America’s China Policy Is Not Working
The Dangers of a Broad Decoupling
This summer the nations that emerged victorious from World War II will commemorate not only the 45th anniversary of their triumph but also the endurance of a remarkable period of peace and prosperity for the members of the Western alliances. In most respects we should not be surprised at the success of those Americans and Europeans responsible for building the post-World War II alliance system. They understood and had learned from the flaws of the 1919 Versailles Treaty; they worked hard to integrate the defeated countries into congenial security and economic arrangements rather than isolate and alienate them.
Roosevelt and Truman, Churchill, Attlee and Stalin, however, could never have imagined at Yalta or Potsdam that a resurgent Japan and Germany would become, in their children's lifetimes, the second and third most powerful economies in the world, and countries whose international influence would be exceeded only by that of the United States.
Dramatic and sometimes disturbing as these developments may be to many in the West, they offer clear directions for American foreign policy. Washington should move quickly to fully engage Tokyo and Bonn (or rather Berlin, when it becomes capital of a united Germany) in all major discussions about the shape of the post-Cold War world. While the United States, Germany and Japan must avoid fueling the suspicions of other governments that they intend to constitute a new tripartite "directorate," it is strongly in the American interest to assure that a shared vision informs policies in Washington, Tokyo and Berlin.
Why is it that Japan and Germany have grown more rapidly since 1945 than their Western partners, including the United States? What effects, if any, did their defeat and occupation by Allied forces have on their astounding postwar development?
In the years following 1945, Japan and Germany were encouraged by the Allies to concentrate almost exclusively on the immense task of reconstruction. After the war crimes trials of Tokyo and Nuremberg and the Allied purges of the German and Japanese wartime leaders, both countries turned to a generation of economic dynamos and nation builders; neither was distracted by ambitions of prolonging colonial empires. In part, ironically, because of the human and physical destruction inflicted on them, and in part because their basic laws were written by the Allies who remained as occupiers for periods of time (as they still do in Berlin), they never had to contend with serious problems of class struggle or crise de régime, as in France, or decaying plant and infrastructure and archaic social institutions as in Britain.
Under the benevolent oversight of the Allies, cooperative, even corporatist, institutions developed that promoted collaboration among government, business and labor, ensuring relative political moderation and social harmony. Moreover, the survivors of the war in both Germany and Japan were prepared to work hard for the prosperity of future generations; they were less demanding than consumers elsewhere in the West for the material dividends being generated by new technologies and the postwar expansion. Relatively more of the Japanese and German gross national products were reinvested, and both countries had well-educated, fairly homogeneous, disciplined populations that had known prosperity before the war and felt capable of rebuilding. Although the Allies tried to break up old leadership networks and business concentrations, many reemerged in different forms and contributed to strong economic growth in Germany and Japan.
Until the mid-1950s, Bonn and Tokyo also were exempted from the substantial defense spending that other Western governments incurred in the early Cold War. To a certain extent, both the Federal Republic of Germany and Japan were protected by their former adversaries, who initially wanted to assure the defense of the West by themselves. Bonn gradually did rearm and assume a share of the NATO burden (roughly three percent of its GNP goes to defense today), but Japan still devotes only slightly over one percent of GNP to defense, compared to a NATO average (excluding the United States and Canada) of nearly 3.4 percent. The United States now spends about six percent of its GNP on defense.
The alliance structures also promoted growth and stability in the F.R.G. and Japan. Once it joined NATO in 1955 and became a founding member of the European Community in 1957, Bonn was embedded in a network of treaties that most Germans quickly came to regard as indispensable to their future well-being. Although no comparable regional organizations were available in Asia, the U.S.-Japan Peace Treaty and the Mutual Security Act, both signed in 1951, formalized a new peacetime bilateral relationship that provided Tokyo with concrete security benefits as well as the promise of a uniquely valuable trading partnership. These guarantees of international support, rooted in systems of common values and objectives, also encouraged postwar regimes in Bonn and Tokyo to work closely with their Western partners. Internal economic development and political collaboration with the West became the watchwords for a succession of German chancellors and Japanese prime ministers.
The German and Japanese people, of course, deserve much credit for their accomplishments, overcoming as they did the pains of defeat and foreign occupation. But it is important to remember at this historical juncture that their achievements are due in part to deliberate efforts by their conquerors. Never before in the history of modern warfare have victors treated their former foes with comparable foresight, generosity and compassion.
Germany and Japan both bring unique and indispensable strengths to the building of the New West.
The F.R.G. now generates an annual worldwide trade surplus of more than $70 billion, larger than that of Japan; a united Germany will have 80 million people and will produce approximately one-third of the output of the European Community. The Bundeswehr fields the most potent land forces between the English Channel and the Soviet border even without nuclear weapons at its disposal, and it is likely that, at the urging of Europeans east and west, a united Germany will remain in NATO. As the Red Army withdraws from Eastern Europe, thereby reducing substantially the Soviet conventional threat, the German military establishment, even if it is reduced in response to eased tensions, will loom increasingly large, especially if significant numbers of U.S. forces also return home.
The strength of the German economy and the Deutsche mark will give Berlin increasing influence on the deliberations of the European Community. If the EC is enlarged in the next decade to include any or all of the members of the European Free Trade Association (Austria, Switzerland, Iceland, Norway, Finland and Sweden), Turkey or some of the new East European governments, Germany's influence, already considerable in all of these countries, will grow commensurately within the EC as well.
The German role in Europe will be expanding at a time when the economic prognoses for the EC are increasingly bullish. Although the costs of incorporating East Germany are likely to be high, a united Germany will remain the single largest Western trading nation and will be the biggest investor in Eastern Europe, and probably in the Soviet Union as well. Today, German trade with the U.S.S.R. is considerably greater than that of the United States or Japan-a strong springboard for making an even greater investment in the Soviet Union in the future.
It can be argued that German leadership will be circumscribed by its membership in the EC and NATO, and by historical suspicions of a strong Germany among its European neighbors and even within Germany itself, or that raw statistics may give an inflated picture of Germany's power and influence. London, Paris and Rome, as well as Warsaw, Prague and Budapest, will oppose any attempt by Berlin to break out of a common European consensus on major issues, and the Germans themselves will remain sensitive to the advantages of close ties with their European partners. But while it is true that Germany will not be able to act independently in ways that Washington or Tokyo can, German power will derive from its growing influence on the economic, foreign and security policies of the various European collectives.
Much of what is important in European politics and economics will revolve around this most substantial mass in the form of a new Germany. Once the European Monetary Union is realized, the Bundesbank will become the dominant central bank on the continent. German bankers and business executives are already involved in most major commercial and financial transactions throughout Europe. The security arrangements for a unified Germany, which must be endorsed by Bonn, will be crucial to whatever Pan-European security systems emerge. These agreements will set the stage for future East-West arms control accords, except for strategic agreements between the United States and the U.S.S.R. Any Western plans for reducing Third World debt and providing extended commitments for technical assistance to developing countries must include Germany's willingness to participate. In every respect, the new Germany will have much more to say than the F.R.G. has about the shape of the international order.
Japan's growing international prominence might have been easier to predict than that of Germany. Only recently, however, has it become apparent that Japan's impact on world affairs by the end of the decade is likely to be considerable. Because Japan's public and private decision-making processes are so opaque to outsiders (and even to many Japanese), and because Tokyo lacks a strategic global vision of the kind that world powers in the past and today's superpowers strive to project, there has been a tendency to underestimate the potential for Japanese global power. There is, however, no longer any excuse for such miscalculation.
If paper and real assets and high-technology capacity are the measures of economic power, Japan is gaining quickly on the United States. Nine of the world's top ten commercial banks and four of the top ten security houses and insurance companies are Japanese. The value of shares traded on the Tokyo stock exchange is comparable to that of New York and almost three times that of London. For the foreseeable future Japan will continue to run current account surpluses with the United States of roughly $50 billion a year. The value of Japanese overseas investment is estimated at over $1.5 trillion today, including more than $300 billion in the United States. Japan is investing more dollars abroad each year than any other member of the Organization of Economic Cooperation and Development (OECD). Moreover, there is little evidence that overall Japanese economic and financial growth will slacken anytime soon, despite recent fluctuations on the Tokyo stock exchange.
Japan's political role in Asia is also growing, albeit more discreetly. When Soviet President Mikhail Gorbachev considers serious diplomatic and economic openings in the Far East, he knows that convincing Tokyo will be his hardest and most important task. Before President Gorbachev visits Tokyo-as he is scheduled to do in 1991-the Soviets will likely decide to offer a qualified return to Japan of the "Northern Territories," four Japanese islands occupied by the U.S.S.R. since 1945. Such an accommodation could lead to increased Japanese investment in the U.S.S.R., although the amounts will not be large until there is political stability and a better business climate in the Soviet Union.
When China's political leaders think of rebuilding their weakened political standing and economic appeal on the ashes of the massacre of Tienanmen Square, they look first to Tokyo. When the four "Asian Tigers" (Korea, Taiwan, Singapore and Hong Kong) and the booming members of the Association of Southeast Asian Nations worry about exporting to an increasingly protectionist Europe and North America, their eyes turn to the huge Japanese market. And when the Indochinese communist leaders reflect on their own uncertain road to economic development once a lasting settlement in Cambodia is finally achieved, they know that only Japan can provide major economic help. As far away as Latin America and Eastern Europe newly emerging democracies also are working to attract Japanese attention. Japan as a "cornucopia" exercises a powerful attraction throughout the world, an image that makes most Japanese both uncomfortable and proud.
There is no doubt that such financial resources are the foundation for appreciable political power in a world where East-West security concerns are easing. What is less certain is where Japan will choose to exercise its influence. The question of how "international" Japan should become is now being vigorously debated. Apparently the Japanese answer will be "increasingly." The emerging generation of Japanese political and business leaders is more comfortable with international subjects and settings than their predecessors of the postwar years. More than 700,000 Japanese travel abroad each year, and communications technology has made the rest of the world quite familiar to the home islands. More young Japanese think internationally and believe that there can be distinctively Japanese approaches to world problems. Japanese diplomacy is becoming more active worldwide, and in the years to come Japan will function globally under many fewer inhibitions than heretofore.
As Americans wonder whether or not to maintain their substantial international commitments, it may seem paradoxical to learn that Bonn and Tokyo consider good relations with Washington to be indispensable even as the Soviet threat recedes. During the present period of transition and uncertainty, and as both move to center stage, Japan and Germany are looking for support and counsel from the most reliable and experienced of their allies, the United States.
Take security matters, which are still more preoccupying in Tokyo, Bonn and Washington than elsewhere in the West. From a German perspective, the United States is by far the most important other participant in the "two plus four" negotiations about unifying Germany. Most Germans believe that a continuing American military presence in Europe and in Germany, albeit at reduced levels, is essential to the foundation of any new European security structure.
They also know that American nuclear weapons on the continent, preferably in the arsenals of both land and air forces, give credibility to the American deterrent at a time of transformation and instability in Eastern Europe and the Soviet Union. Germans realize that it will take an American conventional and nuclear commitment in Western Europe to reassure the other members of NATO, the neutral countries and the governments of Eastern Europe that the new Germany presents no long-term threat. Germany will need the U.S. military less for protection but more for political cover in the coming decade. Thoughts that a European "pillar" of NATO might gradually replace the U.S. military in Europe are less than appealing to many at a time when defense budgets are certain to decrease and an all-German defense force would dominate any West European security organization.
For its part Japan, concerned about the intentions of the Soviet Union, the dangers of chaos in the U.S.S.R., and uncertain transitions in North Korea and perhaps China, also wants the American commitment to endure. While strengthening their technical cooperation with the U.S. military and slowly augmenting the quality of their own armed forces, the Japanese are mindful that substantially increasing their own defenses would frighten the rest of Asia. Nuclear weapons aside, Japan now can field conventional forces superior to any save those of the United States and U.S.S.R.
In most of the countries of Europe and Asia there now seems to be stronger support for an overseas American military presence than at any time since the death of Stalin. The principal reason for the change is the emergence of Germany and Japan as potent international players. Leaders throughout Europe and Asia now understand that even under conditions of a reduced Soviet military and political challenge, a credible Western security system must include a United States that is militarily first among political equals.
America's economic strength, despite uncertainties about its competitiveness and the cumulative effects of its trade and current account deficits, is also important to Japan and Germany. The Japanese still ship almost 40 percent of their exports to the United States. Washington remains Tokyo's principal economic and financial partner, and despite persistent trade problems between the two nations neither is likely to find an alternative to the other in the years to come. Political tensions may grow and the tenor of the dialogue between the United States and Japan could deteriorate further, but a rupture of economic ties is unthinkable; U.S.-Japanese trade relations may be strained but they will not break. The recent agreement between Washington and Tokyo, providing for Japan to make sweeping changes in domestic commercial practices, is the latest example of the progress being made in opening Japan to freer trade. Moreover, Japan can be expected to come to the aid of the United States in subtle but significant ways in times of financial hardship, for Tokyo knows the consequences for itself and the world of any major disruptions in the American economy.
Germany's economic relations with the United States are determined in large part by its membership in the European Community and its greater trade with the rest of Europe. Nonetheless, the growing role of the Deutsche mark in the world economy will link it more to the dollar. The German Bundesbank and U.S. Federal Reserve system both enjoy a high degree of autonomy, facilitating close cooperation and setting them apart from the other Western central banks, which are more closely tied to national governments. In addition Germany wants the United States to help carry the investment burdens in Eastern Europe, where the newly independent governments are themselves worried at the prospect of German economic hegemony.
It is also likely that Japan and Germany will become more politically active outside of their own regions. Tokyo has committed substantial funds to international peacekeeping operations, to Eastern Europe and Latin America and has promoted dialogue between the OECD countries and newly industrializing Asian economies. The EC's framework for European political cooperation will influence Berlin's views, but in areas of special interest to Germany (Southern Africa and the Middle East, for example) the German chancellor will enjoy some freedom of action and be increasingly inclined to play a more active role.
In the early 1970s, Richard Nixon and Henry Kissinger conceived a form of triangular diplomacy to guide Washington's relations with Moscow and Beijing. Because the United States enjoyed better relations with the U.S.S.R. and China than the two major communist powers did with each other, Washington was able to practice a global diplomacy designed to exert maximum leverage on each of its principal foreign adversaries. It was also perceived to be in America's interest for the U.S.S.R. and China to remain estranged from each other, if not in direct conflict.
The triangular diplomacy of the 1970s brought mixed results: it created a favorable climate for significant strategic arms control and normalization with China on terms acceptable to the United States, but it failed to resolve the war in Vietnam or to slow the proliferation of regional disputes involving proxies of the superpowers. This triangular approach to American diplomacy foundered when détente with the U.S.S.R. expired in Angola, Afghanistan, Cambodia and Central America, and the Reagan administration was swept into office on a strong tide of anti-Soviet and pro-defense sentiment.
In the 1990s there will be an opportunity for Washington to practice a quieter but also more constructive form of triangular diplomacy. The potential for American leadership in dealing with Germany and Japan is premised in part on closer American ties to both than either has with the other. Of all their foreign partners, only the United States today enjoys sufficient standing in both Japan and Germany to be in a position to discuss fully with either the essential elements of a common course for the West.
Early in his first year, and before German unification seemed imminent, President Bush demonstrated his understanding that Bonn had become America's most powerful friend in Western Europe and a government worth cultivating assiduously. Despite initial differences with the F.R.G. over the modernization of American Lance missiles on German soil-an issue later resolved during the May 1989 NATO summit in Bonn and now moot-Washington and Bonn remained in close step during the frantic collapse of the East European communist regimes and the rapid rapprochement between East and West Germany. There is greater enthusiasm for German unification in the United States than anywhere in non-German Europe. A recent poll indicates that three-quarters of Americans are favorably disposed to German unification, and a majority of Americans support the maintenance of current levels of U.S. forces in Europe. West German Chancellor Helmut Kohl, whose position was reinforced by the strong electoral showing of the Christian Democratic forces in East Germany last March and who is favored to win the December general elections in the F.R.G., has every reason to expect that President Bush will be a solid supporter during the course of the multilateral negotiations leading to German unification. At this juncture, and probably for some time to come, neither French President Francois Mitterrand nor British Prime Minister Margaret Thatcher will be on equally good political terms with the German chancellor.
High-level attention to Japan has been less constant in the Bush administration. Uncertainty over the leadership and future strength of the governing Liberal Democratic Party may have been one reason for Washington's restraint-before the LDP won a majority in the February elections for the lower house of the Diet. It is striking, however, that President Bush met with European Commission President Jacques Delors five times in 1989 but found time to see the Japanese prime minister only once that year. In dealing with Asia, the prolonged but futile attempts by the administration to moderate the course of events in China, as well as lingering expectations that Beijing might develop into an economic and political superpower within a decade or two, may also have distracted Washington from attending to a country whose bilateral importance to the United States is second to none. It now seems clear to Washington that the Japan connection is of consummate long-term importance and must not be neglected even when more dramatic developments in the U.S.S.R. and Eastern Europe dominate the headlines.
The primary objective of a new triangular diplomacy by the Bush administration would be for Washington to make sure that Germany and Japan are substantively engaged on every major international issue so that, wherever possible, positions can be harmonized. In addition, the United States should seek to ensure that channels are opened between Berlin and Tokyo. This bridging operation, initiated by the United States, as delicate as it is desirable, could have a significant impact on the building of a new Western system of understanding. Communication between Western Europe and Japan is still insufficient on most issues of high public policy. Tokyo's absence from the deliberations of the European Community, NATO and the Conference on Security and Cooperation in Europe (CSCE) compounds the problem of its isolation. Moreover Japan's only treaty relationships are its alliance ties to the United States, and the other Western assemblies that do include Japan-the OECD, the Group of Seven and annual economic summits-cannot cope with the volume of consultation now required.
There are, of course, European issues in which Japan need not play a central role-the mechanics of the unification of Germany, or the future structure of NATO, the Warsaw Pact and any Pan-European security system-all of which should be discussed among the Atlantic alliance partners and then decided in the CSCE context. Nonetheless, other pressing matters exist where European-Japanese understanding brokered by the United States could prove critical: policies for dealing with the U.S.S.R. and China, sustaining the new East European regimes, North-South development issues and regional conflict resolution, as well as global environmental, scientific and special issues such as drugs, terrorism, population, health and famine.
Of comparable importance is the need for better communication between Europe and Japan on a wide range of economic and trade issues. These two major trading entities often regard each other with extreme suspicion. With the Uruguay round of the General Agreement on Tariffs and Trade negotiations well under way, and with the increased likelihood of protectionism and the expansion of regional economic blocs, there is a need for the West to reach broader agreements on new configurations for the world economic system. North Americans, Japanese and West Europeans often meet to talk about immediate short-term economic and financial issues, but even during these summits there is rarely any serious discussion of macroeconomic planning involving collective responsibility and guidelines for the management of their economies.
It is also apparent that the leaders of the developed countries pay insufficient attention to the painful issues of widespread poverty, violence and disease in the poorest countries of the world. In an era of unprecedented prosperity and political promise, the industrialized democracies should not neglect the hundreds of millions-principally in Africa-suffering from hunger, disease and despair. The only way to attend to the acute humanitarian needs of the present and gradually build modest hopes for the future is for the new "Big Three" to take the lead and the responsibility. It is argued that voters will not tolerate the use of more public funds for this purpose, but what is political and moral leadership if not to press the case and set an example-especially in the wealthiest country in the world, which manages to find several hundred billion dollars of taxpayers' money to bail out its savings and loan industry?
The challenge of developing approaches to these issues is great, but there is little hope for progress if Germany, Japan and the United States-countries where nine percent of the world's population produces 40 percent of its wealth-are unable to find ways to work cooperatively. Pending the establishment of broader coordination mechanisms, enhanced consultations involving the United States, Japan and Germany are urgently needed. Although some Europeans may be concerned at what they perceive to be an attempt to impose a three-power directorate or "Group of Three" at the apex of the global hierarchy, tripartite contacts consisting of informal two- and three-way conversations should reduce alliance anxieties.
The success of these consultations will ultimately depend, of course, not on their structure but on their content. Such talks will make a contribution if the United States displays leadership in the form of ideas and resources. On matters relating to Eastern Europe, for example, the United States cannot pretend to be a major player if Washington defers primarily to the West Europeans for initiative and financing. On questions of debt relief and development for the poorer countries, the United States should encourage Japan to propose policies at a conceptual level and should recognize Tokyo, in terms of prestige and position, as a leader-not just a primary funder. Why should the next president of the World Bank not be Japanese, and why should Japan not be given greater voting strength than the United States in international financial institutions if Tokyo's contributions exceed those of Washington? There is a better chance that Japan will consent to provide greater assistance from its burgeoning capital surpluses if Tokyo perceives itself to be a senior partner, not merely an automatic teller machine, in the allocation process.
The ability of the United States to help establish a new international agenda with Germany and Japan also will depend on the vitality of America itself. We cannot stand tall in the world on feet of clay or on a mountain of dollars provided to us by the Japanese. It is clear that America's ability to maintain an international leadership role will depend in large measure on the support of the American voter and solutions to challenges Washington faces at home.
As the Soviet threat fades, there is already growing public pressure to reduce America's foreign entanglements. In such a climate the United States can successfully resist an abrupt contraction in American involvement abroad only if its citizens believe they can deal internationally from a position of strength that, in turn, is based on confidence that their domestic economy will adjust to the exigencies of change at home and abroad. If, on the other hand, the United States is consumed by its failure to resolve internal social problems, American leaders will have little political support for an activist international role. America's principal foreign partners also will judge the resiliency of the United States in part on the degree of its domestic consensus, its prosperity and its stability. Moreover, if Americans continue to poor-mouth themselves, claiming that resources are lacking to innovate or improve conditions here or abroad, they will convince others that the United States is unable to deal capably with the demands of the 21st century.
Recognizing the critical importance of Japan and Germany, and operating diplomatically to engage them profoundly in the reconstruction of the post Cold-War world, presents a formidable opportunity for the United States. Even though it lacks the overwhelming economic and military superiority it had in the late 1940s, the United States occupies a pivotal place in the changing constellation of world politics: its economy remains the largest, its military strength unequaled and its values widely acclaimed. For their part, Japan and Germany would find advantages in working to define their larger international purposes in conjunction with the United States. A primary goal of a revived American diplomacy would be to provide further inducements to Berlin and Tokyo to remain cornerstones of the Western alliance systems. This anchoring to the West is especially important for Japan, which has fewer historical and cultural ties to its developed partners than does Germany. As a consequence, and assuming that the U.S.S.R. no longer presents a military threat to the West, and that the dissolution of communist power in Eastern Europe is irreversible, America's leading international partners will likely be Berlin and Tokyo.
It will be a bitter experience for some in the West to depend heavily on the collaboration of countries that caused so much havoc half a century ago. These sentiments are understandable, but it would be wiser to take heart from ample evidence that Japan and Germany, after paying a high price themselves, have performed extremely well in the span of only two generations, and have successfully built democratic political institutions. Moreover, it is now in the greater interest of the West to have Berlin and Tokyo participate more energetically and creatively in world affairs, because our system and way of life will directly benefit. It is time to take advantage of the fact that Germany and Japan have earned a fair share of power in the world, as well as our support, friendship and respect.