The recently released Tiananmen Papers purport to document the inner workings of China's senior leadership in the days surrounding the tragic events of June 1989, that shook China and the world. If authentic, the papers offer long term observers of Chinese politics a glimpse into processes and personalities that have been only vaguely appreciated. They reveal a collective leadership unconfident, racked by uncertainties and differences. Despite the world's most intrusive internal security apparatus, policymakers seem to have based decisions upon incomplete or simply inaccurate reports of events, some of which were unfolding within earshot of the meeting rooms where they struggled to come up with a response.

It may not be pure coincidence that these revelations arrived over the transom just as a new U.S. administration takes office. Perhaps the release of these papers to American scholars is an effort by factions inside China to "rewrite the verdict" of the Tiananmen debacle, discrediting those most responsible for the crackdown and validating the roles of others. But the story they tell is not so simple.

Rather than vindicating one faction or another, the compilation of documents offers further evidence that China was - and remains - in the throws of a fundamental political transformation. The Chinese leadership emerges from these accounts not as a monolithic dictatorship, but as an autocratic system without a strong ideological rudder, trying to accommodate divergent views and interests. Like any other complex regime, they must struggle to govern. None of the current leaders enjoys the absolute power of Chairman Mao, or even the relative primacy of the late Deng Xiaoping. If the Tiananmen events looked to Chinese and outsiders like a military putsch, the papers paint a much more nuanced picture in which neither the Communist Party itself nor the army is central to decision-making.

If China could be caricatured as a totalitarian dictatorship propped up by an aggressive, expansionist military, it would present clearer policy choices for U.S. officials. The papers - if genuine - largely reinforce the view that China's inner workings present a more difficult set of challenges for prudent American planners. Our actions are likely to be more influential than we might have imagined. That also means we must take more responsibility for the messages we send to the different elements within China's decision-making elites.

If Tiananmen was a defining moment for Deng and his generation, what challenges does the current leadership now face, and how does the United States figure in them? Three issues loom large:

• Taiwan - No Sino-American issue has greater potential for danger than the status of the island and its nascent democracy. But President George W. Bush's administration arrives at a rare moment of opportunity. Most observers felt that Beijing was incapable of dialogue with Taiwan's President Chen, whose election ended the half-century dominance of the Kuomingtang Party. Chen's own party espoused independence for Taiwan and does not control the fractious legislature. Chen surprised many by de-emphasizing independence as a goal, and expanding cross straits ties, including the first direct shipping between Taiwan and the mainland since 1949. Beijing recently served up its own surprise in the form of a possible reformulation of the "one China" policy that hints at a dialogue with Taiwan as an equal, with the ultimate goal of some broad confederation with the island government. If the new U.S. team supplies encouragement and avoids being played by either side, there is every reason to expect Beijing and Taipei can expand their dialogue. One early challenge will be the annual review of Taiwan arms requests in April. The Bush team will need to strike a delicate balance that affirms our support for a strong and credible Taiwan defense capability, without changing the military status quo in a way that unnecessarily provokes Beijing and distracts both governments from the current path of useful diplomacy.
  
• Shanghai Summit - Importantly, in November China hosts the next APEC meeting of Pacific Rim leaders. The meeting itself is less significant than the forum it offers. APEC is likely to be the occasion for President Bush's first official visit to China. If the current trend in cross straits relations is sustained, that meeting also could provide the occasion for a senior Taiwan official to travel to the mainland and meet his counterparts. That would be at least as important as the Korean Kim/Kim Summit in reducing the risk of conflict in Asia and strengthening the case for shared cross straits prosperity. Such a development is strongly in American interests, and worth serious and quiet U.S. diplomatic support.
  
• China's WTO membership - Negotiators are working on the last pieces of China's WTO membership. Not only will these commitments deepen Chinese domestic market-based economic reforms, but China's membership will open the door to Taiwan's WTO admission. That fact -- little noticed now -- could add significant pressure for economic convergence based on the shared interests of these two highly complementary economies. That is the good news. The bad news is that American expectations of the gains from WTO are unrealistically high. As in any commercial contract, the Chinese view a WTO deal as the beginning of real negotiations, not the end. American exporters will shift their domestic lobbying efforts from support for China's membership to insistence on compliance with the WTO regime. Chinese gradualism and barely emerging capacity to cope with the rule of law will collide with American expectations, and we may see another negative mood swing in the pendulum of the economic ties that sustain this complicated relationship. This may occur just as the economies of both China and the U.S. face a cyclical cooling, thus deepening the problems. If managed deftly, there is no doubt of the transformational power of WTO disciplines. But the new U.S. team will be tested in balancing high expectations against intransigence and uncertainty within China.

Overall, these three issues provide remarkable opportunities. Seldom can American policy influence important events inside China. But Taiwan developments, the Shanghai Summit, and WTO implementation work together to create such a moment. Patience and well-considered choices could allow the Bush administration to support outcomes on all three fronts that will encourage market-based reforms, ramp down tensions, and deepen Chinese policy changes that will serve U.S. interests for decades.

China's leadership faces the scheduled retirements of key officials - including President Jiang Zemin and Premier Zhu Rongji - at the close of 2002. If the Tiananmen papers offer any predictive value, it is that we can expect the men and women who are now in charge to continue to play a key role in the toughest choices about the country's future. The decisions American officials make now can have a major impact on our relationship with both the Jiang generation and its successors. Get it right and we reduce the military risks and embed reforms. If we look to exploit points of divergence, we foster distrust and encourage a return to the xenophobia and fear that produced Tiananmen.