print | close Introduction: China's Foreign Policy and Trade

China, with its large population and massive resource-rich territory, is potentially a great power, and the policies of the P.R.C. have been directed -- in part -- at re-establishing China's position and identity as a world leader. China's military forces, while not the most efficient, are the world's largest, and China is one of the few countries capable of launching a retaliatory nuclear strike. The P.R.C. has become more active in international organizations, including the United Nations, where it is one of the five permanent members of the Security Council. China has also demonstrated the capability of putting satellites into space with its own rockets.

For ideological as well as economic reasons, however, the Chinese, since the early 1960s, have preferred to align themselves rhetorically with the poorer countries of the third world and to distance themselves from the two superpowers. Despite China's technological achievements, it remains essentially a giant developing country in need of economic assistance. And as a socialist country with a historical tradition of cultural superiority in the region, its periods of entente with the Soviet Union and the United States have often broken down. Yet, by the late 1980s, China's relations with both the United States and the Soviet Union had substantially improved.

Within the Pacific region, China is potentially a major economic and political force. Its relations with Japan, Korea, and its southeast Asian neighbors, Vietnam, Cambodia, Laos, Malaysia, Thailand, Indonesia, Singapore, and the Philippines, will be determined by how they perceive this power will be used.

By the late 1980s Japan had become China's primary trading partner and source of foreign investment. The Chinese remain sensitive to Japanese atrocities committed in China during World War II, but the two countries share a long history of cultural interchange and commonalities.

After decades of strained relations, trade and cultural and educational exchange between the United States and China is increasing. Although both countries agree that Taiwan is part of China, the United States has long supported the government on Taiwan and insists that reunification with the mainland should be achieved by peaceful means; China maintains that this is an internal matter to be settled by the Chinese themselves and protests the continuing U.S. commitment to preventing a military attack on Taiwan. Having experienced foreign encroachment and intrusion in their internal affairs from the mid-1800s to the mid-1900s, the Chinese remain sensitive to any perceived challenges to their national sovereignty.

Economic reforms since the 1980s have led to disagreement among those who favor the "open-door" policy of contact and economic exchange with the West and those who fear the "spiritual pollution" and "bourgeois liberalization" of social and economic values that have accompanied economic exchange with the West. Just as in the late 1800s, three positions can be discerned among the Chinese leaders: 1) a "neo-traditional" interpretation of Marxism that contains many traditional Chinese values (deference to seniors, paternalistic government, economic self-sufficiency, a Chinese-centered rather than cosmopolitan culture); 2) complete Westernization, including the abandonment of socialism and Marxism (since it is illegal to voice these ideas openly, it is difficult to gauge the strength of this opinion), a position held mainly by younger people and reformers; 3) adoption of Western technology and managerial methods, while attempting to isolate these elements culturally. The idea of a "Chinese-style socialism" represents this desire to adopt all that is useful from the West while still retaining a distinctive, and indeed superior, Chinese cultural identity.