Even the harder question, which we will also deal with, is what do we do about it . A couple notes at the beginning, please turn off your electronic devices, not just vibrate because that can interfere with the sound system, and, if you have a reason to use your phone outside, you are welcome to do so. Our meeting today is on the record and we will talk for about 30 minutes and open it up to questions. Our distinguished panel begins to my right with my friend stephen. She is cofounder and Research Director where she keeps an eye on the macroeconomy on a range of industrial sectors and has as much experience on the ground as anybody i know. Is the chinat study manager eli. He had a special focus on china policy in the midst of a vast portfolio. And our visitor from cambridge to manyend and advisor people in this room. He is director of the Belfort Center of science and the kennedy school. He is most relevant for today, author of the new book destined for war, can america and china escape the trap . The only people who are not on about the book is in is a tribe in amazon [laughter] we will start there. The concept of the trap has provoked intense interest on both sides of the pacific ever since grade started talking about this. Even before the book was out. Whats we will do today is we will ask our panelists to give us a few words at the beginning on how they can conceptualize u. S. China relations from their relative advantage points, what are the opportunities and tensions, and where is this headed. Grandma we will start with you. Thank you so much for this opportunity graham i think if there is a lens that helps us to understand the relations of china and u. S. Today, i think that concept is great. Throughe trying to look the news and noise of the day, whether it is about going from the climate backdoor, a missile test in north korea, or a potential confrontation in the th china sea, Germany China becoming germanys number one trading partner. That, that through principal dynamic is a rising power that is threatening to disrupt the ruling power. Picture helps us but the rest of the things in place. This concept is called luciditys trap. This is not my idea. It, i dont know about hope in this audience i dont have to tell you about it, but you should at least google it. [laughter] you can download his book for free. [laughter] and you can read the first hundred pages. In the whole book, you will learn anything more than anything youll ever read. A spectacular book. It was the rise of athens and the fear that this is still in sparta thats made war inevitable. As i explained in the book, he is using inevitable as a hyperbole for exaggeration. I look at the last 500 years in the book, find the 16 cases where a rising power threatened to displace a rising ruling power. In 12 cases, the outcome is war. In four cases, the outcome was war being averted. Book, businesshe as usual in this case, i believe our case now will produce history as usual. It would be catastrophic. Cases help war can occur. In cases war could be catastrophic, that does not mean war cannot occur. The case i urge people to think about most is the case of 1914. I dont think you can study world war i too much. It is still a dazzling to imagine. Actorsthe present what were asked after the war, and he. Id, if we only knew how could the assassination of an archduke by a serbian a mash thatcome produces a fire that burns down the whole of europe. And of the war, world war i, every leader of the principal actors had lost what they cared about most. Hold re was trying to emperor was tried to hold together the empire. The regime was overthrown. Germany, he was trying to back up his buddy in rihanna. Vienna. France never recovered as a society, and britain, turns into dy would have chosen people tion that its this is like today there is stress thatructural is reflected in what the book is called the rising power syndrome. Sayidea of i deserve more or sway. Confining because they were put in place before i became bigger and stronger. The ruling power becomes anxious am a fearful, maybe even a little paranoid. This, therefore, enhances and magnifies misunderstandings so everything anybody else does looks rather menacing. It also exaggerates the impact of external events that would otherwise be in quantum went to inconsequential. Events from a by third parties, that could be easily manageable, that is the case of smart as well. Partiesct between two that had a great war in which both were destroyed. A thirdparty action produces an action to which there is a reaction for which there is a youn at which, there are at somewhere know he wanted to go. You have been an agent of the ruling power, what you make of the patterns of history and how does it informed the way think today . It is great to see some in frontier looking forward to the conversation. Having spent years debating the andt of china and academia in the white house situation, i have come to the firm belief that almost every arguments over u. S. Policy as it relates to china is what i would call a proxy war over the underlying assumptions of china. Where you land on the assumptions determines where you come out and policy issues. I think thats important enough to be lifted up to the front of the conversation, otherwise, it would be lurked behind. The first is the inevitability of chinas rise. I was reading grahams comment in New York Times describing chinas unstoppable rise. Saying is my left the World Largest pyramid scheme and it wont be important to the Global Economy and a relatively short amount of time. When your prediction on the chinese power projection is fundamental. There are people that believe the subject is relatively benign, the effect want to be different, they want what we want, they want what they want, but its want of it does all that much. Theres a Different School that i subscribed to that suggests that chinas rise is not a bad thing, but elements of it to toe quite severe challenges the vital interests of the United States. Where you come down on the question, the nature, character of chinas rise is fundamental. It is worth bring those out in discussion at the top. As it relates to the trap itself, being a witness and averted this participant in u. S. Strategy, i couldnt agree more that war between the United States and china would be devastating. The capabilities are extraordinary. It would be like nothing the war world has ever seen. We talk about cyberspace, the effects could be absolutely incredible. Shouldnt be complacent about that. I dont think we are, though. We have a deeply engaged relationship with china. With a great military relationship, confidence Building Measures and the fact that we havent had a Major Military crisis between the United States and china over the last couple years is a testament to that this type of engagement is helping us understand intentions and interest, and keeping us away from the precipice of conflict. Were my critique is, is not in grahams arguments but how it is being applied. I think the concern about avoiding confrontation with china, lowering tensions, has been taken too far. Relationship,eeping it happy, healthy, good lowering tensions, avoiding conflicts, confrontation, has become an end in and of itself. Been that is has resulted in what i would consider a risk aversion in the u. S. China relationship that has created a permissive environment for chinese assertiveness, liberalism, and, thats the biggest but today in asia is not on the brink being on the brink of war, but on the brink cure of influence, whatever you want to call it. A china order in asia in which china will win by not fighting to steal a chinese phrase. Wes risk aversion, when center our strategy run avoiding war, it is leading us down another dangers path and we ought not to ignore that potential outcome. The last thing i say as it relates to the tethering our strategic lens around this issue , war avoidance, there are other nt aspects of the u. S. China relationship. Ande is an ideological ideational competition that is getting more fierce. There is an institutional competition that is getting peers. It is my sense that that is the future of u. S. China competition and where lies. We think of the essential feature,s the military we will miss the other part of the competition. I was reading an article by a leading chinese academic yesterday who said, talking about the relationship between us, the rivalry will become less hot but more profound and widespread. I think that is right. As we think about how to manage this critical issue of the challenge of avoiding war, we ought not to let that resulted risk aversion or distraction from the other elements of the competition. Even it if it is endemic point thatimportant were not sleepwalking toward this innocence. Ann, over to you. Ann i think the big question is why am i here. I think there is a good reason why im here and that it is that chinas ambitions are not just strategic. Im a big fan of looking at the evidence in front of your eyes and not what you imagine. The evidence is that they have no plan on designing to become a great world power strategically, but, what it does have designs on his economic extending its economic strength growth of the world, collecting tribute, building states along its borders that have relationships with economic dependence on it, and building its own private channels of economic communication. Allison, this is above my pay grade, but although that is an interesting aspect, there are others that could be just as useful. Im a big fan of carl vogels work. What is his book called . [inaudible] anne exactly. I think perhaps an interesting paradigm to use is the great multiethnic empires that have all perished except for china. Persian, and even the romans. To some extent, the romans were expansionist it but mostly in economic terms because of their extend to to find new sources of income. I think that is what we need to be focused on with china. The effort to build dedicated. Nd less transparent channels transfer system that china has tried to build, the road system to bypass the world bank and multilateral institutions, all of the trade arrangements with Southeast Asia. Yes, they extend military power to their, but i would say that is more about having military power that being interested in invasion or anything like that. The issue ofat taiwan and hong kong and their selationship to the mainland are being underestimated for the risk. The strategy for the rest i think china is quite determined to recapture taiwan in one way or another. Not militarily. That would not benefit china and any possible way. They are very dependent on the technological strength of taiwan industry. T i think, one should think more shenzhen andand the concept used in the past to extend one nation one country, two systems toward taiwan. Get perhaps trying to representation in the mainland on to taiwan as happened under the kmt. A coop strategy rather than a military strategy. I think that is where we should be focused. Another example of war without bullets in that context. If i can, graham, i expect you want to respond to some of these things. I wonder if you would take us to the next question as well, what do we do about it . What are the policy implications . You have staked out, effectively, the stakes. You showed us what the risks of then, theggests, but hard question is what do we do . How much should it accommodate is its rise and how much a check against eventual war, or does it hasten war . Graham let me make three points. I think the difference among us, clarifying and going to the point, thats let me start with a point and i will come back to in the conclusion of the book, i say this book will be very unsatisfactory. In washington, you have to describe the solution in the same sentence as the problem. The doctor says dont just stand there, do something. I allow the last chapter to unfold a new strategy having a snappy title. Take an aspirin and everything will be fine. [laughter] i say this is not the case. This is not a problem subject to washington fix. This also gives you the opportunity for volume two very anne [laughter] volume two. Graham my hope is all you into is somebody that is by somebody in your generation. Those whose minds are not as encumbered or even by the constraints, because i think our discussion about strategy toward sh. Na has been basically mu in the clinton administration, the obama hedge is aion, and great moniker that excludes nothing and permits everything. It essentially goes with the flow. I can explain why i am either hedging or engaging and the Defense Department can pursue containment, treasury can pursue concessions. I would think that this has been the absence of a strategy. This allows us to go with the flow of what ever happens. Point, back to the first the trap is not about only a military competition. Reading about athens versus sparta, the reason why a athens drove sparta crazy was there economy, culture, their invention of everything. What the corinthian ambassador tried to convince to the spartans are not living with the athenians, they said, these people are out of their minds. If whatever they invent doesnt work, they have something new the next day. Withine never happy their own country, and they are not happy to let anybody else be happy in their own country. Inventedhe athens everything. ,rama, philosophy, history professional navy, architecture. These guys were zooming in all dimensions. In the chinese case, and we are seeing china in our face everywhere in every domain. Harvardg i give to my classes 26 indicators on when will china become number one. Maybeudents say in 2040, 2050. The second chart says, already. Already biggest automobile producer, cell phone producer, biggest economy. They say, well. Wow. The proposition is that the impact on the ruling power is not just military, it is economic, cultural, everywhere that we see. Elis point which is absolutely correct, some trap andterpret the proposition that the only to get the only way to avoid war is to concede. Wait was trying to avoid the trap to avoid war basically going with the flow and letting things happen the way that they did. I think this proposition is not in terms of what to do, concede in every setting. Story, iok at the wrote a piece for memorial day about what should be the big what wey anything about owe to people that gave our lives so that we can have our debate and decide what we want to decide. It, it wouldking be avoiding unnecessary wars. Most people think this is about i rock, no. Unnecessary wars we shouldve avoided, our world war i, easy. O avoid, and world war ii the authority for the claim of is winstoni churchill. He tells a story, at one point, fdr asked what should we call this war . He said i should call this the unnecessary war. He was shocked. I told him, how is it unnecessary . Militarily, we done what many people said including churchill, the u. S. , thee, and britain generals that thought this was a you wouldnt have had world war ii. You cant get where we are to concede or confront and in the conclusion, i think what we need now is a discussion and debate among the whole Strategic Community that says, here is this problem, this issue, this diagnosis that i try to. Liminate through the lens we have had to think of something way outside the box of the current conversation are we on a trajectory toward an unnecessary war. A twoday we are on decorate toward china and is a if we are on the path we continue on now. To answer the question on how to resuscitate what u. S. Policy , to answerk like question to graham about where we go from here, what should we policy, looking forward as well, the elements of what u. S. Polishes should look like, what u. S. Government should look like going forward, the first is get your team in place. This. , graham is right, will require a much higher level of expertise than we have had today. We cannot have senior officials coming in to the National Security adviser who are going to learn about the South China Sea for the first time or be traveling to japan for the first time at the level we need to take seriously. This is a central challenge. Our personality will have to reflect that as was the institutions. They absolutely dont. There will have to be a reformation and the state department, Defense Department, but much more to be much more focused. The second, it will be obvious to everyone in the room, u. S. Strategy in asia has to be comprehensive. Right now, the Trump Administration is talking about peace through strength, dual carrier operations in the East China Sea, one person will be giving a big speech at shangrila. It will not cut it. No amount of u. S. Power will resuscitate American Leadership and revive American Interest in the face of this challenge. That has to be an economic components, institutional component. As long as countries in the region believe that china is the future economically, our military will not stand that perception. Whether there it is tpp or something else, there has to be a Major Economic trade initiated for it. My personal critique of the Trump Administration as it relates to asia has been the transactional nature of the way the president has talked about his approach to asia. Very focused on north korea saying things like, what will i do, start a trade war . The president does one again president of taiwan again, i will have to check with others. Because of desires of lowering tensions with china with north korea, as someone who is worked on this issue for many years now, i think many who have would agree, this is the wrong approach. What United States should be doing, is the present when from across the board rather than signaling the United States being for sale or owing to trade up its vital interests. The chinese will have done that interrupted the United States around that. Tohink the United States has be willing to take more risk in asia. There is a perception, not to the point of tripping into war, but theres a perception of china being a very firm they have core interests that would must not get near, save face, and that is the theory and practice. In almost every single