James Lilley: U.S. debate on Chinese strategy currently seems to be shaped by four elements (the resemblance to the global warming debate may be just coincidental):

• American China analysts are using the same data.

• These analysts derive widely divergent conclusions from essentially the same data and two viewpoints emerge:

-the benign China view: "make love not war"
-the China threat view: "the Chinese are coming."

• Discussions among analysts unfortunately tend to degenerate into ad hominem attacks and produce "more heat than light."

• Regardless of which school of though prevails, the stakes of the debate are extremely high; the price for being wrong might be too high as the debate is more than an exercise in verbal skills.

Recourse to Chinese history is valuable because, as is true so often elsewhere, past is prologue. In addition, it is important to have an appreciation for the importance of history to the Chinese. That history is important to the Chinese and that they make frequent reference to history in their current strategic thought are perhaps illustrated by the fact that Beijing has referred to the G-7 meeting after Tiananmen as the "eight power march on Beijing"-the European led assault on the capital during the Boxer Rebellion of 1900. The leading Americans did not catch the historical illustration, and they missed the point of Chinese concerns.

In their study of Chinese history and strategic thought, American China scholars have often drawn incomplete conclusions. Even as distinguished a scholar as John K. Fairbank of Harvard University has fallen victim to this tendency. He reached three conclusions about Chinese strategic thinking from his study of the Chinese dynasties:

• To the Chinese, the threat from Inner Asia was paramount.

• The Chinese placed little emphasis on seapower.

• It is crucial to Chinese strategy to maintain moral superiority over their opponents.

Fairbank cites the construction of the Great Wall and the frequent incursions into China from the north, including first the Mongol and then the Manchu invasions as evidence of these early priorities on the primacy of this threat-but Chinese behavior rarely conforms to the expectations and analysis of outsiders. A perusal of Chinese history reveals substantial variations on the themes of Fairbank's analysis.

Examination of the historical record shows that although the Chinese concerns were traditionally focused on the threat at China's northern borders, China did from time to time turn to the sea. The southern Song dynasty was driven by maritime concerns and evolved into a great maritime-merchant dynasty. Indeed, Marco Polo is said to have called the southern Song "a great merchant kingdom," saying that "if they were warlike, they would rule the world." This period came to an end with the Mongol invasion from the north, but the subsequent Ming dynasty also looked to the seas in its early years. The Ming merchant fleet and Zheng Ho's expeditions brought a surge in maritime trade and established Chinese communities throughout Southeast Asia. Pressure from the north again forced the Chinese rulers to look inward and to the threat from the "northern barbarians," sharply curtailing Chinese maritime activities. Successor to the Ming, the Manchu Qing dynasty also focused its resources on coping with northern pressure and improving relations with the Russians. Indeed, even after the Opium Wars of the 1840s, the Qing maintained their northern orientation, ultimately with disastrous consequences: Taiwan was lost and Japan rose to become the dominant Asian power.

Following the overthrow of the Qing and the Chinese Civil War, the victorious Communist regime, led by Chinese from inland areas, continued its predecessors' nonmaritime focus. During the early years of the People's Republic, the once-vibrant coastal cities of China atrophied. The subsequent crisis in Sino-Russian relations only reinforced the continentalist view of the Communist regime as it concentrated its energies on countering the new threat from the north. A 25-year effort to build Chinese defenses against northern aggression began in 1960. The Chinese Government worked feverishly to create the so-called "third line" (the wholesale transfer of strategic industries to China's heartland where they would be less vulnerable to Soviet attack). China's strategic forces also were built up during this period, including China's nuclear weapon and missile programs.

In a pattern consistent with Chinese history, China has again turned its attention to the seas. According to Paul Godwin, in 1985 China began to shift its military strategy from its largely continental focus. Godwin's assessment was echoed by Chinese General Li Jijun in a speech to the U.S. National War College, when he stated that Chinese strategy was now one of "active defense." "Active defense" entails a strategy of limited, high-tech war with weaker neighbors on China's periphery, especially on its maritime periphery. An integral part of this strategy is the establishment of a defensive zone around the heart of China, an island chain or perimeter extending from the Spratly Islands, to Taiwan, to the Senkaku Islands and anchored in Korea in the north. Within this "zone of active defense," China plans to be the dominant power.

Michael Pillsbury's analysis points to an additional, important factor: U.S. analysts may be overlooking (at their peril) the emphasis the Chinese are placing on high-tech military development. Evolving Chinese strategy may well include plans to attack American satellites, "stealth" platforms, and aircraft carriers. In Pillsbury's estimation, the Chinese are developing a coherent view of asymmetrical warfare, albeit with "Chinese characteristics."

This move away from a continental focus is part of a recurring theme of flux in Chinese history and strategic thought. From the time of Sun Tzu, to Mao to Deng Xiaoping, to the era of active defense supported by high technology, Chinese regimes have concentrated their energies on the threat (and promise) from the north, followed by periods of looking to the sea. Current Chinese strategy seems to be one in which China will largely rely on "people's war" to defend China proper and will use high-technology weapons to support active defense. To achieve this formulation, China has reoriented its priorities, looking eastward toward the sea. Chinese statements place naval modernization at the head of the priority list, followed by the air force and "rapid reaction units"Call of which will allow China to reach out into the oceans to defend its "zone of active defense."

Chinese military acquisitions from the former-Soviet Union fit this pattern of priorities. Moreover, Chinese attempts to shore up China's northern and Inner Asian borders, reflected in its solidifying of connections with Russia, perhaps even forming a "strategic partnership" and the recently signed border agreements with its Inner Asian neighbors, all support China's turn to the east and the sea. Observers will find looking to the history of the southern Song and early Ming dynasties instructive, revealing further continuities over time.

Despite the most recent reorientation of Chinese strategy, official Chinese rhetoric remains the same in many ways. Chinese strategists continue to repeat the worn mantras of "never seeking hegemony," "opposing all forms of power politics," and noninterference in the internal affairs of other countries." Beneath these stuffy pronouncements, however, it is obvious China is engaged in a vast game of chess-from the Persian Gulf to the Korean peninsula, to the Indo-Pakistani border, to managing the Hong Kong and Taiwan situations.

Other Chinese statements make it clear that as China plays this game, the United States remains the central obstacle to the establishment of the "zone of active defense." Wherever the Chinese defense zone stretches outward, the Chinese come into contact with the United States: The United States continues to maintain its bilateral alliances with Japan and Korea and its commitment to Taiwan in the Taiwan Relations Act and continues to insist on the importance of the South China Sea sealanes to U.S. security. Under these conditions, the potential for disagreement and even conflict are apparent. On the other hand, the message emerging from the 15^th Party Congress stresses the primacy of economic development and the flexible management of Hong Kong and Taiwan affairs. This could be a sign that China will choose more moderate policies in dealing with areas of potential disagreement with US, at least in the near term.

Regardless of the Chinese shift in strategic focus, the American response remains in many ways the same. We maintain our forward-deployment policies, our bilateral alliances, and our concern over developments on the Korean peninsula, and we monitor Chinese activities in the Spratlys and attitudes toward Taiwan.

Will these policies and American concerns about the Chinese "threat" become "self-fulfilling prophecies," as has been argued by some in the China-policy community? That seems unlikely. Instead of fulfilling any of the more pessimistic assessments of Chinese behavior, American policy has struck a balance between engagement and deterrence. U.S. efforts to develop a theater missile defense for the region and the strengthening of the U.S.-Japan Guidelines have been offset by substantive gesture to China on a range of issues. This has been a workable and desirable approach that seems to function well, incorporating as it does elements of engagement and deterrence.

The central strategic question is not whether the United States will "create a monster" but rather whether the United States and China can learn to share influence and even power in East Asia. There are reasons for optimism. The United States and China clearly share common tactical goals on the Korean peninsula, both looking toward an eventual peaceful reunification. Since the Chinese will clearly be dissatisfied with a united Korea dominated by a Seoul allied to an unpredictable United States (as the Chinese see the United States), the United States and China must move toward the creation of an understanding on power and influence sharing on the peninsula.

Simmering tensions in the South China Sea also lend themselves to solution. China has shown that it can be susceptible to pressure from the ASEAN countries, especially if it is backed by American seapower, and it will adjust its strategy to reflect changing realities. As a result, if the United States can work effectively with its Southeast Asian friends, a solution acceptable to all parties should be possible. Chinese sovereignty claims will not change but could become muted in the face of strong and persistent opposition.

Likewise, the U.S.-Japan alliance need not be the cause of problems and confrontation with China. Although the alliance functions as a deterrent to Chinese extensions of sovereignty, it also provides an opportunity to change the old formulas of the United States and Japan allied against Russia and China. To that end, China should be increasingly drawn into tripartite dialogue. Such a dialogue could work to assuage Chinese concerns over Japan's expanding role in the region as well as offer China a more constructive regional role.

China takes exception to the U.S. relationship with Taiwan but also feels threatened by Taiwanese military prowess and, even more importantly perhaps, by the danger of the appeal of Taiwanese ideological developments-the enshrining of the free market and democratic, participatory institutions. This issue is particularly thorny for China as Taiwan can not be as easily influenced as Hong Kong.

The solution may lie in the expanding web of economic ties that underpins relations between the island and Mainland China. The emergence of two premiers, Zhu Rongji and Vincent Siew, provides additional hope in this regard; both men are committed to economic development and likely share a vision of a solution that allows for neither the use of force nor the declaration of independence but does emphasize economic cooperation.

It is the American responsibility to work to maintain the balance between the two sides and perhaps at promoting what Harry Harding has called a "One China with different power centers," be they in Beijing, Shanghai, or Taipei.

Chinese truculence on the Middle East and South Asia, particularly with regard to the proliferation of weapons of mass destruction, will ultimately be amenable to the strategic interests shared by the United States and China. Ensuring access to oil resources and restraining fundamentalist Islam provide the strategic context for U.S.-China cooperation. Enunciation of common strategic interests, not sanctions will ultimately resolve these issues.

Like that of other nations, Chinese strategy is shaped to deal with perceived threats and to take advantage of targets of opportunity. History has shown China will indeed strike these targets when the timing is right. But history has also shown that Chinese strategy can be influenced (especially by U.S. actions) and will adjust to account for current realities. The United States should do all it can to encourage a shift in Chinese focus away from the sea and back to the Inner Asian heartland. If U.S. policy is successful and China downgrades its sea-based aspirations, it will turn back to the traditional sources of wealth and threatCInner Asia.

It is important to understand that the United States can not influence China through legislation, however. In this regard, the United States must be cautious. If legislation pending before Congress is mainly an attempt to influence administration policies, it may be useful in forcing the executive branch to clarify its interests and policies. By the same token, the United States must be able (and willing) to change its strategy and policy as circumstances demand. Disciplining China's morality by legislative sanction is simply not the way to go.

Richard Solomon: Since the Deng-era economic takeoff, initiated in late 1978, the United States has tended to China as "ten feet tall and growing." But it is important to be aware of alternative possible directions for Chinese development. As Nick Lardy has pointed out, China's very economic success has set in motion societal trends that could be profoundly destabilizing.

Despite its dramatic successes, China may be approaching a point at which it will be forced to deal with very disruptive social and political consequences of two decades of economic growth.

One factor that will bear upon the way in which China faces these challenges is also an aspect of China's relationships with the outside world that is often overlooked or given short shrift: the dynamic interplay between external events and internal trends, the interaction between the wai and the nei. It is necessary to focus on how China perceives the relationship between the external and internal components of policy and politics.

As Ambassador Lilley has made clear, there are episodes in China's history, and particularly over the last century and a half, that have much contemporary relevance. These events highlight, from a Chinese perspective, the risks to stability and national survival posed by the interaction of factors nei and wai. The 19^th-century Taiping Rebellion serves as a potent reminder of the dangers inherent in the nei/wai dynamic. The Taipings were led by a disaffected intellectual (who had repeatedly failed the civil service exams that would have given him access into the Qing government) who was heavily influenced by foreign missionaries. Hong Xiuqian organized China's enormous pool of "floating labor" (landless laborers and peasants) to challenge the Qing Government. The rebellion very nearly succeeded in toppling Qing rule.

Today, China remains highly suspicious of foreign church groups and NGOs (as analogs to 19^th-century missionaries) and is apprehensive about the growing pool of "floating laborers," especially since their numbers are likely to balloon with the downsizing of state-owned enterprises (SOEs). It is not difficult to imagine a Wei Jingsheng organizing this population (perhaps with foreign inspiration of some kind) and creating a real threat to national stability and regime survival.

The 19^th-century "self-strengthening" movement also presented a powerful internal challenge to the Qing dynasty. The Qing resisted the attempts of the "self-strengtheners," led by Han officials like Li Hongzhang, to "save China" from foreign intervention despite an awareness of the threats it faced from the outside. The Manchus could not accept the buildup of an independent Han military capability in central China through the adoption of foreign technology.

In more recent times, the Japanese represented a very real foreign threat to China, and in the 1930s they were assisted by internal collaborationist forces. The CCP is also unlikely to forget the interventionist role the Comintern played in early CCP history or the internal support for Comintern ideas that was so strong in the founding generation of Party elders.

These episodes highlight the constant, dynamic interplay between domestic politics and foreign influence in China. Today, much of that influence is manifested in the economic sphere. What has been remarkable about China's "opening" to the world has been the degree to which it really has been open to foreign investment joint ventures and the like, unlike Japan. This opening has entailed accepting substantial risks and may have set in motion social trends that could dilute the concentration of state power. Indeed, many Western China-watchers hold out the hope that this will be precisely the consequence of economic opening. Our hope, of course, is that China will become more democratic as it opens.

An alternative development, however, is equally possible: internal chaos, luan, could also result. Chinese fears of this scenario are clear in CCP suppression of human rights activists, leaders and organizations not under Party control, and its reluctance to allow foreign NGOs to develop constituencies not under Chinese state control.

State-owned enterprise reform will initiate a process of "downsizing" in which there will be no social "safety net" for millions of unemployed people; likewise, no safety net exists to ameliorate the effects of the looming banking failure. Thus, foreign groups independent of CCP control could emerge in a time of internal chaos brought on by economic mis-management.

Other internal concerns for the CCP leadership include smoldering unrest in the Xinjiang-Uighur area where a low-level insurrection has been ongoing for many years. In the context of the concatenation of concerns over oil resources and religious separatism, Chinese dealings with Iran become more understandable. Tibet, although like Xinjiang removed from the Chinese heartland, still carries memories of the 1950s and Indian intervention. Today, when the U.S. Congress calls for the creation of a special envoy to Tibet, the CCP cannot help but wonder if the United States intends to use internal tensions to foment wider instability.

It is clear that economic development and opening have initiated trends that have exacerbated Chinese concerns with internal instability. The question remains whether Jiang Zemin and the Chinese leadership will show the same discipline in coping with these issues that they did in controlling inflation in the Chinese economy.

Another area of serious concern for the CCP is what might be termed the outer front of China's inner defensive perimeter. Areas such as Taiwan, Burma, and Cambodia are viewed as important parts of China's security frontier. China will not be entirely comfortable until Chinese influence is paramount in these outlying areas.

We see evidence of this in China's recent withdrawal of support from Sihanouk in Cambodia in favor of Hun Sen. China saw Ranariddh's cooperation with Taiwan as "unhelpful," and when Hun Sen offered to make his allegiance to China explicit, China backed his government.

This episode is part of what is likely to be longer term Chinese strategy to neutralize foreign influence on its periphery and to win these countries over to the "Chinese side." Chinese overtures to South Korea are another case in point.

The so-called "overseas Chinese" (or hua qiao) form a vital link between the Chinese core and the outside world, nei and wai. Most foreign investment in China is channeled through the hua qiao, and the CCP appears comfortable in exploiting this ethnic link to Chinese living abroad.

Taiwan will remain a critical issue in Chinese perceptions of its outer-inner defensive perimeter, and no Chinese leader can relinquish claim to the island. Likewise, in private discussions with Chinese leaders, it has become clear that the South China Sea islands also occupy an important place in Chinese security perceptions. If anything, these territorial issues are becoming increasingly salient. While Mao could tell Nixon he could wait 100 years to reclaim Taiwan, Deng foreshortened that timeframe. Following the return of Hong Kong and Macau in 1999, Taiwan will likely be next on the agenda of territories to be reclaimed.

These "gray areas" of China's outer-inner defense perimeter are the places where military confrontation between the United States and China is most likely to occur. The United States can do much to prevent this and foster an accommodation between China and Taiwan by maintaining an active, stabilizing defense presence in the region. The 1996 deployment of carrier battle groups to the Strait area sent a clear (if unanticipated by Beijing) message about the U.S. commitment to regional stability.

Relations with Japan are also crucial to this effort. The U.S.-Japan alliance remains critical to regional stability and is also in China's interest, despite current PRC attacks on the alliance. The U.S.-Japan alliance helps to prevent the forcible assimilation of Taiwan, which would be disastrous for all concerned, including China.

As the preceding remarks make clear, China's relations with the rest of the world are strongly affected by the dynamic interplay of domestic trends and foreign influences. This is something the United States needs to take into account in its China-policy process.