I think we will go in and get started. I know we got a lot of ground to cover, a lot of questions that people will want to ask. Some of you have contacted me before hand to launch your request. It afternoon everybody and welcome to this council on Foreign Relations meeting on the u. S. China relations. Im evan osnos from the new yorker and the Brookings Institution or im thrilled to be joined by three of my favorite scholar practitioners and theyll introduce them in a second buffer zone what you commended them for agreeing to wait into one of the most complex and pressing questions, foreignpolicy questions before us, and that of course is a question of whether beijing and washington can avert the pressure towards confrontation, the pressure of history, the patterns of history that drive a ruling power and a rising power into confrontation. And then even the harder question which will also do with, and that is what do we do about it . A couple of housekeeping notes at the very beginning. Please completely turn off your Electronic Devices are dont just put it on vibrate because that can interfere with the sound system. And if you have a reason to use your phone, you are welcome outside the repair our meeting today is on the record. We will talk for about 30 minutes appear and then opened it up to questions. Our distinguished panel begins writer to my right with my friend anne stevensonyang, cofounder and Research Director at J Capital Research which keeps an eye on the macroeconomy, on domestic policies, a range of a suspected and she has as much experience on the gratis anybody i know. To her right is ely ratner, dallas at china study of the conspicuous deputy that security advisor to Vice President biden and h get a special focus on cha policy in the midst of a vast portfolio. And, of course, our distinguished visitor from cambridge is Graham Allison who has been a friend, advisor, teacher think too many people in this room. Hes director of the Belfer Center for science and international affairs. He is most relevant for today i suppose, author of the new book destined for war, can america and china escape the trap. By my informal reckoning the only people of yet heard about the book is an uncontacted tribe in the amazon consider 12 people. By the end of this event they, too, will be apprised. Want to know why it is trending on twitter you have to credit graham for that. We will start there. The concept of the trap has provoked intense interest and discussion on both sides of the pacific ever since Graham Allison Start Talking about it. Even before the book was out. What were going to do today is will ask our pals he gets a few words at the beginning to speak for a few minutes on how they conceptualize u. S. China relations from your relative vantage point. What are the structural tension, was the opportunities and where is this had a . A . Grandpa will start with you. The floor is yours. Thank you very much and thanks for the opportunity. I think if we try, if theres a concept that helps us understand whats happening in relations between china and the u. S. Today i think there is anything that concept is thucydidess trap. It were trying to look to the news and noise but they whether its about trump going from a climate pact for whether its about missile testing north korea or potential confrontation in the South China Sea or germany becoming or china becoming germanys number one trading partner, if you look through that to the structural and even sub structural reality, that principal dynamic is a rising power thats threatening to disrupt the ruling power. I think that picture helps us put the rest of the things in place. This concept, its called not grams trap or allison trap but thucydidess trap pics of this is not my idea. This fellow thucydides if you dont know about them, help in this audience, i dont mean to tell you about it but you should at least google it and actually you can download his book for free, after the for free, and you can read the first 100 pages and in a whole month youll learn more than anything else in the month. Its a spectacular book. In any case he wrote famously it was the rise of athens and the fear that its instilled in sparta that made more inevitable. As i explained in the book use choosing inevitable as a hyperbole or exaggeration. He just means likely, very likely. In the book i look at the last 500 years. I find 16 cases when a rising power threatened to disrupt a ruling power, displays, not disrupt but displays. In 12 of the cases the outcome was war. In four the cases the outcome was war with the verdict. As argued in the book, business as usual. In this case i believe sadly what produces his usual and history is usual in this case if it ends with the war between u. S. And china would be catastrophic. So the case helps remind us in instances in which states dont work, nobody wants war, that does not mean war is not figure in cases where war would be catastrophic, that does that mean war cannot occur. And the case of irish people to think about most is the case of 1914. I dont think you can study world war i too much. Its still dazzling to imagine. And, indeed, one of the principal actors in it was asked after the war, how did this happen . He said famously, if we only knew. [laughing] so how in the world could assassination of an archduke in sarajevo by a serbian terrorist cant make this up become a match to produces a fire that burns down the whole of europe. End of the war, world war i forever leader of the principal actors have lost what they care about most. The emperor is trying to hold together simpler. His empire is dissolved, hes gone. The russians are is trying to backup the serbs. The regime has been overthrown by the bolsheviks neckties in germany is trying to backup his buddy in vienna. Hes gone. The french are trying to support the russians and the treaty relationship, a whole generation, never recovered as a society. And britain turns into terminal decline. At the end of the war if theres a chance or do over nobody wouldve chosen war, but working. The lesson i draw from this, one of the lessons from each of the cases come interesting lesson. Each of the want of interesting and important nuances. The proposition that people dont want war and no one would be catastrophic as relevant, helpful but not decisive. And particularly in instances which like today is this inherent, not inherit, this deep, deep structural stress thats reflected in what the book calls the rising powers, which im bigger, stronger, my interest deserves more weight, i deserve more say, more sway. The current arrangement seen a little confined because they were set in place before i became bigger and stronger. And the ruling power becomes anxious, even becomes 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 inconsequential. The world war i case is a great reminder of this. Even they could otherwise by third parties be inconsequential or easily manageable, and thats the cases of athens and sparta as well. Conflict between them was a reason for us to have a great were at the end of which were both destroyed. No. Its terrible idea. A thirdparty action produces an action to which there is a reaction to which there is a reaction, at the end of which youre somewhere where nobody wanted to go. Thats the fear i have in the current situation. So eli, you been an agent of the ruling power probably so pick what you make of the patterns of history and how much does it in for the way you think about it today . Thank you. Because great is his only friend today. Looking forward to the conversation. I thought i would stop by making a point which is having spent years debating the rice in china in academia, think tanks, in the white house situation room, i have come to the from belief that almost every argument over u. S. Policy as wood relates to n is what i would call a proxy war over our underlying assumptions about the rise of china. Let me point out, where you land on these assumptions in many ways determines where he will come out in policy issues. Ill highlight to which are really important and up to be lifted up at the front of this conversation because otherwise they will look behind. The first is about inevitability of chinas rise. We have two different perspectives. I was reading grandes comments are one of his oped in the New York Times describing chinas unstoppable rise and anne who describedescribe chinas econome Worlds Largest pyramid scheme predicting that the chinese economy wont be that important to the Global Economy in a relatively short amount of time. What your prediction is other trajectory of chinese power is absolutely fundamental. The other question is is chinas rise could for the United States and good for the world . There are people who believe its benign, the effects will be that much different, they will want what we want or they will want what they want but it wont affect us all that much. Theres a Different School that i described to others that would suggest not that chinas rise in and of itself is a bad thing but there are elements that do pose quite severe challenges to the vital interests of the United States. Where you come down on the question, the nature, the character of chinas rise is fundamental. Its worth bringing those out in the discussion i think at the top. As a relates to the thucydidess trap itself having been with, or to spend your strategy, i would say the following. First, i couldnt agree more that were between the United States and china would be devastating. The capabilities are extraordinary. It would be like nothing the world has ever seen. You talk to world war i. Now were talking about cyberspace. Nuclear weapons, the effects could be absolutely incredible and we shouldnt be complacent about that bu but i dont thinke are complacent. We have a deeply engage relationship with china. Having military to military relationship. We have confidence building measures. In fact, we havent had a Major Military crisis between the United States and china over the last soviet is a testament to the fact this engagement is helping us understand each others interest in keeping us away from the precipice of conflict. Where i have concern and where my critique is is not an grahams argument but how it has been applied. I think this concern about avoiding confrontation with china, lowering tensions has been taken too far in your strategy. The u. S. China relationship, keeping it happy, healthy, keeping it good, lowering tensions avoiding conflict, confrontation has become an end in and of itself in your strategy. This result, it is result of what i would consider to be endemic risk aversion in the u. S. China relationship that has created a permissive environment for chinese assertiveness, for chinese liberalism, and that the biggest threat to date in asia is not in fact, we are on the brink of great power war but we are on the brink of chinese hegemony, chinese sphere of influence, whatever you want to call it. But a china lead order in asia which china will win by not fighting, to steal a chinese phrase. This risk aversion when we sent our strategy about avoiding war is leading us down another very dangerous path and we ought not to ignore that potential outcome. The lasting policy as relates to tethering our strategic lens around this issue or avoidance is that there are other very important very consequential competitive aspects to the u. S. China relationship theres an economic competition that is getting fierce. Theres an ideological competition that is only getting more pfister theres institutional competition thats only getting more fierce. Its my sense that is what the future of u. S. China competition lies. If we think of the central feature of the competition as a military competition, and thats what we center our strategy around, we will miss this other part of the competition. I was reading an article by a leading chinese academic just yesterday who said, talking about the relationship between the nested and china, the rifle he said will become less hot but more profound and widespread. I think thats exactly right. As we think about how to manage this absolutely critical issue, the challenge of avoiding war with the United States we ought not let the result in either risk aversion or a distraction from the other element of competition. Even if its endemic it may not be a cute at all . Thats an interesting point that were not sleepwalking towards his arrangement. History or dates in a sense. I think the question is why i am i here . I focus on economics and finance adding theres a good reason im here, which is chinas ambitions are economic, not just strategic. Im a big fan of looking at the evidence in front of your eyes instead of the evidence you imagine the evidence in front of our eyes is that china has note geostrategic plans or designs on becoming the great world power strategically. What does have designs on his economic, extend its economic strength throughout 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 and financial communication. As for doctor allison, this is really above my pay grade but i would say although thats an interesting useful, theres others that could be just as useful. I tend to become on the fan of carls work, what was his book called . [inaudible] exactly. So i think that perhaps interesting paradigm to use is the great multiethnic empires that of all perished except for china, egypt and mayan and persians, and even the romans, which to some extent were expensive mistake but expansionist the most in economic terms because of their need to find, to extend, to find new sources of income. I think thats what we need to be focused on with china. The effort to build dedicated and less transparent channels such as the Money Transfer system that china has tried to build, the Asian Infrastructure bank, the belt and road system to sort of bypass the world bank and the multilateral institutions, all of the trade arrangements with Southeast Asia. Yes, there extending military power in Southeast Asia but i would say thats more but having military power than being interested in sort of invasion or anything like that. I think that the issue of taiwan and hong kong and the relationships to the mainland are being perhaps underestimated for the risk, but that the strategy for china is not, i think china is quite determined to recapture taiwan in one way or another, not militarily. That would not benefit china in any possible way. John is very dependent on the technological strength of taiwan, on its ip industry, almost as dependent as it is on the Financial Industries in hong kong. I think one should think more about the special zone concept that is been used in the past, perhaps extending the one nation, the one country to system toward taiwan and perhaps trying to get provincial representation in the mainland onto taiwan as happened under they k mp. Something along those lines, a coop strategy rather than a military strategy. I think thats what we should be focused. Anyway, more to say another example of war without bullets, as Chinese Military strategist which in the context. I suspect you want to respond to a couple of these things. I went a few take us this next question, which is about what we do about it . Innocence one of the policy implications . You have staked out effectively the stakes com can you give us a sense of what the risks are, of what history suggests. Within our question is what do we do . How much does a United States, how much candy, how much should a comment chinas rise . How much is a more assertive use policy a check against eventual war or in fact, does it hasten war . Big topic. Let me make three points, partly respond because i think the differences among us may be more clarifying what im go to the point. Start with a point and i will tell you, ill come back to very basic i say in the conclusion of the book this book will be very unsatisfactory for washingtonians. Because in washington you have to describe the solution in the same sentence as the problem. The doctor says dont just stand there, do something. Im supposed in the last chapter unfold a new strategy thats got a snappy title, taken aspirin and everything will be fine. I say this was not the case. This is not a problem that is subject to a washington fix. It give you the opportunity for volume two which your publisher will be very pleased about. My hope is volume two will be written by somebody in your generation who are likely more imaginative than old cold warriors like me and whose minds are not as encumbered or even by the constraints. Because i think that our current discussion about strategy towards china has been basically mosh. In the book i participated, wires in the Clinton Administration for the Obama Administration, engaged but hedge is a great moniker that excludes nothing and permits everything. It essentially goes with the flow. So whatever happens i can explain why i meet are hedging or engaging and the Defense Department can pursue continued. The treasury can pursue engagement or even concessions. So i would think this is been the absence of a strategy. It allows us to go with the flow in whatever happens. If i go back to the first point, this is now for both i think for ely and anne. Thucydidess trap is not about only a military competition. Thucydides in writing about athens versus sparta, most of these by athens drove sparta craze is a economy, their culture, their invention of everything. Read what the corinthian ambassador tries to explain to the spartans in telling him why you cant live with these. He says of these people are out of their minds. They invent something new every morning and if it doesnt work they invent something to the next day. They never as he says there never happy to let anybody, there never happier within the own country and are not happy to anybody else be happy in their country. They are always actually a bit of everything. They invented drama, philosophy. They invented history. They invented professional navy. They prevented, invented architecture. Look at the paucity. These guys were just zooming in all dimensions. I think the chinese case you are going to see, and we are saying, china interface everywhere in every way in every domain. In the both the thing i give to my horror class, for students, 26 indicators. The question is when will china become number one . And students say in 2040, maybe 2050, whatever. The second chart says already. Already because automobile producer already Biggest Smartphone producers already biggest artificial intelligence, already biggest economy. Across the whole range. I mean every force anybody and the thucydides, the american will impose not just military. Its economic, cultural, everywhere, everywhere we see. Secondly again your point actually correct which i agree with. That some people interpret from the thucydidess trap the proposition that okay, in order, the only problem is avoiding war and the only way to avoid war is to concede. I think actually before the problem avoid war we were also basically going with the flow and letting things happen, happen the way they did. But i think the thucydides proposition is not in terms of what to do concede in every setting. Back i think if you look at the story, i wrote a piece for memorial day of what should be the big take away is we think about what we owe to people who gave their lives so we can have our debate, decide what we ought to decide. I think you taking the thucydides lesson it would be avoid unnecessary wars and then i say most people think this is about iraq or Something Like that. No. Unnecessary wars we avoid were world war i, which was quite easy to avoid, and world war ii, which people, how about world war ii . I say the authority for the claim with respect to world war ii is none other than the greatest states that in world war ii, winston churchill. He tells the story in his book that at one point if the are asked what she would call this war . And he says i told him eagerly we should call this the unnecessary war. And he was shocked. And i told him how is it unnecessary . He said when we done what many people said including churchill we should do, the u. S. And france and britain had sent at the vision. Hitler, the generals that this is a crazy idea. What a turn hitler out. Hitler would therefore not of been the rule of germany and you would not about world war ii. You cant get from where we are to either concede or either confront what i say in the conclusion of the book, the last point, is i think what we need now is a discussion and debate among the whole Strategic Community that says wait a minute, here is this problem coheres this issue, heres this diagnosis that i try to eliminate through thucydides wins. We have to think of something way, way way outside the box of the current conversation. Are we right now on a trajectory towards the unnecessary war . I think as a sediment open, i think were on right now on a trajectory toward a china letter or in asia if we continue down the path we are on right now. To answer the question of how to resuscitate this slide and what policy should look like, will not get into a detailed conversation of every detail but i think that your question of graham about where we go from there, what shall we do viewingn policy, i think principles, this would draw contrast with the current administration, but looking forward as well. The elements of what u. S. Policy to the lord, what the Us Government should look like Going Forward as relate alyssa d china the first is get your team in place and this. I think graham is right is going to require a much higher level of expertise on asian china and the government that weve had today. We cannot have officials coming to be nicest revised secretary of defense you will learn about the South China Sea for the first time or be traveling to japan for the first time. Its a level we will need to take seriously that this is a central challenge if not the central challenge in u. S. Foreign policy. Our personal web to reflect that in our institutions will have to reflect that as well. They absolutely dont. There went the a reformation within the intelligence institutions, state department of Defense Department to be much more focus on asia challenge than what weve had so far. Thats the first thing i would say. The second, obvious to in this room, but you strategy in asia has to be comprehensive. Right now the trumpet ministries talk about peace through strength. Where selling dual carrier operation in the east china sea. Secretary mattis will give a big speech at shangrila dialogue tomorrow morning. Singapore time. Not going to cut it. No amount of use military power in the region will resuscitate American Leadership and revise American Interest in the face of this challenge. There has been economic component, and institutional component. As long as countries believe china is a future economically, our military is likely to be able to bend that perception. Whether its tpp or something else, there has to be a Major Economic and investment and trade initiative associate with u. S. Policy in asia. The third piece, my principal critique of the Trump Administration to date as relates to asia in terms of criticism 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 am according to, start a trade war . Before i call the president of taiwan to get unconnected with president xi because hes helping us with north korea. Lots of rumors about freedom of navigation operations that happening until recently because of desires to lower tensions with china because of their helping on north korea. Someone who has worked on this issue for many years now, and i think many who have what a great its exactly the wrong approach. What the United States should be doing is principled and from across the board rather than signaling that some of the United States is for sale or willing to trade up its vital interestinterest to achieve oth. Because the chinese will have done so far wrote the United States right around that. I think the last thing i will say related to open it, i think the United States has to be willing to take more risks in asia. There is this perception, not to the point, there is a perception of china being very firm, having court interest which we must like it never we must allow them to save face. Thats a theory and practice i will tell you over the last several years, and almost everything is it i some of which are public, many of which are not coming which the United States said to the Chinese Government stop what you are doing, you are violating our interest, well take a principled stand and if you dont there will be these consequences. China has backed out on every single occasion. So theres not a lot of evidence for eskimo tory very risk is set to china and affect some of their economic and political vulnerabilities inside actually make them the risk averse player and we to think about that in terms of how robustly we set our own interests. Thats exactly what i want to talk about which is the domestic picture. In the debates will turn to questions but before we do, frank for us have a domestic scene both politically and economically, i knows complex, informs their behavior and actions in exactly the dynamic that grant and ely have described. To what degree is china feeling as if it wants to pursue a more risk tolerant approach in the world . To what degree are we misreading china from abroad did you think . Lets say this. We know a lot about all of the chaos and strife within the Trump Administration. We dont see that within the Xi Administration but we can assume is exactly the same and, in fact, in many cases worse because youre dealing with such capacity where tactics sharp elbow tactics but when. And there in the year whether going to the 19th article when xi has just been an assistant leader for life. Hes trying to consolidate his position and remain in place to preserve his, both position and his of course life and liberty as always happens in east asia in these transitions. The stakes could hardly be higher. Part of what xi, as if windows including every single human being, china is in a very, very risky economic position. The Financial System has been pushed to the very brink. There are backup plans within the government in case the Financial System blows. There is a very high understanding of how much risk of there is and theres very high risk. As part of the consequence of that, i think that the Central Government wants to project to the Chinese People this sense of, you can be quite as rich come you cannot anybody have a ferrari anymore. We want you to drive, lula apartments, but theres glorious china. We would be projecting about internationally. The renminbi you can use and nationally, you can fly to mow lawn and by things with 6. 8 renminbi to the dollar. Youll be able to be proud to be chinese. I think the messaging of the belt and road program is very important internally for showing up xi and giving them a sense or surround him with this cloud of glory that he really does carry the mantle of the old communist party, and that he can carry it forth into the future. Before we go to question, very briefly. The story we tell each other that as chinas economy slow its more inclined to take a more adventurous posture overseas. Do you think that is right a wrong generally . Is a basically true . You mean militarily . Rally people around the flag. Do they say in the absence of being able to deliver the trip to mow lawn, will deliver emotional sentimental satisfaction and the up to punch somebody in the nose. I think that will. The issue right now is that the system has relied on very high income streams to certain supporters, a and this income streams have to be maintained, and as growth declined and profit streams certainly decline, it becomes more and more difficult to do so. So you have to look out around the world for other income streams and reward people in different ways. I would, i agree completely with the analysis and i would point to relationship with pakistan. You never find china talky but isis 50 never find china talking about terrorists mainly because they close her own borders and they keep their own muslims from leaving and creating overseas movements. But really not interested in International Terrorism what they do, china does things like go into muslim schools and force children during ramadan to eat. It does things like forcing muslims to shave their beards. This can be very popular in pakistan, but one doesnt hear this from pakistan. One does about the friction with the United States from pakistan. We need to be focusing on the economic imperialism rather than on the ships going to vietnam. We will bring folks into the conversation here. There are microphones going around. If you will raise your hand well get you one. Will grow three times the u. S. Three times of the weight of the u. S. Take two numbers and you run three times. You have one taker. I have a lot placed on this. One second, please. Historically when economies fail, this is larrys point, which i agree with, if they faulter, rarely do governments blame themselves. Externalization is problem. If you look at the other leg it stands on is nationalism which you see and you see war. 20 seconds before we turn to this. I want to give a quick answer to that and your first response. Lets see say the Trump Administration was to gather tax from every person in the United States. 3trillion, build huge wall all around all the borders, canada and mexico and kept everybody out. The u. S. Gdp consequently would rise roughly 25 next year, right . Just from the spending from the 3 trillion and Building Material and all that of that . Would that be a good thing . Would that be something that would sustain the growth in the future . Youre 20 points about the auto industry, steel industry. We will exceed the uk in field production by 1990 and then they exceeded the u. S. Okay, nobody even noticed that metric when it was passed. You know why, because it doesnt convey value to the Chinese People. We are going to go right there in the back, please. John with ctib with taiwan. For many years in washington there were people who were saying that if the United States and china were ever going to war it would probably over taiwan. Is that assertion still valid today and is the current in crossstate relations make u. S. China relations more difficult . Thank you. Sure. I guess theres a couple of different ways to answer that question. Again, getting back to the original thesis. I dont think we are on the precipice in war because chi xi jinping seems intolerant to any move towards independence. Domestic policy in taiwan and the way the United States has in my view very good team, very strong team, you know, National Security council to the point where he was not a central component of the u. S. China relationship. It is relatively wellmanaged now and, of course, that could change in the event that there was an unexpected turn in they wane ease politics but i dont think we are at a point where its a defining issue in the u. S. China relationship. Taiwan is a very viable one and i think the hard facts about taiwan, again, washington doesnt like it, but the hard facts are, china will fact over taiwan independence. I think thats a fact. The u. S. Has accepted the fact and the u. S. Is not likely to fight over taiwans independence and thats a hard fact. Charles, right here on the front. Thank you, charles, former member of congress where i cheered the u. S. China working group and now with capital council. I agree this is going to play out in the economic sphere and as i watched on sned and im not going to comment on what donald trump is negotiating in the strategy, as time went on and it became more and more difficult to get substantive resulnd to get the chinese to commit, given that a lot of this is going to play out in the institutional arena and we have our bread and woods institutions, do we need to rely on those and fight it there or propose new institutions to china and we witnessed an opportunity with aaib, we should have engaged. Eli, you have obviously given some thoughts into this, what kind of institutions would you image if we jointly create with china if we are looking to create a new strategy . Again, its a very good question. Its a big challenge. Let me answer that in a couple of ways. Number one, i do think we should be looking to create institution uilingses institutions with china. I do think its important that the United States provides alternatives to in a liberal or aliberal future in the region and china wasnt excluded to be a partner in the transpacific partnership. Even as we look to find a way to bring china into the system in a peaceful way and prosperous way, i do think its important that we continue to maintain what we consider a high liberal standard. First thing i will say, i think we ought to not compromise our own view of where we want the region to go as we go about doing this. If you had been watching the Chinese Media over the last couple of weeks, the rhetoric has gotten, i mean, this is the savior of humanity. A centurylong project. The defining issue around which mankind will organize no, really, literally. [laughter] now theyre adding the arctic, the belt and road in circle literally. You know, its encompassing the world. Its hard to know what to make of this because in a sense its grand and visionary, but you know, theres also and with the nib and also not belittle it but put it in perspective in terms of size and reality. Aib, for instance, is doing back in calculations in my office today because i had a chinese newspaper that i brought back, huge picture on the front. Aib filling the infrastructure gap in asia, right. So Asian Development gap estimated that its 26 trillion over the next decade. Aib, today has loaned 2 billion. This is doing little math here. That is. 00007 percentage wise contribution to what is need today fill that gap. In other words, you would need 130,000aibs to fill the infrastructure. So, yes, its a good thing but we need to put in perspective and its going to be the same thing with the belt and Road Initiative where you have a lot of promises, a lot of big dollars thrown around but what actually new, we have to put in perspective. The last thing i will say and i think this is important because even if the numbers themselves are not that large, even if the economic facts of the aib are not belt and road are not determinative, they do do two things. Number one, they give china convening authority and you saw a number of leaders going to beijing for the meeting and do it again, we will have big conferences. Xi jinping and they are shaping perception. Things like belt and Road Initiative, aib, even if the dollar numbers arent real, if everyone in the room is walking away, china is the future, we better make nice with china. The United States is not even at the table, thats going to spill over into every element in the International Politics and just as an example of that, speaking to the Southeast Asia expert and said we are at the point if not soon where theres no country in Southeast Asia thats going to be willing to entertain a new Security Initiative with the United States because of their perspective on the economic side. They are word about economic retaliation. Even as we assess the reality of these dollars in the institutions, the profound effect on perception and politics is very important. I agree mostly with what eli said but i would say, look in the book and here is the question. In Development Aid today compare the world bank to chinas set of Development Banks and figure out in terms of loans this year and loans last year and loans next year and capital of loans which is bigger and youll be surprised. So the numbers are not the chinese banks are larger. Four times. Four times. Makes you wonder what is the bement and road thing which the China Development bank has three times the Balance Sheet and what has china become a glorious leader, their by, not really. Right here. Which countries does china look at as being natural allies and why, if there arent natural allies, does it need them and if not, why not . I will give one shot. Again, the general view washington and china cant have a Good Relationship because russia is weak and they have a long border and siberia doesnt have any people over the long run this is going to be a troubled relationship. Over the short run, xi jinping is putins best buddy. When putin and xi jinping get together they alie about the u. S. , what do they talk about the u. S. Is trying to undermine both of us, are they correct, the answer is yes. Im interesting on what both you think on the subject. Its an interesting one. My thoughts would be muff briefer because its not my purview. So, for example, youll find the uk very thrilled about its relationship with china right now because china has promised to fund all the power plants that will disappear if china does not or when the next round comes up. I think thats kind of the relationship. China still conceptualizes itself as a great ancient, ancient power with tributary states around it. It doesnt need a alliances but occasional relationship. If you think about military alliance, i think we are not quite at the point of China Signing up for a mutual defense treaties with countries in the world, clearly its expanding military footprint. First military overseas base and shopping in other places in the world to add to that and over time we are going to see People Liberation army in terms of access agreement and moving around. Thats on the military piece. I think on the question, its interesting because one thing that i think china is going to find out and its starting to find out now is its very easy to sit back and engage in sort of a winwin economic relationship with the world, but once it start getting out into the nasty competitive world of International Politics its not going to be able to play the game anymore. And so, you know from the middle eastern, obviously china has tried to develop Close Relationships with iran, saudi arabia and others with the palestinians and israelis. Thats only going to work up to a point and at some point if they want to be a major player in the area, they will have to make hard decisions about which side they want to be on and thats not the nature of chinese politics now and the experience that i have seen over the last couple of years, as soon as we got close to that, theyve pulled back and we are starting to see another example here of that with the belt Road Initiative in terms of the principal component of that that Pakistan Economic corridor which started touching indias sovereignty concerns and all of a sudden china Diplomatic Initiative is stepping on sovereignty concerns about india, indian representation not going to belt Road Initiative. As xijinping steps in the world, they will have to come down and vi havent been able to do today. In terms of xi being innovative, we see china taking sides and that would be telling on the direction of Chinese Foreign policy. Embassador right here. First of all, i want to thank anne for mentioning a book that i read 57 years ago. I didnt want to say ierntal despotas. Would any of you care to comment on some issues on which we cooperate right, true. Send us out on a sunny day. I think it was a great success. Maybe, im not sure. Is that all there is . Do we have anything else at this point . Can it be counterproliferation, can it be isis, can it what are the areas, what are the opportunities . Its the question at the moment that we need to be thinking about . Well, the economic arena and principle could be one and i agree with elis analysis that the way that evolved, in first instance was building china because of the cold war strategy. The reason we opened relationship with china was not for china, was not for the international water, not for all of the reason that is are typically given today but because we had one objective in mind which was defeat of the empire. We built up china through that end, economically, military and otherwise. During cold war, everybody is going to be globalized and whats good for one is good for all and theres going to be democracy and so forth. Not quite recognizing that china was getting bigger and stronger and china was most likely to be like china when it became bigger and stronger. It was not likely that it was going to be washed out easily and what we are seeing a reemergence of china that looks a lot like china. The chinese have a hard time thinking relating to some other party. Theres nobody equal to me. Other people relate to me and the way i understand their relationship with me is the extent to which they give me respect. So basically, in the hierarchy hierarchy system know your place. My place is at the top of the pyramid and your place is adjusting to that. In terms of relationships, the ones that will get on best are the ones that go along with that picture and the chinese were never, never wanting to take not mostly take over anybodys territory, they didnt want to convert people, they want people they didnt want people to become chinese. The chinese say, youre not worthy of becoming chinese. You can imitate us. To the extent you do, it wont be too close. The closer you come, the more i will give you a little bit. Actually if you give me enough respect, i will give you a present. If we go to this question about the basis for potential meaningful cooperation, some sort of way out of the, korea may be the way in which we find something. To what degree do you think theres an opportunity there for a meaningful breakthrough both in the u. S. Lets confine it to the u. S. China relationship on the north korea question. Let me back up for a second. To pile on with what has been said. During the Obama Administration there was the climate deal to work on, the iran deal to work on and the economic relationship which was not great but not necessarily heading in the wrong direction and i think this question of of the vacuum on the positive ledger relationship in the small ball thats being put that of some Law Enforcement cooperation, some counterdrug initiatives, obviously theres constraints on some of the scientific and space exploration, some of those issues and i think the fact that the economic relationship particularly concerns that American Business have the Chinese Industrial strategy is very dangerous trajectory to the extent that the u. S. China economic relationship has been the relationship. Thats not only going away, but potentially going to become the center point of the competition and anne knows much more about this and if that continues, itll be hard to find the way back. On north korea, i dont know, count me cynical, i think that theres still a gap between how far china is willing to go and the degree to which the demand of the United States in terms of applying enough pressure on north korea either to cause kim jong un to change his calculation or to create dynamics within north korea that lead to different decisionmaking within the leadership there and so i dont think its going to be a natural place of a meeting of interests, i think what its going to be ultimately as chi xi jinping will make calculation depending on trade or whether he has to push for more or if thats enough and steer into some negotiation strategy but i dont think because of a strategic overlap. Its going to be determined by other factors. I really cant imagine a dumber strategy. Tell us what you really think. I actually that the taiwan was good idea if it had been supported by a strategy. I think that the relationship is all about investment and trade and thats where we need to use our levers and china has gone backwards in a lot of ways. We are not using the leverage we have over audits, over data security, thats a huge one thats very disvaingous to disadvantageous and the apparent deal between the feds, all the different feds and china at the meeting early last year was dumb and a bad idea and negative for the United States. There are levers we dont use that we should be using but its all about investment in trade, its not on the margins, yes, climate and military cooperation and we have excellent institutions, we just need leadership and we dont have that and i would argue actually we havent had good leadership on china since clinton. On north korea to make north korea the issue between u. S. And china is strange, very strange. I spent a couple of days with people at maralago doing a post mortem. Who is going to be right . I wrote this piece oped in the times about this is virtually a cubanmissile crisis in slow motion. Basically kim jong un in the foreseeable future, that is next year or maybe even sooner but not four years from now on his current path be able to attack San Francisco and los angeles with the nuclear weapon. Thats on the one hand. On the other hand, President Trump said this is never going to happen. First tweet we heard at the hand from president obama when he was president elect. He went out instantly and tweeted, never going to happen and he continues to say, hell not going to let this happen. So you have two railroad trains going right towards unless one of them diverts. Tell the chinese, make sure the guy diverts. If you didnt get him to divert when he was Building Nuclear weapons, you didnt get him to divert when he was able to attack japan with Nuclear Weapons and now youre telling us that attack you and i have to solve this problem, so i would say, this is the train wreck to watch for. Right there. Barry wood, rtha in hong kong. I wont say that. How does japan fit into this equation both in terms of japanchina relations and now it fits with the United States . Youll get the last one. On japan, one of the fascinating differences and not every one of the 16 cases is interestingly different. One of chinas problems if you compare it, for example, with the u. S. When we emerged a hundred years ago as dominant power is that we didnt have any neighbors that were strong, japan is a strong neighbor. Japan is Third Largest economy in the world. Japan is a serious military ally. Actually if there were a conflict between Japanese Navy and the chinese navy it would likely be bad for the chinese navy. So japan will be a significant player but the question and i think this is what eli point he made earlier, the economic gravity has shifted so dramatically that i have no alternative to deal with you as main market, main investor, you as the person who im dependent upon. I think youll see the security relationships that we built up there in the philippines in the first instance and south korea, i predict its extremely stressful alliance and ultimately perhaps even japan. I think we are going to follow the rules here today and finish on time. I want to thank all of you for coming and i hope youll join me in thanking our terrific panel. [applause] [inaudible conversations] this morning we will have coverage of former fbi director James Comey Testimony before the Senate Intelligence committee. See it live starting at 10 00 a. M. Eastern on cspan3 or cspan. Org where you could also read the former directors Opening Statements now ahead of the hearing. And if youre on the go, you can follow the former directors testimony live on cspan radio app available free in the Apple App Store or for Android Devices available on google play. This weekend book tv is live from the 33rd annual Chicago Tribune printers rogue lit fest with author mary. At noon 2016 national abook winner and his book stamped from the beginning. The definitive history of racist ideas in america followed at 1 00 by Michael Eric Dyson with his book tears we cannot stop, a sermon to white america. On sunday, our coverage continues at 11 00 a. M. Eastern with Heather Anne Thompson and her book blood in the water, prison uprising of 1971 and legacy. At 2 00 author Jeffrey Stone with his book sex and the constitution, sex, religion and law from americas origins to the 21st century. Then at 3 00 former congressman with his book democrazy and at food author thomas are his book churchill and orwell, fight for freedom. Watch 33rd annual Chicago Tribune starting saturday on cspan2s book tv. Cspan where history unfolds daily. In 1979 cspan was created as a Public Service by americas Cable Television companies and is brought to you today by your cable or satellite provider. And we are live this morning at the u. S. Senate is about to gavel in, lawmakers today
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