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By Root 1183 0

keep enmeshing Japan with economic ties and greater cooperation, gaining access to its markets, investment, and technology—and achieving dominance over time. There is even an argument for genuine reconciliation. Japan has not behaved perfectly, but it has apologized several times for wartime aggression and paid China more than $34 billion in development aid (reparations, effectively)—something never mentioned by the Chinese. And clearly, a desire for reconciliation was on display when Premier Wen went to Japan in 2007. But it might not last. For China, a domestic problem gets in the way. Having abandoned communism, the Communist Party has been using nationalism as the glue that keeps China together, and modern Chinese nationalism is defined in large part by its hostility toward Japan. Despite his many catastrophic policies, Mao remains a hero in China because he fought the Japanese and unified the country.

The Chinese government has generally assumed it could manage popular sentiment, but it is losing that confidence. Not being a democracy, it has little experience doing so. It deals with public anger and emotions cagily, unsure whether to encourage them or clamp down, for fear of where they might lead. It has no idea what to do with a group like the Patriots Alliance, an Internet-based hypernationalist group that organized the anti-American protests after the 2001 EP-3 plane incident and the anti-Japanese protests of 2005. Both actions were at first encouraged, only to become much more intense than the regime expected. Those incidents appear to have spurred some rethinking, and Beijing has more recently toned down its support of nationalism, more fully embracing a quieter approach to diplomacy and politics.

The danger of external crisis plus internal nationalism looms largest over Taiwan. Beijing, long obsessed with Taiwan, has been uncompromising, as have some Taiwanese politicians—a sometimes combustible combination, as when President Chen Shuibian of Taiwan provoked a flurry of outrage by proposing a national referendum on Taiwan’s independence in 2002. For the most part, Beijing has pursued its long-term plan of “normalizing” relations with the island’s main opposition party and smothering it with conciliation. But not always. In March 2005, Beijing passed an “anti-secession” law, threatening Taiwan with military force if it dared to anger China in any way. As a result, among other things, the European Union postponed its plan to lift an arms embargo on China.

Taiwan offers the most vivid and important example of how the economic incentives for integration and the political urges for nationalism diverge and yet can be managed. The rational decision making that guides economic policy is not so easily applied in the realm of politics, where honor, history, pride, and anger all play a large role. In recent years, Beijing has switched to a smarter, less aggressive course with regard to Taiwan, recognizing that time is on its side. Thus it has made several clever moves that have increased Taiwan’s dependence on the mainland—most significantly the reduction of tariffs on farm products that come from the most independence-minded parts of Taiwan. All the while, of course, China’s military has grown rapidly, its principal strategic objective being to prevail quickly in any conflict over Taiwan. In other words, economic growth and globalization have made Beijing plan for integration and yet given it the power for military and political confrontation.

The Dragon and the Eagle

The importance of China’s relations with every country in the world is dwarfed by its relations with one—the United States of America. Or, to put it differently, none of the potential problems that China faces matter unless they trigger the involvement of America. Without U.S. involvement, a war over Taiwan might be bloody and tragic, but only if it turned into a Sino-U.S. confrontation would it have far-reaching global consequences. The China challenge also has greater implications for the United States than for other countries. Historically, when