Good afternoon everybody and welcome. This is on the subject of u. S. China relations. Is sponsored by the brookings institution. I would like to commend the panelists for agreeing to mostss some of the pressing questions before us, and that is whether beijing and theington can avert pressure toward confrontation. The pressure of history. A ruling power in day rising power in conversation confrontation. The larger question is, what do we do about it . Requests. Ousekeeping please turn off your phones, do not turn it to vibrate because it could interrupt the sound system. Themeeting today is on record, we will talk for about 30 minutes happy or and then up here and then turn it over to questions. On the right, one of the great china specialists. Cofounder and researcher. She keeps her eye on the macroeconomics of a range of subjects. Then, the Maurice Greenberg senior fellow. National security adviser to Vice President biden with special focus on china policy. And, our distinguished visitor from cambridge. Graham allison. Teacher, adviser, director of the center for science and National Affairs at the kennedy school. Author of the new book destined for war can america and china escape the . Ap if you want to know why is trending on twitter, you have to credit him. Captured theas imagination on both sides of the pacific. Even before his book was out. We will ask our panelists today to give us a few words at the beginning on how they conceptualize u. S. China relations from their relative vintage points. Where is this headed. Start with you. Thank you very much for this opportunity. Lens that concept or helps us understands the relation between the u. S. And china today. I think there is. We are trying to look through the noise of the day, whether it climate going from me pact or missile tests or potential conflict in the South China Sea. Becoming we look through that to the structural and even substructural reality. Rising poweris a threatening to disrupt. Helps ishat picture put the rest of the things in place. The notcept is called trap but theaham trap. Ides in 12 of the cases, the outcome was more. And for the cases, the outcome was averted. As i argue in the book, business as usual, in this case i believe sadly will produce history as usual and history as usual, in this case, would be catastrophic. So, the cases help remind us that in instances where nobody wants war, that does not mean more cannot occur. In cases where war would be catastrophic that does not mean we cannot averted. The case i think of most is the case on 1914. I do not think you can study world war i too much. It is still dazzling to imagine. After the war, someone was asked how did this happen . And he said, if we only knew. So how in the world can and art in surrey syria go ago become the end of world war i, every leader of the principal actors had lost what they cared about most. Trying to hold together an empire. The russians were trying to back up the serbs. Kaiser in germany, trying to back up his buddy and the anna. He is gone. The french are trying to support the russians whom they have a treaty with. Creditedwhich has been war, nobodyd of the would have chosen it. But war came. The lesson i draw is of important nuances. Do notspect that people want war. Particularly in instances like inherent,re is this deep structural stress reflected in what the book calls the rising power syndrome. I deserve more say, more sway. The current arrangement seems can whining because they were sent in place before i became bigger and stronger. The rolling power becomes anxious. Fearful. Maybe even paranoid. Magnifiesces and misunderstanding so everything anybody else does looks menacing. Impact exaggerates the of external events that would otherwise be inconsequential. Events reminder of this, that otherwise would be unmanageable,l or like in sparta, a conflict was the reason for us to have a great war, at the end of which we are both destroyed . No, terrible idea. At the third produces an action which is a reaction at the end of which you are somewhere nobody wants to go. So that is the fear i have of the third situation. Agent of have been an the ruling power, probably so. What you make of this and how much does it inform how you think about it . Thank you. So great to see many friends here today. Having spent many years now china andhe rise of think tanks, the white house situation room, i have come to the believe that every argument over u. S. Policy related to china is what i would call a proxy war over our underlying assumptions about the rise of china. Where you land on these assumptions determines how you come out on loc issues. Up at the lifted front of this conversation or otherwise they will float behind. We have two different perspectives. I was reading grahams comment describing chinas unstoppable and and a and, to my left, described chinese economy has the Worlds Largest pyramid scheme. In other words, the chinese economy wont be very important to the world in a short amount of time. Is, iser question chinas rise good for the United States and for the world . Some believe it is the nine, the effects will not the much different. They will want what we want, or we will want what they want. There is a Different School i ascribe to that would suggest not the chinas rise is a bad thing but there are elements that pose quite severe challenges to the vital interest of the United States and where you come down on that or the nature of the character of chinese rise is fundamental. It is worth bringing those out in the discussion. In relation to the trap, cyberspace, nuclear weapons, the effects could be absolutely incredible and we should not be complacent about that but i do not think we are complacent. We have a deeply engaged relationship with china, militarytomilitary. Ae fact that we have not had Major Military crisis between the United States and china of the last seven years is a testament to the fact that this type of engagement is keeping us away from the rest of his of conflict. Where i have concern is not in grahams argument. This concern about avoiding confrontation with china, lowering tensions, has been in u. S. Strategy. The relationship, keeping it happy. Keeping it healthy. Keeping it good. Tensions. Avoiding confrontation. It has become an end in and of itself. It is what i consider to be endemic to this a version of the environment. Chinese liberalism, the biggest threat today and asia is not the fact we are on the brink of a great power war but we are on the brink of chinese hegemony, chinese influence. What everyone to call it. A chinaled order in asia in which china will win. I think this riska version, when we set our strategy around avoiding war is leading us down a dangerous path and we ought not ignore that. The last relays to tethering our strategic lens around us. There are other very Important Competitive express. Aspects. Reasons, ideological competition getting more fears. That is my sense of where the u. S. Competition lies. If we think about the central feature, it is the military. We will miss the other part of the competition if we focus on that. I was reading a chinese academic talking about the relationship between the United States and china and he said it would become lets hot but more profound and widespread. As we think about how to manage this critical issue and the avoidance of war, we ought not let that result in risk aversion or other elements of competition. Endemic. Hough it is an camp, over to you. The big question is, why am i here because i focus on economics and finance and i think there is a very good reason im here and that is because chinese ambitions are financial. The evidence is that china has no geostrategic lands or designs to become a great world power strategically. What it does have designs on is extending its economic strength route the world. Collecting tribute. Elting states along its borders that have relationship of andomic dependence on an building its own private channels of the economic and financial communication. Dr. Allisons heuristic, it is above my pay grade but although it is an interesting characteristic, there are others it can be just as useful. Of exactly. Perhaps an interesting paradigm to use is the great multiethnic empires that have all perished except for china. Persians, even the romans which to some extent were expansionist stick but expansionist stick mostly in expansionist but mostly in economic ways to find new sources of income. That is what we need to focus on with china. The effort to build dedicated, less transparent channels. The Money Transfer system china has tried to build. The infrastructure banks. The road systems to sort of bypass the world bank and multilevel institutions. The trade arrangements with Southeast Asia. Yes, they are sending military power into Southeast Asia but i would say that is more about military power than invasion or anything like that. Problem, theat the issue of taiwan and hong kong and their relationship to the mainland is being underestimated for their risk. But that the strategy for china is not i think the chinas quite determined to recapture taiwan in one way or another but militarily. That would not benefit china in any possible way. Chinas very dependent on the technological strength of taiwan. Industry. Almost as dependent as it is on the financial industry and hong kong. I think one should think more about the special zone concept that has been used in the past. Perhaps extending the one country, two systems system toward taiwan. , youaps trying to get know, provincial representation in the mainland onto taiwan as happened under the campy. A coopt strategy rather than a military strategy. That is where we should be focused. Anyway, more to say but i will not say it now. In other words, were without bullets. Graham, i suspect you will want to respond to a couple things. Take us to the next question, what do we do about it. What are the policy implications . You state that effectively the stakes. The risks of what history suggests. The hard question is, what do we do . How much can and should the United States accommodate chinese rise and how much is assertive policy a check against war or does it hasten war . Big topic. Let me make three points. Partly responding. The difference that is more clarifying. I will go to the point. I will come back to the point. Basically i say at the conclusion of the book, this book will be very unsatisfactory for washingtonians. In washington, you have to describe the solution in the same sentence as the problem. The doctor says, do not just in their, do something. I am supposed to in the last chapter unfolding new strategy with a snap a nappy title, 32dos. This is not a subject for a washington fix. That brings us to chapter two. Volume two will be written by whobody in your generation is likely more imaginative than old cold war warriors like me. And whose minds are not as encumbered by the constraints because i think that our current discussion about strategy towards china has been basically mosh. This i was in in the clinton administration. I was disappointed with the Obama Administration. There is a great moniker that excludes everything but includes everything. Go with the flow. I can explain why hedging, engaging at the defense department. The treasury can pursue engagement or concessions. So i would think that this has been the absence of a strategy that allows is to go with the flow of whatever happens. I go back to the first point. The trap is not about only the military competition. Versus about athens sparta, most of the reason crazy wasoke sparta the economy, culture, invention of everything. I mean, read what the corinthian ambassador tries to explain to the spartans in why they cant live with the athenians. He says they are out of their minds. They invent something new every morning and if it doesnt work and then something new the next day. They are never happy to let happy in their country and they are not happy in their country. Athenians had actually invented everything. History,ilosophy, professional navy, architecture. I mean, look. These guys are just kind of zooming. In the chinese case, you are going to see end are seeing china everywhere, it in every domain. It is in the book. The thing i give to my harvard class. 26 indicators. The question is, when will china become number one and students a calm in 2040, maybe in 2050. The second chart says, already. Already the biggest automobile for it. Already the biggest mark phone reduce it. Already the biggest economy. Across the whole range. They think, wow. Never before has anybody been this fast in all. Thucydides trap says it is everywhere. Some people interpret from the t hucydidian trap that the only way to avoid war is to concede. I think before the problem we thucydides trap is to avoid. I think the thing is not to concede in every setting. If you look at the story, i read aps for memorial day on what should be the big take away, is we think about what we owe to people who gave so we could debate and decide what we decide. I would say, avoid unnecessary wars. I would say, most people think this is about iraq or something. Unnecessary wars we shouldve avoided were world war i and world war ii. People think, no not world war ii. Winston churchill was the greatest orator. He tells the story in his book that at one point fdr asks, what should we call this war, and i told him we should call this the unnecessary war. And he was shocked. I told him, how was it a and he said, if hitlers had militarized, the thing we should do and france and britain, hitlers, the germans who thought this was a crazy idea anyhow would have turned hitlers out. Himmler would not have been the ruler and we would not have had the world war ii. You do not get where you are without conceding work confronting. What i see in the last chapter is what i think what we need now is a discussion and debate among the whole Strategic Community that says, wait a minute. Problem, this issue, this diagnosis that i tried to illuminate through thucydidess wins. There we on a trajectory to unnecessary war . Right now i think we are on a trajectory of a chinaled asia if we continue on the path we are on now. I mean, i think, to answer the question on how to reset the tate resss the fewstate, i think a principles and to this will draw a contrast with the Current Administration but looking forward as well. I mean, the element of what u. S. Policy should look like, with the u. S. Government should look like in relation to asia and china, the first is get your team in place. This will require a much higher level. We cannot have senior officials coming into the National Security adviser as secretary of defense or going to learn about the South China Sea for the first time or be traveling to japan for the first time. It is a level we need to take seriously that this is a central challenge of not the central challenge in u. S. Foreign policy. Our personnel and institutions will have to reflect that and the absolutely do not. There will have to be a reformation within the intelligence department, state department. That is the first thing i would say. The second, again, this is going to be obvious to everyone in this room but u. S. Strategy in asia has to be copper and the. Right now the Trump Administration is talking about peace through strength, dual carrier operations in the china sea, secretary mattis will beginning a big speech tomorrow morning. Cut it. L not no amount of military power will revive American Leadership and interest in the face of this challenge. There has to be an economic and institutional component and is on is the region believes chinas the future economically, our military will not be able to bend that perception. There has to be a Major Economic investment and trade initiative associated with u. S. Policy in asia. The third peas, i think the principle critique of the trump ofinistration today in terms criticism has been the transactional nature of the way the president has talked about his approach to asia. Very focused on north korea. Saying, what am i going to do, start a trade war . Before a call the president of taiwan again i will have to check with the president helping out in north korea. Lots of rumors about navigation operations because of desires to lower tensions with china because they are helping on north korea. As someone who has worked on this issue for many years now, i think many would agree that is exactly the wrong approach. With the United States should be being firm across the board rather than somehow signifying that the United States is for sale. The chinese will have done somehow groping the United States right around that. I think the United States has to take more risk in asia. There is a perception again not war which it we should be conscious of but there is a concept in of a concept of china save face. I will tell you in almost every single incident, some of which are public and many of which are not in which the United States into the chinese government, stop what youre doing. You are violating our interest. We are going to take a stand and if you do not there will be consequences, china has backed down on everything a location said there is not any evidence of this escalated to the thing with china. Make are on her abilities them the riskaverse player and we ought to think about that in terms of how robust our interests are. That is what i wanted to talk about with you. The domestic picture. In a few minutes we will turn to questions but before we do, frame for us the domestic scene politically and economically, how that informs their behavior and actions in the kind of dynamic that the others have described. To what degree is china feeling as if it wants to pursue a more risktolerant approach in the world and to what degree are we miss reading china from a broader view . Say this. We know a lot about all of the chaos within the Trump Administration. Can assume it is the same in the Chinese Administrati