January 1996

Relations between the United States and China are becoming frayed, with serious risks for both countries. Although the Clinton administration has wisely resisted the most reckless proposals, its policies have been inconsistent and sometimes inept. Domestic developments in the United States, China, and Taiwan are converging to create a dangerous mixture. Hard-line U.S. policies based on the assumption that China poses a strategic, economic, and cultural threat could create a tragic, self-fulfilling prophecy. Instead of adopting a confrontational policy, the United States should intensify economic relations. Those relations have a liberalizing influence that increases the likelihood of additional economic and political reforms. Additionally, the United States should encourage the development of a balance-of-power security system in East Asia, with Washington playing a low-key, supportive role.