What's Next for U.S. Policy in China?

Wednesday, January 22, 2020

Henry A. Kissinger Senior Fellow for U.S. Foreign Policy, Council on Foreign Relations; Author, Implementing Grand Strategy Toward China: Twenty-Two U.S. Policy Prescriptions, Council Special Report (speaking in New York)

Jamie P. Horsley

Visiting Lecturer in Law and Senior Fellow, Paul Tsai China Center, Yale Law School; Visiting Fellow, John L. Thornton China Center, Brookings Institution (speaking in Washington)

J. Stapleton Roy

Founding Director Emeritus, Kissinger Institute on China and the United States, Woodrow Wilson International Center for Scholars; Former U.S. Ambassador to China (speaking in Washington)

Vijay V. Vaitheeswaran

U.S. Business Editor, Economist

Panelists discuss current U.S. strategy toward China and offer their security, economic, and foreign policy recommendations to address increasing tensions in the relationship.

VAITHEESWARAN: Good evening, ladies and gentlemen. It’s a great pleasure to be with you here tonight to open today’s Council on Foreign Relations meeting.

We are taking up one of the great debates of our age: How should a great power like the United States deal with the rise of another great power? Our session today, “What’s Next for U.S. Policy in China?” It comes on the occasion, actually, just to commemorate the recent release of a new report from the Council, which we’ll be discussing. We have the author here. We also have a distinguished policy group of experts that we’re going to—I’m going to introduce in just a moment, both here and in Washington.

Hello to our audience in Washington. We’ll come to you shortly, in a moment.

I want to mention to you this is on the record. And so, of course, please be aware of your comments and make them particularly sharp, as the entire world could well be listening. (Laughter.)

VAITHEESWARAN: I have with me to my immediate right Robert Blackwill, who’s a senior fellow here at the Council on Foreign Relations and the author of the report Implementing Grand Strategy Toward China: Twenty-Two U.S. Policy Prescriptions, which will be made available to all of you at the end of this meeting as well as available online.

In Washington we have Jamie Horsley, who is a visiting lecturer in law and senior fellow at the Paul Tsai China Center at Yale, as well as at the Thornton China Center at Brookings.

And we have Stapleton Roy, who is the founding director emeritus of the Kissinger Institute on China and the United States, and a distinguished—at the Woodrow Wilson International Center for Scholars, and of course a distinguished former U.S. ambassador to China.

So please give my guests a round of applause to get the afternoon started. (Applause.)

We are at a moment in our relationship with China in which there is something of a bipartisan consensus that seems to be emerging that the kind of economic, technological, security, and possibly cultural threat posed by China has become of vital national concern. And we are seeing an administration in Washington taking on this question head on with policies that range from trade wars, which we’ve seen, and sanctions to challenging on intellectual property rights. We’ve also seen efforts here at home to look at the influence of China at universities and so on and other institutions, national institutions, as well as other forms of tools of—that could be argued are perhaps the most aggressive and expansive seen in—certainly in recent memory.

Is this the right approach? This is a question. Have we identified the problem correctly? Is this the right way to think about China from a strategic perspective? And what are the kinds of policies that are actually likely to work when dealing with a competitor, but as well as an economic partner, the nature of which we have not encountered before—quite different from the Soviets or from Japan, for example? This is a new kind of frenemy that we encounter in our geopolitics.

To help us think through this, let me first turn, perhaps, to Ambassador Blackwill. Tell us, how do you frame this question? And how do you think we should be thinking about this problem? What did we get right so far in thinking about this, and what did we perhaps miss? Or what do we need to do differently?

BLACKWILL: Thank you, Vijay.

I want to leave you with three big ideas, and—

VAITHEESWARAN: Well, don’t leave us yet. We’re just beginning. (Laughter.)

BLACKWILL: Well, the late, great Dick Neustadt used to say tell them what you’re going to tell them, then tell them, then tell them what you told them.

Any case, so here’s the first big thought: World order cannot be stabilized for the period ahead in a situation of permanent or perpetual U.S.-China confrontation. World order can only be stabilized with some degree of collaboration between the two. So that’s the first big thought.

The second is—has to do with U.S. approaches to China, and I will do two of them. The first is to strengthen our alliance system in order to promote our national interests and values, but also in order to give China incentives to improve their international behavior.

And the third is to intensify diplomacy with China. I’m quite struck by the fact now of how little diplomacy there is between the two nations. This is historic intersection. I think never before in human history have you had two major nations capable of either stabilizing world order or disrupting it whose every move day by day is a topic of general conversation. So diplomacy is missing now, largely, from the U.S.-China relationship.

What I try to do, just to conclude, in the report is to give twenty-two specific policy prescriptions about how the United States should think about dealing with China. There is a section on what we have to do at home. There is a section about what we have to do internationally, including with our allies. And there’s a section on what we should be doing with China. But the stakes are enormous here. The price of failure is global in character and would eventually reach even more Americans than it already has through the trade wars.

VAITHEESWARAN: So you offer a multipronged approach. One of the things that strikes me from the report, you certainly emphasize much more than sometimes in the discourse on China the need to do more to compete at home—that is, investments in American competitiveness, be that technology or education or some of the other areas. I think that’s one distinguishing feature of your report. We don’t have to belabor that if we want to focus, perhaps, on the international dimensions, but I mention that for those who haven’t seen the report yet.

But when you talk about doing more in Asia, let’s say—you talked about diplomacy, the role of alliances. Certainly, one can see that has not been a priority for the current administration.

BLACKWILL: That’s the nicest way to say it. (Laughter.)

VAITHEESWARAN: So what would you—what would you like to see the U.S. do when it comes to how the U.S. works differently with allies or with local—countries in the region, other interested parties? What specifically would you like to see the U.S. do differently that would fit with your worldview?

BLACKWILL: Yeah. First, to stop insulting them—that would be a good place to start—and insulting their leaders.

But the United States, in my judgment, cannot compete with China over the long term by itself. We need, in order to balance the rise of Chinese power, allies and partners in Asia and in the world. And strengthening, therefore, the alliance systems in all its dimension—in economic, diplomatic, military dimensions, high tech, and so forth—should be a major priority for the United States. All of those alliance systems are weaker now than when the current administration took office, and there does remain a question about how long this could go on before these allies adopt new patterns of behavior which exclude the United States. That’s happening to some degree already in tactical ways. When would it become strategic?

So I start with the allies, and—in both Asia and Europe. In both Asia and Europe. And if you want to have your hair curled, read or watch what our president said at Davos about his next step in confronting the Europeans.

On the Chinese side, I’ll just give you one example which I find bewildering. Genuinely bewildering, and I address it in the report, is North Korea. It’s bewildering to me why the United States, why the administration does not deeply involve China in trying to reach an agreement—an interim agreement with North Korea, because we all know that there will be no interim agreement with North Korea unless China strongly supports it. And yet—and yet—there’s very little diplomacy between the United States and China about North Korea. Of course, it’s summit diplomacy and love letters between the leaders of the two countries. So that’s an example.

And I will mention just a few more of the other part of the report, which is what should we be doing with China. Climate, of course—

VAITHEESWARAN: Well, let’s hold there. Let’s hold there.

BLACKWILL: OK, hold that. I’ll hold it.

VAITHEESWARAN: Let’s bring in some observations from Washington. But you know, just to—thank you, though.

BLACKWILL: Happy to hold.

VAITHEESWARAN: But perhaps turning to—first to Ambassador Roy as a veteran of this topic, what’s your perspective on the arguments put forward here with this new Council report, which is a mix of—you know, I’m going to crudely call it a mix of containment and cooperation. I know you’ll be insulted by such a journalistic way of putting it, but it does seem to me there’s both the stick as well as the carrot involved here. What do you think about that, Ambassador?

ROY: I think it’s a terrific report because it makes clear that there’s nothing foreordained about the relationship between the United States and China. We can either be friends, we can be enemies, we can be somewhere in between, a mix of attitudes.

Any regional strategy has to take into account the characteristics of the region, and there are two characteristics of East Asia that are highly policy relevant. The first is that all of our friends and allies in East Asia have more trade with China than they do with the United States. So that means if we adopt a containment approach to China, we will not be linking our interests to the interests of the countries whose support we need.

The second aspect goes to one of the key points that the report makes, which is that China aspires to be the primary country in East Asia and to replace the United States in that role. But a characteristic of East Asia is none of China’s neighbors wants China to be a dominant country in East Asia. So if China sets the goal of getting predominance in East Asia, we will have the countries of East Asia flocking to us because they want us to be heavily engaged not just in a military sense, but many of the countries of East Asia are worried in part because of their trade relationships with China of being dominated economically by China. And therefore, they want the United States to be heavily involved there.

But let me make an additional point. There’s a lot of talk about war with China. There is strategic deterrence between the United States and China. We can’t have war with China with it being suicidal. There can be military conflicts, but they have to be at a level that don’t run the danger of escalating out of control. We didn’t talk about war with the Soviet Union during the Cold War most of the time because we recognized it was too dangerous. But there are two—

VAITHEESWARAN: So let me—let me—let me press you on that one point. Given that, the folly of pursuing war with China—which, as you point out—what do you do about Taiwan, for example?

ROY: OK, let me get into that. There are two really important issues that have to be thought about in developing a strategy for East Asia.

The first is the question of the military balance in the Western Pacific. We want to be dominant militarily. That has been our position in East Asia for most of the post-World War II period. But China, many think, wants to be militarily dominant in the Western Pacific. So we either engage in an arms race with China or we try to strike a military balance. That’s one issue.

The second issue is Taiwan. Taiwan has been defined by China as a warfighting issue. It has said it will go to war, if necessary, if Taiwan becomes independent or tries to become independent. But there’s a difference between these two issues. In the case of Taiwan, we have a framework for handling the issue which has worked successfully for forty years. It’s reflected in the three joint communiques and in the Taiwan Relations Act. So Taiwan can be stabilized as long as we stay within the framework that we have established. And part of the problem in the United States now is we’ve gotten cavalier in thinking about the Taiwan issue—it’s a democracy, therefore we should do whatever is necessary to support Taiwan—and that could create a crisis that would be very much against the interests of Taiwan itself.

But the other issue is not being addressed. We haven’t even begun to think seriously about the question of: Is there a military balance in the Western Pacific that we can live with satisfactorily and that China can live with satisfactorily? And the bottom line in each case has to be China will not be satisfied with any balance that doesn’t give China confidence it could defend its territory, and we can’t be satisfied with any balance that compromises our ability to come to the defense of our allies. So the question is, in between those two criteria is there a balance to be found? Well, that’s a question that we really need to put our minds to. But part of the problem is we are not electing presidents capable of addressing that issue. And this is a presidential issue because when you talk about striking a regional military balance, you’re involving not only major diplomatic equities but major military equities. And the State Department and Defense Department can’t work out those types of issues. There has to be a higher level of guidance.

And this is exactly what we saw during the Cold War with the Soviet Union. I spent nine years during the Cold War working on the Soviet side of things. And there was presidential guidance in terms of how to handle those issues. We don’t have that type of leadership at the present time. So that’s something we have to reflect about, because why do we have a political system in which these issues do not seem relevant in terms of the qualifications that we ask for in our leaders? We’ve had four presidents in a row in the post-Cold War period who had no national security background and no foreign affairs background. So I put that to you as an issue which Bob Blackwill hasn’t solved in this book, but he uses the framework that I’ve been talking about as a way of coming up with ideas for things we should be doing with China in many different areas. But I wanted to highlight these key strategic issues, the Taiwan issue and the military balance. If they get out of control we have a real problem on our hands.

VAITHEESWARAN: OK. Thank you very much. So really the need to elevate our thinking on this issue is a point that comes across clearly, especially in those flashpoint topics.

I want to turn to Jamie Horsley. Jamie, you’re a governance expert. There’s another area where China’s rise has troubled folks in Washington. That is it’s a dimension of its foreign policy, the Belt and Road Initiative, economic and political expansion efforts. Can you tell us, is—are those in Washington who are concerned about China’s Belt and Road Initiative right to be worried that this poses a threat to American interests?

HORSLEY: Well, first of all, thank you very much for having me here, and Ambassador Blackwill for doing your very interesting report that stimulates this conversation.

So I’m a lawyer by training. And I read documents and look at regulatory things. So I approach the looking at the Belt and Road from the perspective to see, what’s actually going on beyond just the rhetoric of it, and where is it headed as we go? And I know that the Belt and Road is viewed as being primarily geostrategic and reflects a global ambition for China—not just regional, but a much broader one. But beyond that, if you start looking through the documents at it itself, it also has—it’s a brilliant initiative. You know, Asia and the developing world need infrastructure. We need infrastructure. Everybody needs it. China is willing to go out and provide infrastructure. What’s the problem with that?

Number one, they’re not doing it in accordance with internationally accepted standards. It’s not transparent. It’s not participatory, so that other companies and nations could get involved. They don’t insist on environmental and social safeguards. There’s no open procurement. And then there’s been the financial unsustainability issue as well, plus corruption thrown in. And so what we’ve seen happen with the Belt and Road is it has expanded pretty loosely. I mean, this is an initiative that is not really well-organized top down if you start looking at it. They formed a leadership group but, you know, nobody’s in charge of it day by day. It’s very entrepreneurial, projects being developed by all these Chinese companies that are overseas, and all these provinces and cities that have their own idea of what they should be doing, and how they can get access to the BRI money up in Beijing.

And so you’ve had a mess. It’s also folded in preexisting projects which weren’t very good. And so about five years on what we began to see was pushback from the recipient countries, and Southeast Asia included. I think it was really shocking to China. Mahathir comes back to power and cancels some projects or decides to suspend them. Even Malaysia—you know, even Myanmar was seeking to renegotiate bad projects that were unsustainable. We saw what happened in Sri Lanka and other places too. So immediately China’s also subject to intense international criticism for, you know, luring countries into a debt trap, et cetera.


VAITHEESWARAN: So, Jamie, if I can interrupt, it sounds like the white elephants kind of solved the problem for us, that there isn’t a whole lot to worry about here.

HORSLEY: Except the BRI’s not going to go away. It’s, you know, Xi Jinping’s signature foreign policy initiative. There are a lot of reputational costs involved. And what they’ve started doing is recalibrating. In the last year, of course, Xi has started promising they’re going to move to high standard, high quality Belt and Road, which would include openness and green BRI, clean BRI, you know, sustainable BRI, et cetera. And last year at the April—the second international forum, there were a lot of initiatives signed a lot of nice language about doing this, but the problem is what exactly are they doing on the ground?

And I was interested in Ambassador Blackwill’s report he was trying to think about in balancing China’s power we should look for ways to collaborate with them constructively in areas, you know, that we face global common challenges, including climate and the world economy, et cetera. We might add global health, particularly in light of the Wuhan virus these days. But one of those he did mention in that connection, looking for areas we could collaborate, that maybe we should rethink joining the Asia Infrastructure Investment Bank. Do you remember, that was the initiative that Beijing had put forward to fund investment? It’s not directly related to BRI, but it’s supposed to help fund infrastructure primarily.

And initially we objected to joining it, thinking this was an illiberal thing, China would be in charge, it would be a race to the bottom in terms of standards, et cetera. But as China started getting other countries to join it, in fact it ended up being a pretty respectable multilateral development bank, you know, following international standards. So the idea that maybe now we should try and join it and show our support is a good one. I personally think it may be too late. But we have the BRI.

Professor Blackwill—Ambassador Blackwill also mentions that in response to BRI Congress did authorize establishment of a new finance agency. This U.S. International Development Finance Corporation, DFC, combines former OPIC and some aspects of USAID with $60 billion. And the idea is to provide alternatives to the BRI for China. But why not also use that facility to maybe seek to collaborate with China on certain BRI projects, so that we could then, by working with them and perhaps other international partners as well, insist on higher standards, open procurement, et cetera, that we could get our U.S. companies and other—and banks that are involved in these as well—and maybe develop what are really bankable projects that our private sector would be involved it?

And another thought, instead of that we could use the DFC financing for sort of the project preparation fund idea. Our companies are great at engineering, design, et cetera. And we’ve done something like this in Myanmar already too, apparently, that we go in there and work with host countries that don’t have the capacity to develop or assess good projects. So we help with the design, the project identification, the assessment, the feasibility study, doing that sort of thing, and then also use it to help develop local capacity. Because one problem with BRI is a lot of these countries don’t have good legal systems, or they have law but they never enforce them. There’s a lot of corruption. So that not only working with China to help its standards affirmatively, but also with the host countries, is the really important part of it. So that was sort of my proposal, that we—and I can talk about why I think China might be interested in this as well.

VAITHEESWARAN: Sure. So, Ambassador Roy, maybe I’ll ask for your reaction to that, the idea not just on Belt and Road but more broadly that there are big areas of cooperation, and that a multiprong approach, where we’re touch on China in a number of areas—much more even than we might be now—but much more open on climate, on investment, on some of the Belt and Road Initiatives. What do you think of that idea of expanding cooperation at this time?

ROY: I think it is a very good idea.

VAITHEESWARAN: Can it work? Is it practical?

ROY: Well, here’s the—here’s the problem of democracies. Your foreign policy should be formulated in terms of the real world outside your country that you have to deal with. But the domestic factor—you have to have domestic support for the policy or you can’t implement it. But you can’t have domestic attitudes formulating the foreign policy, because the domestic attitudes are not based on a careful understanding of the real world outside. So our problem in pursuing cooperation with China under the present circumstance is that we haven’t—don’t have a domestic environment at the moment which looks favorably at expanded cooperation with China. But I think Bob has put his finger on exactly what needs to be done.

We used to talk about the fact that we have a competitive relationship with China and a cooperative one, and the goal is to keep the cooperative factors stronger than the competitive factors. Well, I think that’s a worthwhile concept to see if it’s feasible. At the moment I would say the balance has tilted heavily in the other direction. And I think that this report could be helpful in trying to introduce a corrective.

VAITHEESWARAN: In the couple of minutes we have before we go to questions, I’m going to pick up on something you just said having to do with—

BLACKWILL: You don’t want to stop these compliments from Stape. Give him plenty of time. (Laughter.)

VAITHEESWARAN: Right, exactly. No, trust me, that’s an exhortation to our members to give even more forcefully in their questions. So be careful what you ask for.

ROY: Bob is like President Trump. I’ve learned never to confront him. (Laughter.)

VAITHEESWARAN: All right. So but you made an important point, among many others, about American public opinion. We have seen a sea change in the last couple of years, in part because of administration policy and constant sort of negative comments about China. China’s become the ogre of the age one could say. And a dramatic shift in public opinion on China. How, in this environment, does any—whoever wins the election in November—can any new executive branch pursue cooperation, pursue the avenues that produce wins on both sides—be it economic, or on climate, or other areas. These are all worthy areas I think most reasonable people would agree. But in this policy environment, where people are out for blood in effect, that this is a serious threat, akin to the old Red Menace. In that environment—we didn’t have a whole lot going on in terms of cooperation with the Soviet Union back in the old days—how do you turn the ship around on that?

BLACKWILL: Well, in olden days this was called presidential leadership. In the olden days.

VAITHEESWARAN: Sure. We’re putting an awful lot on the shoulders of whoever wins. And one of the winners is not going to change policy.

BLACKWILL: That’s why the election—no, but that’s why we elect them. I remind you that the anti-Soviet period—and Stape and I worked on the Soviet Union over the years, sometimes together. When Richard Nixon took office, the idea of a systemic effort to improve relations with Moscow and to find areas to cooperate was highly unpopular. And indeed, you’ll recall that by the time Kissinger finished off office, he was under attack for too much cooperation with the Soviet Union. So presidential leadership produced détente and defense, both the same prongs that we’ve been talking about now.

And without that, or with a president who makes matters worse, it isn’t going to get better. But I believe that the United States has the resources and the strength across the board to successfully balance Chinese power in Asia and beyond, if we organize ourselves to do it with our allies and friends. There’s no reason to be defeatist about the competition with China. And there’s also no reason to be defeatist about war, and the likelihood of war.

This is in our hands, as American citizens, in the first instance. And we need a president who will have the leadership, first, to understand—a point Stape made—to understand that this is the biggest challenge the United States is going to face in your lifetimes, including the younger members of this group. This is the biggest challenge the United States is going to face. And we haven’t yet even had a vigorous public discourse on the best ways to address it. And as you say, Chairman, we have now tilted away from diplomacy, away from trying to find ways to collaborate with China while we build our strength.

Can I just mention two things briefly? In the report—

VAITHEESWARAN: And I want to get to the questions. So please get your questions ready.

BLACKWILL: Good, I will be very—just to, if you’re dozing off, let me give you two highly controversial propositions. The first is that our relationship with Russia is being deeply mismanaged and it has to be an important component to a strategy toward China. And I am not, of course, underestimating Vladimir Putin’s effects on the United States place in the world. But that’s the first. We should make a major effort to improve relations with Russia. And I’ll just be provocative. Do we really believe that we’ll keep sanctions against Russia on the Crimea in perpetuity? Does anybody believe Russia will ever leave Crimea?

And then the second is regime change. In the commentary on U.S.-China relations, which I keep very close track of, there are increasing arguments by very distinguished people, including friends of mine, who argue now that we can’t get along with China, as long as it has its current system of governance and societal organization.

VAITHEESWARAN: In other words, the Communist Party.

BLACKWILL: We need—the only way we’ll be able to live on this planet with China is regime change. I believe that’s a deeply dangerous proposition. It will guarantee all of the worst things that we’ve all been talking about here in the U.S.-China relationship and for the globe. But it’s an increasing proposition, including in the halls of Congress.

VAITHEESWARAN: OK. You threw a couple more bombshells in right at the last moment. Should surely provoke some questions from the floor. Let’s have a microphone here to the front. Just a couple of ground rules, as always. I’ll start here in New York, then we’ll come to Washington next. I remind, again, this meeting is on the record. Please wait for the microphone. Please stand, and then state your name and affiliation. And please limit yourself to one question. Keep it concise. Nobody likes a gasbag. Please, the lady in the front.

Q: So many rules! (Laughter.) Robyn Meredith, author of The Elephant and the Dragon.

VAITHEESWARAN: We believe in a rules-based world order here.

Q: That’s right. It seemed to me that all of you are looking for ways in this tense and very important relationship that we can find ways—find common ground with China. And just going back to WTO times, one of the reasons that U.S. embraced China with WTO, brought it into the rules-based order, was not only to expand business opportunities for the U.S., but also to hope that China would engage in the existing world order. Now it seems to me we are seeing increasingly a VHS and Betamax system, two parts of the world separating. And the trade war is often measured in terms of the cost of tariffs, but the longer-term supply chain changes strike me as really important. And can we put back that genie in the bottle of world trade, because I think that has a lot to do with the U.S.-China relationship?

VAITHEESWARAN: Well, let’s start with you. Maybe Washington has to weigh in as well, but.

BLACKWILL: OK. It’s going to be hard. We have an administration that is at war with the international trading system, as we have thought was an important factor in global prosperity for a half a century. (Laughs.) It won’t be easy, but it’s necessary to try. And as I say, the administration’s war on the WTO is bad for America, bad for the global economy. This is not to rule out bilateral trade agreements but weakening these international economic institutions through which the United States has thrived seems, to use a technical term, daffy, to me.

VAITHEESWARAN: Let me take one more question here before handing over to Washington for a couple of questions. Yes, in the middle. Please identify yourself.

Q: Rudy Costanzo, JPMorgan.

I actually have two very quick questions. The first one is, how do we reconcile what we have been talking about in terms of the risk of China versus U.S., relative to the demographic timebomb faced by the—by China, and the implications that would have on the Chinese economy? And second is on the South China Sea. Is there any way for the U.S. to militarily turn back the tide of the effective Chinese control over the South China Sea, with the manmade islands, and whatnot? Thank you.

VAITHEESWARAN: Maybe I’ll ask Ambassador Roy if you want to step in on that, sir. If you heard the question?

ROY: Very briefly, the demographic problem in China was in part created by the one child policy, which has caused them to have a declining workforce now. And in looking to the future, China’s problem is that it’s going to get old before it gets rich. And that poses a gigantic problem of how do you care for a rapidly increasing aging population in China. So there is a real problem there. But I don’t like to refer to demographic problems as time bombs, because they take time to develop and they don’t usually result in explosions. They contribute to problems that societies have to cope with, but societies with good leadership usually have adequate time to cope with those sorts of problems if they’re prepared to look to the future. And some societies are and some societies are not. China is preparing for that problem.

Jamie, you could probably answer this.

VAITHEESWARAN: And in terms of the South China Sea question?

ROY: What was the other—

HORSLEY: The South China Sea.

VAITHEESWARAN: Can the clock be rolled back on effective control, is what I heard as the question.

ROY: On the artificial islands that China—well, I don’t refer to them as islands. I call them artificial reefs because under international law building an island on top of a reef doesn’t alter its status as a reef. In any event, I don’t think we can roll those back. But I do think that we should put better—heavier weight on diplomacy in the South China Sea. The fact of the matter is in 2002 there was agreement among ten Southeast Asian countries and China, and the current foreign minister was the representative at those talks then, called the Declaration on the Conduct of Parties in the South China Sea. And that declaration provided freedom of navigation, freedom of air navigation that all parties would avoid provocative actions, and that disputes would be settled by consultations and negotiations.

China acknowledges there is a dispute over sovereignty in the Spratly Islands. And it has committed itself to settling that dispute through consultations and negotiation. It’s the only area of a territorial dispute where China has taken the position that it’s prepared to negotiate. At the moment, conditions for negotiations are not ripe, but we shouldn’t forget that there is a real possibility of diplomacy opening up new possibilities. The Southeast Asian countries and China are negotiating right now on a code of conduct in the South China Sea, as opposed to a declaration of intent, which would be—have more impact on behavior patterns. So I think that the South China Sea is—should not get out of control if sensible people don’t simply try to approach it from a military standpoint, but let diplomacy have a chance to operate.

VAITHEESWARAN: All right. So we can’t roll back demography, but at least cooler heads could prevail, perhaps in—

ROY: Well, you can’t roll back the creation of the artificial reefs and rocks.

VAITHEESWARAN: Right. Nor the reefs, but we could have cooler heads, I suppose, in both problems working on them.

Let me turn to—Jamie, you have questions in Washington. Let’s have a couple of questions there, and we’ll come back to New York.

HORSLEY: OK, great. So this woman first, and then we’ll get someone from over there. OK.

Q: Thank you, all. Sherri Goodman, Woodrow Wilson Center.

As you’ve said, we can’t survive a war with China. We also can’t—we can’t survive the climate crisis without China. What would you recommend we do to reengage China and the U.S. constructively on climate and moving towards a low-carbon future? And also, at the same time, recognizing the challenges we face in global biodiversity loss, which is an equally important crisis in which China has a major role throughout the region, where we need directly to confront them, from illegal fishing to loss—global loss of species?

ROY: Jamie?

HORSLEY: So would you like to take that first, or Ambassador Blackwill?

ROY: I’ll just—I’ll give you a very quick answer on that. At the moment, we have a Republican administration which is not a firm endorser of the fact that climate change is taking place. So at the moment, the prospects for real engagement with China on climate change-related issues are nonexistent.

So we have to wait until we have a U.S. government that is prepared to acknowledge that climate change is a real issue that has to be addressed. At that point, there is no question that we and China could not only engage with each other on the subject but, undoubtedly, reach some level of agreement on doing it.

Both countries recognize in their heart of hearts that you cannot get an effective global response to climate change if the two largest contributors to climate change aren’t prepared to be part of the process, and when the Paris Agreement was negotiated that was the fact. Both we and China signed onto it. We have now taken ourselves out of that and, at the moment, we’re not in a position to reverse that course.

HORSLEY: But I think in the meantime—if I could interject, too—and we do have the private sector. We have NGOs. We’ve got states who are anxious to engage, as we have seen already, and, obviously, without the state-to-state relationship and tying that into the global one, too, it’s going to be much more difficult.

But it doesn’t mean we have to be doing nothing. And one of the aspects of what’s going on with the administration now that concerns me is the government coming in and telling universities who they can deal with and research institutes who they can have in their laboratories, et cetera, and trying to curb it because we’re talking about China, where you’re right, we need to engage with China and we have been engaging with China quite effectively and a lot of that is still going on now. But having heard what Trump said today about climate change, it really is quite discouraging.

VAITHEESWARAN: Jamie, I would point out, just as an observation, that regardless of whether the U.S. administration has encouraged it or not, and, certainly, it’s not in the recent years, China has taken lots of steps on climate change, energy efficiency, smart grid, electrification, and a path of decarbonization for its own interests that has been widely noted.

And so I think that, you know, we can do more and, certainly, the pursuit of a continuing use of coal, the excess capacity in state-owned enterprises, these are issues where a muscular involvement could achieve more than they are doing now. But it shouldn’t give the picture that China is doing nothing. I don’t think that’s right.

BLACKWILL: Chair, could I just chime in? And just thinking about the direction of our conversation, I think that the theme of trying to find ways to collaborate with China is very important.

But I wouldn’t want that to dominate how we think about China because this is an enormous geopolitical challenge for us, and if you go back, at least in my view, the last three administrations before this one, the emphasis was primarily on cooperation and look where it got us, and they didn’t hold up the other half, which is American power projection into Asia.

So we’ve had this curiosity where that was all collaboration and no power projection. We now have a trade war with China, which will continue in some dimension or other, and no collaboration with China. So it’s the usual Thermidorian reaction by American administrations and we need to do both at the same time and, indeed, if we do the power projection it will increase the likelihood of collaboration.

VAITHEESWARAN: Succinctly put.

Let’s go back to a question in Washington.

HORSLEY: Yes, the gentleman back there in the white hair. Can you please—yeah, introduce yourself? Thanks.

Q: Yes. Edward Luttwak is my name.

I’ve been tootling around the area for decades, as Robert knows, and some. I don’t recognize this story because there is America. America does this. It doesn’t do it. It’s now doing this. In 2008, Australian government issues a white paper warning the countries around about, if you don’t resist China you will become their colony. By 2009, they’re working in Indonesia—the Natuna Islands missile defense, which is—I mean, you know, helicopters and that kind of stuff. 2012 in Japan, the Japanese government wakes up, comes to the United States and tells Obama what about South China Sea; how come you’re not even complaining about coral reefs—you know, so environmental and so on. So the Japanese come in 2012. Then the Indians come aboard. And, finally, in the last six months or seven months of the Obama administration, it’s the United States that says, oh, there is a strategic challenge. So it’s not that the allies are sitting there asleep and now the Americans have come and have to do this and do that. They were there before.

Now, in regard to regime change, what everybody in that area remembers, perhaps because they’re all so old, their model is Ronald Reagan declaring we can’t coexist with the Soviet Union. That was his choice. The Soviet Union wasn’t getting worse. It was getting better. But he says, no, I don’t want to coexist.

In this case, the regime change started in China because everybody was watching Hu Jintao. We’re going to get the next one. It’d be even more (premium ?) to Paris and so on. Big surprise, huge regime change in China. And that is where he brought us.

Incidentally, if you go around Washington and you look for these regime changes, you’ll find none of them really want to change the regime, only in one respect. For example, Nancy Pelosi just wants them out of Tibet. Everything else she can accept, but not Chinese rule in Tibet. And so it goes. Everybody in this town has some piece of the regime of China.

Incidentally, Roy, since you do talk to them, Taiwan is independent—you know, is independent. So the issue of that moment when Taiwan becomes independent and so on. And in that regard, again regard to allies, the Japanese government—it’s no secret—are working out how they can do this Sweden to Finland kind of support.

So I don’t—there is a story there.

ROY: Let me correct you on one point.

Q: And we are not always the protagonists.

ROY: Taiwan is autonomous. It’s the only region of the world in which the autonomy is genuine and full. But independence is a question not of self-declaration. It’s a question of who’s prepared to recognize that status, and Taiwan’s—the countries that recognize it as independent has been decreasing.

It’s only a few Latin American and African countries. All of the major countries of the world do not recognize the independence of Taiwan. So self-declaration doesn’t change its status. But the autonomy of Taiwan is really important and it’s a bright spot in the hopes of the Americans because a lot of people think we support Taiwan because it’s a democracy. That’s false.

We support Taiwan as a function of the Cold War where we and the Republic of China, which was not a democracy, were allies against a hostile People’s Republic of China. And when we broke relations with Taiwan, we did not break the commitment to Taiwan’s security, and then our hopes were realized because the Taiwanese themselves developed democracy.

It was not a question of U.S. policy being successful. It was a question of the climate that we had helped to create there fostered a move toward democracy on the part of Taiwan. But for you to declare that it is independent is meaningless.

Q: Ambassador, I was meaning—

VAITHEESWARAN: OK. If I can—(laughter)—here, let me bring the question back to this—

HORSLEY: Yes, maybe we should.

VAITHEESWARAN: —to this venue here.


VAITHEESWARAN: Let’s have a question here. I see a lady here on my left. I’ll take a couple of quick questions here.

Q: Thank you. Lyndsay Howard, Mike Bloomberg 2020.

Ambassador Blackwill, you’ve written a report with twenty-two policy prescriptions. You’ve spoken about world order and how to stabilize and rebalance it. Probably the United States and China have missed at least twenty-two opportunities to have an important and productive dialogue on transitioning world order.

Could you look at your twenty-two prescriptions and tell us the short list of how the next president, if we have a different president, would best approach streamlining fast action to put that dialogue on the right footing through what institutions and mechanisms, including past strategic economic dialogues with others—World Bank, AIIB? How would you go about streamlining what happens in the first six months to put this all on better footing? Thank you.

BLACKWILL: Well, first, he has to talk about China with the American people, and sometime in the next—in the first ninety days he needs to give a speech about China which contains some of the themes that we’ve been discussing tonight. His first trip abroad should be to Asia, not to Europe. It should—and it should begin in Tokyo. But it should include China in the first three months. And on the substance—on the substance, I just would mention three.

One, North Korea. That situation we don’t know what it’ll be in a year in which probably not good things will happen. But, again, that’s first with our allies and then with China on North Korea.

Second is the issue of climate, and we’ve been talking about that and that should be an enormous priority for the next president. And then the third is strengthening—trying to reenergize international institutions, which this administration has seriously damaged.

But think of conceptually—think of a hub in which the two objectives for the United States with respect to China are, first, strengthening power projection into Asia, and second, finding ways to collaborate, and these twenty-two proposals are spokes to that wheel, that hub, all of which in a government that is competent and, as Stape said, directed by the president and from the White House. This government is capable under the right leadership to pursue these initiatives, having debated them among themselves and with the Congress, which, obviously, has a big role to play.

So this is possible to do and we have enormous inherent strengths to do it. I say that, I realize, and the irony that today we have an impeachment trial going on in the Senate. But we do have the inherent strength to do it. But we are failing—just to finish—we’re failing on both.

We’re failing on an inadequate power projection into Asia and we’re failing on finding ways to collaborate with China. We’re failing on both. But hope springs eternal, and the new president, with the right leadership, can begin at least to change some of these trends which are so dangerous for our country.

VAITHEESWARAN: OK. Let’s have a quick question here in New York. Then I’ll come back to Washington.

Q: Yes. Ed Cox.

If we’re going to collaborate with China, we need a sense of their leadership, how it’s structured, and where it’s going. I think under Deng and Deng’s two successors we had a sense of that collaborative—their two terms. Now it’s different. Xi could go on forever until he passes or otherwise. Is there still collective leadership? What are—where is his new form going to take the leadership that we have to deal with?

BLACKWILL: Well, I think we do have a rough idea of where he’s taking China. He’s taking it to more repression internally and he’s taking it toward expanding in ways that threaten U.S. national interests internationally. So I don’t think—

VAITHEESWARAN: But I think the point’s about how do we cooperate or work with such a regime.

BLACKWILL: Well, we don’t have the capability of inventing a different China than the one we live on the globe with.


BLACKWILL: And we have had diplomacy—

VAITHEESWARAN: Yeah, regime change pals notwithstanding.

BLACKWILL: Well, we’ve had diplomacy in the past with governments with which we don’t have any sympathy. But, as I say, I think the trends of the current Chinese leadership are very clear, and as Ed Luttwak was saying in Washington, there was hope in the—in Xi’s predecessors that maybe there was a certain degree of pluralism evolving in China. That’s dead, that hope. So this is the regime we have to deal with. We don’t have—

VAITHEESWARAN: Let me stop you there.

BLACKWILL: —we don’t have alternatives.

VAITHEESWARAN: We don’t have the luxury of a different regime.

Let’s give Washington a chance for a quick question and answer before we need to wind things up, I’m afraid.

HORSLEY: Did you want to respond to that at all—statement?

ROY: No. Bob said all that.

HORSLEY: No. OK, good. So we’ve got—so one lady in the red and then back here later.

Q: Thank you. Hi. Desirée Cormier with Albright Stonebridge Group.

Realizing that human rights isn’t necessarily a policy priority for this administration, I think we—it would be a travesty if we didn’t discuss the Chinese government’s treatment of the Uighur Muslims. What role do you think human rights should play in a more effective U.S. policy towards China?

VAITHEESWARAN: Who’d like to pick that up?

ROY: Let me answer that because I was ambassador in China when human rights was linked to our most favored nation treatment. I have quite a bit of experience in dealing with this question.

VAITHEESWARAN: Briefly, though, please, given time.

ROY: We cannot maintain domestic support for our policies unless we show adequate attention to our concerns for human rights. But we should not make the mistake of thinking that our concern can actually influence the outcome. Countries—and just reverse it. It’s easy to do. Think about what is the strategy that China should do in order to get us to address some of our domestic problems? The answer is what a waste of time to even think about that. Well, it’s a waste of time to think that we somehow can steer China into how to handle the Uighurs in Xinjiang.

And the second thing which I’ve discovered, because I’ve raised these issues with the Chinese on numerous occasions, is the foreign ministry is almost helpless on these questions because Xinjiang is a domestic issue in China and the foreign ministry has very, very little influence over it. Tibet is the same way.

So China’s big problem with its domestic problems is that its international propaganda on the subject is worthless because the foreign ministry can’t even make inputs into it and they aren’t able to persuade anybody that the way they’re handling things is the right way to do it.

But it’s a difficult problem there and the issue is not really the Islamic aspect of it. It’s that the liberation of the countries of Central Asia have had a(n) echo effect in Xinjiang. The Uighurs, in other words, see fellow Kirkuk nationalities that now have independent countries and that has created a separatism in Xinjiang that China doesn’t know how to deal with.

HORSLEY: But I want to say I’m glad you raised the issue. I think it is an issue that concerns all of us who work with China, you know, how we deal—how we think about it, and I think it’s incumbent at least in our own interactions with the Chinese and through dialogues that we keep trying to at least explain to them why this is such a big issue, and it is impacting their international reputation and how people think about China and think of dealing with China.

I’ve been involved in a lot of dialogues. I talk to a lot of people when I’m over there and, first of all, there’s not a lot of information among the people about exactly what’s going on. There’s enormous support for anti-terrorism and that’s how people do see it, and they’re doing a very good job of propaganda, showing people who have been released from the camps—you know, the happy life, good jobs now, et cetera.

But I think, you know, that through our civil society, through our academics, through our group, and through government, whenever they can have interactions to raise it I think at least that’s important to keep discussing. It’s just part of our own value, too.

VAITHEESWARAN: Jamie, thank you.

HORSLEY: So we have two questions here.

VAITHEESWARAN: I’m afraid we’re just at 8:00, I’m afraid. So I’m glad we did at least touch on that extremely important point about human rights. That was a pretty definitive statement from Ambassador Roy on the unlikelihood of American policy making much difference there.

However, I would point out that there is—that’s not to give up, for those of you who are concerned about this issue—give up hope. There are economic levers that have come from consumer boycotts. A number of multinationals have supply chains that, when one looks at carefully, stretch into Xinjiang, for example. And so there are—it’s possible that pressure could be brought to bear and already people are working on this through other means.

So one doesn’t have to think of this as a hopeless situation. But, nevertheless, from the perspective of statecraft, perhaps we’re hearing from the depth of experience that that may not be the way forward on that issue.

We can probably go on for another hour. I think you’ll agree with me that our distinguished speakers and our author of the new report have given us a fresh way to think about what is surely the greatest challenge of our time and, certainly, one of the most important topics of our time and to think again about how we move forward on our relationship with China.

Please join me in giving them a round of applause, and thanks to you all for coming. (Applause.)


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