Tuesday, July 12, 2005 | The following is a speech given on June 24, 2005, before the San Diego Military, Medical, Educational, Civic and Media (MILMEC) Group.

“These are big times that we are living in. China has a grand strategy and we have none.

“No other community in America has more interests than San Diego in the overall relations between the United States and China. Our Navy and Marine Corps heroes and their ships and installations here, the Graduate School of International Relations and Pacific Studies at the University of California, San Diego, UCSD’s Medical School, our vibrant industrial base led by Qualcomm and Invitrogen, and of course our growing populations of young, smart, hard-working Chinese families – all have strong and growing interests in our relations with China.

“But we as a nation are beset by ambiguities that do not bother China as a nation.

“The single most consistent, bipartisan American foreign policy has been our policy toward China.

“President Nixon, President Ford, President Carter, President Reagan, President George H.W. Bush, President Clinton and President George W. Bush – seven presidents – have affirmed the importance of cooperative relations with China and the United States’ commitment to a one-China policy. But those affirmations now seem ambiguous because China’s pursuit of ‘comprehensive national power’- their grand strategy – has included a robust military build-up which concerns U.S. officials, members of Congress and the media. Secretary of Defense Donald Rumsfeld, in Singapore on June 9 for a conference of Asian defense ministers organized by the International Institute for Strategic Studies, drew attention to China’s expansion of its missile forces and their importation of advanced systems of military technology. He asked: Why this military build-up?

“Rumsfeld knows perfectly well: Why this military build-up? His native intelligence, his worldly sophistication and his institutional ‘intelligence,’ the best in the world, all tell him precisely why the Chinese are doing what they are doing. They are building up their missiles opposite Taiwan, and importing advanced military technologies, to coerce Taiwan into accepting unification with China and/or to deter moves toward independence by Taiwan.

“The Chinese are also gradually building up their ability to influence allies and potential allies in the region so that when the time comes, if it comes, for China to pose as a serious rival to the United States for broad geopolitical primacy, they could prevail among Asian states.

“So Secretary Rumsfeld is alerting Asia to what he sees as China’s grand strategy.

“In March 1996, I was invited to a small breakfast meeting in the Chinese Embassy in Washington, D.C. to meet with China’s national security advisor. Other Americans at breakfast that morning included General Al Haig, General Brent Scowcroft and Ambassador James Lilley. The Chinese had been firing missiles into the sea around Taiwan, and we had dispatched two aircraft carriers toward the Strait. The Chinese NSC Advisor had come to Washington to sound out the political atmosphere.

“We all told him: You have gotten yourselves on a railroad track to disaster, and it’s up to you as a great nation to get off those rails. They did get off the rails in 1996 but accelerated their build-up.

“The PLA has deployed some 500 cruise and ballistic missiles in Fujian Province opposite Taiwan. These missiles and their crews are regularly transported to western areas of China and exercised to insure reliability and accuracy. The PLA has become a major buyer of foreign military technologies, which have greatly enhanced China’s military capabilities. They have developed a new long-range cruise missile, deployed a new surface ship with a Chinese version of the U.S. Aegis battle management technology, deployed a new attack submarine known as the Yuan class, and developed surface-to-surface missiles for targeting U.S. aircraft carrier battle groups.

“Later in 1996, I attended the inauguration of Taiwan’s first democratically elected President, Lee Teng-hui. Since then, Taiwan has been changing in fundamental ways. The native Taiwanese, who are not ethnic Chinese, have been flexing their political muscles in the ruling party, the DPP. This has not been comfortable for the well-educated and financially well-off ethnic Chinese, many of whom have been moving away. For example, some 600,000 ethnic Chinese from Taiwan are now living in Shanghai.

“One of the world’s largest chip-makers and suppliers to the U.S. market has moved its operations including its top managers to the mainland. Taiwan is in danger of regressing rather than developing. The current president of Taiwan, Chen Shui-bian, of the DPP, has tried (without much success) to seek forms of independence as the solution to the island nation’s problems but in light of our security commitment, this has endangered the United States’ military by exposing them to heightened risks from the PRC.

“More recently, the leaders of two of Taiwan’s three main political parties have visited Beijing and initiated very public dialogues with the PRC leadership designed to ease tensions. Dialogues have also been under way among major Taiwanese industrialists and financiers, and Beijing, toward the same end.

“If we listen, we can hear the sounds of giant gongs being struck – a well-known Chinese medium of communication.

“Before the death of Pope John Paul II and the inauguration of the Pontificate of Benedict XVI, the Vatican had been (and still is) in discussions with Beijing about the possible de-recognition of Taiwan by Rome, and the recognition by Beijing of the Roman Catholic Church’s right to name its bishops in China.

“The ecclesiastical benefits to the Catholic Church would be huge, and the geopolitical benefits to Beijing would be incalculable. Even so, these discussions are far from conclusive. The Chinese are worried about the Church “leading the minds of the people”; and the Church wants to be able to do just that.

“From the early days of Deng Xiaoping’s rule beginning in 1978-1979, the quest for ‘comprehensive national power’ has been – and it remains today – the bedrock on which China’s rise to greatness is being constructed. Under this grand strategy, the doctrines of ‘peaceful rise’ and ‘peaceful development’ under China’s current President Hu Jin-tao

have emerged in succession to implement comprehensive national power, and to do so without alarming China’s neighbors.

“As The Economist has pointed out, over the quarter century since Deng Xiaoping came to power, China has experienced the most dynamic burst of wealth creation in human history. This achievement is transforming China into a rising power in world politics and – if its economic growth continues without interruption – would enable it to recover the

geopolitical pre-eminence it last enjoyed under the Ming Dynasty of the 14th to 17th centuries A.D.

“What is fascinating about China’s effort to devise and then implement a grand strategy is the coherence and the conscious direction underlying its behavior at home and abroad – not to mention the adroitness with which it has adapted to meet the challenges of the times. The current emphasis on peaceful ascendancy will likely satisfy Chinese interests at least until the 2008 Summer Olympics in Beijing are past. Then, China’s grand strategy could entail a turn toward intense challenge, or deepened accommodation. Much will depend on how we handle our interests in the interim.

“The Pentagon has been working on its annual, statutory assessment of China’s military capabilities, and will probably release the results next week. It has not been easy to agree on the potential threat from China. The assessment is late: it was due on March 1. The key problem is the difficulty of assessing Chinese military capabilities 20 years out, and keeping the assessment realistic. This report may be the most negative unclassified document on China our government has ever produced.

“What this assessment says now is likely to affect the outcome of the ongoing Quadrennial Defense Review. This in itself is a major procurement and deployment engine for the United States and consequently has massive political and strategic ramifications. Of course the rest of the world, and especially China, will also read the QDR and govern themselves accordingly.

“No matter what you may think about China’s intentions, the PRC is so lacking in transparency that even reasonable short-term assessments are often problematic, and can be highly contested by experts. There is no QDR published by China. The danger is worst-case mirroring, where both sides take the other’s worst case projection as capabilities or intentions that must be met, so each side ends up forcing the other into a corner.

“The fact is that the challenge China poses for the world will, in all likelihood, be political and economic, not military. The exception is the problem of Taiwan. America still recognizes the one-China principle and is opposed to an independent Taiwan. China understands that we, the United States, require the solution to be peaceful and we are prepared to vindicate that principle. We insist that all parties must continue to exercise restraint in not exacerbating tension in the Taiwan Strait, especially since China passed a law in early 2005 authorizing the use of force to prevent Taiwan’s secession.

“The time is coming, in my view, when we will have to remove some of the ‘strategic ambiguity’ that surrounds any obligation we may or may not fulfill to defend Taiwan against a Chinese attack.

“Meanwhile, the British government has proposed that a regular strategic dialogue be instituted by the European governments and the U.S. on Asia-Pacific issues. Such a dialogue would be an ongoing policy discussion on the West’s relations with China. It would require serious compromises by all parties: We would need to yield some of our hegemonic instincts, and the Europeans would have to give up on their narrow focus on trade in Asia rather than wider strategic considerations. But the legitimacy that would flow from consensus may be worth the compromises.

“Also, Japan’s increasingly extroverted defense policy and India’s increasing involvement in East Asia have influenced the U.S.-China atmosphere. For example, in 2004, Japan officially characterized China as a ‘threat,’ while we and Japan in February 2005 jointly identified security in the Taiwan Strait as a ‘common strategic objective.’ The United States unequivocally favors a permanent UN Security Council seat for Japan, and we are intent on forging an enhanced maritime alliance with Japan.

“China’s large and educated population, its vast markets, its growing role in the world economy and global financial system (holding close to a trillion dollars of U.S. government obligations, essentially financing our government’s fiscal deficits) – all foreshadow an increasing capacity to pose an array of incentives and risks. Such incentives and risks are the currency of international influence. This capacity is inherent in the global economic and financial processes that the United States has been preeminent in creating and fostering. We ought to be able to manage these challenges, and we can do better.

“The ancient Greeks said the Owl of Minerva rises only at dusk. It is you, the men and women in this room, who can and I hope will do your part to insure that our geopolitical leaders do not come too late to wisdom in the dusk of the 20th century, but timely at the dawn of the 21st.”

Robert Ellsworth is co-founder of the San Diego-based venture capital fund Hamilton BioVentures, LP, and a member of the Executive Committee of the International Advisory Board of the UCSD Graduate School of International Relations and Pacific Studies. He has served three terms as a Republican Member of Congress from Kansas, U.S. Ambassador to NATO, Deputy Secretary of Defense, and Assistant to the President in the Nixon White House. He is also a Member of the International Advisory Board of China HealthCare Holdings, Ltd., of Hong Kong, Shanghai and Beijing.

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