Problems with Current U.S. Policy.

The main problem with current China policy is the growing tendency in the U.S. to overestimate Chinese military capabilities and China's potential threat to U.S. national security. Current plans to proceed with National Missile Defense (NMD) and Theater Missile Defense (TMD) systems are largely based on this overestimation of the China threat.

Given that NMD currently enjoys a fair amount of support on both sides of the aisle in Congress, it is likely to be implemented in some form. The Bush administration contends that the capabilities of NMD will be sufficient to provide protection from "rogue" states but modest enough to not threaten the Russians and Chinese. From the Chinese perspective, however, NMD represents a substantial threat to its national security. Chinese officials argue that Washington has greatly exaggerated the rogue state threat, and there is widespread suspicion that NMD's real objective is to neutralize China's nuclear deterrence capability.

Indeed, the proposed NMD system would be more than adequate to eliminate any deterrence credibility from China's meager ICBM force. This would leave China without any second-strike capability in the event of a confrontation with the United States. If the U.S. proceeds with NMD, then China will likely decide to improve its own nuclear capabilities. One option for China would be to increase its arsenal of missiles in an attempt to overwhelm any missile defense the Americans build. China could also upgrade its missiles with multiple-entry warheads, thereby increasing the number of warheads aimed at the United States. It might even do both. However, any plan by China to increase the size or capability of its nuclear forces would likely also increase sentiment among U.S. policymakers that China is indeed a potential threat to America's security. Thus, the deployment of NMD could easily trigger a series of events that would trap the U.S. and China in a classic security dilemma of mutual misperceptions.

Extending a missile shield to Japan and Taiwan may also be destabilizing. Washington regards TMD as necessary in northeast Asia to defend Japan (and U.S. forces stationed there) against a North Korean missile threat. A TMD system could also help Taiwan resist a potential attack from China. (See Missile Defense and China by Wade Huntley and Robert Brown, FPIE January 2001.) Beijing, which sees TMD as a threat to its territorial integrity, argues that such a system would encourage Taiwanese independence and otherwise foster the political separation of Taiwan from mainland China. China's most obvious response would be to increase the number of its battlefield missiles, so it could overwhelm any Taiwanese missile defense system. Less obvious to many American observers is that China is also concerned about TMD in Japan. Within China's military, TMD is seen as a potential first step in the remilitarization of Japan. Far from creating greater stability in the region, TMD systems in East Asia may set off an arms race.

Arms sales to Taiwan also remain problematic. The Taiwan Relations Act (TRA) commits the U.S. to offer arms for Taiwan's self-defense. Over the past decade the U.S. has sold Taiwan 126 F-16s as well as Patriot antimissile systems, eight Knox-class frigates, seven Perry-class frigates, M-60A3 tanks, and electronic equipment. Combined with arms purchases from France, these sales have substantially improved Taiwan's defense capabilities. The Taiwanese government is currently seeking further arms purchases from the U.S., including four Aegis-class destroyers, designed to provide air defense for Taiwan's Navy. Other items reportedly on the list include submarine hunting aircraft, missiles, AIM-120 air-to-air missiles, ship-to-ship missiles, antiaircraft missiles, and submarines.

The Aegis-class destroyers have come to assume enormous symbolic value as a litmus test of the degree of U.S. political support for Taiwan. From both the Chinese and Taiwanese perspectives, any sale of Aegis destroyers would signal that the United States is moving closer to a de facto military alliance with Taiwan, rendering Washington a potential enemy in Beijing's eyes. Ironically, for all the controversy over the proposed sale, the Aegis is not necessarily the best military choice for Taiwan. These ships will do little to counter China's newer submarines, which represent Taiwan's primary threat. Taiwan would be better off buying antisubmarine weapons, which are also less politically offensive to Beijing.

Worst-case scenarios and ideological considerations are pushing the U.S. in the direction of providing Taiwan with more than is necessary for its defense. This creates a negative reaction in China and reinforces Beijing's perception of the U.S. as a potential enemy. China, in turn, is taking a more hard-line stance toward the U.S.--thereby confirming Washington's suspicions of Beijing.

Washington is also moving away from its traditional policy of deliberate ambiguity toward a more clear-cut commitment to Taiwan's defense in advance of any actual crisis. This limits future U.S. options and increases the possibility that the United States and China will stumble into a crisis that neither country wants or desires. This is especially worrisome in light of renewed congressional pressure to end or sharply curtail military exchanges between the U.S. and China. These exchanges have come under criticism, because they are perceived by some as rewarding China, despite its bad human rights record, and because the exchanges have not produced as many positive results as had been hoped. However, mutual misperceptions about military capabilities and intent are most likely to occur in the absence of communication. The April 2001 spy plane controversy, for example, was aggravated by a lack of trust on both sides. If the Bush administration decides to end the exchange program, there is a risk of fostering even greater mistrust between the two powers and increasing the chance of more dangerous incidents in the future.

Key Problems

* Washington is moving away from its policy of deliberate ambiguity toward Taiwan's defenses. This limits future U.S. options and increases the possibility that the United States and China will stumble into a crisis.

* U.S. perceptions tend to exaggerate the extent of Chinese capabilities.

* U.S. policy on TMD and NMD has the potential to be destabilizing.