China on the march.

• Author: Carter, Ashton B.

TWENTY YEARS from now, will China be a friend or foe of the United States? Certainly, China's youngest generation will influence the answer. It controls future policies, the pace of internal development, domestic stability and whether there is a crisis over Taiwan. Yet America's response is also important; the wrong actions could turn China against us.

The United States must adopt a two-pronged policy. The first is to encourage China to become a "responsible stakeholder" in the international community. The second is to hedge against competitive or aggressive behavior by China. Americans are impatient and dislike ambiguity, so successive U.S. administrations have struggled to sustain public support for a policy that to many, at first glance, can seem self-contradictory. But there is no reason for our policy to be self-contradictory. The key is what might be termed "prudent hedging", which does not impede engagement and does not create a self-fulfilling prophecy where treating China as an enemy turns it into one.

Since Chinese military leaders cannot predict the future, they will prepare for the worst even as they hope for the best. Hedging is contagious. The problem is their efforts will appear to Washington as the very behavior against which we are hedging. During the Cold War, hedging and worst-case-scenario assumptions led to a dangerous and expensive arms race.

There is already, of course, a localized but very real "arms race" between the two powers--where U.S. and Chinese forces are committed to direct, head-to-head military competition--over the Taiwan Strait contingency. The United States has a policy, the Taiwan Relations Act, to be prepared to defend Taiwan from Chinese invasion or coercion. (At the same time, Washington opposes Taiwanese independence.) The U.S. military therefore correctly anticipates the long-term mission of ensuring access to the strait and achieving air and sea dominance there. China, for its part, will not renounce the use of force to prevent Taiwan's independence. For the Chinese military, this means being able to intimidate, if not conquer, Taiwan. It also means being able to chase or scare away U.S. forces from the strait by making naval and air operations there too hazardous. For the foreseeable future, the U.S. and Chinese militaries will take each other's measure in the strait and pursue competing military objectives.

To make things more complicated, both China and the United States have other strategic factors driving their military postures. For example, global leadership requires the United States to maintain its forces' qualitative superiority and quantitative sufficiency. The Defense Department will receive in excess of $500 billion (including supplementals) in the 2007 fiscal year for a host of current missions and future contingencies--but many are completely unrelated to east Asia.

For its part, China will be spending about 15 percent of this amount on defense this year (even correcting for hidden subsidies in the Chinese budget). In China's eyes, it has not yet built a military large and strong enough for the large role it sees for itself--no matter how the relationship with the United States turns out. Moreover, China weighs its military power in relation to the neighbors it seeks to deter--Japan, Russia and India--as well as to the United States. So even in a world where Washington and Beijing had the best of relations, China would still build its military to match its global ambitions and pursue its regional rivals.

This should concern the United States, but what should we do? It is important for China's people, its neighbors and the United States to know the size and shape of China's build-up, and the requirement that they be open about it might dissuade the Chinese from an excessive buildup. But emphasizing transparency does not address the question of what would be "excessive." Former Secretary of State Warren Christopher, when characterizing U.S. sanctions on Iran, was fond of saying that the United States should not sell Iran a Kleenex. In the same spirit, the United States would clearly prefer that China arm itself with only a bow and arrow. Between a bow and arrow and an all-out drive to match the United States across all elements of military power, where will China end up? Where should it end up, in terms of American interests?

MAO ZEDONG gave the People's Liberation Army (PLA) a strategy of "People's War" aimed primarily to cope with a Soviet invasion (and, secondarily, a U.S. invasion). The idea was to draw invading armies deep into Chinese territory, enveloping and slowly destroying them in a war of attrition. This strategy required a mass conscript army spread all over the Chinese countryside; a side benefit, as Mao fully understood, was that this army could also maintain Communist Party control over the huge population.

In contrast, Deng Xiaoping and his successors have advocated new theories of "Local War" (versus total war) and "Rapid War, Rapid Resolution" (as opposed to war of attrition). The Chinese have a plan, described in their Defense White Paper of December 2004, to bring the military out of perceived backwardness. It describes the modernization trajectory for the PLA in terms of a "Revolution in Military Affairs with Chinese Characteristics."

First is to deal with the...