China Aims to Project its Power, Says Ambassador James R. Lilley

James R. Lilley, currently director of Asian Studies at the American Enterprise Institute, served as Ambassador to the People’s Republic of China from 1989 to 1991, and Ambassador to the Republic of Korea from 1986 to 1989. Most recently, Mr. Lilley served as Assistant Secretary of Defense for International Security Affairs from 1991 to 1993. He spoke to the Risk Report about Sino-American relations, China’s military buildup, and Chinese nuclear and missile exports to the Islamic world.

Risk Report: How would you characterize Sino-U.S. relations during your tenure as ambassador from 1989 to 1991?

Lilley: After Tiananmen, relations hit rock bottom. But, the Chinese were anxious to improve them. There were three major priorities established by Secretary of State James Baker in 1990: action on human rights, trade inequities and proliferation of weapons of mass destruction. Baker’s objective was to get the Chinese to sign on to the Nuclear Nonproliferation Treaty (NPT) and to adhere to the Missile Technology Control Regime (MTCR). By the fall of 1991, we got agreements on proliferation. The real test was when we detected China sending Pakistan missiles and imposed sanctions that held up delivery of satellites and supercomputers.

Risk Report: China was sanctioned again in 1993 for selling missiles to Pakistan. Have missile sanctions against China been effective?

Lilley: The first sanctions we put on their satellites in 1991 really shook them up. Space cooperation was a huge national prestige item. China had nowhere else to turn, so it was a success then. We also had pretty strict safeguards on satellites. That’s when we made a breakthrough. The United States got them to adhere to the MTCR and to agree to join the NPT. This was important to establish. Then at least you have something to work with to get them to adhere to international rules. But sanctions imposed by the United States alone is not the best technique. You need support from other countries.Risk Report: How would you assess the threat to the U.S. posed by China’s military buildup?

Lilley: China is not so much a threat as a challenge. In terms of threatening basic U.S. interests in East Asia, they haven’t got the military force, but they are working on it. China’s announced figures on military spending cannot be believed; they don’t include R&D costs, or military income from sales, or all weapons purchases.

What we know is that China’s spending is increasing substantially and it is aimed at projecting power. They are developing an elite military that is isolated basically from the large, commercial, so-called “corrupt” military.

The Chinese think years and years ahead. They foresee a gradual expansion of Chinese influence to reach what they call their extended sovereignty, which includes the entire South China Sea.

The real question is can they put together a modern military force: command, control and communications? There are strong forces inside China that don’t want to do this because they fear it will antagonize China’s neighbors and could affect commercial interests.

Risk Report: What’s the current U.S. policy? Does the Pentagon want defense cooperation?

Lilley: The Defense Department has just come out with a very forward-looking study whose major thrust is that the United States will not cut its forces in Asia. It says all the right things. One problem is that few believe it. They say, “Look at the way you’re gutting your military budget.” The United States has a credibility problem.

Risk Report: Why does China continue to test nuclear weapons despite negotiations to complete a comprehensive test ban treaty?

Lilley: They consider a nuclear weapon program important because the United States has never fought a war with a nuclear power. If you can cancel out the nuclear option by having capability on both sides, you drop down to conventional capabilities. Then if you project ahead ten years, the Americans are drawing down their forces, the Chinese are building theirs up, so the balance of power will have shifted and that’s in China’s interest.

Risk Report: How do China’s neighbors respond to China’s military buildup?

Lilley: In one word: ambivalently. These countries find it very difficult to confront China unless the United States is there. China deals with each country bilaterally and will not discuss issues such as [February’s seizure of] the Spratly Islands multilaterally.

Risk Report: China says it does not engage in nuclear proliferation and promises to curb its missile sales. Yet Chinese exports continue. What do you make of China’s promises?

Lilley: It’s the same in trade. It’s the same in human rights. To them, an agreement is just the framework in which you slug it out. They don’t see the MTCR as a legally binding document.

Risk Report: What do you think of China’s relations with the Islamic world, particularly Pakistan, Iran, Syria and Libya?

Lilley: Clearly China is building up its relations with the Muslim world. The cooperation of the poor against the rich powers has been part of the Chinese mantra for 40 years.

What has changed is China’s budding relationship with Israel. Israel is one of the best arms technology suppliers in the world, and the Chinese love their stuff. They’ve been getting it for years and they are still getting it.

Risk Report: The Clinton administration has protested Russia’s sale of cruise missile rocket motors to China, as well as other transfers, but Russia is going forward with the sales.

Lilley: The stuff the Chinese can’t get from us, they get from the Russians. It was the Russians who trained the top Chinese leadership. What the Chinese have always wanted is not the hardware, but the people and the technology to build their industrial base.

Risk Report: How much does China rely on U.S. technology?

Lilley: The Chinese know we are the best in the world. Desert Storm really had an impact on the Chinese leadership. They want all the modern technology. They can get cruise missiles from Russia, but they can’t get the kinds of things they’re really missing: the military technology of the 80s and 90s. Establishing good relations with the United States is important in trying to get that.

But, some Chinese think that they can have it both ways. Cheat on Pakistan, sell reactors to Iran, and acquire advanced military technology and hardware from Russia. This is perceived as in their interest. They think, “The Americans will complain, the Americans will catch you, the Americans will try to pressure you,” but they deal with this in the context of an overall relationship, a range of issues where China is essential. Is America going to jeopardize this framework for some two-bit deal in Pakistan?

Risk Report: It seems that if China wants U.S. cooperation, China should be willing to moderate its export behavior.

Lilley: And I think they have. But it’s always a question of degrees. What the Chinese are able to do is lower the threshold of proliferation to where it doesn’t really threaten their other interests. If they are only shipping missile components to Pakistan, or if their nuclear weapons cooperation is confined to technical exchange, are they then slightly below the threshold of U.S. sanctions and intervention?

Risk Report: Where will we be with China in five years?

Lilley: Over the long haul, you’ll see China become a more balanced partner in the world, but there will be a rocky patch in the short term. It’s important not to have any delusions about what they are up to. It is disturbing when people in our government try to downplay China’s military capabilities. There are people sprinkled throughout our government who are trying to prove that China has neither the intention nor the ability to become a military threat, but they are misguided.