Briefing Book

An Insider's Guide to Washington's China War

Where and how the battle lines are being drawn.

When it comes to U.S.-China policy, Washington is broadly separated into two camps: the "functionalists" and the "strategists." And as the two countries have met in Washington this week, the internal debate has begun to unfold. U.S. President Barack Obama told his counterparts that Washington and Beijing should be "partners"; Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner wrote a joint op-ed in the Wall Street Journal calling for broad "strategic level discussions." Make no mistake: The functionalists are winning.

The functionalists tend to be economists and those concerned with the U.S.-China economic relationship. The United States and China are so economically intertwined, the functionalists argue, that they ought to be strategic partners as well. Win-win cooperation -- not zero-sum competition -- is a very achievable goal. Barriers between the two countries are transactional, and any tensions are usually due to mere misunderstanding. Yes, there are profound disagreements, but fix the practical problems, and many obstacles toward a fruitful partnership will eventually melt away. In fact, they will have to melt away -- out of necessity on both sides. As Clinton and Geithner put it, quoting a Chinese proverb, "When you are in a common boat, you need to cross the river peacefully."

"Strategists," however, don't see quite such a rosy picture. For them, the U.S.-China relationship is one of strategic competition -- an irreversible rivalry already well under way. Sure, Washington and Beijing ought to improve their interactions and mutual understanding to minimize friction. But any such cooperation is tactical, nothing more. Underlying all bilateral interactions, the strategists believe, is a fundamental clash of interests and values that can be managed but never solved unless the values and interests of either Washington or Beijing change -- and that's highly unlikely.

Amid global recession, at a time when China owns a hefty sum of U.S. Treasury bonds, it's easy to see why the functionalists have the upper hand. The Chinese economy is ticking at an enviable pace that many hope will spur global (and U.S.) growth back to life. Encouraging economic growth in China has the doubly touted benefit of accelerating the prospects for domestic political reform. China could, over time, become a willing participant in -- and even defender of -- the  liberal regional order in Asia, the functionalists believe.

But there's a logic leap here, overlooked to America's peril. As China grows richer, it is the state-controlled sectors of the economy that are growing more powerful, not the independent private sector -- which has been deliberately suppressed. Of the roughly 1,500 companies listed on the Shanghai and Shenzhen Stock Exchanges, less than 50 are genuinely private. As much as 95 percent of Beijing's $586 billion economic stimulus package, announced last November, will go to state-controlled enterprises. This makes China Inc. more powerful but does not push it closer to political reform. On the contrary, it has offered the Chinese Communist Party better and more resources to entrench its power and position in the country's economy and society.

The implications go well beyond China's borders, strategists warn. As Beijing's power grows, it will be less inclined, not more, to uphold the current regional order in Asia. In a recent study of 100 recent articles by more than two dozen of China's top strategic thinkers, I found that four of every five articles spoke of circumventing, reducing, or superseding U.S. power and ideas in Asia. China views the liberal order as one designed to preserve American hegemony in the region. Even if Beijing has so far benefited enormously from rising up within the existing order, it might not be so friendly to it once it's risen far enough.

Washington's strategists cannot prevent China's rise, nor do they want to. But they do argue that the country's strategic ambitions must be constrained, especially in Asia. That will mean enmeshing China in the regional hierarchy that is underwritten by U.S. alliances with Japan, South Korea, Australia, Thailand, the Philippines, Singapore, Indonesia, and increasingly, India. Acutely aware of this existing dynamic, China prefers to deal either with Washington or Asia -- never both.

This is why the "G-2" approach to U.S.-China relations is more dangerous than reassuring. Strategists fear that such a top-level dialogue of equals, discussing non-economic issues such as security and regional institutions, would offer Beijing precisely the strategic billing it desires from Washington -- with little in return. Already, U.S. allies in Asia -- basically the whole region minus Myanmar, North Korea, Cambodia and Laos -- fear that U.S. leverage over Beijing will be too easily given away.

As advantageous as functionalists' win-win U.S.-China cooperation may seem, the hidden loser may well be Asia, where most states see the current U.S.-led power structure as the best guarantee of continued peace and stability. Rushing into a G-2 approach - the kind that Washington functionalists prefer -- would jeopardize much of this.

Unfortunately, so long as economic matters dominate, functionalists may well win the day. Others in Washington and throughout Asia can only hope that too much U.S. leverage on China is not whittled away in the meantime.

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Briefing Book

Sound the Alarm

How to stop Burma from getting nukes.

When senior Chinese officials arrive in Washington on Monday for bilateral talks on strategy and the economy, they will find a new item near the top of the agenda: U.S. concerns that North Korea is supplying nuclear weapons technology to Burma. U.S. Secretary of State Hillary Clinton warned of this possibility speaking at the Association of Southeast Asian Nations forum this week in Thailand -- a threat she said the United States takes "very seriously." So seriously, in fact, that Clinton will raise the topic when she meets with her Chinese counterpart, State Councilor Dai Bingguo, on Monday, according to officials at the State Department and in Congress. As one official involved in preparations told me, "Burma is very much on the agenda."

The evidence of malfeasance so far is slight: a North Korean ship bound for Burma that turned back when shadowed by the U.S. Navy, photos of tunnels being excavated near the new Burmese capital, and a handful of suspicious export cases. But the motive is there, a government official who monitors the country told me. "Burma's leaders are paranoid and it makes sense that they might look for security in a nuclear weapon," he said. And if the history of proliferation teaches us anything, it is that the best way to stop a covert nuclear program is by ringing the alarm bells early and often.

Indeed, the early stages of what might be Burmese nuclear attempts look eerily familiar. The first leaks about Israel's nuclear program in the late 1950s, which involved several dubious explanations for a suspicious construction site in the desert, were ignored -- and Israel eventually developed the bomb. The same story held true for both India and Pakistan, where results might have been different had the international community reacted to suspicious procurement activities. Then, of course, there is Iran, where the desire for a nuclear weapon dates back to the mid-70s and now it may be too late to stop them. Signs that the present rulers of Iran were buying nuclear technology on the black market in the late 1980s were dismissed because U.S. intelligence thought a bomb was beyond Iran's capabilities.

Today in Burma, some of the basic elements for a nuclear program are, in fact, already in place. After several years of discussions, Russia signed a deal in 2007 to provide Burma with a light-water nuclear reactor, facilities for processing and storing nuclear waste, and training for 300 to 350 Burmese scientists set to work there. While the proposed reactor is not suitable for a weapons program, the deal is still a foot in the nuclear door for one of the world's most repressive and reclusive regimes. Rosatom, Russia atomic agency, told the Associated Press recently that there has been no progress on the deal.

But it's Burma's relationship with North Korea that is causing heartburn now. North Korea has been selling conventional weapons like artillery and small arms to Burma for years; the Burmese tend to pay in badly needed rice. But worries that the relationship moved into the nuclear arena surfaced two years ago after North Koreans were spotted unloading large crates and heavy construction equipment near the site for the planned Russian reactor. Concerns increased in June when photographs and videos appeared in the press showing that North Korean helped dig hundreds of vast tunnels in Burma between 2003 and 2006, in an operation codenamed "Tortoise Shells." The purpose of the tunnels, which were built outside the new Burmese capital of Nay Pyi Taw, remains unknown.

It all might seem like thin gruel for accusing the two countries of embarking on a nuclear weapons program, no matter how obliquely Clinton leveled the charge. And there is very little chance that Burma is anywhere near having the bomb. But if these tiny clues add up to nuclear ambitions, there is indeed cause for alarm -- not least because the world is simply not well-organized to contain nuclear weapons. The Nuclear Non-Proliferation Treaty provides no punishment for signatories who are caught, and U.N. resolutions do not carry sufficient force to deter would-be proliferators. Iran is Exhibit A for the failure of the NPT and U.N. sanctions. The International Atomic Energy Agency? It's hardly equipped to deal with smuggling activities and procurement networks. Smuggling by Pakistan's rogue scientist, Abdul Qadeer Khan, eluded the IAEA for nearly three decades, during which time he helped his own country, North Korea, Iran, and Libya all obtain nuclear material.

So given the gaps in the international system, cooperation among key countries, particularly nuclear-weapons states, is essential for deterring nuclear aspirants. In this case, the United States and China are the lucky ones who will have to sort out how to keep North Korea from giving Burma nukes.

Fortunately, no country has more leverage with North Korea than China, which supplies much of the food and oil that keep the regime in Pyongyang afloat. So far, China has been reluctant to exercise its influence because Beijing fears that destabilizing North Korea will send a massive wave of refugees streaming across the border. But Clinton will try to persuade China that the time for diplomatic timidity is over. Kim JongI Il, the ailing North Korean dictator, needs to understand that helping Burma's military junta obtain nuclear weapons technology is a step too far. The two countries should share intelligence between them and with the IAEA. Tough sanctions and interdiction should be on the table to punish and isolate the transgressors.

There is reason to be hopeful that early efforts can do the trick. Past attempts to stop proliferation have been successful when the United States and others have acted on the first intelligence warnings about nuclear aspirations in Taiwan, South Korea and Ukraine. "None of these countries completed the programs it began; all were quietly nipped in the bud," Henry Sokolski, executive director of the Nonproliferation Policy Education Center and a former Pentagon counter-proliferation official, wrote in 2004 in The Weekly Standard. Quiet U.S. diplomacy and threats of exposure helped prevent those threats from ever materializing.

For the Obama administration, early success with Burma would have another silver lining, on top of keeping Burma nuke-free: The effort could serve as an example for what might happen to Iran should it fail to turn back from its own nuclear ambitions. And while a nuclear weapon may be merely a mirage in Burma, it is a tangible possibility for Iran. That makes the test case all the more urgent.

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