A n old Mandarin proverb states, “If you think you understand China, you don’t.” That warning also sums up the challenges that face Americans in dealing with this fascinating part of the world. When viewed separately, each of the various aspects of policy involving China-economic, political, military, and environmental-while difficult, is perhaps manageable within a sufficiently tough-minded decision-making process. But no aspect can be approached in isolation from the others and, taken together, they involve ever more complicated interrelationships. For example, more liberal flows of trade and investment are likely to generate a higher living standard in China, but would also generate more environmental pollution, enhance China’s ability to expand its military establishment, and increase political tensions.
The challenge of reconciling these factors becomes even more overwhelming when we introduce the possibility of significant change in the economic outlook facing China. But no matter how daunting that task, we must attempt it.