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Constructive Engagement:
An Examination of America's Economic Policy
Towards China
Jason Meade
Submitted in accordance with the requirements for the degree of Masters of Arts Degree in International Political Economy

The University of Leeds
Institute for Politics and International Studies
September, 2001





The candidate confirms that the work submitted in his own and that appropriate credit has been given where reference has been made to the work of
others.
I. The Growing Importance of Economic Relations
A. "out of the nowhere…"
    1. The US embargo and Chinese withdrawal
    2. The Great Leap Forward and the Cultural Revolution
    3. Normalization, liberalization, and "strategic alignment"
    4. The Golden Age of the 1980s
    5. Tiananmen, the collapse of Communism, and the search for a new paradigm
B. "  …into the here"
    1. Deng's "nan xun" (trip south) and Clinton's new trade expansion initiative
    2. Economic recovery contributes to expanded ties
    3. The elusive national consensus
II. The View from the US
A. China as a large, fast growing market
    1. Viewed in isolation
    2. Viewed as part of the region
B. Bigger isn't always better
    1. Difficulties in the Chinese market
    2. China's overarching goals
C. The Bottom Line
D. The Rest of the Region
III. Analysis
A. Interest Groups
    1. Theory and predictions
    2. Evidence

    3. Interpretation
B. Rational Response
    2. Evidence and interpretation
C. Elite Consensus Theory
    1. The epistemic community
    2. Elite theory and elite consensus
    3. Origins of the consensus
    4. Maintenance of the policy
      a. Direct defenses
      b. Indirect defenses
IV. Conclusions
V. Appendix
VI. Bibliography


    This essay will examine the motivations behind US economic policy towards China usually known as constructive engagement (see Box 1.). It will
begin by giving
an overview of the history of USChina relations since the foundation of the People's Republic of China. This will be followed by a comparison of the
Chinese
economy to other roughly comparable economies in the region. The following section will anlayze the nature of the constructive engagement policy
and attempt to
determine how it has been maintained over more than a decade. Finally, some conclusions will be presented. This essay will argue that US economic
policy towards
China is a response to a series of notions held in common by leading decision makers in the United States, rather than to the actual demands or
conditions of the
bilateral relationship.

I. The Growing Importance of Economic Relations
A. "out of the nowhere…"
1. The US embargo and Chinese withdrawal
    Following the success of the Chinese Communist Party in the Chinese civil war, mainland China was proclaimed the People's Republic of China on
October 1,
1949. As a result of the communist success in China and the alliance between China and the Soviet Union, the main US goal in dealing with China
was "to prevent so
far as possible China's becoming an adjunct of Soviet politicomilitary power (Chen, 1994)." The American policy was to create as many difficulties
for the Chinese
government as possible, and this included denying China various beneficial trade links with the noncommunist world. USChina economic links,
which had grown
weak over decades of internal turmoil, virtually disappeared under America's containment policy. ^
2. The Great Leap Forward and the Cultural Revolution
    At the same time that the US was cutting economic links from the outside, the Chinese government was pursuing policies which had the effect of
cutting China off
from the US from the inside. After an initial burst of economic growth in the early and mid1950's, the Chinese government embarked on a series of
misguided
economic reforms which culminated in the disastrous Great Leap Forward of 195860 ("Chronology of the People's Republic of China 19491999",
2001).  This
was an attempt to produce rapid economic growth through mass mobilization of the population. However, the actual effect was to produce widespread
starvation,

death, and economic collapse. This was followed five years later by the Cultural Revolution which paralyzed the country. Conditions resembling
civil war broke out in many areas. Given the circumstances, most noncommunist economic links between China and the outside world disappeared
during
this time frame.   ^
3. Normalization, liberalization, and "strategic alignment"
    In 1972, President Nixon travelled to China to reestablish relations between the two countries. His trip was motivated primarily by a strategic
interest in
containing the Soviet Union. This interest had come to be shared by the Chinese government after the SinoSoviet split in 1959, the SinoSoviet
military engaments in
1968 and 1969, and the enunciation of the Brezhnev Doctrine in which the Soviet Union had asserted the ability to use military force to maintain
socialist regimes in
neighboring countries (Tucker, 2001: 220). These considerations, combined with the expansion of worldwide Soviet influence in the 1970s,
convinced the US and
China that a strategic alignment between the two countries would be in their mutual interest. Although Nixon reestablished links with China in 1972,
it was not until
1978, during the Carter administration, that USChina relations were officially normalized.
    In the interval between Nixon's visit and Carter's normalization, great changes had taken place domestically in China. The Cultural Revolution had
come to an end,
Mao had died, Deng Xiaoping had risen to power, and China had abandoned the radical leftist policies of the Mao era in favor of a pragmatic drive for
development  and modernization. The four modernizations (modernization of agriculture, industry, national defense, and science & technology) were
put forward by
Zhou Enlai in 1974, and Deng had proposed wide ranging economic reforms, including the allowance of foreign investment, during the Communist
Party Congress in
1978 ("Chronology of the People's Republic of China 19491999", 2001). These developments paved the way for new and growing economic links
between the
US and China.   ^
4. The Golden Age of the 1980s
    The 1980s were something of an "era of good feelings" between the US and China. There were increasing cultural contacts between the two nations,
with very
few major problems. Even popular American children's television character Big Bird went to China (Florcruz, 1998). The 1980s produced a marked
departure from
thirty years of unrelenting hostility on the part of the American public towards Communist China. While China had actually been more disliked than
the Soviet Union
in the early 1970s, by the late 1980s over 70% (see Figure 1.) of the American public was reporting positive feelings towards China. In part this was
due to the
tantalyzing vision of the vast Chinese market. Another factor contributing to warmer relations was the renewed exposure to the better aspects of
Chinese civilization.
Continuing economic and political reforms helped to continue this trend.
    While the American public was warming up to China, it seemed that strategic alignment had also been a success. Although Chinese relations with
the USSR
remained cool, tensions began to recede as Soviet leader Gorbachev sought to ensure that external relations would not interfere with his plans to
rehabilitate the
domestic Soviet economy. Finally, on the economic front, USChina relations were growing quickly, although from a very small base. By 1986, the
US was
importing $4.8 billion worth of goods from China, and exporting $3.1 billion worth of goods to China. In 1989, these numbers had grown to $12
billion and $5.8
billion respectively ("U.S. Trade Balance with China", 2001). As these numbers show, trade was increasing, but so was the deficit. On the Chinese
side too, there

were few problems with the economic relationship. Most of the foreign activity in the country was carried on in closely circumscribed areas such as
the Special
Economic Zones (SEZs), Coastal Open Cities, and similar enclaves and therefore did not cause much controversy. ^
Figure 1.    *
(Source: "China", The Gallup Organization, 2001)
5. Tiananmen, the collapse of Communism, and the search for a new paradigm
    The era of good feelings came to an abrupt end in 1989 with the Tiananmen Square massacre and a hard line revival in China. This episode quickly
turned
American public opinion back to its old hostility against Communist China. The failure of China to take part in the wave of democratization following
the collapse of
the Soviet bloc (and the Soviet Union itself) further alienated the American public from China (Harding, 1992: 291).
    The fall of the Soviet Union basically destroyed the foundations upon which USChina bilateral relations had rested for the previous 20 years.
Without the need
for a strategic alignment, and without any sign that the Chinese Communist government was going to follow the lead of the governments in the former
Soviet bloc,
many people began to question the wisdom of continued close contacts between the two countries. However, in spite of all the political crises in US
China relations,
the economic relationship continued to grow vigorously.    ^
B. "  …into the here"
1. Deng's "nan xun" (trip south) and Clinton's new trade expansion initiative
    In 1992 Deng Xioaping undertook a tour of southern, coastal China. His purpose was to counteract the hard line revival and reinvigorate domestic
economic
reforms. He called for a further round of economic liberalization, this time including a more active role for foreign commercial interests. As his reform
program took
effect, Chinese policy shifted from export permissive to export promotional. The domestic economy was opened slightly to foreign participation and

promises were
made of more reforms to come.
    Meanwhile in the US, President Clinton had just won his first election on a platform of renewing economic growth. A major part of his plan for
economic
revitalization focussed on the promotion of foreign trade through the use of "managed trade" and "aggressive unilateralism" (Bradsher, 1993a). He
gave increased
international weight to the roles of American economic agencies such as the Department of Commerce and the US Trade Representative's office.   ^
2. Economic recovery contributes to expanded ties
    The coincidence in time of the Chinese reform program, the American trade promotion program, and the worldwide economic upturn contributed to
expanded
economic ties between China and the US. In the US, the economic connection came to be seen as the new rationale for bilateral relations. A somewhat
illdefined
policy of "constructive engagement" (see Box 1.) replaced the idea of strategic alignment which had previously served as the cornerstone of the
relationship
(Subcommittee on International Economic Policy and Trade, 1998).
    Other approaches to the bilateral relationship were rejected as likely to ignite a new Cold War between the two countries. An explicit facet of this
argument was
that a more prosperous China would inevitably become more democratic just as had happened in South Korea and Taiwan. It should be noted that
while this policy
was most in evidence under the two Clinton administrations, it would also appear to have been foremost in the mind of President George HW Bush
who went to
great pains to maintain ties with China in face of public outrage over Tiananmen Square (Harding, 1992: 227). ^
Box 1.

The Tenets of Constructive Engagement:
1. The US should preserve amicable bilateral relations with China under all circumstances. The only alternative is to return to a
policy of isolating China.
2. An isolated China is a dangerous China, erratic, and detrimental to regional security and the welfare of its own people. The
example of the Cultural Revolution is often cited.
3. A China which is increasingly interdependent economically with its neighbors and the world economy is a China that will behave
responsibly and  exercise restraint so as not to endanger profitable trading relationships. In essence, China will become committed to
maintaining the global system as it currently exists.
A. By locking China into certain international groups, it will be forced to modify its behavior on everything from trade barriers to
human rights.
B. US engagement with China will allow the US to guide Chinese behavior and structure China's international obligations.
4. A. Continuing and ever increasing economic contacts between the US and China will bring about the political transformation
which failed to materialize after the reforms of the 1980s and the collapse of the Soviet bloc. This will primarily be the result of a
supposed direct relation between economic prosperity and political freedom and democracy. The example of Taiwan is most
frequently cited.
B. Another important argument is that continuing contact with American businesspeople and practices will have a demonstration
effect upon Chinese society. The implication is that as the Chinese come to see the superiority of the American way of life, they will
gradually move to adopt the more noble aspects of American society and will put increasing pressure on the Chinese government to
further liberalize the country.
5. The failure of the US to take advantage of economic opportunities in China would be counterproductive in three senses. First, it
would reduce US leverage over China. Second, it would isolate the Chinese leadership and increase tensions between China and the
US. Third, it would put US commercial interests at a competitive disadvantage relative to  other Western business concerns.
3. The elusive national consensus
    However, this was not the end of the story. A diverse array of interests never really accepted the ideas behind constructive engagement. For
example, James
Lilley pointed out that "in the case of Taiwan, economic integration did not lead to closer political integration (with China) (1996: 33)." Instead, closer
integration actually strengthened the hand of Taiwan's opposition party which favored even cooler relations with Beijing. The state of ChinaTaiwan
relations was

then (and is now) essentially an object lesson in the lack of causality between closer economic integration and improved bilateral relations. Moverover,
in 1993
Morley identified China as a deviant case which does not fit the supposed pattern of growth leading to political liberalization in Asia (1993: 308). As
these
examples show, significant arguments put forth by the supporters of constructive engagement have been in question for some time.
    The trade deficit, MFN (later PNTR), entry into the WTO, textile transshipments, and a host of other economic and noneconomic problems have
dogged
bilateral relations since the events of 19891992. However, in spite of its many problems and many opponents, the constructive engagement policy has
remained the
central guiding principle of US economic policy towards China since at least the beginning of the 1990s.  ^
II. The View from the US
A. China as a large, fast growing market
1. Viewed in isolation
     Looking at China from the perspective of the US, it is clear that China offers a potentially enormous market. With nearly 1.3 billion people, China
is the most
populous country in history. It has also had one of the fastest growing economies in the world over the past two decades, with growth rates of 7% or
more annually
(Huang, 1999). Taken together these two facts seem to demonstrate the great potential of China as an engine of global growth and prosperity. Indeed,
China's first
president, Sun Yatsen, identified this latent potential in China as along ago as 1922 (Sun, 1922: 7).
    Since Deng's trip south, China has made it easier for foreign businesses to operate in the country; an attractive option when most developed
economies have
growth rates only half as large, or sometimes even smaller. As one recent news article pointed out, US businesses have not been reluctant to take
advantage of
opportunities in the Chinese market. "From 1990 to 1998... the number of U.S. majority or minorityowned subsidiaries in China jumped from 45 to
335, and the
number of Chinese workers on their payrolls rose to 180,000. At the same time, surging U.S. direct investment helped lift the total assets of such
companies from $2
billion in 1990 to nearly $25 billion by the end of the decade (Koretz, 2001). "
     There are many potential opportunities for foreign economic interests. It is the stated goal of the Chinese government to reach the same level of
development as is
found in the West. Given that conditions in China range from the cutting edge of world civilization all the way down to the extremely primitive,
virtually any US
business can hope to find a place in the Chinese market. In the twentyfirst century it seems that America's (and the world's) age old dream of selling
to the
enormous Chinese market may finally come true.
    The Chinese government has identified a number of key areas of the economy which it cannot modernize via domestic initiatives, and these have
received
government encouragement. High technology manufacturing and infrastructure projects are the most notable areas in this category. Over most of the
reform period
businesses engaged in encouraged activities received preferential benefits from the government, such as lower taxes and greater autonomy (Huang,
1999). In return,
businesses were expected to pass foreign knowledge and technology into the Chinese economy in some way, usually through participation in joint
ventures (Li and
Li, 1999: 43). But recently, more Chinese companies have been privatized, and more of the economy has been opened to foreign participation.
However, the
Chinese government remains committed to playing a major role in the economy for the foreseeable future. ^

2. Viewed as part of the region
    China also figures high in America's regional calculations. China shares land borders with 14 other countries in Asia. It has disputed maritime
claims involving a
further five countries ("The World Factbook", 2001). Economic growth, liberalization, and the ease of movement into and out of China have helped to
make China
the center of a growing regional economy. Chinese business interests and small traders continue to expand their influence all around China's borders.
At the same
time, China has remained a popular export production platform for both regional and global producers. Finally, the size and partial insulation of the
Chinese economy
from the world economy have put China in an advantageous position in recent years. For example, while many countries in East Asia were being
battered by the
1997 financial crisis (Lane, 1999) China's economy remained strong. So, it is clear that China has the potential to be an important market, as well as an
important
regional actor with the ability to influence the economic climate in Asia.  ^
B. Bigger isn't always better
1. Difficulties in the Chinese market
    As Huang Yasheng (1999) and others have observed, although China is ostensibly a single country of 1.3 billion people, in many respects it behaves
like a
collection of small neighboring countries which maintain a variety of barriers between them. Huang compares modern China to the Latin America of
the 1970s. He
writes, "trade is restricted, either via implicit or explicit tariffs or quotas, market access is conditioned upon building and operating production facilities
behind a
protective wall…. the interregional trade restrictions act exactly the same way as trade restrictions at a country level." So, in terms of market size and
market
access, China is not really the massive market that it appears to be at first glance. According to the US Trade Representative's Office, "the China
market is small and
concentrated in a few areas along the eastern seaboard ("China country commercial guide FY2001", 2001)."
    Another phenomenon that has been rarely reported in the US is the fact that as particular Chinese markets open up to foreign participation, they very
quickly
become highly competitive (Rosen, 1998: 86). Shortages of qualified personnel become common from an early date. Competition on price and quality
also rise
quickly so that Chinese markets frequently come to resemble more mature markets in other parts of the world in fairly short order.
    Yet another problem with the Chinese economy is corruption. Corruption is widespread despite attempts at reform by the central government
(Murphy, 2001). It
is present in both the government and business sectors and has an adverse effect on the performance and profitability of foreign business operations.
One PRC
economist estimated that net industrial revenue lost to corruption amounted to $8.3 billion annually (Groombridge, 1999: 23).
    A related issue is the opacity of regulations and erratic government intervention in business. According to the US State Department,
"Despite this progress (in reducing tarriffs), other measures have effectively closed existing markets for imported goods and services. Nontariff
barriers
to trade and tradedistorting measures persist. Nontariff barriers (NTBs) include quotas, tariff rate quotas, import licensing, import substitution and
local
content policies, and unnecessarily restrictive certification and quarantine standards ("2000 Country Reports on Economic Policy and Trade
Practices",
2001)." The lack of published guidelines and rules makes it more difficult for businesses to operate and easier for corruption to take place (Rosen,
1998: 199).  ^
2. China's overarching goals

    Although generally unrecognized, another stumbling block for US business is the fact that China is formulating its policies according to a set of long
range goals
which call for the creation of strong domestic firms which will replace foreign firms in the domestic market and achieve world class status in the
global marketplace
(Biers, 2001). These goals also call for the Chinese government to retain control over the most crucial areas of the national economy even after
liberalization is
completed. The Chinese government also continues to favor domestic over foreign firms in its long term planning. All of these factors suggest that
China may be a
rather unfriendly place for foreign operations.   ^
C. The Bottom Line
    "The United States remains China's most important market; it takes more than 40 percent of China's total exports ("2000 Country Reports on
Economic Policy
and Trade Practices", 2001)." On the other hand China takes in only 2% of US exports. While China continues to be a rapidly growing market for US
goods, the
fact that this growth began from a starting point of essentially zero means that even sustained high growth rates leave China in a less important
position than many
other US trading partners. The composition of trade between China and the US is shown in the following chart for the years 1996 through
2000 (Figure 2.). This
chart illustrates both the extent of the trade deficit and the composition of the twoway trading relationship.

Figure 2.
    Note: "imports" into the US, "exports" out of the US
    (Source: "US Trade Balance with China", Foreign Trade Division, US Census Bureau, 2001)
    One interpretation of the USChina economic relationship is that it is beneficial because the two economies are more or less complimentary, with
China being a
lowtechnology, labor intensive economy, and the US being  a hightechnology, capital intensive economy. However, as the chart shows, from the

years 1996 to
2000, Chinese goods entering the US were concentrated in relatively more sophisticated items. Meanwhile US exports are much smaller, and the
second largest US
export was inedible crude materials in the year 2000. " These factors do not seem to bear out the argument of the US as an exporter of high value
added goods.
    In general, these bilateral statistics present a potentially misleading picture to decision makers, since when viewed in isolation China appears to be
very important.
However, as mentioned previously, China actually only accounts for 2% of total US exports. As a US Congressional Research Service report pointed
out, in 1996
China was a smaller market for US exports than Hong Kong, Singapore, South Korea, or Taiwan regarded as individual markets (Morrison, 1996). It is
noteworthy
that even Singapore, a city state of only 4 million people, was a larger market for US exports than all of mainland China. China is a larger source of
imports into the
US, but Chinese imports only accounted for about 6% of all imports into the US in that same year.  ^
D. The Rest of the Region
    China is not the largest Asian market for American goods, nor is it the easiest to do business in. And, these facts are not likely to change
significantly in the near
or midfuture. As the following charts show, China does not stand out from its neighbors in terms of its transportation and communications
infrastructure, both of
which are vital for business. China is roughly at the same level as Thailand in the extent of  its communications infrastructure (Figure 3.). In terms of
transportation
infrastructure China makes a very poor showing. For example, China has only 270,000 Km of paved highways to Indonesia's 160,000, despite the fact
that China's
population is five times larger (Figure 4.).
Figure 3.
(Source: CIA World Factbook, 2001)

Figure 4.
(Source: CIA World Factbook, 2001)
    In other terms China also comes out only in the middle or slightly above average. Comparing among China, India, Indonesia, Pakistan, Thailand,
Malaysia,
Vietnam, and the Philippines we see that China's GDP growth rate was the highest at 7.1%, but India is not far behind at 6.4%. China does well in
terms of female
participation in the economy and in maintaining low rates of poverty.  However, China does not stand out from the region in terms of the literacy of its
population
(Figure 5.).
     In terms of electricity production and overall energy consumption China occupies a middle level below Thailand and Malaysia, but above the rest
of the countries
considered. But, a comparison of energy consumption to per capita GNP shows that China is inefficient in this area. China consumes almost one
kilogram of oil equivalent (KgOE) for every US dollar of its per capita GNP. By contrast, the Philippines uses only 0.3 KgOE per US dollar of
GNP (Figure 6.).
In general, China stands out more in comparison with South Asia and much less in comparison with East Asia.
Figure 5.

(Source: "Key Indicators of Developing Asian and Pacific Countries 2000, Volume XXXI", Asian Development Bank, 2001)
Figure 6.
China really only stands out in three respects. One is foreign direct investment. FDI into China is over twice as large as FDI into all the other

countries combined.
The second aspect where China stands out is the sheer size of its total GNP (unadjusted for population). China's GNP is roughly equal to that of all the
other
countries combined. The last place China stands out is in the size of its trade surplus with the US (see Section V., Figures A1A3). China alone had a
trade surplus
with the US in the year 2000 equal to over twice the combined surplus of all the other countries considered.

    As the foregoing sections have shown, while China provides ample source material for many an optimistic forecast, the actual character of the
Chinese economy
is neither as remarkable nor as profitable as it first appears. In fact, two out the three areas where the Chinese economy really stand out the levels of
FDI and the
size of the trade deficit are as much the making of foreign interests as they are of the domestic economy. In addition, the noneconomic benefits
expected in the US
from expanded economic relations with China have failed to materialize. Finally, despite assertions to the contrary, neither the business climate nor the
political
climate is likely to improve significantly in the near to midfuture.   ^
III. Analysis
Box 2.

Quotes in favor of the China trade:
1. "China (is) a gigantic, juicy new plum for business" San Francisco Examiner, 1979 (Harding, 1992)
2. "China..is the pot at the end of the rainbow" Commerce Secretary Ron Brown (Weidenbaum, 2000)
3. "Trade, investment, and economic growth can help improve personal liberty and the quality of life for millions of
Chinese. History proves that economic growth helps promote freedom." US Senator Chuck Hagel (Hagel, 2001)
4. "Business is the ultimate force for democratic change in China" Li Lu, Tiananmen Square protestor
(Weidenbaum, 2000)
5. "(If MFN is not renewed without conditions) The capitalist revolution will screech to a halt. Moderate leaders will
be undermined and the recuperating democracy movement will face a renewed backlash" Pei Minxin, Senior
Associate Carnegie Endowment for international Peace (Pei, 1993)
6. "The benefits of building a business in the Chinese market are enormous, and every company in the retailing
industry that considers itself a global player has spent the past five years jockeying for position and trying to win
the favor of Chinese officials. While most continue to lose money, including WalMart, they have come to realize
that loss is the cost of admission to a market offering the potential for enormous sales and profits as it transitions to a
marketbased economy
and the standard of living increases for its 1.2 billion people. " (Anonymous, 2001)
7. "Trade is a force for change in China, exposing China to our ideas and our ideals" President Clinton
(Subcommittee on International Economic Policy and Trade, 1998)
8. "No nation on Earth has discovered a way to import the world's goods and services while stopping foreign ideas at
the border." President George HW Bush (Sutter, 1998)
9.  "Booming China is dream market for West" New York Times (WuDunn, 1993)
10. "Further development of China's trading relationship with the United Stated and other industrial countries will
work to strengthen the rule of law within China and to firm its commitment to economic reform." Federal Reserve
Chairman
Alan Greenspan ("Which vision for America's future?", 2000)
    Despite China's middling status in Asia and the world, the USChina relationship has been identified as one of Washington's key relationships, and
since the outset
of the 1990s the key aspect of that relationship has been economic. Congressman James Leach, Chairman of the US House Subcommittee on East Asia
and the
Pacific, summed up the prevailing attitudes towards China in his opening remarks in a hearing held on April 25, 2001. He said that:
"Washington should maintain its focus on the longterm endeavor to build a cooperative, mutually beneficial framework for SinoAmerican relations,
one

that welcomes greater Chinese integration into the rulesbased international system, and encourages progress by China toward a more open,
accountable, and democratic political system…. In the final measure, the most important bilateral relationship in the 21st century is likely to be that
between China and the United States (Subcommittee on East Asia and the Pacific, 2001)."
    This thinking reflects an acceptance of the constructive engagement policy. The heart of the matter is how this policy came to be adopted, and how
it remains in
force. This section will examine some possible explanations, examining whether the policy may be a rational response to the situation, or the result of
interest group
pressure. Both of these interpretations will be rejected however, in favor of yet a third explanation, that of elite consensus theory.   ^
A. Interest Groups
    Interest group theory states that in a pluralistic society such as exists in the United States, a variety of interests will compete to exercise influence
over the policy
making processes of the government. In this theory, the various interests are expected to balance one another out, resulting in moderate policies
acceptable to all
interested parties. Particular policies are viewed as being fluid and constantly subject to change as different interests enter and exit the policy debates
and form
different alliances to pursue their agendas. Under this theory, the government is usually regarded as an impartial mediator seeking to steer a middle
course which is at
least minimally acceptable to all parties (Davis, 2001).
    In the particular case of China policy, the theory would predict that American economic policy towards China would change over time as
circumstances changed
and different groups gained influence over the direction of policy. It is true that various groups have attempted to alter the course of US policy towards
China over
the past ten years, but they have had remarkably little success. Even in the wake of the Tiananmen Square massacre, groups opposed to constructive
engagement
were not able to significantly alter actual government policies.    ^
2. Evidence
   After Tiananmen, a variety of sanctions were placed on China (see Box 3.), but the Bush administration almost immediately began to soften their
effects and
vigorously opposed new sanctions. An embargo on US satellite launches from China was lifted after only a short interval, and Bush cleared continued
USChina
military cooperation on development of a Chinese fighter jet, despite the ban on military sales and high level military contacts with China.
Box 3.

Official US actions following the Tiananmen Square Massacre:
1. A travel warning was issued advising US citizens to avoid travel to China
2. Suspension of military sales to China
3. Postponement of high level military exchanges
4. Sanctuary for all Chinese citizens in the US at the time of the massacre
5. Asylum for wellknown Chinese dissident Fang Lizhi
6. Postponement of further international lending to China
7. Suspension of all official exchanges with China at and above the level of Assistant Secretary
8. Suspension of investment guarantees by the Overseas Private Investment Corporation
9. Suspension of Trade Development program financing
10. Suspension of export licences for US satellites scheduled to be launched on Chinese rockets

11. Suspension of the implementation of the 1985 USChina Nuclear Cooperation Agreement
    Furthermore, Bush sent two secret missions to China to reassure the Chinese as to the strength of the American commitment to the USChina
relationship. These
missions were headed by National Security Advisor Brent Scowcroft who was sent to convey American concern over the events at Tiananmen Square,
and also to
express "the President's desire to prevent the collapse of SinoAmerican relations (Harding, 1992: 228)." On Scowcroft's second visit, he reportedly
assured the
Chinese leadership that China was now more important to the US than ever before, and that President Bush "still regarded Deng as a friend forever
(Harding, 1992:
257)."
    By way of contrast, the United States Congress voted to impose further sanctions on China by a margin of 4180 in the House of Representatives
and by a
margin of 8110 in the Senate (Harding, 1992: 232; Crossette, 1992). These lopsided margins persisted as issues pertaining to China came up later in
Bush's
administration. And yet US policy, as implemented by the Executive branch, was not noticeably altered during the remainder of the Bush presidency.
    Under the first Clinton administration there was an initial effort to link China's Most Favored Nation (MFN) status to improvements in a range of
areas of
economic and political concern to US interest groups. However, this effort was opposed by many business groups as well as federal officials both
within and outside
the Clinton administration, and had no effect on the behavior of the Chinese government (Tucker, 2001: 438). Following the failure of this linkage,
Clinton embraced
the policy of constructive engagement with renewed vigor and maintained it as the central feature of the USChina relationship for the duration of his
time in office.
    Meanwhile, public opinion towards China has remained more negative than positive in the period since 1989. The lowest percentage of the
American population
viewing China unfavorably was 47% in 1998 ("China", 2001). The percentage of the American public viewing China favorably has never exceeded the
percentage
with an unfavorable view in the entire period since Tiananmen.
    In addition, various members of Congress such as Nancy Pelosi and Christopher Smith have been long time opponents of the policy of constructive
engagement.
A diverse range of both business and nonbusiness interest groups have also opposed the policy. Business opposition has mainly come from industries
competing
with Chinese imports, particularly the textiles industry. Nonbusiness opposition has come from groups as varied as labor unions, human rights
organizations, and
leaders of the Christian community. ^
3. Interpretation
      Without belaboring the point, suffice it to say that with the exception of President Clinton's onetime effort to link MFN to improvements in the
behavior of the
Chinese government, opposition interest groups have been singularly unsuccessful in influencing policy towards China. Therefore the available
evidence seems not to
confirm the interest group theory in this instance. Despite the entrance and exit of various interest groups, and despite the formation of various
alliances, the central
policies of constructive engagement have been maintained across both Republican and Democratic administrations and under a variety of
circumstances. Even within
the business community, various sectors have opposed government policy at different times. This seems to argue against the idea of the business lobby
simply being
more successful than other interest groups.   ^
B. Rational Response

    A second interpretation of the constructive engagement policy is that it is a rational response to the emergence of a new global superpower.
Supporters of this line
of thought cite the rise of Germany and Japan as great powers which destablized the world system and precipated enormously destructive wars. The
implication is
that an unguided China will follow the same path. Therefore, the rational response to the rise of Chinese power is to bring China into the fold of
peaceful world
citizens and prevent it from becoming a destructive rogue superpower (Hagel, 2001). This will preserve the balance of power and avoid world war.
    Unfortunately, this type of thinking almost never makes reference to China's conduct over the several millenia which went before the period of
imperial decay and
civil disorder. During this time China often adopted a highly defensive foreign policy and avidly sought to preserve peace and social order ("Concise
Political History
of China", 1998). A more comprehensive view of Chinese history might offer a very different interpretation of the significance of China's rise to
power, with China as
a potential source of stability rather than chaos.
    The perspective of China as the next giant to straddle the world is based on the same optimistic views of China as were mentioned in section II.A,
namely that
China is such a large country with such a high growth rate that it must be an emerging superpower, almost by definition. China's determination to
implement the four
modernizations is supposed to demonstrate China's growing power and influence. US Congressman Tom Lantos summed up this line of thinking when
he said,
"China is one of the greatest, if not the greatest, civilizations on the face of this planet. China will be one of the great powers in all fields of endeavor
in the 21st
century (Subcommittee on East Asia and the Pacific, 2001)."
    A corollary to this idea states that China is vital to US interests in balancing the power of other major world leaders such as Japan, and the European
Union, and
that therefore the US must maintain good relations with China at all costs. Former President Nixon (Harding, 1992: 251) was a proponent of this line
of thinking, as
is former Secretary of State Alexander Haig (Tyler, 1993). In testimony before the Congress following Tianamen, Nixon stated that China would be
"essential to
balance the power of Japan and the Soviet Union in Asia," and that "to leave the present and future leaders of China isolated (by sanctions), nurturing
their
resentments and even hatred of the United States because of what they consider to be unjust actions against China is senseless and
counterproductive."   ^
2. Evidence and interpretation
    Arguments against this rationale have already been partially enunciated in the earlier sections of this essay. Although China is big and has a rapidly
growing
economy, there are so many people and it started from such a low base in every field, that even decades of sustained high growth have not brought
China to the level
of Thailand or Malaysia in terms of development (see charts above). According to a year 2000 Defense Department report ("Annual Report on the
Military Power
of the People's Republic of China", 2000), China does not expect to become a "mediumsized" great power in terms of "political, economic, and
military strength"
before the year 2050 at the earliest.
   Furthermore, the Chinese government's preoccupation with domestic affairs means that China's potential influence will not be used to the full in the
near future in
any event. Finally, while China was a moderately effective ally during part of the Cold War, it is not likely that it will have an opportunity to repeat
that role in the

future. If the desire to be on good terms with China is actually based on an expectation of China's future strength and influence, it is a remarkable
example of
foresight on the part of the federal government. There are few, if any, other examples of the US seeking the friendship of a foreign nation more than
six decades in
advance of its expected rise to global power.
    Likewise, the idea that China can be used by the US as a counterweight against the world's other leading powers becomes more questionable in light
of the
preceding objections. In addition to the objections raised above, it should be considered that Japan has been mired in recession for nearly a
decade (Figure 7.),
while Europe continues to suffer from slower growth rates and higher unemployment than the US. China also has less intensive economic relations
with Europe and
Japan than it has with the United States. Among China's top 15 trading partners in the year 2000, the US was second (behind Japan) with 15.7%  of
total trade. All
the European countries in the top 15 combined accounted for only 11.1% of China's total trade. In terms of foreign investment, the US is ahead of
every economy
save that of Hong Kong (see Section V., Figure A1). The US accounted for 8.3% of all the foreign investment in China in 2000. Japan was second at
8.1%, while
all of Europe within the top 15 accounted for only 6% ("China's top 15 trading partners", 2001).  These figures do not paint the picture of a highly
influential ally. At
the same time, both Europe and Japan are already linked to the US through various treaties, agreements, and international institutions, while China is
not. So it is not
clear exactly why China is needed as a counterbalance at all. Taking all of these factors together, it is clear that the policy of constructive engagement
must be
motivated by something other than a hardheaded, realist approach to the situation.   ^
Figure 7.
(Source: "Real Economic Growth Rate", Japan Information Network, 2000)

C. Elite Consensus Theory
1. The epistemic community
    Two complimentary ideas can best explain how constructive engagement has become such an abiding facet of US policy. The first is the idea of the
epistemic
community. The second is the elite theory and the idea of elite consensus. The epistemic community is an idea elaborated by Ernst Haas and later his
son Peter
(Haas, 1990). They define an epistemic community as:

"A net work of professionals with recognized expertise and competence in a particular domain and an authoritative claim to policyrelevant
knowledge
within that domain or issue area (quoted in Michaels, 2001)."
Four identifying factors of such a community are:
1. A shared set of normative and principled beliefs
2. Shared causal beliefs
3. Shared notions of validity
4. A common policy enterprise
    In the case of constructive engagement, the shared beliefs are that China is an emerging superpower and that the US must be on good terms with this
superpower
for its own good and for the good of the international system. Conversely, if the US is not on good terms with China, China will become isolated and
erratic in its
behavior. The US has an obligation to "tame" China and make it a responsible member of the global system (which has been largely defined by the
US).
    The shared causal beliefs include the idea that making China interdependent with the rest of the world will exert a major influence on China and
give it a
commitment to maintaining the status quo. Then there is the idea that contact with the US will necessarily have a strong effect on China, and that that
effect, primarily
transmitted through commercial contacts, will be to make China more democratic, more freedom loving, and essentially more like the United States.
Finally, there is
a perception that USChina relations can be mutually beneficial, but only as long as they remain friendly.
    In terms of shared notions of validity, the main idea is that commercial relations are the most effective means of achieving the expected effects and
that government
policies must therefore support these relations. And of course the common policy enterprise is the subject of this essay constructive engagement.
    As this essay has hopefully shown, many of these beliefs are at odds with the observable state of China and of USChina relations. For example,
China is not
seriously expected to become even a medium sized world power within the next 50 years. There is little indication that US engagement has had a
positive effect on
political and social conditions in China. In fact, the deterioration in political conditions following Tiananmen coincided with a marked increase in US
investment.
    The persistence of the constructive engagement policy can be explained by reference to Richard Higgott's interpretation of the epistemic community
which
supports free trade. In "Competing Theoretical Approaches to International Cooperation: Implications for the AsiaPacific" (1993: 298), he writes:
"A problem with epistemic communities is that they tend to be "true believers", and as such they are often oblivious to some of the contrasting
positions
that exist to their own. Specifically, there is little comprehension of the manner in which the doctrine of free trade might be challenged…A failure to
recognise that their given truth it not universal, but rather a community accepted truth, leads them to misunderstand the degree to which they
themselves

contribute to misunderstanding and conflict."
    The argument of this essay is that an epistemic community exists in the United States which supports the policy of constructive engagement, and
that the same
dynamic is at work within this community as that which Higgott identifies in relation to free trade. Namely, the commitment to the consensus within
the community, to
the "truth" of the value of constructive engagement, is so great that it outweighs the evidence to the contrary. ^
2. Elite theory and elite consensus
     At this point, we turn to the elite theory. This theory argues that there is an economic and political elite which exerts considerable control over the
conduct of
affairs in the United States. This elite exerts power downward onto the bulk of the population, and is composed mainly of wealthy families which tend
to intermarry
with one another. They are typically members of mainstream Protestant churches and attend exclusive private schools, and Ivy League institutions
(Davis, 2001). The
elite shares a consensus on a variety of subjects such as the importance of private property and the idea that change should be incremental rather than
revolutionary.
Robert Reich explains the origins of the elite consensus in terms of shared background. He writes that the elite (or the corporate statesmen as he calls
them) "attend
the same preparatory schools, Ivy League colleges, and business schools. They read the same news papers, belong to the same clubs, vacation at the
same
resorts. They serve on the boards of directors of one another's companies. In short, the corporate statesmen of America view the problems and
opportunities facing the nation in much the same way because they view everything in much the same way. (1991: 53)"
    This is no idle assertion, as the Chicago Council on Foreign Relations series of polls of elite and popular American opinion demonstrate. Elite
opinion was derived
from interviews conducted with a variety of leaders from the government, business, academia, private foreign policy groups, labor unions, churches,
and interest
groups.  There is a clear divergence between elite and popular opinion on a wide variety of issues (Reilly, 1998). As Steven Teles wrote, "polls suggest
enormous,
near consensual support among leaders for internationalism and the cosmopolitan values that underlie it, and substantial, if not majority level,
opposition to these
values among the public (1998: 41)." The following chart showing the gap between popular and elite support for an active US role in world affairs
illustrates the
extent of the divergence (see Figure 8.). The smallest recorded gap is 33%, while the largest is 44%, and it is persistent across twenty years of polls.
    The data for China show the same gaps. On the question of whether China is expected to shrink or grow in importance over the next ten years, there
is a gap of
28% between the public and the elite (see Figure 9.).

Figure 8.

(Source: "American Public Opinion and US Foreign Policy 1999", The Chicago Council on Foreign Relations, 1999)
Figure 9.
Over the past twenty years the gap on the question of whether or not China is a vital US interest has never fallen below 21%, and has risen as high

as 29%. This
gap is consistent with the idea of an elite consensus which is not shared by the general public (see Figure 10.).
Figure 10.
    Separate Gallup poll data of public attitudes towards China also seem to offer an oblique reinforcement of this conclusion. With the exception of
1979 and
preTiananmen 1989, the American public has consistently held mainly unfavorable views of China over the past twentytwo years (see Figure 1.).
    To sum up the progress so far, this essay argues that constructive engagement is not an easily defensible policy upon which to base relations
between the US and
China. Observable conditions do not support the assertions made by supporters of the policy and predictions made about the effects to be had from
pursuing the
policy have consistently failed to materialize. The persistence of the policy is not a response to the actual nature of USChina relations, but rather it is a
response to a
series of notions held in common by leading decision makers in the United States.
    These notions have taken hold within an elite community which is prone to taking its own advice over that of outsiders. Furthermore, this elite
community occupies
a commanding position in American life, and therefore is uniquely situated to put its ideas into practice. The following sections will offer a possible
explanation for
how the particular conceptions associated with constructive engagement became lodged in the minds of the elite, and how the elite has maintained its
preferred policy
over the past decade or more.  ^
3. Origins of the consensus
    It is difficult to pin down exactly how any idea gains prevalence, but several factors seem likely to have had an influence on the rise to prominence
of constructive
engagement. The first of these is the idea of the vast Chinese market mentioned earlier in this essay. Given the commercial background of most

members of the elite,
the lure of China is both a current consideration as well as a traditional preoccupation. Secondly, as Xing Li points out (2000), the "loss" of China to
the Communist
government in 1949 was a traumatic blow to the view that China was following in American footsteps. The McCarthy era, which attempted to assign
blame for this
loss to leading figures in the US, accentuated this trauma. As a result, Nixon's trip to China in 1972 and Deng's subsequent economic reforms gave the
American
leadership a sense of "regaining" China. The prospect of losing China again is something that members of the elite are likely anxious to avoid. Thirdly,
there has been
a longstanding strain in American thought which regards China as the natural protégé of the United States.
    In a sense, this last line of thought is somewhat equivalent to the vast Chinese market idea. It might be called the vast Chinese spiritual market.
American
(Protestant) missionaries had been active in China for decades prior to the establishment of the People's Republic of China in 1949. Many of these
missionaries had
links to elite families, and many others became active in US dealings with China following the Communist revolution, for example, by joining the
Foreign Service's
Chinese section. The missionaries overtly promoted the idea that China would become more like the United States under their influence. American
missionaries led
people in the US to believe that China would become another powerful, continental, Protestant, democratic nation essentially America's younger
brother.
    This desire in turn is an outgrowth of a broader effort on the part of Western nations to remake China in the image of the West. Jespersen (quoted in
Li, 2000)
writes that, "the current Western thinking about China traces its roots to the very first intercultural contact five hundred years ago….Over the years,
numerous countries have employed multiple tactics and approaches in trying to mould China into an entity acceptable for their purposes be they
strategic, economic, political, cultural, or otherwise."
This same desire to remould China in America's image seems to lie behind the policy of constructive engagement, which more or less explicitly
states that the policy will allow the US to guide China's development and integration into the world system. At the same time, engagement with China
allows the elite
an opportunity to attempt to prevent rival influences from diluting those of the US.
    Taken together, these considerations seem to account for many aspects of the constructive engagement policy and the elite attachment to it. The
policy appeals to
the elite search for wealth and commercial opportunities. It also appeals to the desire to convert China to the American way. It is interesting to note
that this
missionary zeal has quite a selfcongratulatory tone to it. Members of elite which share the consensus on China seem to take it as an article of faith that
Chinese
people like, respect, and desire to emulate American society. There is a similar faith in the positive demonstration effect of contact between ordinary
Chinese people
and US businesspeople. To quote Calman Cohen of the Emergency Committee for American Trade (ECAT), "we lobby the Chinese government and
Chinese
people each day by doing business in China (Bradsher, 1993c)."
    The idea that the people of China may not be enthusiastic about adopting the American way, or that American businessmen may not be the best
conduit for
transmitting American values to China seems to be a matter outside of consideration. However, as Mr. Robert Kapp, President of the USChina
Business Council
stated in testimony before the US Congress, "we in American business are not in China to transform Chinese society, convert the Chinese people to
any particular
creed or worldview, or for that matter remake Chinese politics in the image of any other country (Subcommittee on International Economic Policy
and Trade,

1998)." This would seem to be a clear refutation of the conception of business as the emissary of the American way, and yet even such blunt
statements do not seem
to have much effect.
    This missionary aspect also helps to account for the frequent arguments that a less intensive bilateral relationship would simply provide an opening
for America's
foreign competitors to gain a greater hold on the Chinese market, and that a unilateral lessening of USChina relations would "isolate" China.
Following an ordinary
interpretation, it is very unclear how a major trading nation such as China could become isolated by the lessening of contacts with one trading partner,
albeit a large
one. However, this fear of isolation becomes much easier to comprehend when the observer realizes that the American elite fears that China will
become isolated
from the United States and all it has to offer. This interpretation renders Nixon's comment that Chinese leaders would "nurture resentment and hatred
against the US
for isolating them" more comprehensible. The fear of foreign competition also comes into focus because such competition would not only endanger
American profits,
equally as important, it would threaten supposed American influence.   ^
4. Maintenance of the policy
    Finally, there is the question of how this policy is maintained. The foregoing sections have hopefully demonstrated the lack of popular support for
constructive
engagement with China, as well as the lack of a broad national consensus in favor of the policy. Therefore, the persistence of the policy must be
maintained by
processes which can prevail in the face of domestic resistance, such as that from the Congress which has repeatedly voted for a tougher attitude
towards China than
the Executive branch has been willing to display.    ^
a. Direct defenses
    The elite epistemic community relies on a variety of tactics to defend the policy of constructive engagement from attack. These fall into two general
categories
which might be called direct and indirect defenses. In the first category is use of the "bully pulpit", or downward lobbying from the highest levels of
the Executive
branch onto the rest of the government and the public at large. A large part of this effort consists of the presentation of data, testimony, and interviews
from various
highlevel officials and exofficials of the Executive branch of the government. The aforementioned testimony from former President Richard Nixon
fits this category.
Statements by the president also add weight to the argument in favor of engagement with China. Furthermore, there is the usual trading of political
favors which is
necessary to maintain any policy over time.
    However, the downward lobbying also relies on several logical fallacies long known in the study of rhetoric, but which are not usually identified as
acting in
support of elite arguments. The first of these is the ad hominem argument, by means of which the elite supporters of engagement attempt to discredit
their opponents
by attacking their "motives, intentions, qualifications" rather than addressing the arguments (Craig, 2001). Specifically, opponents are frequently
characterized as
isolationists and protectionists, or boobs, idiots, and xenophobes, (Subcommittee on International Economic Policy and Trade, 1998) if they come out
in opposition
to the engagement policy.
    A related tactic is to erect a strawman, that is to misrepresent the opposing position, and then refute the misrepresentation. As noted previously, the
supporters of
engagement typically rely on the argument that the only choice is between the engagement policy put forward by the elite, or total isolation of China.

However, this
has never been the argument of opponents to the engament policy. Even former US Ambassador to China Winston Lord said that "it's phony to debate
isolation
versus engagement. You can have engagement of a hardheaded nature. You can be firm with the Chinese but also have a broad agenda of positive
things to
accomplish (Tucker, 2001: 453)." Frequent repetition of the argument of engagement versus isolation allows engagement's supporters to avoid
addressing the
substantive questions concerning the policy, and contributes to its maintenance in the meantime.
    Two further tactics are the appeal to pity and the appeal to personal interest. Supporters of engagement frequently argue that trade with China is
helping the
common people of China, and that any deviation from the current path will injure those same people. The complimentary argument is that engagement
with China will
be good for the American economy. As noted earlier in this essay China is not as significant a factor in the US economy as it is often depicted. For
instance, a year
2000 report from the Economic Policy Institute explains one facet of this lack of significance in more detail. In response to a claim made by the
Commerce
Department that PNTR would expand trade opportunities for small and medium sized enterprises, EPI pointed out that "fewer than 1% of America's 24
million small
businesses export any goods anywhere, much less to China (Faux, 2000)."
     Another method of continuing engagement in the face of opposition is creative interpretation of laws, regulations, and Executive branch decisions.
This method
was used extensively by the first Bush administration, as has been noted elsewhere in this essay. It was less frequently used by the Clinton
administration, which was
more overt in placing economic criteria ahead of other considerations, and therefore did not have a need to circumvent selfimposed limitations.
Finally, in terms of
direct defenses there is the presidential veto. Again, this was more characteristic of the first Bush administration which frequently vetoed China related
items in an
effort to maintain China policy as "the prerogative of the Executive, not the Congress (Harding, 1992: 232)."   ^
b. Indirect defenses
    In terms of indirect defenses, supporters of engagement have followed two main routes. The first is the decentralization and compartmentalization of
Executive
decision making on China. In US Policy Towards China: An Introduction to the Role of Interest Groups, Sutter argues that policy making has become
more
pluralistic since the end of the Cold War, and cites as part of his evidence the involvement of more Executive agencies in foreign policy making,
particularly economic
agencies. However, this may not be an accurate interpretation of the situation.
    There is evidence to support the idea that decentralization has rendered the constructive engagement policy more impervious to outside influence.
Broadly
speaking, Jensen (quoted in Garson, 1977: 338) has made the observation that the fragmented federal system was meant as a check on democracy.
That is, the
system was designed to prevent the population from exercising too much influence over the course of government too quickly. Continuity and
incremental change
would be ensured. The same process of fragmentation has produced the same dynamic within the Executive branch, with the result that the China
policy in place
when the dencentralization took place has been substantially insulated from outside influence.
    During the early part of the Clinton administration, this decentralization strategy clouded the debate over US policy towards China and made a
major contribution
to the defeat of Clinton's attempt to link China's MFN status to other considerations such as progress on human rights and protection of US copyrights.

A New
York Times report of April 1993 (Bradsher, 1993b) detailed the interagency battles over the course of China policy. Treasury Secretary Lloyd
Bentsen allied with
Warren Christopher in the State Department and Robert Rubin of the National Economic Council against US Trade Representative Mickey Kantor and
Laura
D'Andrea Tyson of the Council of Economic Advisors. Ron Brown of the Commerce Department and Robert Reich in the Labor Department oscillated
between
these two opposing camps. At issue was the question of how forceful the US should be in pursuing its commercial relations with China. All other
issues, such as the
wisdom of the engagement policy, were pushed aside by this all star battle within the administration.
    The effects of this battle were clearly described by Winston Lord. "What was not legitimate (in the MFN linkage debate) was the behavior of our
own economic
agencies, particularly the Treasury, the Department of Commerce, and the USTR…(on background) they were attacking the president's own policy.
This totally
undercut our leverage (Tucker, 2001: 460)." Ambassador Lord goes on to assert that without this administrative infighting, the policy of linking MFN
to other
concerns stood a good chance of success. This is significant, since the failure of this attempt at linkage was used as the justification to move to a more
purely
commercial approach to relations with China. So, it is clear that decentralization has played a role in the preservation of the engagement policy, and
that it can act as
a means of insulating the policy from outside influence.
    The other indirect defense is the use of symbolic action by the government. Garson defines symbolic action as being present "whenever acts of
government are
used to reassure citizens of one thing when the substance of what is done is something else (Garson, 1977: 18)."  This is precisely what happened when
President
George HW Bush imposed sanctions on aspects of the USChina relationship and then proceeded to essentially ignore those same sanctions. As
Harding notes
(1992: 283), the imposition of sanctions had the desired effect. It calmed the debate and brought out support for the President's actions, as far as they
went.
Although demands quickly grew for further action, the momentum had been blunted by the initial support for Bush's response. Opposition to Bush's
conduct towards
China never regained the coherence it had in the days immediately following Tiananmen Square, and Bush was able to maintain his policies. The same
thing may have
happened when Clinton linked China's MFN status in response to popular pressure, and then allowed the linkage to be undermined by his own Cabinet
members. ^
IV. Conclusions
    The great shame of all this effort on the part of the American elite is that it doesn't work. Historically, China has stubbornly refused to follow the
West's
lead. This trend has only increased since the foundation of the People's Republic. As Chairman Mao remarked in 1949, "the Chinese people,
comprising one
quarter of  humanity, have now stood up (Mao, 1949)."  More recently, in 1997, US Congressman Christopher Smith, referring to a State Department
report said,
"'No dissidents were known to be active at years end.' In other words, engagement appears to have failed beyond our wildest expectations. Dissent has
not just
been stifled, but it has been silenced altogether (Subcommittee on International Operations and Human Rights, 1997)." David Shambaugh, Director of
the China
Policy Program at George Washington University testified on 25 April 2001 that China is still "very resistant to political change from without, and is
experiencing only
superficial political change from within. (Subcommittee on East Asia and the Pacific, 2001)."

    So, engagement does not appear to have had any very noticeable positive effect on political conditions in China. At the same time, the US has been
less than
successful at guiding China's behavior in the international arena. Economic links between the US and China appear to have provided the US with as
little leverage as
China has derived from its economic links with Taiwan. Finally, the economic effects of the relationship are at least questionable. While the US does
get a variety of
cheap manufactured goods from China, the cost involves not only the actual payment for goods, but the transfer of technology and sophisticated
business practices,
among other things. Taken together, all of these considerations indicate that constructive engagement has failed to fulfil its stated goals. At the same
time, the unstated
goals of the elite have also gone largely unfulfilled.
     And yet the policy apparently continues under the new Bush administration. The implications of this fact are disturbing. The United States is
pursuing a
wideranging economic policy which has a proven track record of failure. Moreover, it is maintained on the basis of essentially irrational
considerations that are not
subject to debate, and which are not made explicit in any event. Finally, the policy is causing an annual trade deficit of $80 billion dollars.
    The most important conclusions of this study are:
1. that US economic policy can be simultaneously vulnerable to manipulation from officials in the Executive branch, and substantially insulated from
the rest of the
American government and society,
2. that elite opinion can be motivated by essentially irrational considerations, and
3. that elite opinion is largely impervious to contrary arguments and even to contrary facts and objectively observable trends.
    The original intention of this essay was to rely on interest group theory to demonstrate a causal link between the substance of US economic policy
towards China
and the benefits enjoyed by various groups as a result of that policy. The specific expectation was that business interests would predominate both in
terms of
influence over policy and benefits from it. However, investigation did not bear this out to any significant degree. As noted elsewhere in this essay, the
business
community has had the same rosy expectations of future profits, and the same complaints about current problems with the economic environment,
virtually since the
restoration of normal relations. At the same time, no other identifiable interest group appeared to be in a better position.
    Therefore, an entirely different approach was taken which yielded the results presented in this essay. The interpretations offered above appear to
have a greater
explanatory power in relation to America's policy of constructive engagement than any other identified in the course of the research for this paper. This
is particularly
true in relation to the justifications given by engagement's supporters. These findings were quite surprising, but they do seem to be closer to the truth
than any other
available interpretation.  ^


V. Appendix
Figure A1.

(Source: China Statistical Yearbook, 2000)

Figure A2.



Figure A3.
(Source: "US Trade Balances by Country", Foreign Trade Division, US Census Bureau, 2001)    ^







VI. Bibliography
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in the
AsiaPacific Region;
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Manchester University Press; Manchester, UK
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