For a nervous and wavering Beijing, the stakes were high. In the case of failure, some had even envisaged the beginning of a Cold War with Washington. But even before President Hu Jintao met with the troublesome United States Congress last week, Beijing felt relieved.


The Chinese champions of dialogue, the volunteers of a future alliance with the US, and the willing dreamers of the ''sweet and sour'' AmeriChina were already claiming victory.


A significant sign of their success was a reference in a speech of US President Barack Obama. He had mentioned in positive tones the Chinese theory about its peaceful development, the brainchild of Zheng Bijian, Hu's top adviser, who accompanied him to the United States.


The idea of peaceful development, with Washington's endorsement, can become the compass of the bilateral relationship. It gives new power to the moderate wing in the debate within the Communist Party of China and it could already give a new, more "pro-American" spin to Chinese foreign policy in the coming months.


It is not the Group of Two, but a test not only of words but also that there is real substance in the new ties - the approval of the establishment of a US-China joint research center on clean energy in Beijing. These signs embody the search for mutual trust as a basis of the bilateral relationship that for the past year has been the mantra of Chinese policy towards the United States.


Some fear that the US wants to incite the toppling of the Chinese government and then proceed to cut China into pieces, dividing Tibet or Xinjiang from the rest of the country. Obama's assurances on these issues were echoed by Hu's acknowledgement of the weaknesses of Chinese human rights, and he also admitted that Beijing could learn from Washington. However, he maintained that the countries had different histories and levels of socio-economic development, and thus their human rights record could not be compared in the same manner.


In exchange for this support, Hu granted assistance on the delicate North Korean and Iranian dossiers. It is therefore an important victory for the voices of dialogue in China, even if it is not a final and absolute victory. Taiwan still represents a slippery slope.


Here, things are fine for now, and if the elections at the end of next year give Ma Ying-jiu another term in the president's office we might even see the start of political talks on reunification, possibly led by Zheng Bijian.


But if the elections are won by the opposition Democratic Progressive Party, which is in favor of Taiwan's unilateral declaration of independence, the situation could become much more tense. For Beijing, it will be important to strengthen ties with America in the months before Taiwan's voters go to the polls and hope for no surprises.


Chinese monsters over bilateral ties
Success did not come easily and monsters still lurk in the many dark corners of bilateral ties. In Washington, Hu went with a large shadow over his shoulder - that of the Chinese military, which had challenged US technological supremacy with the experimental flight of a stealth fighter jet, the J-20.


It is unclear if Hu had fully supported the test, held to coincide with the visit to Beijing of US Secretary of Defense Robert Gates. But Hu's most important office is that of chairman of the Central Military Commission. This was the last post held by Deng Xiaoping, in synch with the mindset of Mao Zedong's warning that "power comes from the barrel of the gun".


The party and the army are actually two structures one inside the other. The soldiers are still a major constituency of China's top leadership. At the latest party congress in 2007, nearly 30% of the delegates were from the army. Moreover, social security depends on the armed police, or wu jin, who partly obey the Ministry of Public Security and partly the armed forces, but constitute one military body.


The central problem of the army, however, is: what is its mission and ambition now?


Under Mao it was very clear: to bring revolution against the invading Japanese or the incumbent Nationalists, but also, in the 1950s and 1960s, to support communist forces in other countries, like Korea, Indonesia, Malaysia, Vietnam, Burma (Myanmar) or Mozambique. Deng, who came to power at the end of the 1970s, changed the tune, cutting off all "revolutionary" missions and in 1979 deploying troops against those of a former brother country, Vietnam, which had invaded another former brother country, Cambodia.


The war against Vietnam was a disaster and Deng cut half a million soldiers, but also created a new political pact with them. The military would not receive new funding (which was short in general) for weapons, but in return could get into business.


Starting in the 1980s, the military was one of the engines of economic growth as it opening thousands of businesses and gained more privileges at a time of major expansion in foreign trade. This phase had an initial end in the mid-1990s. At the time, China was in talks to join the General Agreement on Tariffs and Trade (GATT), the predecessor to the World Trade Organization (WTO), and there was dispute about tariff levels requested by the West.


A study by the Chinese Academy of Social Sciences broke the deadlock by proving that in reality, the level of tariffs on Chinese total imports, official and smuggled, was in fact lower than the rates required to join the GATT. If the government had cut the rates for the GATT while cutting off all smuggling, tax revenues would have increased along with protection of the domestic Chinese market. Smuggling was then largely under the tutelage of the army.


Therefore, between 1997 and 1999, the Chinese government took all enterprises away from the army, removed its import privileges, radically eliminated smuggling, and entered the WTO.


But what this brought was a new political pact with the army. Soldiers were no longer allowed to make money with business and had to be in the military full time. Thus, they would receive funding from the state to buy new weapons and upgrade their technology.


At the same time, China was getting rich; it increased its tax revenues and had no spending on social welfare as schools and hospitals were, and are, privately run. Therefore, it had more money to throw at the People's Liberation Army (PLA).


In the past decade, according to the most conservative estimates, military spending increased by more than 10% per year, faster than the gross domestic product (GDP) growth rate, and it was also distributed differently from in the past. The air force, missile force and navy had the lion's share in new technological acquisitions compared to the once-dominant ground forces.


Their mandate has become to avoid defeat in the case of limited or major confrontation over Taiwan.


Hu certainly does not want an armed confrontation with Taiwan. He has opened an intense relationship with the island's president, Ma Ying-jiu and his ruling Nationalist Party, the KMT. But even the mere possibility of a confrontation creates tension with the US, which pledges to defend the island from a possible mainland attack by selling advanced weapons.


Here, the limit is very thin not militarily, but politically. From China's view, it is not clear whether the promise of an American engagement against any attack on Taiwan by Beijing is just passive or if it represents an active US commitment to prevent reunification. For the Chinese generals, and also for Hu himself, who pushed so much for the cause of reunification, the US stance on Taiwan is crucial.


It could also be crucial in some military sectors to show that resolution of the Taiwan issue was obtained because of the military stance, not thanks to political maneuvering. Furthermore, thinking of the 2012 party congress, military forces or those who want their support can try to flex their muscles to gain the upper hand.


Here, there might be differences, but there is also a common denominator - a deep mistrust of the US, cordially reciprocated, according to the Chinese. Hu's task at the summit was then double: to try to reassure President Barack Obama about Chinese intentions but also bring home solid arguments in the next few days, when he will brief China's top echelons, to convince the other politburo members about the sustainability of a relationship of increasing trust with America.


This will in turn define the next political mission of the Chinese army, to be decided in years to come. We do not need to think of open hostilities, but it is enough to wonder whether the PLA mission should be aligned with or against the US. Will the patrol of naval routes in 10-20 years, when the Taiwan issue is solved and Chinese GDP is two to four times its current size (without considering yuan revaluations), be held together in coordination with American ships or not?


The first conditions in response to these questions have been raised in recent days. In the following weeks and months, one important testing ground for the new relationship will be North Korea. The issue between China and Korea, besides all geopolitical and security issues, is a problem of political identity of what the People's Republic of China used to be and what it is or may be, the truly new China.


The identities of the People's Republic of China and North Korea are intimately linked. Kim Il-sung, the first in the breed of North Korean communist dictators, began his revolutionary career in the ranks of the Red Army of China, after leaving a school he attended in China. This thread became a chain after Pyongyang attacked the South in 1950.


At that time, China had to decide what to do and the decision was extremely complicated.


China would have preferred to leave Korea to its fate and concentrate instead on the recovery of Taiwan, where nationalists had taken refuge. Here, at first, the Americans lacked a clear attitude. Indeed, the US did not intervene directly when in China the Nationalists were overwhelmed by the PLA, and it seemed that, as had happened before, the US would not oppose the communist attack against the nationalist bulwark in Taiwan.


To a then-emerging China under a new communist rule, it was a matter of national unity and eliminating the dangerous hotbed of opposition, which would clearly become the anti-communist Nationalist government in Taiwan.


North Korea was a more controversial issue, one which counted in the complex international arena affecting beleaguered Soviet leader, Joseph Stalin. For him, confrontation with America and the West had become hard, while Mao had spent the 1940s getting some support from the Soviets and flirting with the Americans. The Soviets responded to these gestures with some support for Mao's Nationalist enemies. In short, between Americans and Chinese communists there had been no confrontation, as indeed there had been approaches to engagements.


US military advisers had arrived in the Yanan revolutionary base, and Mao had entrusted his memoirs to American journalist Edgar Snow, and four-star US General Joseph Stilwell had said he would have armed the communists rather than the Nationalists. When the civil war then broke out with the Nationalists, the US had armed Chiang Kai-shek, but had stayed away from intervening in the conflict; this is in contrast to what happened later in Korea and Vietnam. On the other hand, the Soviets had armed Mao (ungenerously), while grabbing as spoils of war much of what the Japanese had left in Manchuria.


This is important because in many ways the Cold War could have begun with the outbreak of hostilities between communists and Nationalists in China, but it never did. America still held a cautious attitude towards Mao. Even Stalin was prudent with Mao as the Soviet leader had his ambassador follow the Nationalist president Chiang Kai-shek to Canton. In fact, the Soviet ambassador was the last diplomat to follow the Nationalist government into Canton, just before its departure to Taiwan.


The newly established People's Republic of China was friendly to the Soviet Union in 1949 but was not an outright enemy of the US, partly because American neutrality was useful to the re-conquest of Taiwan. This balance was broken into two stages. The Americans intervened directly in defense of the South against the invading North Koreans.


It was a very important strategic shift in respect to substantive neutrality observed in China. They did it by using a new, international institution, a result of the war: the United Nations, which sanctioned the operation. The Soviet Union then - probably for fear of being isolated in an international context whereby they felt alone and surrounded by enemy countries (other members of the Security Council were Britain, France and China - at the time Chiang's Nationalists) - did not veto a military intervention in support of the South.


The North, however, was likely to be swept away and Soviet boundaries threatened in the confrontation with the US, sending a strong signal against Stalin after he had just taken a big territorial leap by winning Eastern Europe. In other words, the Soviets had to try to assert their control over their part of the world as their control was far from certain.


On the other hand, Stalin, who had not vetoed the UN intervention, could not then come openly in support of Pyongyang. Even if he was just considering a limited war, intervention was risky because he could be beaten and there could be further escalations and an open war on all fronts that probably would have destroyed a Soviet Union yet to 1/26/2011recover from the wounds of World War II.


The Chinese card offered Stalin numerous advantages. It advanced a line of defense against America and forced Mao to make a clear choice between the US and the Soviet Union, a choice which he had played with for years. If China had been defeated, the loss would not be lethal, as Mao was unreliable according to Stalin. Moreover, the Russian leader had maintained many ties with Chiang, whose son had also lived for years in the Soviet Union. Chiang would have had ties with the Soviet Union, just as America would protect Taiwan, while the Chinese intervention in Korea would mark a clear break between Mao and the US.


We do not know what pressure Stalin exerted to push Mao to intervene in Korea, it is clear only that Mao was at first very reluctant, fearing both defeat and also missing the opportunity to reunite Taiwan and break his flirtation with the Americans. Certainly, the Soviet Union promised aid and technology transfers to China, but this was only the carrot of the ties. There was certainly a stick we do not know about, but this had to have something to do with the alleged leverage Stalin still had within the Chinese Communist Party.


In this context, Mao went to war officially supporting the view that territorial contiguity with Korea made action there a priority compared with Taiwan, which was protected from the sea and thus less strategically fearsome.


The thesis was not entirely farfetched, because the Americans led by militantly anti-communist General MacArthur might have behaved differently this time than during the civil war and might have crossed the Chinese border after having swept up the North Koreans. But surely, if Mao had not feared Stalin and was serious about the issue of Taiwan, he could secure a trade with the US: neutrality on Korea in exchange for the return of the island.


The exchange could have been agreeable in Washington, for in one stroke, it would bring two successes: the US would recover all of Korea and it would have distanced China from the Soviet Union. With this, the Soviet Union would have been expelled from Asia and its weakest border, Siberia, would be dangerously exposed. Moscow would have then been in a vise on two weak fronts. In Asia, as we have said, and in Europe, the French, the British, plus the Germans could rearm and wipe out the Red Army from new Soviet territories, the countries of Eastern Europe, where the Russians were not welcome.


Mao then ensured strategic depth to Stalin, and it was important that he should stop the American advance. Mao succeeded; this consolidated Soviet power in all areas under their control. This started the Cold War, but it cost China's reunification. After the Chinese intervention in Korea, Washington began to protect Taiwan's independence. For decades, the People's Republic has still not been "China" due to the lack of Taiwan and because of Mao's intervention in Korea.


Had it been 60 years later, the historical situation could have been reversed, but it would need different elements. One is certainly a closer relationship with Taiwan that voluntarily moves nearer to Beijing, and this actually is happening. But the other element to change, the offspring of the Korean War, is the US protection over Taiwan.


Here, the situation is similar to the great exchange between Mao and Stalin. Stalin gave technology to China in exchange for the intervention in Korea and the loss of Taiwan. Today, Beijing has a US request to give up Pyongyang. Beijing probably could do it, but in return it wants the end of US military protection of Taiwan (ergo the American arms sales to Taiwan) and US technological concessions. In return, Beijing could give up North Korea and also work together on a number of other international issues dear to the US, such as Central Asia, the Middle East and Africa.


Can and does the US want to accept the offer? The problem is that America, unlike Stalin's Soviet Union, must construct its policies on the basis of democratic public opinion. It is not easy to build a compelling political reason to persuade the American public to leave Taiwan alone in order to resolve the North Korean problem. In some ways, then, America may think that if the exchange is to have North Korea and cede Taiwan, then the status quo would work better for its present interests. For the US, Pyongyang is a never-ending problem, but Taiwan brings many benefits.


In any case, for the first time after Mao's political defeat to Stalin over Taiwan 60 years ago, China's Hu Jintao is in the position to repair Mao's loss. This, for future Hu biographers, should be an underscored point, because it puts Hu as equal if not better than Mao on the issue of national reunification.

This success over Taiwan in turn could give Hu clout to push for the major institutional reforms he may deem necessary for the future. And certainly in the next 10-20 years, when China's economy will catch up and possibly overtake the US's GDP, these reforms could be necessary to make Beijing stand safely in the domestic and international arena.

(Courtesy: Asia Times)