Daniel Russel: US-China Relations and China's expanding international presence

Good afternoon, everybody. Welcome to The Ford School.

I want to really thank all of you for being here.

It's great

to see so many people come out for this program.

I want to thank the Lieberthal Rogel Center for Chinese Studies and Mary

Gallagher for making this event possible today with us.

Nearly half a century ago, our namesake Gerald Ford traveled to Beijing

as minority leader for the House, part of a series of meetings in

Since then, China has risen dramatically on the world stage, as has the

importance of the US China relationship, one that features a great deal

of cooperation but also, as we've seen, many points of tension.

US China relations are now central to many of our most pressing domestic

and foreign policy discussions.

Whether we consider President Trump's planned meeting with North Korean

leader Kim Jong Un, whether possible effects of US tariffs on steel and

aluminum, whether we focus on global financial markets or on climate change

negotiations, US China relations are crucial.

To help us understand the dynamics of this critical relationship, we are

delighted to welcome Danny Russel to the Ford School and to the University

of Michigan.

He is a diplomat in residence and senior fellow at the Asia Society

Policy Institute and a career member of the Senior Foreign Service at the

State Department. He served as Assistant Secretary of State for East Asian

and Pacific Affairs from 2013 to 2017,

after serving for years at the White House as a special assistant to

the President and Senior Director for Asian Affairs at the National Security

Council. He was one of the key architects of President Obama's strategic

rebalance to the Asia Pacific, including efforts to strengthen alliances,

deepen US engagement with multilateral organizations, and expand cooperation

with emerging powers in Asia. Before joining the NSC, he served in a

number of important diplomatic roles in East Asia, Europe and at the State

Department headquarters in Washington. He has an extraordinary record as

a diplomat, and deep knowledge of China, US Chinese relations, and of broader

international politics in which they are embedded. We are very privileged

to be able to learn from him today,

and also appreciate the time he is spending with faculty, students and visiting

scholars all day long. He will begin with some prepared remarks and then

open it up for Q&A. Please join me in welcoming Danny Russel to

the Ford school.

Hi, everyone, and thank you very much, Michael, for the introduction.

Thanks to Mary Gallagher for getting me out here. It's an honor to

be here.

My background, my expertise is in foreign policy. I've been a diplomat now

for 33 years in the Foreign Service, but

I'd actually like to start with a question about astrophysics.

And the question is,

what's up with the space time continuum? I mean, is the universe expanding?

Is the universe contracting? Is time accelerating? Decelerating? And the

reason I ask is that it seems like depending on whether you're standing

in Beijing or Washington DC,

the world, even the universe looks pretty different.

In Beijing right now the National People's Congress is underway. Not only

was there a lot of drama in connection with cementing Xi Jinping's leadership

status and removing term limits,

but at the same time there's also been a very significant

set of announcements about changes in

government structure, to government party

reform. It should come as no surprise to anybody who's been paying any

attention that the net effect of the changes

is to strengthen the party's control, at least in the short term,

and Mary Gallagher had a great piece a couple of weeks ago in

the New York Times pointing out some of the longer term pitfalls in

this trend line.

In Washington,

the pace of change is, if anything, even more breathtaking, and the character

of the events, more shocking.

Summit with little rocket man?

Rex Tillerson out, Mike Pompeo in? HR McMaster may be out,

John Bolton may be in. And you notice, I'm not even mentioning

Robert Mueller, Stormy Daniels, I'll stay away from all that.

But if you're in Washington, it sure feels like time is speeding up

and it feels like the universe is kind of closing in on you.

You can get whiplash standing still just from the news crawl on tv.

But at the same time, America's aperture seems to be

tightening, constricting in a way.

There's the banner of America first. There's the withdrawal from the TPP,

Trans Pacific Partnership. There's the walk away from the Paris climate

accord. There's the turn away from multi lateralism. There's the sentiment

expressed again just yesterday, that America's allies are really just freeloaders.

That global engagement has been a losing proposition for the country.

The focus on hardening our borders, not on

sustaining global leadership.

We seem to be sending signals that, rightly or wrongly, are construed by

many friends and partners overseas as signals of abandonment

that reinforce a sense of a diminishing international agenda on the part

of the United States.

Whereas on the other side of the spectrum is China. Now,

we all know that the Chinese horizon is... The time horizon

is historically a long one, and if anything, it's lengthened. It's not just

that we may be looking at a Xi Jinping third term,

a Xi Jinping fourth term, who knows? But also it's

the centenary goals of becoming a modestly prosperous society by 2021,

of achieving socialist modernization by 2035, of

becoming a great power and realizing the China Dream by 2049,

but it's also the vow to make

China the definitive leader in artificial intelligence by 2030.

That means something. That's a kind of Kennedy man on the moon

caliber national commitment.

So China's field of vision internationally, its global vision, is expanding

also. National rejuvenation goes hand in hand with greater global stature.

Hide and bide has been supplanted by the community of common destiny

by

the new Asia security model, by the Asian Infrastructure Investment Bank,

by the Belt and Road Initiative, by the strong army dream,

by Xi Jinping's speech at Davos in 2017. There's no shortage of indicators,

and engagement by China in the world post hide and bide seems to

be driven by a number of different factors. Some of them are obvious

ones, economic, military, geo strategic imperatives, even demographics as

the expatriate Chinese population expands, and China gets dragged into issues

and areas in defense of its citizens or to protect its investments.

There's also the very human "because we can"

dynamic. That factor is driven both by China's economic clout, but also

by the growing military strength of the People's Liberation Army.

But the push to elevate China's global stature clearly is also a mechanism

to strengthen the Communist Party's hold on power.

It's part of the substitution strategy, where national pride,

increased prosperity, these sorts of things, help compensate Chinese citizens

for the lack of civil rights, the lack of political space.

Now, there's a lot of discussion also about Xi Jinping's, not just his

motives for pursuing more ambitious global status, but his goals in pursuing

them.

My own belief, based on my experience, is that

China is not out to replace the United States as the super power

provider of global goods.

I'm prepared to take the Chinese authorities at their word on that one,

because China is not and hasn't been a missionary

culture, not a proselytizing culture, it's not Wilsonian, it's not altruistic.

There was a "China First Policy," there was a "Make China Great Again

Policy" long before Donald Trump came onto the stage.

And look, Xi Jinping may be a devotee of Lenin, but he's no

Trotsky. He's not trying to promote global communist or socialist

revolution. He's not exporting that ideology. In fact,

the China model is conspicuously laissez faire when it comes to the politics

of other countries.

But it sure does look like China seeks to discredit

and delegitimize the Pax Americana postwar liberal order.

Why?

My hypothesis and my experience is that probably the main reason for this

is to relieve China from pressure to comply with international rules and

international norms in areas where it finds it inconvenient.

In my engagements,

all American diplomats find that China routinely invokes

a kind of core interest waiver,

that international rules don't apply to China on

issues that it proclaims are fundamental core interests to it. And

the fact of the matter is that, increasingly, China's

powerful enough to get away with that in many cases.

In addition, China undoubtedly sees... We know sees opportunities to

occupy abundant space opened by US missteps or even US retreat.

As I mentioned, Davos, where Xi Jinping claimed the mantle of the champion

of the open global trading order. Not something you would have

expected, given China's actual policies.

I mentioned TPP, where the withdrawal really left open the

multilateral trade arena.

And abandoning the Paris climate change agreement,

which ironically was a product of a US China

deal.

And relegating the United States once more to the

position of majority of one in an international

arena. So on the one hand, what has emerged is

Washington sees in China

a growing swagger, a sense of entitlement, even hubris.

They're building a non Western form of capitalism and a Sinocentric form

of economic and security, the New Asian Security Model, or whatever the

label is. At the same time, Beijing sees the US,

which is increasingly and publicly defining China as "the threat,"

as

a country that's

out to defend a rigged status quo.

That the United States is seeking to use international rules and

international institutions which China had no hand in developing

as instruments to contain China, or worse, to weaken China, and to divide

it. So this is not a great dynamic.

There's a key question in all of this,

which is if China is in fact going to fill the void left

by American retrenchment,

what are the tools that China is going to use

to motivate other countries, the rest of the world,

to go along with it? Will it rely on coercive tools like economic

leverage?

Or can it build consensus around common interests

and universal principles? And if so, what are those interests?

What are those principles?

Put it this way,

is there an export model of the China dream?

Well, shift gears for a second, and just do a quick

inventory on the US China relationship, including then and now.

So the then, at least for me, was when

I was loaned by the State Department to the

incoming Obama administration in January of 2009, and the starting point

for the Obama administration that I was part of was

the value of the Asia Pacific region to America's economic interests,

which were under tremendous stress, as well as to our national security

interests.

So the

theory of the case was to put equal emphasis on

strengthening alliances, engaging and supporting regional institutions for

rule making, promoting soft power and the values agenda, democracy, and

human rights, not as a sermon, not as a rebuke, not as a

lecture, but as a guiding principle of our behavior and our policy.

But also engaging with a span of emerging powers that includes Vietnam,

and Indonesia, India, but of course, importantly, it includes China.

And we were deliberate, though, in developing an Asia Pacific

rebalance strategy with a China component to it,

not developing a China strategy with an Asia Pacific component to that.

Secondly, we operated from the conviction that number one, competition is

legitimate and can and should be healthy. That

cooperation, if it's meaningful, is worthwhile and can co exist with competition.

Third, that we weren't going to ignore the real differences or paper over

the significant differences and points of friction between the US and China.

We were trying to deal with them. We weren't going to go along

to get along. We weren't going to give a pass or barter

concessions. If China supports us on North

Korea, well, we'll be deferential towards China's self proclaimed

core interests. We didn't do that.

Thirdly, we worked to improve communication at all levels.

Leader level, of course, because, hey, China is an authoritarian country.

You've got to be talking to the leaders if you're going to have

an impact. But also to expand horizontally, to try to widen communications

across the spectrum of stove piped agencies and elements of the Chinese

government, Chinese society,

to cover the range of issues

encompassed in the US China relationship. And vertically in the sense of

not just at leader level, but down through the working level,

where implementation has to take place. And also along what... Call it the

Z access, the people to people, the institutional, the academic,

the connectivity between businesses through exchange, etcetera, etcetera.

We tried to do all that. The last element, in my

description anyway, is what I'd call the three R's: Resolve,

reassurance

and rules.

So by resolve, I mean that the United States

showed that we would stand firm on

issues and values

important to us, including on matters like international law, universal

freedoms, and that applied in the South China Sea, it applied in the

Senkakus, it applied in the Taiwan Straits. Reassurance in the form of,

as Obama said again, and again, and again,

"The US welcomes the peaceful rise of China that is

whole, that is at peace, that's prospering."

And we worked to demonstrate that in what we did, not only in

what we said.

And rules in this sense, that

there shouldn't be a superpower exemption from international law

and from universal norms, notwithstanding all of the

failures of the United States in history to

fully honor international law or our own

obligations.

The conviction

that we held and that America holds, that

no country, neither the US or China,

can exempt itself from the rules, that we're bound by the same rules

as small countries, notwithstanding that we have the power to flout the

rules. And that was a key component of our South China Sea strategy,

where

our arguments were based on international law, not on merely an opinion

about sovereignty.

But that was then and this is now.

And now, the Trump administration is showing a mix of

cordiality on the one hand and belligerence on the other towards China.

President Trump has publicly declared his feelings towards Xi Jinping are

incredibly warm, that he celebrates the great chemistry that they have.

At the same time,

he sees no contradiction, apparently, in turning the trade relationship

into battle space, holding up the prospect of sanctions

under Section 301, putting in place punitive tariffs. The papers are talking

today about a

$100 billion spanking, although in his... He tweeted 1 billion, maybe

two decimal points is just doing business in

the Trump era, I don't know. The late and lamented Rex Tillerson,

as Secretary, vilified Chinese development in Africa when he was just there

last week, warned against the dangers of the Belt and Road.

And most significantly, much more significantly, the National Security Strategy,

the National Defense Strategy, the Nuclear Posture Review, three

important policy documents issued by the Trump administration in the last

four months,

all characterized China, and China is always lumped together with Russia,

as the pre eminent threat faced by the United States.

Not terrorism, not pandemics, climate change, not

anything. China.

This is not an abstraction if you are reading this in Jo Nan Hai, if

you are a senior Chinese

official.

These are not just words, because

the Trump administration has also significantly boosted defense spending,

because the Trump administration is talking openly, and Congress is passing

legislation to encourage visits to Taiwan by US warships,

all kinds of changes to our relationship with Taiwan and beyond that.

You know the old saying, even

paranoids have enemies. Well.

Back in 2011, I remember Aaron Friedberg wrote a book in which he

made a case for the inevitability of US China strategic conflict.

And that theme has

been resurgent now with, say, Graham Allison's book on the

imminent threat from the Thucydides Trap. I have, throughout all of this

time, been arguing as forcefully as I could

against that thesis of a kind of inescapable clash, for a couple of

reasons. First of all, it seems based on determinism, that there's something

inexorable about this dynamic. But my point has always been... I've felt

strongly about working directly for the president of the United States and

the national security advisor.

Leaders are not billiard balls.

They don't have to move according to these pressures.

They don't have to yield to these kind of mechanistic forces and averting

strategic rivalry, insuring that we didn't act

in ways that were going to drive us towards conflict,

was a very important

component of Obama's approach to China, and I happen to believe was a

component of Xi Jinping's approach to the United States as well.

Secondly,

this thesis is predicated on the decay of the

existing power, and my argument was, "Hey, China is rising too,

but you know what, so is the United States."

Look at the shale gas revolution, look at energy more broadly,

look at IT, and innovation and entrepreneurship and these sort of magical

digital unicorn enterprises, Airbnb, Google, Uber,

Facebook, you name it.

America is not

disintegrating, it's thriving. And thirdly, my argument always was

there are strong institutions in the regional and the international scene

that serve as

hedges against confrontation in innumerable ways. And in fact,

taking the example of APAC or the East Asia Summit in the Asia Pacific

region, institutions are thriving and are strengthening.

That was then.

Because if the Trump administration is in fact taking an overtly confrontational

approach designating China, as I mentioned, as the principal threat to US

economic and national security, well,

maybe I can't rule out that the billiard balls are going to collide.

And

what if the United States really comes to believe that

America is in decline and therefore needs to be somehow made great again?

Or even what if the USA is just in withdrawal?

And also, what if global institutions are accorded less value by the US

administration that denigrates multi lateralism at the same time that China

seems to have enhanced its influence, as Xi Jinping did in Davos,

or created competing institutions like the AIIB or the Shanghai Cooperation

Organization.

You could argue then that the guard rails against strategic rivalry are

starting to look a little flimsy. Now, there are very specific issues in

the US China relationship that can be, that are, sources of tension,

that have the potential to disrupt the relationship and destabilize the

region: North Korea, where there's overlap but not complete unity in our

respective objectives;

maritime issues, South China Sea, East China Sea, more broadly freedom of

navigation, where there's an inherent contradiction between conventional

maritime law and China's assertion of indisputable sovereignty over disputed

features in international waters;

Taiwan and cross Strait relations, that's always played a huge role in US

China relations; Trade. I mentioned today's headlines about a

$30 billion parking ticket

the Trump administration says it's getting ready to issue against

China for forced tech transfer and other

serious

offenses.

There's a basket of law enforcement issues, the so called Fox Hunt operations,

where Chinese security officials

essentially coerce or even kidnap Chinese citizens from

overseas, from the United Sates or other countries.

Or the exit bans that are put on American business people,

citizens sometimes, preventing them from leaving China, often at the behest

of

a business partner.

Influence operations, the activities in parliaments, in local governments,

in universities, think tanks, labs, media, etcetera. You name it. Australia

is kind of exhibit A for that problem. But beyond any of the

specific points of contention

we can increasingly see a broader international struggle for,

say, geo strategic or geo economic primacy. And a case study in that

is the One Belt, One Road or the Belt and Road Initiative.

It's always struck me that

the Belt and Road

Project or Initiative is a kind of a Rorschach test.

Different people see very, very different things.

Different perspectives, depending on, change metaphors, sort of what part

of the elephant you're touching. So is it a

ambitious 21st century Silk Road that unites the Eurasian continent in a

network of trade and energy routes, setting the stage for global prosperity?

Is it a heavy handed strategic play to establish military outposts and essentially

recreate a kind of Han dynasty imperial system of tributary states around

China's periphery?

Is BRI a neo colonial form of spheres of influence via state capitalism?

Or is it the flagship of a new globalism?

Target countries are wary of exploitation, of unsustainable debt loads,

of influx of Chinese workers, some of whom will never go home.

But

who's not up for a little free money?

So you've got these contradictions, you've got differing views even within

China.

Today, you're not going to hear a lot of Chinese disparage the...

Question the party line.

But it is not unusual, was not unusual, certainly privately, to hear many

business people, even officials, scholars,

speak dismissively of BRI projects as sort of a vanity play,

risky, wasteful investments that endanger Chinese lives and capital, that

generate financial mismanagement through expanding government subsidies

to SOEs. And there's also the debate about what's

behind BRI. One driver is to export excess capacity, steel, concrete,

labor, construction equipment, foreign currency reviews.

Another driver is energy security, commercial interests, feeding Chinese

factories and getting its products to market, developing China's rural west

and beyond,

military advantage. It's certainly true that the acquisition of ports

expand the capacity of the PLA Navy to operate a blue water navy.

It's certainly true, the maritime Silk Road provides access to the Indian

Ocean, the Persian Gulf. There's not anything intrinsically diabolical about

that, any country would want to defend its maritime commercial and supply

routes. So, the real issue, in my view, comes down

to trust. And the lack of strategic trust

serves to handicap China's ambitions through Belt and Road, and particularly

in East Asia. 'Cause there's no question about the need for infrastructure

investment in East Asia. There is a question, however,

as to whether the investment and the commercial projects

aim to simply become a source of leverage, of economic strong arming.

Is Belt and Road about connectivity and commerce?

Or is it about co option and coercion? The question relates to a

bigger one which is, to what extent is China prepared to shoulder international

burdens, to show restraint and to accept limits, to adhere to standards,

in order to win trust and to allay some of these fears?

Xi Jinping has set incredibly high expectations,

expectations for China's future for a national rejuvenication, both at home

and abroad. And to meet these expectations, surely the Communist Party is

going to have to win the trust and the confidence,

not only of its citizens but of its foreign partners.

Now, of course, a relevant consideration is the extent to which America

is sending signals of detachment, of disengagement, because if China's the

only game in town, then that's the game that countries are going to play.

But to me, the most profound and the most

unanswered question is this:

What is it that China stands for

that non Chinese will believe in and will support?

Development? Great. Trade? Great. Infrastructure? Great. Laissez faire politics?

Maybe great.

But none of those are principles that non Chinese will feel are

worth fighting for,

so ultimately we may...

We don't know how the intersection of the Chinese dream, the China dream,

and the American dream

is going to play out on the international stage.

But after my own three decades working on foreign policy,

my conviction is that the United States and China are simply going to

have to find ways to work together to surmount

and to reduce our mutual suspicion, to identify a shared interest in building

global governance systems. And building systems that both

accommodate China's legitimate interests but at the same time preserve the

foundations of a rules based order that is respectful of universal rights

and universal freedoms. So where I come out is,

the US shouldn't walk away from its global leadership responsibilities,

and China should seek to

ensure that its international initiatives complement and not undercut existing

international institutions. So that's my thought. Let me stop here and open

the floor to your thoughts. Thank you very

much. As you all can see, we've got a couple microphones going around,

so if you have a question please raise your hand and Suzanna or Neil will

bring you the mic. Thank you very much for that overall assessment.

I'm Bob Axelrod at the Ford School and political science.

I grant you the strengths that America has

that you outlined... I grant you the strengths that America has,

as you outlined, but my question is are the terms of

competition

changing in the last decade and probably the next decade in China's favor

and I've mentioned three examples. In the South China Sea it's clear that

they're asserting themselves more than ever.

In foreign direct investment, they are asserting control over technology

and the terms of investment of American businesses in China. And in terms

of foreign influence, as you say, they're expanding

their influence

in countries where they invest. And so are the terms of the competition

moving in China's

favor? I think those are three very different

instances.

The short answer is we don't know.

In the case of the South China Sea,

the major

drivers of advantage to China have been extraneous

events. The election of Rody Duterte in the Philippines,

combined with the coincidence that the Philippines took the chairmanship

of ASEAN in 2017,

combined with the results of the US presidential election and an administration

that

either chose or was only able to focus on

two issues pertaining to the Asia Pacific region,

North Korea and the merchandise trade deficit. And as a result,

the

dynamic in the South China Sea altered dramatically and rapidly.

Prior to that point, you'll recall in the aftermath of the

judgment handed down by the Law of the Sea Tribunal,

China was

back footed and was

in retreat from earlier absolute assertions about sovereignty of the Nine

Dash Line, etcetera, etcetera.

We and the claimant states and most of the ASEAN countries and interested

countries certainly had their hands full

trying to shape China's behavior in the South China Sea, but

I think things were definitely not going the way the Chinese had envisioned

them. That's different now. In terms of foreign direct investment

into China,

the Chinese

are perhaps killing the goose that lays the golden eggs.

It is certainly true that

Chinese regulations, Chinese practices and the prejudicial treatment,

the leverage that the huge Chinese market

offers

have combined to

compel the transfer of a lot of intellectual property and a lot of

technology

to China, and I think people who

paint a caricature of China merely as

the bandit, the robber, the thief incapable of developing its own

intellectual property or competing technologies are making a very big mistake.

But the fact is that China has been operating in a way that

is inherently unfair

and I'd argue unsustainable, even though they can get individual companies

for a period of time to hold their nose, hold their breath and

to

make sort of deals with the devil when it comes to

localization of data and sharing of technology and so on and so forth.

So that's an equation that we haven't

seen the end of yet.

I think, though, that there are

abundant indicators from the international business community as well as

from international

legislatures and governments that enough is enough, and

that inevitably the cost to China for this kind of predatory and prejudicial

behavior will start to rise.

In terms of

foreign influence, China's influence overseas, well, I tried to make the

case that

the variables there are the behavior of China itself as well as the

behavior of the United States.

If the United States and the network of

Western liberal

free market democracies

flourish and remain

available as advocates if not guarantors for an open system, for a rules

based system, particularly in the Asia Pacific region,

then my experience is, admittedly I'm not unbiased, but my experience is

that

that is

the preferred partner, that these are the partners of choice for most societies,

not all governments. Some of the strong men

in Asia are only too happy to deal

with the Chinese because they can trade national interests for personal

gain. But generally speaking,

countries in Asia, in my experience,

while they do not want to have to make a choice between China

or the United States,

they do want to have choices and they want to have the ability

to make their own choices, and even if they don't chronically choose to

align themselves with the United States or do what the US says,

a credible US presence engagement, involvement and the expectation that

the United States is going to speak out, and speak up and maybe

act in the event that rights and borders and international law are fundamentally

compromised

I think gives them the latitude to make their own choices.

So not a succinct answer, but that's what I've got.

Hi, there. Thank you so much for talking to us today.

My name is Amara, I'm a first year MPP student. And my question

to you was how do modern diverse religious practices within Chinese society

impact both domestic and foreign policy, and how do those practices relate

to this idea of Chinese morality when they communicate with other nations?

Well, speaking from my own experience,

the

efforts by

Obama, Hillary Clinton, Vice President Biden, John Kerry, other senior US

officials, Congressional delegations, distinguished Americans, and people

like me, in our engagements and encounters with Chinese leaders and Chinese

officials to make the practical and pragmatic case

for religious tolerance, for the respect, for respecting

different creeds and faiths within China

was like talking to a brick wall.

And my Chinese partner counterparts, at least, were number one,

brilliant debaters who availed themselves of the artesian well of

American hypocrisy.

Whether they were reaching back into the late

Charleston or another modern episode in the United States,

they could paint a

picture of a vicious, corrupt, intolerant, racist, religiously intolerant

America that makes your blood run cold.

Moreover,

I found them categorically resistant to very practical, fact based arguments

about the

effect that their

policies in Xinjiang have

among the Uygur communities and of

the

trouble that they are cultivating,

the petri dish

that they're making, which is just so ripe for

the introduction of

extremist doctrine and the

ISIS type Jihadist message. And we went to great pains to share

information with the Chinese that would help them see

what the return of foreign fighters from Syria

looked like and where and what we knew was happening

further west in Central Asia, etcetera.

But I've never been part of a discussion or a process with the

Chinese

in this area that in which they didn't

devolve almost exclusively to the like, "Give us names

and we want you to outlaw all Uygur related, Uygur sympathetic groups,"

and so

we just could not get through to them.

You have the issue of the home churches

as well as the tug of war underway now over with the Vatican

over the authority to name priests and so on and so forth.

So every experience that I've had as a diplomat in dealing with

religious related issues and ethnic minority issues in China

has taken me to a dead end.

In terms of how other countries

behave,

I haven't seen much evidence

that

countries like Indonesia or Malaysia, Muslim majority

developing and emerging

economies and societies in East Asia

have

allowed their concerns about the treatment of

Muslims within China to interfere with business.

So I just can't report that I've seen evidence there, so I'll limit myself

to that. So I got the microphone from somebody

but I can pass it down after... I just have one...

It's a pretty simple question, it's what do you think is the best

outcome of a meeting between Trump and Kim Jong Un? And I just

want to preface it by what I surprised to see in the media

reaction as a kind of victory, because it seemed to me to be

such, even Denis Wilder I think talking on Fox News about this is

something only a Republican administration can do and making a comparison

to Nixon going to China, because it seems to me that

it's just another part of the failure of American foreign policy regarding

North Korea. We are now saying that we will meet bilaterally with North

Korea, which is something that the other administrations prior to Trump's

said they would not do and they are much, much closer to having

nuclear weapons, or having nuclear weapons that can hit the US mainland.

So the

basic question is what could be the best outcome? I'm not a Trump person.

Sure, yeah, Oh, you don't mean a Trump Tower Hotel in Pyongyang? Look,

there are plenty of people who are, as the saying goes,

putting lipstick on a pig, but

this is not Nixon going to China, and

you can ask Henry Kissinger, you can ask Win Lord, you can ask Stape Roy,

this is not that. That was a

thoroughly considered, meticulously planned, deliberate, strategic move.

More to the point, it was an American move.

What's happening now is a North Korean move. This is

the North Koreans, whatever they may have actually said to the South Koreans,

setting up

an outcome that they've aspired to for now

three generations,

demonstrating that the American president, the world superpower, will come

and deal with leader of North Korea as a peer,

and doing it moreover at a moment when North Korea is in

complete defiance of international law and has rebuked and frustrated

the United States and all its partners,

thereby in effect legitimizing North Korean nuclear and ballistic missile

programs, establishing, okay, you may not like it but

you gotta deal with me and you gotta deal with me as I

am, as a nuclear power. And that is the Kim family agenda,

not the Trump family agenda, not the US agenda.

So it's not Nixon to China; you could argue

that the closest analogy is Jimmy Carter to Pyongyang in 1994.

Alright, he was no longer a sitting US president, but he went

in a

missionary spirit of

conviction, that

if you sat down face to face with

the North Korean leader, you could reason with him, you could make a

deal, you could silence the drums of war that are beating

in Washington, and you could get a pause,

and you could save his face.

That was what Jimmy Carter set out to do, and to a certain

extent you could say, alright, well, he opened an alternative path.

Both sides hit the pause button and negotiations,

in fact, did

ensue. Using that as the model,

probably the best thing that one could hope for

in

a Kim Trump summit is that

it doesn't go badly.

That it

results in

both sides

agreeing to pause any escalatory moves,

and to open the door to some kind of negotiation.

But the fundamental problems in

the equation are utterly unchanged and unaffected. Or, to the extent that

they are affected,

it is not to our advantage, because

number one, North Korea's status and stature, which is not trivial,

is radically enhanced, the leader domestically, but also North Korea more

broadly. And related to that, number two and very importantly is,

sustaining and intensifying international sanctions against anybody, in

this case North Korea, is a bailing the boat exercise. It takes constant,

constant work. You've got to just maintain a lot of positive pressure just

to keep the business as usual deal makers from reverting to making money.

Which is kinda what this sanctions busting and black market is really all

about. And not every country is nearly as motivated as the United States

or Japan to implement sanctions. Once you see the picture of Kim and

Trump shaking hands, sitting down at the table, and the headlines are,

"Sigh of relief. Spring has come. Olive branches and doves, Bambi and Thumper."

The level of sanctions enforcement is going to drop precipitately. So there's

a second dimension in which North Korea has already

moved far along

towards its goals. Thirdly, North Korea's MO is, "Divide.

Create gaps. Split."

It operates in the gaps among the five major powers around it.

And

already one could impute

gaps between the United States and Japan. What the hell just happened

between the United States and China?

The lingering fear on the Chinese part in

the American push for China to crack down on North Korea is that

the Chinese said, "We're going to alienate North Korea forever,

while you Americans are going to go in the backdoor and make some

sort of deal and leave us hanging. Well,

what's going on?" And even South Korea. And it's one thing to have

inter Korean talks where the South is in the lead, but where is Moon

Jae in, the head of South Korea, left

when

it's Donald Trump who's now

taken the chair? So there are

infinite complications and risks associated with this move. It does not

make it more advantageous in getting at the

negotiating objectives that we have on the nuclear issue.

But the biggest risk, Mary, is the simple one.

If your starting point

is the ultimate authority, the highest diplomatic actor

that a state can produce, its leader,

where do you go from there?

What if it doesn't work?

And God forbid, what if it goes badly?

So I think the notion that there's a

hidden genius in

what may otherwise be described as a hail Mary pass,

is something we should suspend judgment on until

our own receiver has caught it and taken it across the finish line.

Thank

you. Okay. Yeah, so Phillip Lipscy, Stanford University.

I think you rightly focused on US China relations in the talk,

but I'm curious to hear your views on the other countries that are

stepping up in the Trump era, Japan with the new TPP.

Germany, you have the Japan EU

trade agreement.

Japan also providing a lot of financing for infrastructure in the region

that arguably competes with the Belt and Road Initiative. And so,

is this a hopeful sign that even if US leadership might experience some

turbulance that other countries are willing to step up to the plate and

uphold international order? Or is this simply not enough and too limited?

And so I'd be interested in your opinion. What do you think about

that? Right. Well,

one would love to think that there is a option

whereby the model of the primacy of America as a superpower

and as the leader of

various alliances

evolved into a more co equal fraternity or sorority of

peaceful

like minded free market democracies.

That would be a good thing. And the United States, I think,

historically has accepted and embraced the principle that it's willing to

take a smaller relative share of a bigger pie, and that the growth

of Japan and Europe, etcetera, isn't a threat, it's an asset,

etcetera.

The TPP example, however,

raises some real concern,

because while you may see individual countries or groups of countries stepping

up to some degree,

you're not going to see an emergence of

a substitute for the United States if, in fact, the United States is retreating

or retrenching,

certainly not one that shares the commitments to

universal rights and values. In the case of the TPP,

this began as

an emergency effort to keep the patient alive or to

sort of cryogenically preserve the trade agreement for the day when America

sort of came back to its senses and decided that that was just

an epileptic fit. We're here. We're in. We're back. Everything's okay.

And I'd discussed this with a number of

Australian and Japanese and Vietnamese and other counterparts,

and that was really the thinking behind the TPP 11. Like let's just

not let it die,

maybe the Americans will change their minds.

In the process of sorting out what a TPP without the United States

would and wouldn't be,

something interesting happened. The 11 countries formed their own

trade agreement. Yes, it's cannibalized from the parts that were the original

TPP, but it's now a real thing. It's a thing.

And they're pretty happy with it. And not all of them are so

utterly convinced that

we gotta have the Americans back. And the terms on which they would

have the Americans come back into TPP are their terms.

So what has evolved is not just sort of, either a substitute for

the United States or a straight up

outgrowth of what the United States championed. They've done their own thing.

And in doing so, they've learned that they had better

insulate themselves from the United States. They needed to diversify their

economies away to be less dependent on the United States. They learned that

they couldn't rely on the United States. So

that's the cloud that surrounds the silver lining of

the TPP 11. Now, I think it's right

for the Japanese, the Australians, and the US and others in looking at

the Belt and Road and looking at China's infrastructure projects

to decide, "Hey, we are not going to just seed the field.

We're not going to disappear. We have a lot to offer."

The countries in Central Asia, the countries in South Asia, the countries

in East Asia, and China is by no means the only game in

town. I'm all for that. Personally, I think

that presenting it as a rival, or as a counter to Belt and Road

is

two dimensional thinking. It's not all that credible,

and it sets it up in the wrong way.

I think that

if the US, Japan, Australia, India began with an inventory of the attributes

of our investment,

there is important governmental work in terms of development assistance,

but the vast majority of money that flows into these regions comes from

the United States and it's private money. It's commercial investments.

Our foreign direct investment in East Asia vastly outstrips that of China.

And when you unpack it, yeah, they are trying to make money,

but they are bound, for example, by US law that prohibits bribery,

the Foreign Corrupt Practices Act. That's no small matter.

They

export traditions of corporate social responsibility, that having traveled

around and seen a lot of these projects and companies, are really admirable

and

impressive.

And they have other accomplishments and attributes that are

tremendously appealing and of value to the target countries, to the host

countries, whether it's on environment, whether it's on labor standards,

whether it's on debt sustainability,

etcetera. I think that those are good grounds to compete,

but the goal ought to be convergence. Because

what China has in terms of resources, in terms of construction

capabilities, etcetera, are immense. What it doesn't have is a commitment

to the standards in these kinds of projects that

we consider to be

desirable. And so the goal is not to

produce head to head competition, in my view. The goal is to

try to shape

the

direction of and the character of China's own

investments and projects.

Thank you. That's a great point to finish on.

We appreciate very much your insightful remarks and responses to our questions.

I hope you'll all join me in thanking Danny Russel for coming here today.

Thank you.