But will the punishment work? President Clinton came into office promising to be tougher than George Bush on China’s human-rights abuses and destabilizing arms sales. Since then, Washington has badgered the Chinese on issues ranging from dumping cheap pipe to jailing dissidents. Beijing has shown few signs of changing its ways. The sanctions, which will block some $1 billion in high-tech exports over two years, signal the rockiest patch in relations since the 1989 Tiananmen massacre. But the reality is that the United States has much less leverage over the Chinese than Washington would like. And U.S. efforts to teach them a lesson could backfire on American companies. “We have drawn our gun, aimed carefully and blown our foot off with no tangible evidence of damage on the other side,” says Joel Johnson, a vice president at the Aerospace Industries Association.
Sanctions may even hurt the United States more than China. China is the United States’ fifth biggest trading partner, and exports to China account for about 150,000 American jobs. U.S. businesses this spring argued vociferously–and successfully, over the objections of human-rights groups–for extending China’s most-favored-nation status. The new sanctions won’t hit the Chinese hard; they can buy European products instead.
Vice Foreign Minister Liu Huaqiu called the U.S. move a “naked hegemonic act” and threatened to “reconsider” China’s commitment to the Missile Technology Control Regime, an accord designed to limit missile proliferation, which China claims to honor. Beijing also denies U.S. charges that a ship called Yinhe is carrying chemical-weapons ingredients bound for Iran. If inspectors find the chemicals, the Chinese are likely to feign ignorance, exacerbating Sino-U.S. tensions.
Internal politics are guiding Beijing’s policy more than Washington’s punishments. Though China’s economy has been booming, inflation is rocking the cities, and farmers are protesting over tight credit. Rampant corruption is discrediting the government further. “In circumstances like these, you often see a conservative line emerge,” says one Beijing-based diplomat. A succession struggle amplifies the conservative voices: top leader Deng Xiaoping, 89, is frail and hasn’t appeared in public since January. With such uncertainties, no leader wants to be seen appeasing the West; nor can Chinese officials afford to antagonize the People’s Liberation Army.
Some U.S. officials suspect the PLA may have struck the missile deal without central approval; the military won’t easily surrender its missile sales, particularly since their earnings have lately plummeted. Beijing’s arms sales to Third World countries dropped from a 1987 peak of $5.6 billion to only $100 million last year (chart) as a result of a decline in purchases from Iran and Iraq, and stiff Russian competition. The one bargain China still offers is missiles–which it’s desperate to sell, no matter what the West says.
The thought that Washington has little clout in modifying China’s behavior is scary-particularly given that Beijing’s increasing economic prowess could lead to broader geopolitical ambitions down the road, But the best way to promote change may be through engagement and expanded trade. An explosion of capitalist activity has already transformed China’s coastal areas, where a new, looser political culture is emerging. The next generation of leaders is bound to be more worldly than the old revolutionaries who still run the country. The United States can only hope that they can be more easily persuaded to play by the rules.
