On October 18, Secretary of Defense Donald Rumsfeld landed in Beijing for a three-day visit, his first trip to China for the Bush administration. Beijing’s Communist leaders had long been pushing for a Rumsfeld tour, hoping to have the same effect on the Pentagon boss as they have had on other official visitors.

Treasury Secretary John Snow has just returned from one of his frequent trips to China. He came back again voicing confidence that Beijing was on the verge of major financial reforms, despite having been badly burned over the summer by Chinese claims that they would soon settle their vexing currency-manipulation issue. The much-anticipated shift in July from a dollar peg to a tightly managed float for the yuan–which changed its value by only two percent–has done nothing to change the economic situation. Yet, on the basis of his week in China, Snow has again delayed release of the Treasury’s semi-annual report on global-exchange-rate policies. Snow has refused to state the obvious in past Treasury reports, which is that Beijing does control its currency values so as to gain a trade advantage.

The Pentagon’s annual report on the Chinese military was also delayed this year because agencies outside the Department of Defense (mainly the State and Commerce departments) tried to water down the perception that Beijing is a rising threat to the United States. The muted tone of the report’s early chapters indicates that this vetting process was at least partially successful. However, China’s astounding growth in capabilities and confidence could not be ignored.

The Department of Defense emphasis on the changing balance of power between China and Taiwan got considerable attention, but that was the start, not the end, of the story. The report stated, “Although the principal focus of China’s military modernization in the near term appears to be preparing for potential conflict in the Taiwan Strait, some of China’s military planners are surveying the strategic landscape beyond Taiwan. Some Chinese military analysts have expressed the view that control of Taiwan would enable the People’s Liberation Army Navy to move its maritime defensive perimeter further seaward and improve Beijing’s ability to influence regional sea lines of communication.” General Wen Zongren, political commissar of the elite PLA Academy of Military Science, is quoted as saying that taking control of Taiwan is of “far reaching significance to breaking international forces’ blockade against China’s maritime security… Only when we break this blockade shall we be able to talk about China’s rise… [T]o rise suddenly, China must pass through oceans and go out of the oceans in its future development.”

Rumsfeld posed the question of Chinese intentions at a security conference in Singapore shortly before the report was to be released. A firestorm of criticism ensued from those who favor an appeasement policy towards Beijing, delaying the report’s publication for another month. This did not stop Rumsfeld returning to this theme at the Central Party School on Oct. 19, telling students that “a growth in China’s power projection understandably leads other nations to question China’s intentions–and to adjust their behavior in some fashion.”

Rumsfeld’s experience dates back to the Cold War, so he is aware of the “Potemkin Village” gambit used by Communist regimes to convey a false impression to visitors. While being whisked around Beijing, he will hopefully note not only the massive growth and sense of energy in the Chinese capital, but also the palpable feeling of ambition that pervades the country. On October 16, two Chinese astronauts landed safely after a five-day earth orbit mission, confirming Beijing’s status as only the third country to develop its own manned space program. The program is run by the General Armaments Department of the People’s Liberation Army, so its role as an engine of scientific advancement will directly benefit weapons development.

Rumsfeld irked Beijing by including other stops in the region, including Mongolia, South Korea, and Kazhakstan. He cancelled a visit to Japan, however, because of a stalemate in talks on where to relocate a U.S. military base on Okinawa. The change in plans and its reason undoubtedly pleased Beijing, but it does not change the fact that Tokyo shares the Pentagon’s growing concerns about Chinese power. Last February, Japan joined with the U.S. in declaring that “peace” in and around Taiwan is a “common security goal.” Tokyo worries that Chinese control of Taiwan would move submarine, air, and missile bases closer to the vital sea lanes just north of the Philippines through which oil and raw materials move to Japan from the south. Tomohiko Taniguchi, a former Brookings Institution fellow, recently told Defense News on October 17, “If Taiwan falls to China, Japan and Korea will find themselves buying insurance policies from Beijing.”

Japanese forces have been redeployed from the north, where they had faced a Soviet threat during the Cold War, to the south and west to face a North Korean or Chinese threat. Tokyo has acquired an air refueling capability to support possible air operations across Korea and parts of China, is building a 13,000-ton fleet command ship for blue-water naval missions, and may soon consider a new constitution which would return Japan to the ranks of “normal” countries capable of closer joint military actions with allies like the United States.

On the day Rumsfeld landed in China, Japan’s leading newspaper, the Asahi Shimbun, reported that Japanese officials are leaning toward allowing Washington to deploy an early-warning radar system as part of a defense against intercontinental ballistic missiles aimed at the United States.

The decisive victory of Prime Minister Junichiro Koizumi and his Liberal Democratic Party in the September 11 elections to the Diet’s Lower House will further strengthen moves by Japan towards military vigilance with respect to China. Seiji Maehara, who was elected leader of the opposition Democratic Party last month, has called in the past for Japan to acquire ballistic missiles, aircraft carriers, and other means of projecting power beyond mere territorial self-defense. Both Koizumi and Maehara favor amending the “pacifist” Article 9 of the present constitution to allow Tokyo more freedom of action.

Working with Japan (and India) the United States can offset China’s rising power in Asia. But the Bush administration needs to settle on a Chinese strategy, rather than see different Cabinet officers engaged in their own parochial policies. It makes little sense for the American “business wing” to build up Beijing’s capabilities through investment flows and technology transfers, only to require the American “security wing” to redeploy military units and strengthen alliances to contain those new capabilities at the risk of war.

– William Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council in Washington, DC.