How important is China in the field of America's foreign policy?

It is critical commercially. It is the only strong economy in Asia today, in fact, its one of the only growing economies in the world today. ... Also...there is a worry that if China used its military power or its growing political influence to undermine U.S. national interests, we could have a very significant problem in Asia over the horizon.

What sort of problem?

Although China has traditionally never been in a traditional sense an expansionist power ... they clearly have interests that could potentially run counter to the United States. ... Some have suggested, as China grows, they would be increasingly uncomfortable with the large role that the United States plays in Asia, and that, in a sense, the region wouldn't be big enough for the both of them. America's challenge, and indeed, the challenge of the world, is to find a way that these two great powers can find a way to work together to preserve peace and stability and to preserve prosperity -- no small feat, in the current context.

People within the Bush administration staff, as well as others, seem to think China is a military threat. Is that true?

When we think of American foreign policy challenges, we often think about the differences between our political parties, the Democrats and the Republicans. But the reality is that, when it comes to China, the real differences are not so much between the parties, but inside the parties. So, for instance, one wing of the party in the Republican Party really believes that China is the next great market, and that we have tremendous potential to be able to trade and interact with China. And the leaders of engagement with China were all from the Republican Party, like Henry Kissinger, Brent Snowcroft. Alexander Haig, President Bush's own father ... one of the group that was involved in building strong ties between the United States and China.

At the same time, there is also a wing in the Republican Party that argues -- sometimes quite vociferously -- that China is not the next great market in the United States; that China is the next great enemy of the United States. As you indicate, there is a raging debate, sometimes in full view, sometimes behind the scenes, about how to conceptualize China.

From my perspective, the challenge for the United States is that China will represent many things. It will be a challenge in foreign policy and security. It will be a challenge and an opportunity economically. And so it is likely to encompass all of these things. .

When President Bush is in China ... he will presumably ask the Chinese to join him in a war against terrorism. Will they do this?

It's a very challenging question, and let me try to answer it in this way. China was very smart politically to be one of the first countries to come out and condemn these acts of terrorism. And I think that was received very well in the United States. I think some even believed that this was a sign of maturity, and that, in fact, China viewed the world very similarly to the United States in this regard.

I think a more subtle assessment might suggest that, not only is the United States as a major society threatened by Islamic terrorism -- China is, as well. In fact, if you look at over the last several years, some of their weaker separatists in the western part of the country who have strong ties with Osama bin Laden and indeed other Islamic groups have waged their own brand of horrific terrorism in China, with bombs going off in busses in urban areas.

And so China is also keenly aware of the challenge that Islamic terrorist presents to its own society. And so to join with the United States in condemning such acts is a natural thing. It is also a smart thing for them, because job number one in their foreign policy in the short term is to ensure that Bush comes to China.

However, the delicate part will come, if and when the United States asks China for support, either in the Security Council or rhetorically ... for military steps, here, you will see China's dilemma: On the one hand, wanting to fight international terrorism, but preferring that to be done either internally, inside their own country, or through other means, the United Nations and other efforts; but also deeply uncomfortable by the expression of American military might, as we saw in both Kosovo and the Gulf War.

... What's interesting is ... behind the scenes in other countries, you hear one of two things: Either sort of cheering [that] the American hegemony has finally received its appropriate punishment, or secondly, perhaps, some cluck-clucking that the United States deserved it. ... You have seen that very visible in the United States in terms of initial pictures from Pakistan. China has been a ruthless ... in trying to suppress any signs from its media or from its internet that those sentiments exist in China. And the reality is, they exist in very large quantities.

You mean there is anti-American feeling in China?

Absolutely, yes. I think China's one of those countries that has very complex feelings towards the United States. They like our music. They like our movies. They like much about what the United States stands for. At the same time, they are deeply dissatisfied with certain aspects of American foreign policy. Many Chinese believe, fundamentally, that the United States is set on destabilizing China, or at least trying to stop China from reaching its full potential.

Most Americans would find that hard to believe, but the reality is that Chinese have very complex feelings about the United States. The art and the science of opinion polling is just starting to be applied systematically in China. But what we think we know from opinion polls in major urban areas -- again, these are mostly cities in the east and in Beijing -- suggests that there in fact are growing pockets of anti-Americanism that really have real concerns about how the United States conducts itself in the world.

Is China going to ask for things in this war against terrorism?

Very interesting. The reality is, if you look back at the now-coming-up on 25 years of diplomatic relations between the United States and China, in many respects you see an almost single-minded focus -- that when the United States wants things from China, China in some way comes back and says, "Well, in exchange for this, we are going to need some movement on Taiwan." And what's fascinating is that, across the board, whether it was on the Soviet Union or combating proliferation, or assistance in regional security efforts like on the Korean peninsula, the general response has been, "You need to help us on Taiwan." This administration has been very firm in terms of making clear that the U.S. interest is to preserve peace and stability in the Taiwan Strait, and, if anything, lean a little bit towards Taiwan in the steps that they are prepared to take to preserve that peace.

What will happen if China sort of asks as part of a quid pro quo for signs of warming between the United States and China, which can be interpreted as sort of a distancing therefore from Taiwan? It's hard to know how the Bush administration will act. One of the things that is absolutely clear is that, at least for the immediate future, what matters more than anything else is combating this terrible ... aftermath of our attacks in Washington and New York. It will have a centralizing and convening feature in American foreign policy. That's extraordinarily difficult to underestimate.

How dangerous is the Taiwan Strait area?

I would say that there are many factors associated with the Taiwan Strait that makes it quite dangerous. ... Probably the most important factor is that you have forces at work that appear to be almost inexorable.

Over the last several years, [there has been] a really sort of determined Chinese military build-up aimed at Taiwan that neither scolding from Western diplomats, nor appeals to their own self interest had any success in blunting or lessening. At the same time, there is an inexorable process in Taiwan of greater democratization, sort of a greater identity of seeing themselves as more Taiwanese than Chinese. And perhaps, most importantly, a lack of clarity in the United States about what precisely are our strategic interests, and perhaps more importantly, how to achieve them.

So it is a potential flashpoint?

Oh, it's undoubtedly a potential flashpoint. I would say that the interesting thing about the world today is that every major challenge to peace and stability that has the potential to erupt on a global scale is found in Asia. There is nothing in Europe. You can't really imagine a scenario that would lead to a global war ... overnight in Europe. I can imagine three, in Asia.

There are still tents that stand on the Korean peninsula. The increasingly delicate and complicated relationship across the Taiwan Strait and, of course, the ... nuclear rivalry between India and Pakistan.

The Taiwan Strait issue is most complicated, because the United States does not have a firm and clear role in terms of what it would do in a military crisis. The unusual thing, from the perspective of the security planner, or strategic thinker, is that if you span the globe ... you see a strong U.S. role in trying to bridge gaps and bring peace, literally everywhere. ... The Taiwan Strait ... is the only place in the world where we, at the outset, have forsaken an active diplomatic role. But it is also a place that, overnight, we might find U.S. forces thrust into the mix.

So that is potentially severe for America?

And for the world. Before the tragic bombing [9/11/01] it was the one convening issue that American policy makers and strategists were spending more and more time thinking about behind the scenes. Our military establishment and our intelligence organizations do these war games ... often recreating the tensions associated with major international dilemmas. I think it would be fair to say that, in the last couple of years, probably a hundred of these run on some facet of Asia, generally associated with the Taiwan Strait.

The foreign policy towards Taiwan, and China ... they call it "strategic ambiguity." Do we really not know what we would do if there was conflict between Taiwan and China?

One of the great opportunities for tools that you have at your disposal ... when you are in the Defense Department, when it comes to the Taiwan Strait, is that you say you will never answer hypothetical questions. This is such a question. And unfortunately, when you are out of government, you lose that sort of protective ... answer.

I think, increasingly, the United States does have a sense of what it would do in a crisis in the Taiwan Strait ... and I think that notion has been more refined over time. I think you saw earlier signs of that in the first Taiwan Strait crisis of 1995, 1996, when the United States sent two aircraft carriers and their associated ... ships and submarines with that group to the Western Pacific. That's a pretty strong statement of the U.S. will to preserve peace and stability.

But in some ways, it's out of the U.S. hands if Taiwan, having achieved democracy, wants independence... Then, for China, say, that would be a declaration of war.

I know that there is a group that believes that that's the most dangerous potential trigger. ... I have less worry about a growing desire for independence in Taiwan. I think fundamentally that Taiwanese body politics understands, despite its flirtation with the sort of formal independence, that it's not on, and that they are sort of destined to live and prosper in this sort of between state -- not a sovereign, and not independent, either. Until there are major changes in China, I am more wary and more worried about a growing impatience in China.

The interesting thing about the so-called White Paper that was published in 1998-1999, the White Paper in China about the Taiwan Strait... In it was an enormously important and troubling development. In the past, China has basically said that any unwarranted adjustment in the status quo would potentially lead China to use of force. They felt that strongly about it. The clause in the White Paper that was quite worrisome was what might be thought of as a new wrinkle in this approach. [It] was essentially argued that [if] Taiwan clung to the status quo -- as opposed to tried to adjust it - it, too, could be seen as a cause for the use of force. So what's worrisome is a sense that if Taiwan refused or chose not to head into negotiations that would lead to reunification, that that would be seen as a pretext for the use of military force. From my perspective, that's dangerous, and unacceptable.

And before those negotiations begin, they have got to accept "one China?"

Well, again, remember that the PRC conceptualizes one China ... it is such that it seems like a sort of a modest precondition. But the reality is that it is loaded in such a way that basically, in many respects, the negotiations would be over. It would be just a matter of time before you move on to sort of cleaning up the last details.

My own personal view is that I would like to see a situation where China and Taiwan began talks without preconditions. It's not for the United States to determine that. But I think that the lack of communication is unhelpful, and ultimately undermining China's cause. I think the inflexibility on their part has made it more difficult to make progress in an area which ... just small steps to improve cooperation, to improve understanding could have enormous consequences.

Ultimately, I think China is going to have to take much more significant long-term steps to try to win the hearts and minds of the people of Taiwan. When you were in China, you no doubt heard ... the oft-repeated refrain that China has a quote, unquote, "peaceful policy towards Taiwan." And I guess in some meaning of the language, that is in fact true. But the reality is that the essence of China's strategy towards Taiwan is coercive. "Essentially, we are going to threaten you, that unless you basically work with us, unless you agree to reunify, we are going to threaten force. We are going to hold this Damoclean sword over your head." Ultimately, in a proud democracy like Taiwan, that has, if anything ... unintended consequences.

What is the military build-up in the area opposite Taiwan?

I'd say over the last several years it has been fairly inexorable. In a few areas, we have seen a substantial growth in the number of short-range and medium- range ballistic missiles targeted on Taiwan. For instance, in 1995, 1996, we were looking at a couple of battalions of missiles -- probably no more than 40 or 50 aimed at potential targets at Taiwan. Today that number, just five or six years later, is over 300, and likely to grow to many more. That is destabilizing. You know, I don't think our Chinese friends are willing to accept that.

But I assure you that if you go to the surrounding states in the region, they understand that it's ... although it's meant to be directed just at Taiwan, it has a sort of cascading effect of creating more insecurity in other states, as well. It's not in China's interests.

So why this military build-up opposite Taiwan?

I think they see it as the essential threat that will mobilize the mind of Taiwan to accept their ultimate destiny, which is to rejoin with China.

Why Taiwan? Why do they want Taiwan?

It's an obvious and important question for Westerners. But if you asked ... you know what ... concepts and notions have animated Chinese thinking for this last century -- the notion of restoring China to its former geographic centrality and glory is absolutely critical to have both the people and the Chinese leadership see their destiny.

And so the idea that imperial Westerners, particularly our friends in Great Britain, have been involved in sort of cutting up China, the concept is that Taiwan is sort of a last piece in the puzzle. There is a sense when Jiang Zemin starts talking, and people ask him, "What is your destiny, what do you think about in terms of your legacy as a leader?" He has, in private moments, confided that this is how he sees himself: that Mao opened China, that Deng modernized China, and that he wants to unify China. So we have had Hong Kong, Macao, and sort of Taiwan next.

My own sense, and I think the sense of much of the region of the world, is that it would be better to take the advice of an earlier Chinese leader -- both Mao and some of his earlier supporters, who had an unusual patience when it came to Taiwan -- that we could wait 50 or perhaps even 100 years for ultimate resolution. What we need to do now is to encourage patience on all sides, but particularly in Beijing.

What about the American sales of military hardware to Taiwan? Hasn't President Bush rapidly sort of created a military escalation in that area?

To be honest, the real increase in military sales to Taiwan -- which I think are appropriate and defensive and in response to build-ups in China -- really begin in the Clinton years. And even though there's a lot of nasty back and forth, you have seen sort of a slow, steady and I think not aggressive or overly militarized response from the United States. If you look at this year's arms sales to Taiwan, they were a series primarily of ships that are going to be remodeled, and are provided to Taiwan. Taiwan's fleet today consists of a variety of ships that saw service during the Second World War. Many of its military capabilities are extremely outmoded. And it is a very small island.

And at least from my perspective, it seems that responding with appropriate defense sales to Taiwan is both a signal that the United States stands by Taiwan, and a signal to Beijing that really this course of action -- escalating military sales and capabilities -- ultimately will not be in your interests.

But it makes it a dangerous, doesn't it? If this conflict comes on, the disaster could be worse ... if there is tension and conflict.

If you are raising the point that there has been an increase in military sales and military build-up across the Taiwan Strait, the answer to that is yes. I think we are still at a fairly early stage, at a stage in which this process can be arrested. But my own view is that the driving force here really is not the United States or Taiwan. Taiwan's military is one of the most isolated militaries in the world with remarkable little staying power. ... They do well with what they have. But they are facing, across sort of a narrow divide, where the largest militaries in the world ... still quite a primitive military in many respects. And so they appreciate and understand the reality of their circumstance.

What we have seen really is this inexorable process in China. China is where there needs to be a change of thinking about how best to interact with China, with Taiwan. And coercion, threats ... will not serve China's ultimate purpose, and, in fact, will probably undermine it.

Now, America accepts "one China." Why doesn't it try and persuade Taiwan to rejoin China?

Remember, the definitions or the conceptions of "one China" can be extraordinarily ... varied, both in the United States, in Taiwan and in China itself. The challenging thing about the Taiwan Strait is that all the major problems of American foreign policy are collected together in one major issue. The question of sort of big power relationships, U.S. support for a former formal ally ... the idea to preserve democracy and independence ... and a strong functioning economy. These are all sort of U.S. national security goals that, in this context, are perhaps arrayed against one another.

On occasion, I think there is a general consensus, however, that although we accepted there is "one China" -- and believe that ultimately the conditions will exist that will allow for closer interaction between China and Taiwan in the context of a single China -- that the conditions right now are such that the most important steps that China can take is to try to increase communication and trust with Taiwan.

How tense was it during 1995, 1996?

I have to say that when you are out of government and a horrible crisis like what the United States has just experienced transpires, you inevitably think back to your own times in crisis -- a little bit like post-traumatic stress syndrome for government bureaucrats. You recall the unbelievable late nights, the stress, the nervousness in the rooms as you are reviewing intelligence and making difficult decisions. You know, it's very tense, very stressful. For me, it was my own personal sort of Cuban missile crisis. You are up all night, briefing senior officials. You are trying to come up with the best options for an unbelievably difficult situation.

What had you planned would happen if they continued with their missile barrage?

All I can tell you is the United States had made a decision that we thought it was extraordinarily important to send a signal to China, that this was in our interests. And by doing so, by sending two carriers, I think the message was well received in Beijing. It was well understood.

But if it hadn't been well received, you couldn't have backed down?

I am going to fall back on the sort of the hypothetical question here. I think that it is extremely important that the United States again here try to marry several objectives. We must always try to avoid a debilitating experience like with Vietnam, where we withdrew and lost a tremendous amount of credibility. ... The key there then also is to avoid situations where that might occur in the first place. And so diplomacy, dialogue, clear strategic thinking, is absolutely critical.

But you must have debated what you would do if the Chinese didn't back down -- presumably, that was central to your worries?

Absolutely. And it wasn't just whether they would back down or not back down, but what steps they might take. Taiwan, as you know, is not one island. The situation that we saw after the Chinese civil war is that, literally, there are hundreds of islands, many of which are just a few miles from the Chinese border, from the Chinese mainland. The question is, what about the status of those islands, if China chose to move towards one of them? All those questions came to bear. ...

I think it became fairly clear about halfway through the crisis that the Chinese had miscalculated. They were trying to send a signal to Taiwan; instead, we got the signal. And they, I think, carefully started to back down. And when we saw those signs, it was reassuring. However, it was by far and away the most stressful experience I have encountered since I was in government.