Clinton to China: Delicate Work as Countries Gear Up for Summit, Many Tough Issues Are Waiting on the Table

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At 9:51 a.m. on Memorial Day, as the world recoiled from India's nuclear tests, President Clinton picked up the new "hot line" connecting the White House with Beijing for the first time.

Chinese leader Jiang Zemin, working late, joined Mr. Clinton for a 40-minute dialogue on South Asia in the first direct phone link ever between an American president and a Chinese Communist Party chief.

Such a call would have been unthinkable just two years ago. In March 1996, China was lobbing missiles near Taiwan to intimidate the island's more assertively independent leadership. Washington intervened by dispatching two battle groups to the region and threatening "grave consequences," despite Beijing's earlier warnings that it could retaliate with a nuclear strike on Los Angeles. The two crises offer sharply contrasting snapshots of US-China relations: one marked by cooperation on vital mutual interests, the other marred by armed provocations and threats. As Clinton prepares for a nine-day China visit starting June 25 - the first by a US president since the 1989 Tiananmen Square crackdown - these images frame a major debate among decision-makers in both nations. Are China and America destined to become allies, they ask, or adversaries? The answer, according to senior US officials and China experts, is an unsettling "it depends." Deep-seated differences and mistrust could again quickly escalate into conflict between the world's most powerful state and its most populous one, they say. After years of neglecting the relationship, Washington must now aggressively use its leverage to avert hostilities and promote shared interests. China today does not pose a significant military or economic threat to US security, analysts stress. Hampered by a backward infrastructure, unwieldy bureaucracy, and outmoded state-run industries, China's economic strength by many measures is far behind America's. "By any definition, China's industrial and technical base lags dramatically behind that of the United States," says Jonathan Pollack, a senior China specialist at the Rand Corp. in Santa Monica, Calif. China's military is likely to remain technologically inferior for many years. "The Chinese are decades away from developing a serious power projection capability, with the exception of their existing ballistic cruise-missile program," says a Pentagon official. Moreover, Beijing's traditional, overarching concern with domestic political stability and sovereignty means that, beyond its periphery, it is unlikely to provoke conflict with the United States, according to Michael Swaine, a Rand expert on Chinese military strategy. "China's mind-set is not offensive. It is still highly defensive," he says. Nevertheless, the anticipated rapid growth of China's power and wealth as the world's largest economy in the next century will inevitably impact US interests, especially in Asia, experts say. "There is a growing list of issues of concern to the United States that can't be discussed without China's cooperation," says Chas Freeman, a former senior Pentagon official and US diplomat in Beijing. Unlike a decade ago, Washington today feels compelled to consult closely with Beijing on problems such as Korean reunification, the nuclear rivalry on the subcontinent, and the Asian financial crisis. Indeed, US Treasury officials now talk with their Chinese counterparts each week, according to Treasury Secretary Robert Rubin. As China gains strength and influence, experts say it is essential for Washington and Beijing to skillfully handle differences that emerge along with these new power dynamics. "The major issue is one of psychological adjustment," says Mr. Freeman. "Can the US deal with China as an equal? And can China deal with dignity with its own status as it becomes more equal?" Chilled relations Yet for most of the 1990s, say experts from across the political spectrum, US-China relations stagnated as a result of the chill from Tiananmen, a succession struggle in Beijing, and the lack of a coherent Clinton administration policy in the post-cold-war era. …