LITMIR.BIZ

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missiles.²

      Chinese planners ultimately proved less interested in buying military hardware than in gaining access to Western technology of all kinds. Within certain limits, the Americans were happy to oblige. Soon after Reagan’s election in 1980, US officials indicated their willingness to relax controls on high-tech exports to China and to start treating it, as one put it, “as a friendly less-developed country and no longer as a member of the international Communist conspiracy.”³ In 1983, the Reagan administration announced that, for purposes of granting export licenses, the US government would henceforth treat China as “a friendly, non-aligned country.” Among the commodities now deemed suitable for export were computers, integrated circuits, precision measuring devices, and semiconductor manufacturing equipment.⁴ At the same time as it relaxed its own controls, Washington worked with its allies to synchronize national policies and ease collective export restrictions.⁵

      According to one former State Department official, the “driving force” behind this loosening of controls was “overwhelmingly strategic, it had nothing to do with commercial factors.”⁶ As far as the US government was concerned, the object of the exercise was to strengthen China rather than to promote the fortunes of American companies. Still, the shift in policy was undeniably good for business. By the end of the 1980s, US high-tech exports to China (including both dual-use and purely commercial items) had increased in value by a factor of thirty.⁷

Technology transfer took other forms as well. Even before the resumption of formal diplomatic relations in 1979, the Carter administration agreed to permit several hundred Chinese students and scholars to attend universities and participate in research in the United States. These opportunities proved even more attractive than had been anticipated, and the number of visas granted for educational purposes more than tripled over the course of the 1980s.⁸ During this period, a total of around 80,000 Chinese citizens came to study in the United States, the vast majority of them in science and engineering fields. In 1989, roughly 43,000 were still enrolled and another 11,000 had become permanent residents. The rest had returned to China to teach others, conduct their own research, and help rebuild a scientific establishment ravaged by years of political turmoil.⁹

      American policy-makers took other steps to assist China in strengthening its economy and thus the foundations of its long-term national power. In 1972, the Nixon administration lifted a twenty-three-year embargo on all commerce with the PRC, clearing the way for an increase in bilateral trade from close to zero to over a billion dollars by the end of the decade.¹⁰ In 1979, the Carter administration announced its intention to grant China most favored-nation (MFN) status, lowering tariffs on its exports to the same level as those imposed on any other trading partner.¹¹ Coinciding with the launch of Deng Xiaoping’s program of economic “reform and opening up” in the same year, this enabled a further increase in two-way trade, which grew by an order of magnitude over the course of the 1980s.¹²

      The Carter administration also helped China obtain much-needed capital by supporting its entry into the World Bank and the International Monetary Fund. In keeping with his preference for private enterprise, Ronald Reagan subsequently expanded the use of domestic institutions like the Export–Import Bank and the Overseas Private Investment Corporation to help finance the export of American products to China and to encourage investment there by US firms. As with its relaxation of restraints on technology transfer, these moves reflected the judgment contained in a 1984 National Security Decision Directive that it was in the nation’s strategic interest to “lend support to China’s ambitious modernization effort.” In the words of a 1981 State Department memorandum: “[O]nly the interests of our adversaries would be served by a weak China that failed to modernize.”¹³ With significant assistance from the United States, China had begun its transformation from a poor and backward nation into a global manufacturing and export powerhouse.

For as long as the Cold War was underway, American policy-makers generally downplayed or ignored the repressive, illiberal character of the CCP regime. In a widely read 1967 article in which he made the case for easing Maoist China out of its “angry isolation” and coaxing it back inside “the family of nations,” Richard Nixon argued that “the world cannot be safe until China changes.” It followed that, “to the extent that we can influence events,” the aim of US policy “should be to induce change.”¹⁴ At least so far as its domestic institutions were concerned, however, once in office, Nixon explicitly rejected the idea of trying to change China. As he told Mao during their first meeting: “[W]hat is important is not a nation’s internal philosophy. What is important is its policy towards the rest of the world and towards us.”¹⁵

      Despite significant differences in outlook, for all practical purposes, Nixon’s successors followed a similar path. Jimmy Carter wanted to make the defense of universal human rights into the centerpiece of his foreign policy, and Ronald Reagan sought to rally the free world against the evils of Communism, but both ultimately bowed to the necessity of staying close to China in order to offset the greater threat posed by the Soviet Union.

      As Deng’s economic reforms began to unfold, it also became easier to believe that political liberalization could not be far behind. Following a 1984 visit during which the authorities censored portions of his speeches in which he discussed the virtues of faith and freedom, Reagan nevertheless concluded that China’s embrace of markets meant that it was already merely “a so-called Communist country.”¹⁶ The president’s optimism about China’s direction was mirrored in shifting public attitudes. Even after the initial exchanges of the 1970s, a majority of Americans remained highly skeptical of a country that was just beginning to emerge from the ideological frenzy of the Cultural Revolution. With the normalization of relations, and the launch of market-oriented reforms, perceptions of China changed almost overnight. In 1978, 67% of those questioned in one poll regarded the country unfavorably, with only 21% expressing a favorable view. One year later, the ratio was almost completely reversed. By the spring of 1989, the figures were 72% positive and only 13% negative.¹⁷

If China was seen to be evolving in generally favorable directions, it was also still perceived to be poor and weak, and likely to remain so for some time. The prospect that it might someday pose a threat to the United States or its regional allies thus seemed doubly implausible. Nevertheless, from the start, there were occasional expressions of concern about what the future might hold. In a 1975 conversation with President Gerald Ford, Henry Kissinger mused of China that “in 20 years, if they keep developing the way they have, they could be a pretty scary outfit.”¹⁸ Asked in 1983 to assess the impact of proposed arms sales and technology transfers, the Joint Chiefs of Staff concluded somewhat more precisely that, while the risks were real, they were also still relatively distant. Intelligence experts expected that the People’s Liberation Army (PLA) would take nearly a decade to fully absorb whatever new technologies it might acquire, meaning that the modernization of its ground forces would not “appreciably affect US and allied security interests through the 1990s,” while improvements in its naval capabilities were “unlikely to have any significant impact on US forces in the region during the remainder of this century.”¹⁹

      Attempts to take a broader, longer-range view were few and far between, but there were some. In 1987, the Pentagon’s Office of Net Assessment sponsored a study that aimed to project the worldwide distribution of economic capabilities twenty years into the future. The findings were striking: based on the size of its population and plausible improvements in productivity due to technological upgrading and market reforms, by 2010 China might have the world’s second largest economy. If it began to invest even a small fraction of its newfound wealth in its armed forces, in two decades China could also “become a superpower, in military terms.” Whether at that point Beijing’s strategic interests would continue to align with those of the United States was an obvious but unanswerable question. Having highlighted the PRC’s potential to transform the global balance of power, the report concluded prudently that “large uncertainties attach to China’s future.”²⁰

Engagement 2.0

In the span of

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