Although many experts now view Beijing's military actions as an exercise of intimidation, they tend to overlook the fact that China's "bluff" could have easily spun out of control. Threats to invade Taiwan, test firing of ballistic missiles dangerously close to cities and explicit warnings to the American Navy to stay clear of the Taiwan Strait - an international waterway - sent shock waves throughout East Asia.
Even the Japanese, who are usually cautious in their dealings with China, lodged strong official protests and some politicians called for a freeze on further economic credits. That the Taiwan crisis did not deteriorate into full-scale warfare has reassured East Asian countries of the stabilizing value of the American military presence when it is backed by a firm U.S. foreign policy.
Yet China's brazen actions ought to be a wake-up call to American policy makers. Managing peaceful relations with this centralized authoritarian government that controls one-fifth of the world's population during a period of unprecedented economic and social change is the greatest challenge to Asian stability in this decade. The challenge is magnified by China's demand for a greater international role commensurate with its fast-growing economy.
The period ahead is risky and uncertain as China faces a leadership succession. Former U.S. Ambassador James Lilley was correct when he told the Senate Foreign Relations Committee, "The Chinese transitional leadership is paranoiac and can be dangerous in dealing with the threat of democracy (Hong Kong, Taiwan)," and its spread on the mainland.
The growth of nationalism is on the rise, spurred by the increasing influence of the People's Liberation Army on China's foreign policy - chauvinism backed by military power, resentment of decades of humiliation by foreigners and ambitions to protect its legitimate "extended sovereignty" over Hong Kong, Taiwan and vast areas of the South China Sea which are in dispute with several East Asian states.
Today, China's largely obsolete military is not a threat to the United States. But this situation is changing as China aggressively modernizes its military with foreign technology, including power projection forces and expanded nuclear capabilities. It has already tested a missile which can hit the West Coast. Recent congressional testimony by former CIA Director R. James Woolsey provides an ominous glimpse of a future U.S.-China relationship turned sour: Chinese ballistic missiles used for blackmail, terror and to drive wedges between the U.S. and its friends in Asia.
The administration's China policy of constructive engagement sounds good, but has never gone much beyond the rhetoric and lacks strategic substance. Instead it has followed an omnidirectional course that reacts to domestic interest groups which criticize China on issues ranging from human rights and unfair trade practices to the international proliferation of nuclear and other dangerous technologies.
This approach is deeply resented by Chinese leaders. Republicans have offered no viable alternative and some who advocate "containment" or "confrontation" play into the hands of militarists in Beijing who are convinced that the U.S. sees China as the future enemy.
This may well become a self-fulfilling prophecy if Washington fails to confront the reality of China's emerging role as a major force in regional and global politics. The Clinton administration should make it crystal clear to Beijing that the U.S. supports a greater international role for China, but only if it acts responsibly and jettisons its policies of political-military intimidation. These and other strategic issues should be tackled via an institutionalized high-level dialogue, something that is overdue.
Firm principles must be established with China up front. Access to capital, technology and markets to facilitate China's growth and prosperity are contingent on ending its aggressive policies and a determination to halt its crude trade practices, human rights abuses and dangerous proliferations.
The United States cannot implement such a strategy alone. Japan must use its enormous economic leverage as well, even if it takes some heat from China. Beijing will soon get the message. China's leaders are pragmatic and they respect power.
Does the U.S. have the leadership ability to engage such a strategy? Perhaps we will not know until after the elections. If our China policy fails, the only alternative may be to construct a solid impenetrable dome covering all of America.