Transcripts For CSPAN2 Book Discussion On By All Means Necessary 20140202

Michael levi is the david m. Rubenstein senior fellow and director of the program on Energy Security and Climate Change at the council on Foreign Relations. He was previously nonresident science and Technology Fellow at the foreignpolicy studies at brookings and the director of the federatifederati on of american scientists are teaching security projects. He is the author of the power surge, Energy Opportunity in the battle for americas future. On Nuclear Terrorism and the future of arms control. He received a bachelor of science with honors from Queens University in kingston in mathematical physics and his ph. D. Is from the university of london. Treat please join me and walk coming our authors. [applause] our format this evening is going to be a little different than usual. Im going to start by asking a few questions and then we will turn it over to the audience. Michael, elizabeth its nice to have both of this evening. I would like to start by setting the stage for us. Why did you read write this particular book a book that looks at chinas quest for resources so broadly from the minerals to food and Energy Insecurity and want her and more . First let me thank you heidi for having us this evening and thank the World Affairs counsel. Its a pleasure to be here and thank you to all of you for coming out on this cold and chilly night. Each of us probably has a slightly different reason for why we came to write this book. I think for me it really began initially number of years ago as my work on the environment. My first book was largely focused on domestic considerations of Chinese Economic Development and the ramifications for the environment but as i began to look at it i saw what china was doing at home was likely to be what china was going to be doing abroad. In many respects the same kind of Development Practices that would lead to the same kind of environmental challenges abroad that china was facing at home. That was my original impetus for starting to do research on this topic in 2006 and 2007. But as mike and i sat down and began to think about writing this book together a really became for me much more a function, an issue was that was at the heart of chinas rise and how china is transforming the world. If you look at this issue of chinas resource quest you see that it does in fact address all of those issues that we think about when you think about chinas rise and how it china has transformed itself. What is chinas impact on security and what is chinas impact on Global Governance . [inaudible] these are the kinds of questions in many respects that it tries to get that through this prism. This is how it involves an intellectual challenge. For me im at a similar place but i come at it from a different starting point. At first i should thank you for having us here tonight. Its great to be here. Where i started was at the broad intersection of economics and International Politics and security. If you look at how people thought about Foreign Policy during the cold war its really split into two areas. We thought about economics and markets and how we dealt with our friends and we thought about security and adversarial relationships when we looked at how the United States and the soviet union dealt with each other. There were two pretty different spheres but in most times in history they are not so separate and particularly when you see a rising power Rising Economic power increasingly taking political responsibilities of the world. The two tend to clash and ive tried to a lot of my work to understand that intersection. Liz talked about her last book in my last book talked about their consequences for Economic Security and the environment to understand how those pieces fit together. As i looked at that i started to appreciate more broadly to get a handle on this place for Economic Security. If you look at history, rising powers tend to engender concerns on economic front, political and security front through their efforts of secure resources. Countries that pretty do pretty much do it anything they want to, they have people in technology and capital but you have to deal with the resources that are on your lap and if you dont have then you go out. Whether it is ancient greece or japan in the 1960s and 70s and 80s this is an inevitable part of what happens with the rising power but to Say Something about the last part of your question why so broad . In order to get a real sense of whats happening i do think you need to look across these different resources. If you look at people who study oil and come to conclusions about chinas resource they have a different picture of china and the world then you get if you look at someone who studies food we talked about this early on that to really get the full sense of whats happening we have to look at a variety of resources because it turns out the way china is dealing with each of these varies enormously. Let me go to your subtitle. Give us a few examples of how its changing the world. So there are obviously a lot of examples that i will tell you where its had a bigger impact than any other area and one that i look at for the future. One of the striking things when we were doing this was the repeated conclusion that chinas biggest impact in a lot of ways is in. So we focus on china investing in this or that part of the world of the possibility that china might becoming gauge militarily because of its resource quest. These are the exciting things but if you really drill down on of the biggest impact so far in a lot of ways comes because china buys an enormous amount of resources. On the market, but with a very globe broad global consequences and youve seen enormous rises in the price of oil, a gas, iron ore, of copper that wouldnt have happened had this huge demand not emerge so rapidly from china. The consequences of that touches everything, not just the countries that china buys from but other producers that are able to develop our resources and sell them for more that has economic consequences but also environmental and social ones and it also has an impact on consumers around the world. We pay more for our resources because of this emergence of china. That to me is probably the vegas thing that happened so far. When i look at the future im very interested in whats going to happen with the security of the path through which chinas resources travel. We take for granted that we can produce oil in west africa and have it end up in the United States are in japan or any other part of the world. We expect that this Global Economy run seamlessly and we forget its underpinned by power and underpinned by decisions by powerful players about who can. With whom and if you look at the future i dont think you can be completely certain that we will have that same security under pinning. I think if youre looking for big ways that china could change the world in the future and im talking multiple decades out you are looking at the security and up innings of that. One of the things that interested me was how [inaudible] this is a way china is transforming the worlds governance landscape and if you look at for example issues like transparency and if you look at things like labor safety the practice is chinas of whom are very much the ones that china is bringing abroad. The minister minister of Land Resources considered to be one of the most corrupt in the Mining Industry so you might expect to some extent when chinas Mining Industries Company Brought their used to dealing with things that deal with bribes and this is something we found across the resource landscape. In terms of the environment as well. The Chinese Companies recently started to do things like Environmental Impact assessments on the homefront so again the Chinese Companies began going abroad and a lot of them did Environmental Impact assessments and for countries whose own governance was not that strong of course they didnt bother enforcing any kind of laws in terms of undertaking these Environmental Impact assessment say you found undermining of governments governance. When it comes to labor as well one of the things that we found her research is Chinese Labor practices has two impacts. One is that many resource rich countries will report that Chinese Labor practices are at the bottom of the barrel and their Safety Practices are much worse than the Safety Practices of the americans and the pay is much less than other countries. To some extent thats true and to some extent its not. The story is more nuanced than that but also what you see is this enormous influx of Chinese Labor. It really is very different from any other country and has caused a lot of tension for a lot of countries. Here too you find countries react very differently. Countries with strong capacity tend to pass laws which says Foreign Companies have too hired nine mining workers from mongolia for every Foreign Worker that they bring in or they will task the wages of the Foreign Worker by 15 . They will find different ways to try to limit this influx of Chinese Labor. The Chinese Laborers are much harder workers. You see this again acrosstheboard whether countries in africa or southeast asia. Theres this sense that workers in one of the interviews that we did the chinese officials said they want holidays. They wont labor unions and this kind of thing. The Chinese Workers will work seven days a week and 12 to 18 hours a day. So in many respects when it comes to issues of labor and the environment and transparency with the chinese how they work at home is how much is very much how they work abroad. Later perhaps in our discussion i would love to talk about the way this is changing because there are a lot of treasures on china both of me outside and then from the bottom up within china. As we see better practices in terms of Corporate Responsibility to china on the homefront in here too having an impact on how china behaves abroad. This is one of the positive things that we have found over the course of our research. I think thats another way in which chinas transforming a landscape. It want to come back to the Strategic Access to resources but first i want to go to a point you both made about china obviously not being the first emerging power that went out looking for resources. Tell us how its different than the english experience or the spanish for the United States for that matter. One of the interesting things about the work that we did that those of us took a piece of the historical puzzle and since my background is china i took the china party and since mike is more global he took the other part but from the chinese perspective what was fascinating was to look back even before but that was where we focus our book so not quite 700 years can see there are many strains of continuity in how china approached its resource quest dating back centuries. Its really quite surprising to me in fact some of the things we discovered for example, there is always a strong degree of state control in the over resources that the Chinese Government was always interested in dictating what would be grown. They wanted to grow rice or grain, they could want to grow tobacco so they try to pass laws that would say you can grow tobacco because the demand is too great for grain. Things like resource of security, fear of not having enough resources especially grain. Again it dates back centuries. Its one of the things we track throughout the book that this is still a central part of the chinese mindset is concern over whether or not china can use grain and food as selfsufficient. China going out did not begin 15 or so years ago. China again dating back looked outside of its borders in particular for rice but also for silver and for wood. And sometimes it was expansive in its land grabs for example taking over taiwan, a fertile land for rice and sugarcane. I think one of the really interesting things that are a little bit different from other countries is the strong strain of continuity and probably the degree of central State Government control attract really all the way through the history of china. Let me flag one precedent and to go to the most recent other example and thats japan. If you look at a lot of the writing in this country about the rise in japan and japans demand for resources particularly oil and or its very similar to what reid reid today. There are a lot of lessons you can take from that. This evolution we have seen in china, first they buy on the International Market and then they start investing up broad in order to improve what they see as their security and supply. That strains the marketing creates a lot of tension that eventually things start to work themselves out and then you see a lot of pieces of that pattern reemerging with china. We are not at the end of the pattern yet and things could still diverge but we have seen that sequence of trying to picture things on the market it not being satisfied with that investing abroad, some tension but now may be a bit more of a rationalized approach to it. The striking thing you see with japan that i think you are starting to see in china is there are big fears that because the state is so dominant in japan japan will take the world away from markets. Theres a big focus of american policy for a long time because we want markets to govern the distribution of resources. It turns out Global Markets and a lot of these things are extraordinary powerful and very difficult to undermine a global market. We have seen the same thing and we know japan did not for example take away the global oil market. Now we see a similar thing with china. There were a lot of fears throughout the 2000th at china through his efforts to lock up resources would fundamentally break the market as a way of governing a lot of resource. And they havent. They invest a lot of broad but they procure most of their resources through the markets and their places were actually china not intentionally has driven us in a more market ace direction. Essentially nothing the iron ore before a certain writing this look i assume been commonplace to a lot of people in this audience but one thing that happened over the last decade or so is the china because it had so many small producers competing with each other to get at this iron ore for their steel mills through no delivered policy ended up with rising the iron ore market. They went from a persistent dominated by bergrin users to a much more normal market today. This is another important lesson. Even when the Chinese Government cant accomplish its goals china can change the world in big ways theres a really important distinction there. Just because china doesnt accomplish what it wants to doesnt mean it doesnt have a large import. One reads all the time news articles that begin with some reference to every ago in africa these days there are chinese businesses there gobbling up all of the minds and the resources of every sort and also usually in the same article there will be a reference to the fact that American Companies arent doing so well because the United States is more interested in human rights issues and Fair Elections in things like that and just dont bother governments with that. Tell us about the specifics of how china deals with its african resources. Let me offer a few words and then maybe mike will want to jump in as well. Something else we found surprising when we were doing research for this book is exactly what you began with which is the sense that china and is in africa and other places as well cobbling up resources and developing a direct pipeline, resource pipeline. But in fact if you look at africa china is the fourthlargest source of Foreign Direct Investment in africa, not the first and behind United States. In many respects it speaks to what mike just mentioned which is a much bigger aspect of chinas resource engages in. As opposed to investment in many cases so i think that bears remembering. That also holds true in many areas. For example with ran land we have read in the media about chinese land grants but in fact china is a distant third after canada and the United States in terms of overseas land investment. Such as some surprising facts that change your impression of how much china is gobbling up those resources in ways that other countries are also not dissipating. To your question about africa, i think the biggest challenge that china faces to some extent is china went in there and has a long history of engagement dating back to the 60s. It has many longstanding ties with african leaders, zimbabwe for example, an old friend of chinas and when china began an uptick in terms of Resource Investment after 1999, 2000 found it much easier to strike deals right at the very top. The Chinese Government is comfortable with it so you have this massive diplomacy where the chinese president and a large entourage with enterprise heads in ministries who traveled to africa to meet with foreign heads and strike what seemed to me this past. And investment deals and could read about aliens of dollars, tens of billions of dollars in fact in the structure of Natural Resources primarily. Much of it ended up not being realized that the way that they structured these deals in some cases is problematic. In this case it wasnt transparent and that caused consternation among some african publics. There was the issue of exploitive labor also problematic and too more recently there is them the sense that china against all of its own best wishes and writer guy would say is a neocolonialist. This is following the same path that western powers went into africa so its the exact same thing even though chinas promise its not going to do that. Thats that started to try to address some of that popular dissatisfaction by doing things like establishing special Economic Zones in africa where they are trying to develop manufacturing for africans actually. Its not clear if theyre having much success yet. The very next story. Companies find it difficult and the government it aging would like them to do it but the government are not interested. They are really taking off in the way that beijing really wanted that its one effort they are making to address the problem. The other thing i will say is they are really trying to improve their responsibility so a lot of this backlash has to do with labor and environmental issues, a sense that china simply doesnt care about how and what its doing. So the government and the Stock Exchange etc. Has established all sorts of laws and regulations to try to govern these enterprises. For example they save you dont do an Environmental Impact assessment we are not going to loan you money. Thats a strong incentive for you cant go public or whatever it might be. A lot of Times Companies find ways around these regulations but sometimes they arent enforced so thats another positive trend we are seeing in this effort to address what i would consider to be backlash. Let me give three quick examples of what highlight interesting aspects of whats happening with china. If you go to mozambique and you visit the Mozambique Foreign Ministry one of the first things youll notice is that its roof is a pagoda style ref. That is pretty consistent with the deep political relationship and longstanding political relationship that china has. The biggest thing going to mozambique is natural gas. They have big offshore natural gas discoveries but if you would have gone there a year ago the chinese would not, you would not see any chinese presence in the natural gas sector. It was an Italian Company and an American Company harriet why . Because there is still this technological edge that a lot of western companies have, this ability to do serious explanation in resource areas. The Chinese Companies still dont. Today up one of the big Chinese Oil Companies buying in to part of that development. There are still a lot of operators so no matter how deep the political relationship is you dont have the technology and the management capacity to produce the particular resources of the cant do it yourself here that political connection is worth a limited amount. You see that repeatedly and its important not to overstate how much china can do by itself. Second, the second little story. In zambia, some of these Chinese Companies have had an absolute nightmare of a time. There is one Small Company who has been there for a long time. It has had a disastrous experience. All sorts of people seem to get shot at facilities. No one likes them and they dont seem to like the place much. They have ongoing festering issues there. When i was in zambia last year i went to visit with the chinese ambassador. I expected the defense of colin cole. Instead the master said if your adjusted in this company i would like to have it be sold to you because i dont want anything to do with it anymore. The message was we control everything and that might be true with the big Oil Companies. They can influence them though the heads of big Oil Companies are powerful political players in their own right but when it comes to these smaller players particularly in their friday of resources where you have smaller players. They are not stateowned enterprises. The administrative capacity of the Chinese Government to control them is a lot less than we might thing thing. We have got to be careful to understand what china can and cant do when it comes to actually getting Chinese Companies to play by the book. The last case that comes to mind is looking at whats happening right now. Chinas handsoff strategy is being challenged. China says we are not adjusted in the domestic politics of this country or that country or the other. The domestic politics of others countries are adjusted in china and Chinese Companies are being affected by what is happening domestically in sudan and they are learning and the Chinese Government is learning that they cannot avoid these entanglements and they are having to figure it out on the fly how they deal with it. Of course Chinese Foreign investments arent limited to the developing world if you will talk a little bit about how their investments in places like canada or australia and the United States for that matter and how that differs from their purchase elsewhere in the reaction to it or particularly the differences of any between the u. S. Response and that of canada and australia. So the first overseas chinese Oil Investment wasnt in africa. It wasnt in latin america. It was then canada. It was in alberta. Theres a long history of overseas Chinese Investment in this area. These countries have welldeveloped policies and each has its own quirks. I think the characters are of them the australians are much more willing to try to make reciprocal deals and much more willing to talk about trading access to this or that piece of australian resource for reciprocal access to the chinese market. The u. S. Is becoming a much more attractive destination for Chinese Investments in resources, particularly in oil and gas. The u. S. Is going to have to grapple with the. I think actually what i found interesting is that the Chinese Companies look at canada and australia and the United States as the golden apple. The most desired. And the access is sort of the highest of priorities and in many respects they understand the practices that they have brought to the higher order. And its a good way of forcing change on Chinese Companies. This part of the investment value change that has proved to be quite useful. I think the chinese are looking for land acquisitions, which they are doing right now in the United States, there is a lot of interest in buying farms and accessing the u. S. Land because of the situation in terms of chinas soil contamination. So it part of the productivity levels which they are saying that we are a hundred years ahead in terms of agricultural productivity and and it is truly astonishing. So i think that the chinese start coming here and theyre going to oesterle or canada and there are those challenges with their own practices in with their own opportunities to buy into these better practices to buy into this. I think its a good way of forcing change back on china. There is also a political question. Lester in the year before with a variety of Chinese Companies were looking at u. S. Shale gas and oil, there was a quiet message that if those companies were also going full speed to take the sanctions, the United States might not look as favorably on these investment in the u. S. Resources. And so this increasingly attractive set of resources can actually give up political leverage around the world when it comes to how the chinese work. [inaudible question] one more broad question and theres also a very big difference between asia and vietnam, burma, hamon and of course the whole issue of the south china and East China Seas. Can you address the sorts of things in a quick trip around the block . We want to talk about the resources. Because it is a fascinating case and its very different relationships and central asia now were china seems to be not only in the physical backyard but also in the political backyard and there is scarcely a set of countries with who china is more politically and can in some of the authoritative data of central asia. So as they are developing the pipeline structure they are also willing Stronger Political relations. For example also existing security ties. In contrast, you see this with many Southeast Asian countries right now under quite a bit of stress. So that despite the fact that they called this a diamond decade, its priority now is moving away as they are looking toward the next 10 years with the chinese leadership, moving away from this emphasis on the u. S. And china relationships. Including this will be promoting positive relations. And what they have done is try to develop a bifurcated policy, which is to move ahead on the economic front. And you see a lot of these challenges and vietnam and the philippines and the South China Sea not to mention the East China Sea as well. And there are a lot of Security Dynamics that are really quite challenging for china in many respects. The last thing i will mention is the overlay of the water issue, which we havent touched on at which affects those with india or central asia and this includes how china controls the headwaters including the important rivers that are running through the region. And how it allocates how it manages its Water Resources which is absolutely critical with the water security and the development of all its neighbors here. And we have seen them being more willing to talk about things like Water Quality and monitoring and disasters and there are a lot of concerns that emanate from the region over the plan to dam the river is right now. Planning 21 as well. It was quite significant that has enormous implications as well. So that is a huge issue including river diversion in that case including what seems to be overblown. It was a very interesting case for china where you had a country where china has been the largest source of investment in recent years with the government transitions. In the relationship with them is now quite soft. I think its a testament certainly for the chinese public and the chinese ngos and even systemic into the chinese leadership. It is a lesson about what can happen when you strike deals with officials but fail to do so with the general population. So its a pretty significant backlash that china is facing. Including causing a significant rethink about this and their resource diplomacy. So i think its a very interesting thing that i do think its having an impact. I am not going to go blow this level, im going to go up to the 40,000 level briefly. Its striking that we havent talked about this yet. Because when you typically have discussions about international relationship, it revolves around this or that corner of the world and we likely have killed down around china and that is one of the things i think ive emerged for research in the book. And it is for a fairly simple reason. China does not have an almost global reach in the same way that the United States does. And so you can imagine this in the china sea. And there are a lot of others and you have the potential for friction and in contrast china doesnt have the capacity yet to project something significantly far from its shores in the middle east. Even in the heart of africa where they have done some of this, still not the big scale stuff. So if you do want to see where the tension points are going to be with intersections, it is in the backyard in those places and that is where we want to focus not so much in the places where we traditionally think about resources and security. Thank you. Okay, lets turn to our audience for westerns and we will need just a moment to reposition the camera. And then the microphone will be what will be . Well, it will be right over here. So we just one moment. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] now lets go to a question from our audience. Please give us your name and eight brief question we can get to as many people as possible. Congo [inaudible conversations] [inaudible question] i am talking about another based company about a chevron purchase. It also talks about how cyclical the quest is. As of right now the source of Natural Resources in southern sudan. When you talk to executives they are lamenting this law and when you expect this demand for Natural Resources issue in the foreseeable future . Thank you. I think it very much depends on what happens to the chinese economy which is clearly in transition. There is 7. 7 growth over the past year. More to the point, the effort and a push within the Chinese Government to rebound the economy away from this investment led growth to the services are commonly, if the just a continued slowdown for many resources. However at the same time the Chinese Government is talking about organizing another four or 500 million people. Sermonize those people means to build roads and buildings and apartment houses and a lot more infrastructure. That should cause is pretty significant uptick or at lease maintaining a level of relatively constant demand for many resources. So i think that what we are looking at is a question of how successful is the Chinese Government at doing what it said it is going to do including investment led growth. The second part is how much china makes on improving the efficiency of its resources and Conservation Resources to this objective and if it makes significant progress on that again, i think in some cases we will see the resource demand in the terms of the growth of demand. But from my perspective much of this remains up in the air and we need to wait to see how this trajectory progresses. These are the same goals that the previous leadership had a decade ago and i think that its part of the questions of what is moving forward. If you look at the record of the two thousands, what drove the high prices was not this in the abstract. And it wasnt an absolute shortage of resources. But it is a surprising liquidity in the chinese demand and other Resource Producers to keep up the pace. And it is that that leads the prices to blow up. We are at a point now where expectations have been reset area known as surprised by a rapidly growing chinese resources consumption. It makes us cover for places to go for hire than people expect. If you look over the next decade, a set of surprises will be more likely. And it can put you way out of this if i were a betting man i would focus on those kinds of possibilities. And i would look out for them. June parsons. My interest is actually in securities for the Oil Resources that china demands in the past of giving those resources to china and their relations since within malaysia and so on and their recent aggressive stance in the South China Sea and out the East China Sea and the dynamics and what is your take on that and a lot of discussions have been on the resources and when you drill down the set of forces, it goes well beyond that. And it goes to control of this as well. So its highly relevant but often not in the way that people tend to think. So i will leave most of this and let me tell something about this. The u. S. Ability to control that critical control point for a lot of the gas supply is still very much a large threat looming over them. And they would be foolish to ignore it in the United States has the capacity to stop these actions. If you look at what china does at home, not just alternative sort of supplies, but it is a protection of not just the economy but their ability to fuel the Chinese Military during this. It takes a lot of fuel to fight a significant conflict in the region. And the reality that even projecting the chinese course through the strait of morocco is a threat. And it brings up a difficult capacity to do that which is a stronghold to deploy that much closer to china to deal with whether they are much closer as a high tory tee contingency. One of the things that we concluded our book is the path is not a prologue and things can change very rapidly and the security is one we can really agree upon. That can change rapidly and in ways that are not only unexpected but not too sophisticated and i think that what we have seen is the fundamental conflict between the china and the East China Sea and its not really about the resources as much as it was about nationalism. And those are in some ways much more difficult to control. And i think it is going to be difficult and i think we are taking a step back from what is a contentious potential flashpoint kind of situation. Particularly with japan and also the philippines and vietnam. You can see this rising nationalism in all these countries. So i do think that part of the problem is the International Law here that does not provide a very concrete type of guidance and unfortunately the concrete guidance supports two different claims in two different ways and that is a lot. And also the fisheries that are becoming particularly a hot issue now and this includes nationalism. Hello, agriculture is my passion. So when i heard you bring that up, my question is that in the u. S. , farmers like myself, we can only grow certain crops and his china trying to move into latin americas area because they can be basically used to tj can we are going to focus on the u. S. Or are they going to latterly tried to get into those americas also . And spend some time in brazil. Again there was a lot of hype surrounding the Chinese Investment in agriculture and brazil. And it came out recently is the study about two thirds of the chinese have stated not just agriculture but across the board and have yet to be realized. So there are huge numbers of i think 70 billion and fully two thirds of it have yet to be realized. And we realize these investments and there are a number of reasons. First it is a matter of how the chinese do business at home. And so and so if you hunt this you can just take it and somehow you buy because they dont technically own apparent that they would travel and say to the local officials are matter how many times they dont have the power to find the perspective promises. They were approaching this in the wrong way. And they say that this is not designed specifically in response to the chinese to move in. But in fact they will at knowledge that it raises the issue of new rates for them. So there was a concern and they said that it was this constant flow of local officials from the chinese local areas traveling to me and talk about the potential Land Investments and they were really never understood. Its just that all of these locales have an overseas investment and everyone likes to go to this. And they were never really truly interested in investments. And theyve made the point that its really very difficult. A lot of the infrastructure in terms of the roads and highways to get the soybeans or whatever to sort it out. It simply doesnt exist and they do not make it easy and the brazilian officials themselves will at knowledge this. They have gotten out to try to attract because the law doesnt assist with that. So i believe there are a number of reasons as to why they have gone to brazil. But they really havent realized it is a kind of return on their investment with a anticipated. Hello, my name is stephen. Im really interested in this Economic Security. He said the wrong thing and im wondering about in narrow picture and what are the implications for overall government. Is a great question. Very much in translation is narrow areas where the two intersect. And there are a lot of discrete pieces where the economics and security, it is a tough governance problem. They have a different role for government. And it leads to different views on how this is international. Bureaucratically we are not all that well set up at night or many others to think about that two effectively. The u. S. Government does have pieces that tried to do that and we have improved in recent years by a chief economist at the state department and the National Security adviser. And we have people that are supposed to build ridges and unique coherent vision for how the pieces fit together in some sort of its not consistent. If you want to have this. We deal with this on an issue by issue basis. And we fight these things through. This intersection is going to become more difficult and more prominent. And again you see whether that is sovereignty issues are the cybersecurity issues that were dealing with now where all of the energy and security concerns that we have exist. Its a combination that is not going to separate itself. Hello, i am from the brookings institution. At least i have a question for each of you. Can you talk about food and assess in china for water and food. And what is the key thing in the matrix . You talk about other resource acquisitions especially japan. But they are 10 times more population of japan expected to reach this this year and 19 arise from 2013. Dc is pattern that they will break . Something else you might hear. Water was the number one problem that they were concerned about particularly in the northern part of china, where basically you are looking at roughly 19th of the precipitation that the southern part gets that even in Southern China because of pollution the in the water issue is quite serious. And all sorts of dogmatic things which the yellow river stops running and it doesnt reach shanghai anymore but you can see those 16,000 dead pigs floating down the river. Theres a lot of dramatic sets of water churning green or black or whatever the colors from pollution. But fundamentally it is an enormous pressure on the chinese system. What are they doing about it and it does affect exactly as you say the potential for Energy Development. Mike is done a lot of work on development of shale gas and fracking. This is something that it chinas interest in not only in United States for developing its own reserves and one of the challenges, not the only challenge but one of the challenges it faces is that kind of new Age Development requires enormous amounts of water and it simply doesnt have so in some cases the type of Energy Development that china wants to move forward on our limited by its water constraints. China has for many years taken a lot of different experiments with Water Pricing and water conservation. Its working on desalination, it aint desalination plants but they are expensive and they take time to develop. There is still a kind of campaign mentality so diverting rivers not only from the water that would go to those other countries but even within china like taking water and making it move north to the yellow river but you know what the people say in tianjin and we dont want the water from the south because its all polluted. There are a lot of challenges begin not to mention as you raise the agricultural issue because not only is china still contaminated because of the heavy metals and toxic dust from its factories but when the water is contaminated thats a second problem. And then of course last i will mention the Health Consequences of chinas water blue shin which is only recently in the last five to 10 years really moved to the floor of chinese and there was a chinese researcher that publishes study a year or two that talked about 400 cancer villages in china so places where the rates of cancer are much higher because of this water blue shin. So across the full spectrum of those Development Issues and Health Issues and i would also add social interest when it comes to the environment now the number one source of social unrest in china is the environment. This issue of water is absolutely fundamental. You hit the nail on the head when you talk about china and one of the points we emphasize is that this is the way in which china can be very different. You do have to be careful in distinguishing among the different resources because chinas scale is a bigger deal in some places than in others. And let me give you two examples where the scale might not be so consequential as you would expect. The first actually is in some parts of the food world. While chinas particular development onto leaves it to consume a different disproportionate amount of iron ore and bauxite and so on, it doesnt actually lead to disproportionate amount of food. It drives a lot of concerns about Food Security but all sorts of other countries are also driving Global Demand for food in a big way. So china is significant and a piece of the much bigger trend. The second area is gas. You point out gas. For china gas imports are largely discretionary and since the gas market isnt particularly robust i would be surprised if china chose to become heavily dependent on imported natural gas. Especially because china to the detriment of its environment has an alternative to natural gas and that is cold. And domestic coal for the most part. Chinese policymakers have an option and they seem to definitely be choosing domestic coal over imported natural gas so yes their imports have increased a lot. Its fairly small within the broader context. Japan and korea are the dominant in the region. You ask the global structure for deal in security. We can go on for a long time to let me flag three basic instances. Two of which are not things i would traditionally put a security states. The first is the more the rest of the world hindu to restrain its consumption the fewer security spillovers there will be from chinas resource class. So we control a lot of the pieces of that puzzle. We reduce the pressures. Prices are lower and everything is generally calm her. Second, we can reinforce markets to the extent that mandates this this marcus decide where recesses goes resources go and who develops them you are going to take some of the security challenges out of the equation. When we have decisions about exporting our own resources, or when we have decisions about investment into our resource opportunities, we obtusely have to keep security in mind in the broader u. S. Economy mind but we also should remember that we are helping set the framework that china operate in the first person asked a question that talked about the warded unocal deal. That sends a message to the chinese that we cant rely on the markets and we have got to make sure again we are taking into account the other pieces that we need to to the extent we can send a signal. The third piece is on the military front. The fastest way to accelerate chinas appetite for an expensive military presence driven by resources is for us to step away rapidly from our own commitment to providing security on an equal basis for everyone which is something we do today. We provide security for resources coming out of the middle east for example. Even if they predominantly traveled to asia increasingly they travel to asia in increasingly traveled to china but we still remain better off when we do that. Rather than inviting the chinese to essentially take our place. Those are the three i would emphasize. Hello my name is andre and my question is china has gained so much popularity in their growth and the rise in power in the past couple of years so my question is, what are they doing differently than what the u. S. Is doing or is it just a case that they are doing what we have done and are doing and we just want to see if they are going to do a better and what strategies they want to implement to ensure its better than what the u. S. Has done . I dont know in my travels if i went to anywhere more popular than the United States. We might disagree with the premise of your question. I think what we found and if perhaps we had been doing this research around 2006, or 2007 i think you mightve been on target but i think increasingly there is then not only in terms of the chinese resource quest but a lash among public in many countries across the globe. This is not limited to one continent at wherever you find resource rich countries you find significant portions of the populations that are quite discontent with the way china does business that reflects badly on china. In fact the ministry of Foreign Affairs met with a couple of officials one who was number two in charge of latin america and number two in charge of africa that said its very difficult for them. They spend a lot of time out in countries with many consulates to deal with the particular problems that state stateowned enterprise or another factory might have with the labor force. Very challenging set of issues constantly trying to make up for whatever bad practices their firms are doing in this mic alluded to earlier not only stateowned firms, it could be those 4500 miners in ghana for example often a couple of villages that the Foreign Ministry has to go out and try to negotiate some kind of happy settlement. I think again a decade ago are a little bit less than that probably you are right but i think today the vision is quite different. I think particularly within chinas Backyard Division is different. Part of the reason that the u. S. Pitted or rebalance was not only welcomed but in some ways i would say initiated by actors in the region was because of their concern over chinas rise. I think their fear of how china was going to behave in the region particularly on the security front so i think probably i see the popular perceptions of china these days a little bit differently. Thats not to say that many leaders across the country including political leaders here and you can go to any state in fine governors traveling to china and seeking foreign investment. Still there is an enormous amount of excitement and interest in bringing chinas investment not only to the United States but pretty much everywhere. So dont get me wrong. I think in that sense there is a lot of interest but i do think that the image of china has been somewhat tainted by its practices over the past decade. Speak to build on that very briefly something important was said earlier about the distinction between chinas ability to work with the regime and to work with the country at large. Often leaders are very excited particular if they can get a sweetheart deal on an investment but the Chinese Companies tend to not deal with the broader population. This is actually a case where the western firms can raise the car. When the striking things i found is in places where you find the infrastructure of consultants and contractors and others that do things like dealing with the local people understand what they actually want. Do they want housing . Do they want services for health . When those pieces are in place because of other Companies Often because those other companies are held to Higher Standards by their own governments the chinese can increasingly take advantage of the same tools to work well. Now you can have two different views about that. One could he the chinese are able to perform better so we will ease up on the competitive races but the other is this is better for the people. Hi. My name is marv from emmett university. My question is, to what level can china alleviate economic sanctions placed on countries that the west finds a Security Threat . I will use iran as an example. Iran has had significant economic sanctions placed on its regarding its world market and its export and import of goods and china has become, you could call it a release felt for iran and they sell a lot of oil and resources to china in return for a market to sell its own goods and to do business. So the fed has raised issues in the west and its not just iran so to what extent does that go to and what does it do for the relationship between the west and the country in question and china . Iran peace and i think its useful to look at the. Sanctions in the investment sanctions ever. The. Sanctions china has been able to afford its being complicated notches by the financial sanctions but if we are going to be honest i think we have got to accept that those sanctions probably would not have been put in place had we not expected china to be able to continue to buy some iranian oil. Theres an enormous fear in policymaking circles that the sanctions were essentially for western economies. The hope in a lot of places that china would continue to import oil from iran but demand a steep discount and get the best of both worlds. The world would be well supplied and iran would have revenue. I dont think we have quite got that but that was a theory so its kind of nuance there. They have them ultimately able to have imports to the extent that they want to. On the best in front i think its been really interesting. First the chinese to have to restrain themselves from stepping in but in cases even where they have looked to step in and fill the gap by western companies they havent been able to. Sometimes thats because the iranians have been a nightmare to work with. They have endless negotiations and havent had a deal but a lot of cases because theres this or that widget that they need that comes from europe or comes from United States and they can get access to it. So we still live in a world where a lot of the High Technology parts of the Global Supply chains are in western countries. That is one of those pieces that that substantially over time. We tend to focus on the operators from a look at how the world of Resource Investment works and exons in the bhps and so on and we say china has their own but its often that next layer of suppliers and contractors that china doesnt have that gives western countries more leverage but in a way that might dissipate over time. I will elaborate on the question little bit more in regards to your response. Shirt. Thank you. In the case where the technology is in the west and just not available to other countries, do some of these countries look to china to fill that gap or are they looking at other ways to get technology that is restricted to them . Right now china turns to western countries to get that technology so no country has been able in the absence of cooperation from the west and i think thats something that could change in the future. But you have this balance. China cant the autonomous and everything particularly if it wants to develop its economy and the pace where you have to rely on these International Markets and rely on comparative advantage. Now, will chinese leaders come out of this experience with iran and say we need to do the following things differently . Perhaps and one of the things i dont think we do enough is look at her ticket where acute instances where policymakers are particularly focus on a resource issue. To give you another example the libyan crisis. There was a lot of distrust that markets would resolve in the aftermath of the libya crisis in a way that was fair to everyone. If our Intelligence Community is in trying to understand the lessons that china ultimately took away from that about the village markets and of me to have their own bilateral supply range, they are missing a big thing that they should have paid attention to. Thank you very much. See a very brief question. You my name is Caitlin Antrim and im the director of the rule of Law Committee for the oceans. China in its near abroad acts like a coastal state of the 1960s trying to control access to controlled resources and yet at the same time they look to the law of the Sea Conventions freedoms in ensuring access to cobalt in, oil from the gulf, passage through the straits of malacca, access to gas on the russian Continental Shelf and iron ore from norway. Middle resources on the deep ocean floor so on one hand they are taking an antagonistic attitude toward the widely accepted law of the Sea Convention and did another they are both demanding independent on the freedoms incorporated a map. How do you see this going . Will china be able to continue these two opposing attitudes indefinitely . Will they have to accept one or the other, be strong locally or get the freedoms that they need globally . If you look back in chinas history youll find china is comfortable with what they call contradictions so i dont think the chinese industry has in it problem getting those two separate scenarios. I would also point out that from their live to a large extent what they are trying to do is defensible under the law of the sea especially in the East China Sea because they have the Continental Shelf so in their view of understanding the law of the sea they are their claim extends far past what for example the japanese recognize under the law of the sea. They may see it is as not quite such a great contradiction as you are laying out but certainly the neighbors do and i think more than that china has just shown an unwillingness in many instances to sit down and negotiate for example in the South China Sea with the range of players in the way that they want and i think that is problematic as well. So personally i dont think they recognize that contradiction nor do i think they have any difficulty holding it in their head. Ive think thats right on the money. Dr. Elizabeth economy director of area studies and dr. Michael levi trekker programs on Energy Security at the council on Foreign Relations in their new book, by all means necessary. Thank you all for joining us about such an important topic. Goodnight. [applause] [inaudible conversations] Speed Reading attention to what women do or how women have contributed always returns to the question of the body so for one thing many people object to bringing womens studies or womens history to a middle school or High School Classroom because there is an assumption that womens studies is only about, birth control, abortion and actually its also about women in politics, women in law, women working on farms, queens, prime ministers and my job is to break down the fear many people have. What goes on in a womens studies classroom