training, and rule of law initiatives

corporate good governance, transparency, and accountability

professional, accountable law enforcement and judiciary practices

development of community-based, quasi- or nongovernmental social and civic service organizations

improved customs and export control practices.

Engaging China in a new security era. The counterterror framework guiding U.S. security policy may offer new opportunities to draw China into a more cooperative and constructive international outlook more consistent with American interests. U.S. policy toward China can link numerous problematic bilateral issues to the broader framework of counterterrorism. The trick will be to convey the counterterrorism message in a way that gains greater Chinese support across a range of other issues that bedevil a productive U.S.-China relationship. For example, China's proliferation practices remain a difficult problem for U.S.-China relations. The message from Washington should be that if Beijing wishes to make an even stronger contribution to the fight against international terrorism and to improve its ties with the United States at the same time, it should proactively stem its proliferation practices with Iran, Iraq, North Korea, and Pakistan, given these government's known relationships with terrorist movements in Central, South, and Southwest Asia.

Similarly, the United States should seek even stronger acknowledgment from China of the value of the U.S.-led alliance system as an instrument for regional stability. In the current context, the alliance's ability to respond to threats emanating from Central and Southwest Asia provides an international public good from which Beijing clearly benefits. The new security paradigm also offers Washington a chance to promote more supportive policies from China on questions of sovereignty, intervention, peacekeeping, peace enforcement, and the role of great powers in rebuilding more stable regimes from failed states.

It is also an opportunity to engage Chinese leaders more vigorously on questions of human and political rights in China, especially in developing common understandings to distinguish clearly between a terrorist and those individuals and entities that are peacefully seeking more latitude and flexibility in their political relationship with Beijing, including Taiwan. On the Taiwan question, Beijing should be reminded that the U.S. commitment to a peaceful resolution is stronger than ever, as is its commitment to supporting the growth of democracies and markets, the most potent long-term tools to counter the terrorist threat to Western political systems and economies. Beijing should be strongly encouraged to open a political dialogue with the leadership of Taiwan and continue to place emphasis on economic and political means to resolve cross-Straits differences.