CHINA: Is Engagement Still Working?

8/10/2019 CHINA: Is Engagement Still Working?

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CHINA: Is Engagement Still Working

Paris Dennard: Good evening. My name is Paris Dennard. I'm the Events Director here

at the McCain Institute. We're delighted to have all of you here.

I want you to do me a favor. If you have an iPhone, anything that's a device that rings,

that buzzes, we want it to buzz tonight, so put it on vibrate for me. But I want you to

participate throughout the course of tonight's debate.

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I see some of you all from our last debate. I asked you if you followed us and you said,

"No." I hope tonight we can change your mind and you follow us, @McCainInstitute on

Twitter, on Facebook and on Instagram, and our YouTube page as well.

Throughout the course of tonight's event, you can look inside of here and you can see theTwitter hashtag for tonight's debate. That page, it says "MIDebateChina." Use that

hashtag. Our moderator @TomNagorski and the rest of our panelists have their Twitter

handles there as well.

I hope that you will be engaged tonight. Let people know where you are, let them know

that you're excited, and let them know what you're listening to this evening.

Last point. There will be a portion for question and answer, so please, if you have the

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affiliation. Make it easier on everyone that's here.

Without further ado, I'd like to introduce to you our ambassador, Kurt Volker.

[applause]

Kurt Volker: Thank you very much. I'm honored to be here myself, and I am delighted

to see all of you. I see a lot of friends, I see a lot of repeat attendees, I see some new

faces. Thank you for coming and supporting the McCain Institute.

The McCain Institute was founded to honor the legacy of service to our country. Senator

McCain, Mrs. Cindy McCain, the McCain family going back generations. It's part of

Arizona State University based here in Washington, DC, with activities also in Arizona.

One of the issues that we've taken on is promoting the next generation of

character-driven, global leadership. We want to see emerging leaders around the world of

good character and values. We're delighted that two of the participants in our program are

here tonight. I hope you get a chance to interact with them.


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Another area that we've taken on is trying to re-establish a culture of serious, informed,

structured debate about the greatest challenges facing our country, and the democratic

community of nations around the world.

We've launched this debate series. I can't count how many we've done now. This is

probably about the 12th. I think you'll find there's a very interesting, very informative,very engaged debate this evening.

Before I introduce our moderator, I'm delighted to have a special guest here tonight. I'd

like to introduce to you Mrs. Cindy McCain.

[applause]

Cindy McCain: Thank you very much and welcome all of you. This is a wonderful

opportunity for me to be able to be here. I'm not here that often. To be able to be here

tonight to enjoy this debate is especially special. I can't say that, I guess.

Anyway, I bring greetings from two people. Of course, my husband who cannot be heretonight that sends his greetings. If there's anything John McCain loves more, it's the spirit

of debate. But he does apologize for not being here.

I also extend greetings from my mother-in-law, my 102-year-old mother-in-law, who

when I said to her what I was doing tonight, she said, "Well, can I come?" I said, "Well,

of course, you can come." "Oh, no, wait, I've got something else to do."

[laughter]

Cindy: I'm quite certain you'll see her at the next debate or whatever it may be.

Welcome, enjoy, and we appreciate your continued involvement. Thank you.

[applause]

Kurt: Thank you, Cindy. We do have a few members of our board here this evening.

We're delighted to have them here. One of them who is not here is the president of the

Asia Society, Josette Sheeran. But we are delighted that we have the executive

vice-president of the Asia Society, Mr. Tom Nagorski. He is the moderator for our debate

tonight.

He is a former managing editor for International Coverage at ABC. He brings a wealth of

both [indecipherable 0:04:14] experience and media experience to this. I'll turn it over tohim to introduce what is a very distinguished panel of debaters this evening. Thank you

very much. I hope you enjoy our program.

[applause]

Tom Nagorski: Thank you Ambassador Volker and Mrs. McCain. I hope your

mother-in-law watches online and isn't disappointed.


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The McCain Institute has put a quite ambitious and bold policy question on the table for

our great panel here tonight. It's really arguably one of the great policy questions of our

time namely "How best to engage with a very new and rising China."

Should we deepen our collaborations and cooperations with the Chinese? Should we get

tougher and more punitive as China asserts itself in all sorts of ways often ratheraggressively?

The implications in terms of how we answer that question are profound, obviously, for

the United States' economy, for national security, for global efforts to deal with climate

change, with trade, everything from food safety to terrorism and a lot more.

As Ambassador Volker says, and you know because you've got your programs, I think,

and you probably know many of these people already. We have a blue-ribbon group here

to tackle all of this.

Briefly, Sophie Richardson, two from my left, is China Director for Human Rights

Watch. Mike Green, to her right, Senior Vice President for Asia, and the Japan Chair at

CSIS. I should say, by the way, if you don't know, you're not familiar with the format

here, they are a team.

Although we're a little concerned that there may be some disagreements within the team,

there may be some agreements across the aisle, but we'll honor Senator McCain's wish to

have a spirited dialogue, if not an argument.

[laughter]

Tom: David Lampton, who is known, by the way, as Mike, just so you're not confused,

is Director of China Studies at SAIS at Johns Hopkins. At the end, Deborah Lehr fromthe Paulson Institute, which has just recently, by the way, announced a major effort to

combat environmental troubles in China.

Why don't we start by giving them all a big hand?

[applause]

Tom: Before we begin, I just thought I'd set out some very basic propositions about what

we're going to talk about. First of all, every nation of any size or import today, I think,

needs a China strategy. Every conversation about Asia invariably comes around, at one

moment or another, to China. I have first-hand experience with that in my current job atthe Asia Society. We have programs like these, not necessarily debates, about everything

from India's presidential elections to global trade, to climate change. China, whether

they're there or not, get into the conversation one way or another.

Just yesterday, actually, we launched a new report on the Chinese economic reforms. A

trustee of ours, Jack Wadsworth, who used to run Morgan Stanley for all of Asia, said, he

was actually quoting a strategic document that Morgan Stanley had put out more than two


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decades ago, "You can get every country in Asia right. You get China wrong, you're

going to fail." I thought that was a good setup for tonight.

The other thing I'll say, just so we're clear, no-one on this stage, and I've just asked them,

so I know this, is going to sit here and argue that we should cut ties with the Chinese.

No-one is going to argue that the United States, on the other end of the spectrum, shouldsit idly by no matter what the Chinese do.

In that spectrum, there's a whole range of policy options and recommendations that I

hope we can get into tonight.

I'll add one more thing about the format here. They run a tight ship at the McCain

Institute. No pun intended, given where we are.

[laughter]

Tom: I feel like my colleague, Charlie Gibson at ABC, back when there were clocks all

over the place, there's a clock there that says four minutes, which is really for the debateparticipants to see. I'm to frame a couple of propositions and policy statements, if you

will. One side will have four minutes to tackle that, the other side, two minutes to rebut.

If I seem rude, those are the rules and I'll interrupt as needed.

I thought we'd start with a framing question about...it's very much derived from the news

right now, and that has to do with Hong Kong.

The showdown continues there. We have new developments almost every day. Very little

give from China, defiance from the protesters. A lot of people in Hong Kong and beyond,

all around the world, are looking for a far more robust response to this, not necessarily

just in terms of rhetoric and what's been seen so far, especially from the world's majordemocracies.

Sophie Richardson, from Human Rights Watch, wrote just a couple of weeks ago, "If you

were told the Chinese government, an unelected, one-party state, will decide who you can

vote for, what would your response be, not only would you most likely object, you would

expect others, especially democracies, to loudly condemn the idea."

Sophie, you accuse democracies, the UK in particular, of "Appeasement of China and

betrayal of Hong Kong." The premise for this first question, should the world's leading

democracies, especially the United States, be far tougher than they have been on this?

Should they set some red lines? If not, are they not, as Sophie suggests, betraying thepeople of Hong Kong?

The team on the left, you have four minutes.

Mike Green: I think we have to start by stipulating that we all would like to see the

highest degree of democracy in Hong Kong as we could see. Secondly, I think we have to

stipulate that the British when they negotiated for more than a decade on the


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arrangements were in a weak position, because in the end, the Chinese could cut off the

water, the electricity and so on. They had the advantage of proximity, so this is a

constrained situation.

Secondly, I think we have to read the governing documents here. It's interesting that the

Chinese use the word the ultimate aim would be universal suffrage. There was never anypoint in time that was specified for the delivery of universal suffrage elections in the

agreements. The Chinese have picked the earliest possible date to at least allow what

they're calling a universal suffrage election. Also in the agreements were specifications

there would be a nominating committee.

One could argue that the Chinese have in fact met their agreement. You could argue

maybe they had better lawyers in developing the agreement than the British did. Maybe

they were cleverer. But a strict reading of it would I think lead you to think the Chinese

are at least doing the minimal they agreed to do and that a reasonable interpretation of

what they wrote would suggest.

Now, of course, there are the expectations of people in Hong Kong who would like all

these processes to unfold in the most rapid and most democratic way, and I think fairly

speaking certainly to a western audience and a Hong Kong audience the manipulation, so

to speak, or the construction, this nominating committee that will limit who can in fact be

voted for is a problem.

I'm actually quite heartened by the degree to which at least the, in the last couple of days

the Hong Kong administration has said they could entertain the idea of talking about how

people on the nominating committee are selected to be more representative, and there's

lots of room for wiggle room. We'll all have to see whether the Chinese avail themselves

of this.

I would just say one other thing that this is, it seems to me, not a case of legal violation of

agreement, it's a case of a common sense in politics. Beijing should want to govern Hong

Kong in a way that is most acceptable to the people because that will be best for China.

I see this as a litmus test of how enlightened can China be as to its own interest. While I

wouldn't bet necessarily how these negotiations so-called might unfold, I think there is

room for optimism.

Tom: Deborah Lehr, you have a little over a minute, but do you want to come to what

you think the United States ought to be doing or not doing in this area?

Deborah Lehr: Absolutely. First, it's a pleasure to be here, and just to really echo what

my partner here has said, certainly we believe in the highest degree of universal suffrage.

But that said, there's a room for megaphone diplomacy and private diplomacy.

On an issue like this, just playing it out in the public sphere could actually bring about the

type of result that we don't want to see by forcing China's hand. There certainly have


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been discussions by the government behind the scenes and I think that's much more of an

appropriate role for the government to be playing, in encouraging Beijing and helping

them understand why it's in their best interest to handle this in a rational way.

Tom: Sophie Richardson. I don't want to put words in your mouth, but you have been

pretty strident about wanting more of what was just referred to as megaphone diplomacyor megaphone something, right?

Sophie Richardson: Let me start with two foundational points, one of which is that I

think we should all remember that the hope and the expectation in 1997 was that more of

politics in the mainland would come to resemble the degree of interplay that was actually

tolerated at the time in Hong Kong. That the positive influence would go in the other

direction.

I think that while the US' response to some of the degradations of rights in Hong Kong

have essentially been substantively accurate and reasonably timely, I don't think they

have reason, really, either to the level of degradation that we've seen or been consistentwith the US' commitment to defending democracy worldwide.

I think China exceptionalism is a pathology that affects governments all over the world,

that governments behave differently towards China than they do to most others. The fact

that, for example, we did not see I think real alarm exhibited either by the US or by the

British.

What sparked that piece was that David Cameron failed to call out Chinese officials

while they were in London after they released a paper over the summer for which there

was no legal basis essentially saying, "We're going to decide who you can vote for."

Yeah, the Chinese do get some credit for expanding franchise in a way that the British

never did, but you can't take away, you can't undermine that right by then limiting

people's choice over who actually gets to run.

I don't want to get into an extensive discussion about the finer points of international law,

so I'll simply point out that by virtue of the universal declaration of human rights, which

all UN member states are expected to abide by, everyone everywhere, in Hong Kong, in

the mainland, here, everywhere, gets the right to run and the right to vote.

David Lampton: The clock is confusing me...

Tom: Go ahead, go ahead.

David: ...it was bouncing all over the place. But...

[laughter]

Sophie: I thought I only had 43 seconds.


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[laughter]

David: I'm already getting...

Tom: Don't worry about it. Go. Mike.

David: One point. Megaphone, maybe no megaphone. But I think for US foreign policy,

when we're not consistent in articulating our support for democratic principles, when we

put it in our back pocket and then we're later forced to roll it out, US-China relations get

worse. Some consistency in our stance on this is good US-China policy and it's true to

our values.

We need to, as Mike said, encourage our friends in Beijing to wiggle in the wiggle room

they have in the right direction. I think Mike is also right that this could be a litmus test or

an indication of how China under Xi Jinping is going to use its power.

This is not enlightened by China. If you want to unify with Taiwan, how does this help

you win over the hearts and minds of people in Taiwan, for example?

The record with Xi Jinping so far -- I think the jury's out, I think we agree on that -- but

the record with Xi Jinping so far is when blunt instrument hits blunt instrument, he

doesn't back down. So, I'm less optimistic and think we need to watch this very carefully

as an indicator of how under Xi Jinping China is going to use its power, because the

assumption and the bipartisan consensus behind China policy has been engagement and

integration will lead to a more increasingly enlightened China, and this is a case worth

watching because of that.

Mike: I would just inject in this. The comment was made that there's a sort of China

exceptionalism. Of course, I understand what you mean, and in some degree it's true. But

China is a rather unique, interesting case, if not unique, of governance inasmuch as the

scope of population that it's trying to manage and the diversity of its internal units.

It's trying to manage a Mongolia, a Tibet, a Xinjiang, a Macau special administrative

region, a Hong Kong administrative region. It's got a lot of complexity, point one.

Point two really is that development is a process. As I was listening to President Carter

on another occasion recently, he pointed out we didn't have the primary system till, what

was it, 1974. We were talking in the preceding period about smoke-filled rooms.

I think we have to be a little embracing of the idea that development is a process andwhen you're trying to move that many people from an autocratic system to something

more humane and responsive, it isn't going to happen overnight. I think that's the first part

of wisdom and what I would call realism.

Tom: I'm going to jump in just because our next premise or proposition or framing

question, whatever you want to call it, is a segue of sorts. In a way, I think this would be


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an argument that absolutely as Mike Lampton was just saying we should treat China as

an exceptional power. But here goes.

I want to ask this team here, the Mike Green-Sophie Richardson team, what's wrong with

the following statement? The economic and trade relationship between the United States

and China is the most important relationship on the planet and involves and impacts thelivelihoods of nearly two billion people. It impacts the health of the global economy.

China is opening and reforming its economy in unprecedented ways, and, therefore, it's

madness to upset or undermine that relationship for the sake of a protest movement in

Hong Kong, or for that matter a maritime dispute over some uninhabited islands. In any

case, if you want to influence China's behavior, more economic engagement, not less,

would be the better way to go.

Mike: Did you say that?

[laughter]

Tom: I'll tell you later.

Mike: Look, the United States since Richard Nixon has pursued engagement with China.

No country in the history of the world has done more for China's development and unity

than the United States, historically.

Every president since Nixon has deepened and expanded engagement. In the Bush

administration Secretary Paulson did. Secretary Clinton and Geithner in the Obama

administration. That's not in question. We need to deepen dialog, we need to build

confidence, we need to find new areas, climate change, to work together.

That's been one side of our policy. The other side of our policy, particularly since the

'90s, has been trying to establish in Asia and more broadly in the world an environment

where Beijing is not tempted to use its increasing power to tilt the apple cart, to change

the rules, to use its power to coerce smaller neighbors. You can't have one without the

other. You can't put all your faith in the economic interdependence and the dialog.

It's critical, but you've got to establish an environment where Beijing understands that if

they use coercion against the Philippines or against Japan or against India or against

Vietnam that at a certain point the United States and other powers are going to asserts our

interests and freedom of navigation, that we are going to shore up weaker states so that

they're not intimidated, and that that has to clearly understood.

Now, is that madness? No, it's absolutely necessary to make the engagement and the

deeper economic dialog work. To throw it away I think would be madness, because we'd

be putting our faith in economic instruments.


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In 1928, Thomas Lamont, the head of JPMorgan, predicted war with Japan was

impossible because of economic interdependence. Then there's a famous Norman Angell

quote in 1912 about Germany. Absolutely we need to...

Tom: I told you these were good debaters, right?

Mike: Absolutely. That's two guys wrong.

Tom: Let's let your teammate say a word.

Sophie: I'll just add quickly that opting out, that isn't one of the choices, but I do think it

is madness to expect that the relationship can develop, deepen, strengthen in a healthy,

sustainable way absent certain kinds of changes inside China.

Look. Part of what the US needs to be concerned about in Hong Kong is the erosion or

threats to the rule of law or the freedom of expression. Those are legal realities that in

part make Hong Kong the place it is, both for investment, for trade, as a place to live and

visit. Those realities are just as important to secure in the mainland to make it a

sustainable diplomatic, economic, strategic partner.

Deborah: When I started at the NSC a million years ago, there were three basic aspects

of the relationship. It was proliferation, human rights, and trade was the poor cousin.

Obviously, we've come a really long way, I mean just covering the issues that we're

talking about here.

Certainly, the economic relationship really is the underpinning of our relationship with

China, and as we look at it from our own strategic interests it's been very good for us.

Since the WTO, there's been an increase of 350 percent of our exports. We're now

attracting Chinese investments. It's creating jobs here. It's nowhere near the kind of levels

that we should be seeing. It should be much more.

But the reason that we've had that relationship is because we've continued to push China

into a rules-based society. We pushed very hard to bring them into the WTO. We should

be trying to do that within our economic relationship in other areas, such as through

negotiating the bilateral investment treaty.

But we should also be looking at how we bring them into the tent in other types of

relationships, because it isn't just the economic relationship that represents our overall

strategic relationship with China. There are times that we need to be very clear about

what our expectations are and take action. Sometimes it's going to be taking action on the

trade side.

Certainly, when we were doing the major trade negotiations, we were willing to take

away significant amounts of their trade in order to get what we wanted, and that's what it

took to actually get those agreements done.


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Now, we are intertwined in many ways, but there's still a lot of flexibility I think to be

pushing China into the types of rules-based organizations with an expectation that they

play fair. Cybersecurity is a very clear issue where we have those kinds of issues. Climate

change, too. These are areas of potential cooperation of we handle it right, but there are

obviously potentials for huge conflict if we don't handle it right.

Tom: I guess the premise of the statement is or was that we risk, in the trade sphere and

the economic sphere in particular, we risk something if we are aggressive in those other

areas. Right now, by the way, there does seem to be a great deal of belligerence

underway in those areas. Do you buy that or not? Either one of you.

Deborah: We've seen this and we've heard about this for years. The big argument

always about going to negotiate on intellectual property rights was, "Oh no, you can't do

that because they'll take it out against the companies."

Well, certainly, there are times when the Chinese government does play tough. We need

to also play tough. I think the Chinese are too dependent on us, at least in the short term,to really undermine the overall economic relationship.

Xi Jinping has outlined an exceedingly ambitious agenda. Not just economic, or certainly

their whole economic model is failing right now. They need a transformation of the

economy. To be able to turn China around in the way that he hopes, he is dependent on a,

maybe peaceful is too strong a word, but a stable relationship with the United States and

a stable relationship with Europe.

David: I would just add, the way the question is posed, it's only the US that's got the

levers here on the management of the relationship. I think you're in a weak position when

you think it's all your decisions.

The Chinese are making decisions, and frankly right now I think they're making a set of

decisions internally and with respect to their dealings with Japan and so on that are

inflicting prices on the system that are going to be very heavy for China. It's a security

reaction going on in Asia in the surrounding countries. FDI, foreign direct investment

from Japan has dropped in the last period since this tougher PRC policy.

I think we have to have a little bit of faith that there are interest groups now in China that

have a stake and they're beginning to push back. Now, who knows who's going to win in

that ultimate pushback?

I would just say one other thing is that our system of federalism is a very fortunate

system, because it provides lots of actors. I was out in Michigan not too long ago and the

governor there, Rick Snyder is his name, goes every year to China. In any case, there are

over a hundred foreign direct investment, Chinese foreign direct investment factories

employing Americans. In some cases billions of dollars, hundreds of millions of dollars

of revenue.


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We've got some real positive incentives to make this thing go. We have state actors that

are willing to be positive as congress or the federal government has to play the bad cop

sometimes in this picture. But the Chinese have a responsibility to make this work, and

they're going to pay a big price if they don't. We're already seeing now in the relations

with Japan some of those prices.

Tom: I want to pick up on something you said, Mike Green, which was interesting. That

you said that we should pursue a policy in this country that, if I have you right, that

doesn't get the Chinese to a place where they are tempted to engage in bad behavior, if

you will. Can you explain what you mean? What would a US policy be that might take

away the temptation?

Mike: I think there probably is some consensus up here that our levers to change

Chinese behavior are limited, increasingly limited.

Tom: We don't want too much consensus.

[laughter]

Mike: But when we say it, we're right.

[laughter]

Mike: No. I think, look. Good China strategy is about setting expectations consistently.

That China cannot divide us from our ally Japan, that coercion against smaller states will

be met with support for those states.

That we will stand up consistently, not gratuitously, but consistently on democracy. That

we will strengthen our partnership with China everywhere we possibly can, including

exchange of students, work on the climate, and eventually someday getting China into the

trans-Pacific partnership. We need to set expectations.

Where we get in trouble is where we don't do that or where we change the expectations. I

have faulted the administration for throwing out phrases like respecting each other's core

interests with China or embracing a new model of great power relations.

Because we set the expectation, perhaps unintentionally, that we're willing to shift how

we think about Asia to a bipolar condominium with China. That our allies aren't

important, that our principles aren't important.

Consistency about setting expectations. Understanding that in China there are multiple

interest groups but the government understands power, and that the government

understands that the president of the United States and his administration are going to

deal with the unruly interest groups in our country to try to keep the relationship moving

forward. It's both sides of the coin.

When we don't think about the expectations we're setting, that's when we get in trouble.


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Tom: Let's do a proposition now for the team on the far end. Picking up on this great

phrase, bipolar condominium and the smaller states you just referred to. We hear

constantly from visiting delegations from particularly the members of ASEAN, the

Philippines, Indonesia, to a lesser extent maybe the Malaysians and certainly the

Vietnamese.

That they're in a world of hurt sometimes with the Chinese and they do not understand,

among the many countries trying to better understand the US pivot to Asia, they don't

understand why the United States is so afraid of criticizing the Chinese.

They don't believe ASEAN has been strong enough necessarily, but they also think that

we in this country ought to help them feel, and do exactly what you just said. "The

Economist" said recently in a lead editorial that it would be a big mistake to draw red

lines, say in the South China Sea, which is obviously the issue that most preoccupies

these countries. Do you think it would be a mistake, and if so, why?

David: I guess I have a couple of reactions. First of all, this whole word robust responsekeeps coming up, and of course, I think most people, certainly most Americans respond

positively to being robust. The problem is, when you start trying to specify what the

concrete policy of "robust" is going to be, you begin to find in an interdependent Asia, in

which every one of these ASEAN countries has China as its principal export market for

sure, and probably its principal trade partner for sure, now.

It's true we hear a lot from our partners, but what you also hear from our partners is they

don't want to choose between us...they expect us to responsibly manage this so we avoid

conflict, and allow trade to continually go on.

They actually have their problems about how robust they should be, and what theyactually want us to do. They don't want us to roil the waters to the point that it affects

their economic future, and so forth.

Also, I think we have to be aware, the more tightly aligned you become with countries,

sometimes the more trapped you can become by their interests. I don't think Mike Green

would necessarily agree with me, but I think we ought to be a little more forthright with

the Japanese about some of their policies, and let's say "revisionist history" on World

War II. They've created a gap between one of our other allies, very important, Republic

of Korea, precisely because of this.

I think behind the scenes, I'm assured we are trying to urge restraint and moderation onthe Japanese, but we've got this problem dealing with our allies, the same way with the

Filipinos. Do we want to back them up on every rock and atoll in the South China Sea?

Probably, our national interest would suggest, maybe not.

All I'm saying is, everybody's got their interests in this region, and they're trying to

manipulate the big powers to provide them either the security or the opportunity for

economic advancement. But they're in our camp as long as we serve their purpose.


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Tom: What about Mike Green's point that we should have, or maybe you want to make

it again, that we should have some more consistency about what would be OK and not

OK, from the US's standpoint, in, say, the South China Sea? Do you want to come back

to that?

Mike: On the Japan piece quickly, some of their historical revisionism is unhelpfulbecause it complicates our relations with Korea, and Korea is our other big ally, and we

need our allies to work together on a range of issues. It's unhelpful, no doubt about it.

However, in the rest of Asia, outside of Korea and China, Japan has a 96 percent

favorability rating. The US, in recent polls, it's well over 80 percent, so Japan is not a

liability.

We have a problem with Japan and Korea, and I have been, actually, outspoken on the

need for Japan to tone it down a bit. In, say, Japan, there are multiple actors, multiple

voices, and it's actually a quite complicated issue within each of these countries, the

historical memory issue.

On the interesting point Mike raised, which is you don't want to be entrapped by smaller

allies or partners, you don't want them to think they have a blank check to bring the

seventh fleet in to fight the Chinese for them, that's absolutely right. You have to have a

kind of tailored program with a treaty ally like Japan, where we have a solemn

commitment to come to their defense, or Korea, we want to be engaging and cooperating

more on how we deal with these security problems.

Then China gets the message it can't divide the US and Japan, and Japan gets the message

that we will stand by them. We have a lot more say, each of us, we and Japan, how we

move.

In other words, if you are worried about Japan pulling us into a crisis, then the best thing

to do is embrace and jointly work together on these problems and capability.

In a case like Vietnam, we have no treaty relationship, but we do have an interest in

helping Vietnam develop its capabilities, and we are doing this, the...

[crosstalk]

Tom: The arms embargo...

Mike: ...arms embargo is being lifted. So that they understand what's happening in theirwaters, that they're not surprised.

It's going to be case-by-case, but as a general principle I would lean towards embracing

our allies and helping them with these challenges, because it gives us more leverage on

these problems from their side. It sends the message to Beijing that coercion will not lead

us away from these countries, it'll lead us closer.


14/33

p.14

Sophie: Can I offer up the first intra-team conflict here?

[laughter]

Mike: You have to move to the other side.

Sophie: Should we just rotate? Maybe I'll go sit over there.

I think in pursuit of that strategy though, the US has to be very careful not to ratify or

approve of behavior by some of these other governments, particularly in southeast Asia,

that's appalling and doesn't deserve to be rewarded.

We are deeply, deeply disturbed that the US is going to start selling weapons to Vietnam

again, when this is a government that has an appalling track record on human rights

issues. These are not cost-free decisions, especially inside some of these countries.

Tom: I want to come back to something Deborah Lehr said in a different context, about

your opposition to "Megaphone diplomacy." You were saying, talking from your ownexperience, how much is done behind closed doors.

Do you or anyone else on the panel believe, on the South China Sea or any of these

disputes, that the Chinese have been told by US officials in crystal-clear terms of the kind

that Mike Green is espousing, what would be OK, what is not OK? Just because we keep

hearing about the nightmare scenario where there is a miscalculation and leads to God

knows what. Anybody want to tackle that? It may not be a debate point, but it's a...

Mike: The answer is no. We've been, for the past few years, wildly inconsistent.

When you have very senior uniformed officers in the Pacific saying, "We're not going tofight to defend a bunch of rocks with these guys," the signal in Beijing is, "Hmm." The

signal in Manila or Tokyo, or whoever the person's talking about is, "Oh, man," so they

got ahead.

If they're a small state, they're going to start leaning to China, and in the theoretical

phrase, "Bandwagon." If they're a bigger state, they're going to start hedging by

developing their own ability to strike, or defend themselves, so we've been inconsistent

on this.

Red lines are not, generally, a good idea. I wouldn't draw a red line, in part because we

have no position on these territorial claims in any of these cases, except between Japanand Russia. We don't have a stake in anything except a peaceful outcome, and stability,

so no red lines.

But we need to think about the signals we're sending when senior folks in the

administration, including in uniform, saying we'd be nuts to fight over a bunch of rocks.

Maybe, but the point is, that sends a signal.


15/33

p.15

David: I agree with the idea of no red lines, but Tom was, in effect, asking, have we

given them a red line? You say no, and then you criticize the inconsistency. Either the red

line is clear, but then you've got to live up to it. It's unclear, operationally, what you

actually mean.

Mike: Hillary Clinton did it. She said very clearly in the ASEAN regional forum that theUnited States will stand for freedom of navigation, which was pretty clear. A red line

saying, "If you take this rock or that rock," since we don't have a territorial position, is

less helpful, but we have a very clear red line against coercion and freedom of navigation.

"Red" is not the right word. Fuzzy, pink.

[laughter]

Mike: But it's pretty clear, I think, to Beijing when you say that, and say it consistently,

that coercion, and there is an increase in maritime and air and cyber and mercantile

operations against the maritime seized by China, that coercions can be met with aresponse. It doesn't mean we're going to attack, but it's going to be met with a response.

That has to be said consistently. That's what I think we haven't done.

Tom: Have you got a point, Deborah?

Deborah: I was just going to add to the consistency. The consistency of the message has

to, obviously, come from the administration, but you also want the consistency of the

message to come from the countries that we're dealing with so that we're not hearing one

thing from them, and another thing that they're telling China.

Agreeing across teams, I agree with Mike on the need to create these relationships with

them, so that we're really bringing them closer, so that the Chinese aren't able to play all

of this off against each other.

Tom: Just so you know, have your questions ready. In a short while we'll...not just yet,

but we'll take some. I just want to make sure you start thinking. I'm not going to

monopolize this debate.

Also, at the end, the real challenge for all four here is they have been given some

homework, which is to come up with a policy recommendation for what the United States

might be doing better.

I want to read you another quote, if I may. This comes from Wesley Clarke, so it's not

anonymous. He wrote last week, I think in the New York Times, "China's harsh

suppression of dissent, from Hong Kong to Xinjiang, and its close ties to Russia, Iran and

North Korea, have finally laid to rest the dream that 'constructive engagement would

inevitably lead to more openness and democracy.'"

I'm going to ask the team on the far side to take that one up. Constructive engagement.


16/33

p.16

David: I went to China first in 1976, the month after Mao died. That was a society that

was so terrified of dealing with foreigners that people would cross the street a block

before to avoid even being on the same side of the street.

Now, China is a place in which, talking to individuals, they're quite open about what they

even think of their national leadership, in zones that were unimaginable. We have somany migrants in China trying to move around, improving their circumstance, that it

numbers in the hundreds of millions.

I think we have to recognize that China's engagement with not only us, but the rest of the

world, and the Japanese were very helpful in many stages of this development as well,

China has moved enormously rapidly. The problem is their political structure hasn't kept

pace with the economic and social change.

We can decry that, and we can decry all the injustice that flows from it, and we ought to

do what we can to help build capacity, broadly speaking, there to bring this into closer

alignment. But ultimately, this is an administration, the Chinese administration, trying togovern 20 percent of the world's people.

It's a big task, and they started from a pretty miserable spot. I think we have to be pretty

patient and tolerant, and I wouldn't for a moment say engagement has failed. China is not

obligated to realize, on our time frame, every aspiration we may have for them.

Tom: Sophie Richardson, "Patient, tolerant," those aren't words you use often on this

front.

Sophie: That's how I'm usually described.

Tom: I didn't mean you personally.

[laughter]

Sophie: Let me start with the point that, 65 years into Chinese communist party rule of

the country, that their best selling point continues to be, "Without us, there will be

chaos." It does not inspire a whole lot of confidence about the approach to governance.

I think also, the single biggest failure, and again I'm going to agree a little bit, I think the

biggest failure of constructive engagement is really between the Chinese government and

people inside China.

There are incredibly dynamic, thoughtful people with perfectly reasonable demands,

trying to make those views known every day, for which they are being beaten, abused,

jailed, exiled, tortured. If Beijing cannot bring itself to listen to these people's views and

take them on board, I think it comes at a real cost, both to the government and to the

country.


17/33

p.17

Whether US-China constructive engagement has paid off, obviously these are such

dichotomous options. "Not engaging" wasn't really one of the choices, and none of us

would argue for that.

Has the US pushed hard enough, I think, both to get the Chinese government to listen to

voices domestically? No. Do I think the US government is doing a good enough jobreaching out to, and recognizing and learning from, those voice itself? Not yet. They've

got a long way to go too.

Tom: Deborah Lehr, I want to come back. Given all your experience on the global trade

and economic front, to another question about US policy in that regard.

What opportunities do you think, right now, given all those statistics that boggle the mind

about the Chinese economy right now, what opportunities do you think the United States

is missing on the economic and trade and business fronts right now? Take a stab at that,

and we'll see if that provokes anything at this end.

Deborah: [laughs] Sure. I think if you look at the challenges that Xi Jinping faces,

they're immense. It's obviously the sheer size of China, but it's also amazing what he's got

to undertake. He is trying to govern a country which, in many ways, is not governable

because he doesn't have the mechanisms to implement his policies at a local level in any

kind of consistent basis.

He's trying to clean up the Party, which is the way of ruling the country, which is

basically trying to clean up the equivalent of corruption of the country of Germany. He's

got a floating migrant population that rivals the population of the United States, and he's

got an economic model that's running out of steam.

Where I think there's tremendous opportunity is, one, in the trade field. That is creating

these structures as we did in the WTO negotiations to bring them into a rules-based

society around trade.

One Chinese official explained to me recently that they viewed the bid as potentially

more transformational for China than the WTO was, which is a pretty astonishing

comment. We don't see, maybe picking up on what you were saying in the human rights

area, that the administration is seizing upon that in a way that they could to be driving

towards a trade policy in that area.

I also think there are a number of other areas where we really could be creating potential

cooperation. Obviously, climate change is one of those. China's CO2 emissions now are

more, on an annual basis, than, I believe, the United States and European combined. It's

an area we need them to cooperate. It's not just a China problem, their pollution is

showing up in the United States. It's a health issue, it's an economic issue.

There are a number of these areas -- food safety is one. Actually, it's one where we've

seen a lot of really good cooperation because of the crisis there. I think these are also


18/33

p.1

areas where Xi Jinping has recognized that they have to be priorities for his ability to

continue to govern.

Even if in democracy they're not going to listen, they're listening in the environmental

area. It's the largest number of protests, and they have major reforms that they're starting

to introduce, ranging from mayors are being judged by their ability to implementenvironmental practices in their cities for their promotions.

There's talk of, at the plenum, restructuring the whole organization, which I think would

be an incredibly major step, of the Ministry of Environmental Protection, where it no

longer would report to local officials who can implement whatever policies they want, to

having to report to Beijing directly.

I think these are some positive areas where the United States has great opportunity to

work, not just bilaterally with China, but multilaterally with the community to bring

about positive change.

Tom: I wondered, do you mind sharing with the audience the point you made when we

were talking before about where you think there are some deficiencies, in terms of a

concentrated, consistent...if you don't want to, you don't have to.

Deborah: [laughs] We were talking about the structure, just in the basics, of how to deal

with China. When Secretary Paulson created the strategic economic dialogue, the idea

behind it was to create a mechanism to deal with China in the way that China makes

decisions.

It was to bring top leaders from both countries together, and create the top-down kind of

decisions, at a high level, to make it easier for the working level in China to move

forward on the details.

When the Obama administration decided to change that structure, for very understandable

reasons, within our own government and split the leadership between Treasury and State,

whereas before it had been every economic issue was led by Treasury, it bifurcated the

system within China.

For example, you have the strategic dialogue led by Secretary Kerry, but he's also the

lead in the US government on climate change. But his counterparts in China have nothing

to do with climate change, they're all the security system. So no decisions are being

made, because you have a mismatch at the highest level to create that kind of structure.

It's, again, a missed opportunity, for very understandable reasons on both sides, but it's

not really a demonstration of understanding how China really works, and its

decision-making process.

Tom: Anybody else on that point?


19/33

p.1!

We're going to go the audience, then. I hope you guys can provoke fights better than I

have.

[laughter]

Tom: I think there's somebody from the McCain Young Leaders Group. Is that you, sir?

No.

Male Audience Member: I could be.

Tom: You could be, yeah. I think it has to be a longer process than that. While we're

looking for that person, who has a microphone? Maybe this gentleman here? Forgive me,

it's hard to see.

That must be the McCain young...yes. Hers first, then we'll come to you.

Female Audience Member: I'm not that young, but very fortunate part spent of the

NGL program at the McCain Institute. My name is [indecipherable 0:49:08] and I'm aTurkish journalist.

First of all, thank you for the lively debate. I think not only in China, but the human

rights activists all around the world looks for, expects the US support and leadership for

freedom of expression. I completely agree that the need for the change should come from

within, but most of the time the US pressure or US support is the only protection for

some activists.

I wonder, if the US turns a blind eye to human rights violations, then who will be actually

doing this? Isn't it really contradicting the core values of the United States? Thank you.

Tom: Sophie Richardson would agree with you, so let's go to the other side.

[laughter]

Sophie: Can I add just a quick anecdote? Sorry, the lights are blinding, so I'm sorry for

not looking right at you. I spend a lot of my time dealing with different governments on

human rights issues in China.

Almost invariably, when I go to a government other than the US and say, "We see that

you have this connection on that issue. We would like you to fill in the blank." Almost

invariably, the first question I will get asked is, "What is the US doing on that?" It reallysets the bar.

We can talk about whether that's fair or unfair, reasonable or not. But often when the US

takes a strong position on a certain case, or on certain issue, many others will follow

along with it. It has a greater value.


20/33

p.2"

Mike: If I may, we've lost our mojo on this in the past few years. I think it's the hangover

effect of Iraq and Afghanistan.

We've done surveys at CSIS of strategic elites, think-tankers, academics in 10 Asian

countries the past few years. When we ask, "What norms should guide Asian immigration

in the future?" after peace and economic cooperation, the next ones are always goodgovernance, human rights, free and fair elections, and so forth.

Those numbers have consistently gone up in every country except China, but they've

plummeted in the US.

The last year, what we did, the spring, there was an increase overall in the Pacific Rim

about the importance of democracy and human rights. But American exports went from

being at the top to being second only to Chinese exports in terms of how they saw the

importance of these issues.

We're in rut right now. But I'm confident because of Sophie and others like her that we're

going to get our mojo back and find a way to articulate this. [indecipherable 0:51:57] but

consistently. But right now, we're a bit of...

[crosstalk]

Deborah: ...because she's patient and tolerant.

Tom: It's a false choice though then, too, because I can hear when you're saying that. He

shall remain nameless but a governor from this country who was with us not long ago,

basic proposition was that in China, we're overly obsessed with the human rights question

to our detriment in terms of...His point was basically if we're like that, they're going to go

elsewhere with their business. Now, is that a...

Sophie: Where were they going to go?

Tom: But is that a false choice, do you think? I would imagine, for example, if you were

today in those kinds of trade negotiations, that's not an idle matter, is it? In any way, you

want to...Go ahead.

David: The question, and I understand exactly and as an American flattered to be part of

a country that's seen as having an idealistic and values based. It's very flattering in the

most positive way. But quite frankly, when we push human rights, frequently, our allies

were picking up the contracts.

Just think about the competition over aircraft. Boeing, what is it, one and six in their

aircraft rolling off the lines goes to China. We're in a competition with the Europeans

there.

Frankly, we find that not only our allies frequently behind us, they're way behind us on

this issue. I would ask our friends, too, to not take advantage of our forthrightness when


21/33

p.21

we express it. That's point one. Point two, I think it's not entirely fair to characterize the

current administration as missing in an action on this. The lawyer, Chen Guangcheng,

and all of that. That sucked out a whole lot of time at the US government, in that one

case.

I think we are continuing to raise individual cases privately, and so forth. I'm not trying tosay it's all it could be, but it's certainly a lot more, A, than nothing. B, certainly we don't

always find our allies firmly in our corner.

Mike: When I was in the White House, this is an important point, and one where I do

disagree with my good friend on Team B...are you guys Team A, or Team B?

[laughter]

David: You know there's a disagreement when they say, "My good friend."

[laughter]

Mike: Exactly.

Sophie: It's Washington code.

Mike: I was on the NSC staff for five years. I won't name the companies, but big

companies would come in and say, "Oh my God, the president's position on the US-Japan

alliance," or Taiwan, or Xinjiang, or Tibet, "is going to cause us to lose our big sale in

China. You've got to stop them."

Every single time, aircraft, whatever it was, the Chinese would split it between the EU

and the Americans.

I don't think there's a really concrete set of evidence that we're losing economic ground

because the government stands up for human rights. When there is a problem, it's because

of what I said earlier, expectations. If it's clear that the President of the United States is

going to consistently speak out on these issues, but respectfully and so forth, that sets the

expectations, and we don't disadvantage our commercial partners.

If it's a surprise that we're suddenly paying attention to human rights after having not

done it, then maybe there's more of a political problem for our companies.

Tom: There's a lot of hands up. Yes, sir? If we can get a microphone here? Please saywho you are, and no speeches.

Kami Barton: My name is Kami Barton, I'm with the Pakistani Spectator. My question

is, can you give me a couple of quality [indecipherable 0:55:47] Chinese foreign policy

that prevent Muslim, or any country in the world, not to burn Chinese flag, not to attack

Chinese embassy.


22/33

p.22

My question is in the context of India/Pakistan, Pakistan was almost taken over by India

in 1971 after they took over East Pakistan, and mated Bangladesh. Mr. McCain knows

the history well, because they adopted it out of them there. It was President Nixon who

saved the rest of the Pakistan.

Pakistani ballots of payment [indecipherable 0:56:21] . They cannot survive[indecipherable 0:56:22] because we have the [indecipherable 0:56:25] at IMF. It's

always American nodding save Pakistani economy, whenever they are about to collapse.

Tom: I'm sorry, you have a question about US policy in China?

Kami: Beside this all, US is so helpful to Pakistan. But once it's come to choosing

between China and the US, people love to burn American flag. Even China is giving third

rate [indecipherable 0:56:49] to Pakistan, third-rate industry to Pakistan. And Pakistani

know this, but they don't fear China. But somehow...

[crosstalk]

Tom: ...ask a question. I'm not sure there was a question, but anybody want to jump in?

Mike: I don't know what the question was.

Tom: OK, sorry. You had your hand up, sir, in the front. I thought I saw a hand up, no?

There you are, yes.

Deborah: You're not allowed.

Male Audience Member: I'm not a young visitor. My name is Mike Pillsbury. I've been

paid for a long time by the Pentagon to translate Chinese writings and publish them asbooks for free on the Internet.

I think I can tighten things up here in your debate by criticizing the moderator. We've had

delegations from China in the Pentagon over the last 25 years. One of the very first ones

had a 27-year-old named Xi Jinping.

In those delegations, they asked many questions, pretty tough on us. The panel, both sides

and the moderator, had not mentioned about eight or nine really tough questions the

Chinese asked us.

One is, "Why won't you accept the new type great power relations? Otherwise it meanswar." By the way, a new phrase Chinese delegations used in the last couple years...They

used to always say "China never wants war, we're the most peace loving power in the

world." Now they have the phrase, very frequently repeated, "China does not want war,

but..." and then some of these points will come out. "Please stop your reconnaissance

missions off our coast. Please stop them now."


23/33

p.23

So yes or no? Mike and Deborah, would you stop all the reconnaissance missions? That's

what China wants.

Number two, please don't restrict the military exchange program. There's a law that says

there are 12 areas the Pentagon cannot discuss with visiting Chinese. Please drop this law

or waive it. Mike and Deborah, would you agree, waive that?

Number three, please stop all arms sales...

[laughter]

Tom: Are you going to go through all 12 here?

Male Audience Member: I'll stop at three or four.

Tom: These are good questions.

Male Audience Member: Please stop all arm sales to Taiwan, including bullets andspare parts. Not big things, but everything. Deborah and Mike, is that OK?

Number four, we Chinese were sold weapons by Ronald Reagan, we need spare parts. A

lot of our helicopters and things are breaking down that you sold us under President

Reagan. We need military weapons spare parts. If you don't give them to us, that's a bad

sign.

Number five and six and seven, please don't sell to India, XYZ P8 aircraft. Please don't

sell Vietnam anything, despite Senator John McCain's speeches and visits. Please don't

back Japan.

President Obama made a speech in Tokyo in April, Article 5 of the Treaty requires we

defend [indecipherable 0:59:43] . This hurts the feelings of the Chinese people. Mike and

Deborah, is that OK that President Obama brought up Article 5 of the Treaty when he

was in Tokyo?

These are the kinds of nitty-gritty issues we face all the time. It's not a vague idea of

constructive engagement or not. It's nitty-gritty things. How do you feel about these

issues?

Tom: Good point. You've implicitly answered some of them, but let's start with

reconnaissance flights. Huge issue.

David: Well, I can go through and just tick off what my answer would be to these.

Actually, Mike has implemented many of these policies in the last administration, so his

remarks will be of great interest as well. What about the core interest idea? The problem I

always had with that, it was the mutual recognition and respect of each other's core

interest.


24/33

p.24

The problem is, with respect to Taiwan and South China Sea, our core interests, in some

sense, are at Loggerheads. So if we promise to respect their core interest, we're almost

undermining our own traditional policies. I've always been very nervous about that and

think, even after it was articulated, the administration became the more they thought

about it, more nervous.

I think that was a dangerous road to go down and I wouldn't recommend doing it then and

I certainly don't think we ought to continue on that road. So that's that.

On reconnaissance, of course there's not only the issue do you do reconnaissance or not.

My answer to that would be of course.

Part of making a stable world is understanding what the opposition or the other guy's

doing.

Tom: Where do you do it?

David: But how often do you do it? How close do you have to be? How much

antagonism, is the information worth the antagonism? It's something I can't answer

without being in a position to have all the information.

But I think there's probably something between intensive effrontery on the one hand and

denying ourselves what we absolutely need. I would be searching for a grey zone. I

wouldn't be totally unresponsive to Chinese concerns, but nor would I be totally. But in

the absence of concrete knowledge, I don't know to be more specific.

Male Audience Member: [indecipherable] ?

Tom: Do you disagree?

Deborah: I'm not necessarily, I would just look at it slightly differently. That's all I

would [indecipherable 1:02:08] .

[laughter]

Tom: Divide the barbarians.

Mike: Our arm sales, we're prohibited by law, we're obligated to provide sufficient

defensive capabilities. That pretty well from my mind, the law prevails. I won't go on but

I think you can see my tendency.

Tom: But the fact is, am I right, Mike, that on almost every one of your questions the US

administration, recently anyway, has gone ahead and done those things, I think. But Mike

Green, you were involved in some of this. Do you agree?


25/33

p.25

Mike: First of all I would answer no on every question. I don't think we should stop arm

sales to Taiwan or reconnaissance flights or our commitments under our security treaties

with Japan.

The only one where I might disagree with you, Mike, is on the military-to-military

cooperation. Not the arm sales, but the military-to-military. I think we should beloosening restrictions. I think the more our incredibly impressive young officers are

interacting with a new generation PLA officers, the better it is for us.

The irony is it's the PLA leadership who fears transparency, because it's the tool of the

strong. On that one, we should be encouraging...I mean, Mike and I are both professors

and what we see with students from China is just phenomenal. The exchange and the

opportunities to understand. Our militaries ought to be doing that too, because the PLA is

beginning to live in a bubble. That's very dangerous.

On the new model, I could go on for hours but I would just say the biggest problem with

the new model of great power relations is not a new model of relations, but the greatpower part [indecipherable 1:03:34] , which in all Chinese writings is Russia, China, the

US, and occasionally the EU. It's not India, it's not Japan.

It's a reordering of how we would think about Asia. Across the region people don't like it,

because it looks like we're going to work this out with the Chinese and our traditional

allies and partners with common values and interests are going to wait outside the door.

That's a little bit of a caricature, but it is a positive vision in the sense that war is bad, but

it's a bad vision for us because it's an ask that we exceed to spheres of influence and

answering yes to all those questions you asked in order to have this new model.

I thought Secretary Hagel got the administration out of the trap very well, because a

number of very senior people were saying new model of great power relations. Hagel

goes out and says, "We want a new model of relations," and I think that's right.

Deborah: Could I just add? Obviously these are questions that have been around a long

time and there's a whole language that goes along even with each of those questions. But

for all of us who've been working on China for a long time, there's policy, and then

there's how things are really done.

Just my little anecdote is when I was at the NSC, we sold the F-16s to Taiwan, and there

were many in the government who were writing in and lobbying us and telling us that the

relationship was over, it was going to fall apart, it could never survive this, we were at

such a sensitive time.

But the Chinese understood very clearly what the motivation was behind it. George Bush,

their friend, was running for election and he needed to sell those F-16s for political

reasons to get votes in Texas. That's what it was.


26/33

p.26

We, with the sale of those F-16s, which was strategic but also political, we balanced it

out with a number of things that we did for the Chinese. They did their expected

complaining in public, in private. But the reality is the relationship continued on and we

managed to put together and rebuild the political relationship after Tiananmen.

When obviously George Bush lost the election, when Clinton came in he didn't have tomake a number of the very difficult decisions that would have been politically difficult

for him to make just coming into office, such as reestablishing cabinet-to-cabinet ties and

some of the other behind-the-scenes types of things, including returning some of their

aircraft that the defense department was holding that wanted their spare parts and

managed to get those off on boats by the time that President Clinton was sworn in. But a

variety of other things that went along with it.

I would just say, really, there is policy and the diplomatic language that goes along with

that, that we all at this dance we have to play. But then there's really how things actually

get done.

Tom: Very well put. Yes, sir. Here in the second row. Again, if you can say your name

and keep it brief.

Male Audience Member: Sure. My name is Zee. I'm from Georgetown University, a

proud student of Dr. Green. I remember in one class we were talking about China...

[laughter]

Male Audience Member: ...and Dr. Green asked us, "What do you think that Xi Jinping

thinks of the first thing in the morning?" and the first answer we got from the class is that

he needed to bag up his political enemies and take them out.

My question is that...

[crosstalk and laughter]

Male Audience Member: My question is that given right now there's a political storm

going on in China, officials are falling off left and right off the radar. I want to know,

what do you guys think about where this campaign is going? Do you think Xi will

emerge out of this campaign eventually with a renewed sense of confidence, a renewed

sense of ambition? Will that translate into a more assertive stance towards the United

States?

Mike: I'll take a stab at it. First of all, I think that the current characterization of him is

he's pulled off really quite a rapid consolidation, particularly compared to his

predecessor, and it's impressive how he's got his hands around the chokepoints of the

policymaking system. If you look at the chairmanships of committees that he's gathered

into his own singular hands, it's impressive.


27/33

p.27

But ultimately, I think, I'm not as convinced of his durability and the soundness of his

position and strategy as many others. I think I have to ask, you've got limited resources.

You have limited attention. We now get more conflict and friction in the Asia, Deng

strategy was keep the outside quiet so we can focus internally. He seems to be less

concerned about keeping the outside quiet. I think that's going to have very big costs for

him.

Then Deng was always very careful not to get too many enemies simultaneously. He'd

pick them off one at a time, but not all at once. I wonder if, quite frankly, taking on more

domestic and foreign opposition than he, even he, is going to be able to deal with. I'm not

convinced, quite as convinced as the conventional wisdom is that this is going.

I think, what we're seeing is a fight under the bed sheets. We're seeing elbows and legs

and everything else. We don't know quite what's going on, but I think it's a little risky to

project here.

[laughter]

Deborah: That's not an analogy I'm going to try to attack.

[laughter]

Deborah: I don't even want to try to take bets on what's going to happen to Xi Jinping in

the long run, there's so much that we don't know. But I do think it's important to talk a

little bit about the human cost of the anti-corruption campaign.

Obviously, we're all for eradicating corruption, but there's so clearly a political agenda to

this. Even if you look at the number of independent anti-corruption activists who have

been given ludicrously harsh sentences in the last year in the context of this campaign,literally for doing as little as going out in public and saying exactly the same thing Xi

Jinping has said, that he gets to run the country, they wind up in jail.

But even if you look at the number of suicides by officials who've been accused of

corruption, the number of people I think we can now reasonably assume are being subject

to the party's own internal disciplinary system, which affords none of the protections one

should have when one is accused of a crime. Even in the normal legal system, all of the

rights to a fair trial, those protections are extremely weak, but they're worse within the

Party's system.

I think there's a larger political effect too, especially as you go further down the foodchain, that officials are extremely nervous and want to make sure that they are stamping

out any kinds of issues, or people, who could prove to be problematic in the long run.

We've seen an incredibly hostile response to behavior that, five years ago, may have

gotten you called in for a cup of tea, and is now resulting in actual, criminal sentences. I

think that's a real concern, longer term.


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p.2

Sophie: I think [indecipherable 1:11:06] , who Xi Jinping brought in to really run this

campaign, has a background that's very unique, given his many previous positions in

business, in government, in the provinces. He has a unique understanding of how China

works, but where the corruption is.

The way that they've been going about this, obviously part is to build up public supportfor Xi Jinping and his policies, to show that they're really addressing the corruption.

Two, I think, is whatever the political motivations may be in going from a human rights

perspective, if you look at the organizations that he's targeted, many of them are critical

to his reform program. He is taking on those very powerful, vested interests that he wants

to reform economically, and he is systematically cleaning out the networks.

He's getting the head of SASAC that governs the state-owned enterprises. He is tackling

not only the CEOs but down through the system of the leading SOEs in telecom and

power and media, all those sectors that are monopolies. He's going after the research

institutes and the academic institutes that all provide the policy support for them.

Key to its success, though, is not this shock-and-awe campaign, which they've been

remarkably open about. They have a website, they publish, they take comments. It's been

wildly popular. They have their own catchy phrases. It's not just "the tigers and flies," but

there are all other kinds of catchy phrases that the Chinese people are now using, related

to this campaign. Critical is going to be if they start to actually change the system.

They've made one really important change, and that is that the disciplinary inspection

teams, typically at the center, operate separately from those in the provinces. They have

restructured that relationship so now that those local officials, when they start an

investigation, have to report to Beijing, so they can no longer cover it up if there's aninvestigation going on. It's a slightly more transparent system.

The key will be how they then create, within the Chinese government and these other

enterprises, a system that, instead of promoting corruption, promotes good behavior.

That, I think, is Zhang's biggest challenge.

Tom: I think we have time for...

Mike: Real quick, corruption is key. China is not going to keep going without dealing

with this problem. It's a problem for the Chinese military. You can't get promoted above

senior colonel in the PLA without bribing someone.

The worrisome thing is the knife is not just out for the corruption that affects the

economy. It's out for Tibetans, [indecipherable 1:13:47] , civil society groups, NGOs

operating, it's across the board. We may or may not be at an inflection point, but we

haven't seen this kind of broad suppression of alternate voices in a long time, in China.


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p.2!

Deborah: I would just add though, to your point, I think that Xi actually has much

broader support within the important constituencies like [indecipherable 1:14:07] and

some of these others, than we might think.

Tom: I want to go to the back for the last question, I've been remiss there. Yeah, with

your hand up? Right there, the young lady. Yeah?

Female Audience Member: Hi. I have a quick comment, and then a question.

The comment is about Chinese exceptionalism. I'm from Taiwan, and I remember vividly

the KNT government making the claims in the '70s, when I was a child, that Chinese

culture is unique and, therefore, not subject to the requirements of democracy. We all

know how that story turned out. I believed them at the time. Also to say that they KNT

also claimed it before the communists took the country from them.

My question is about the US government's attitude towards Chinese civil society, which

is separate and distinct from the state. There's a Chinese colonist in exile in Germanycalled Xiaoping. He says that his biggest complaint is that all of the evils, all of the

monstrosities that the government in China had perpetrated have now become the bar by

which they are judged against.

Therefore, there was [indecipherable 1:15:30] before, and now people are not starving,

that that's considered an achievement. Chinese civil society does not take that view.

My question is, what kind of risk is the US government running when we take a view of

[indecipherable 1:15:44] and democratization in a way that's so vastly different than the

way Chinese civil society chooses to view it? Especially since these people are being

tortured and jailed for those views. Thank you.

[applause]

Tom: Anyone want to take that on?

Sophie: Can I start with that? Let me back up a little bit and explain precisely what I

mean by the term "China exceptionalism," because, obviously, it's a term that gets used

by governments, and obviously China is a unique place with a distinct culture.

My point is that often I find government officials in the US and in other countries will

talk about China and have expectations for China that they would never articulate for

other countries.

This became painfully clear to me around the last leadership transition, when in a

moment of non-patience and tolerance, I was reading over the US' congratulatory

remarks to the new leadership. I surfed around on the State Department's website and

found, that day, expressions of concern about three or four other countries that, in the

previous week or so, had had somehow problematic elections, or had failed to have

elections at all.


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p.3"

I queried a couple of people at the State Department and said, "Why is it that you guys

can't bring yourself to say, politely, 'Nice to meet you, look forward to working with you,

but we're a little bit concerned that your ascension to power has been fundamentally

premised on denying 800 million people the right to vote' the way you would say it to any

other government around the world?"

I agree with your point, that I think the US really cheapens and demeans its own rhetoric

to supporting democracy all over the world when it pulls its punches on China, because it

anticipates some kind of response that often isn't forthcoming. I think that's a serious

mistake.

[applause]

David: First of all, I take the premise that we should support the development of civil

society in China. We could always do more, but I would choose to focus my response on

what I take to be a very fundamental aspect of our policy since Richard Nixon and

certainly, since the Carter administration. It's to build capacity in the infrastructure inChina for a more humanely governed society in the first case, and more democratically in

the future.

You have to acknowledge the fact that we've got 235,000 students from China at the

tertiary level, we don't know how many at the secondary school level and primary school,

even. Not to mention people that are here studying as interns, or opportunities for training

in corporations, and so forth.

Also, I'd go to something like the Ford Foundation played a major role in bringing the

study, not only of modern economics but modern law, back in the '80s, and so forth.

I think at the same time that we acknowledge our deficiencies, our blind spots, our fears

as a nation, our hesitancies, we ought to also recognize we've done an enormous amount.

I think we need to always strive to do better, but let's not ignore the very, I think,

profound impact we've had.

Mike: I think everyone would agree the Nixon/Mao Summit and the Shanghai

communiquis the most important bilateral event of the modern era between us andChina. But if you go and actually read the Nixon/Mao communiqu, President Nixonsays, "Democracy is the best form of government. Japan is our closest ally. Human rights

matter." It's all there, and then Mao says, "Isn't Pyongyang great? We like North

Vietnam."

[laughter]

Mike: About three-quarters of the document is each side stating, with no reluctance,

exactly what its core principles are. Then the operative paragraph at the end, "We will

move towards normalized relations." We've lost that. If Nixon can say this, for goodness

sake, the ultimate realpolitik practitioner, we ought to be able to do it.


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p.31

I remember in the '80s, everybody in Asia pretty much said that Asians like to be beaten

with [indecipherable 1:20:25] . Liu Qian Yu, Markos, Park Chung-hee, in Indonesia,

Chiang Kai-shek, it's very convenient for the government in China to argue that there's an

Asian or Chinese exceptionalism, but history proves it's not true.

I think the fact is, Xi Jinping is a Marxist, and I mean that literally, he's a student ofMarxist theory. Marxist theory argues that the forces of history are material, that

economic factors determine everything.

I think he probably he believes, Mike and Deborah might disagree and would know

better, I think he probably believes that economic development obviates the need for

religious freedom, human freedom, civil society. I think that's in the operative

assumptions of Xi Jinping, and that's why he's acting the way, and the government is

acting the way it is.

I think Mike's right, there's going to be some kind of reality training, and we'll see how

the government adjusts. I don't see how China gets out of the middle income trap withoutadjusting, but we'll see.

Tom: We have to wrap this portion there. It is now, you may have tripped into what your

final statement is going to be, but as I said at the outset, all four of the panelists have been

asked to come up with a one-minute, that's all you've got and that we have to stick to,

prescription for what should be done differently.

We're going to go from closest to me to the end. Mike Green, you're in the oval office

and you've got a minute with the president and the secretary of state. Go.

Mike: Deepen and broaden engagement. Look for new areas to cooperate that we haven't

cooperated on. But ultimately, as Rich Armitage and Joe Nye and Kurt Campbell and a

number of us put in a report some years ago, to get China right you have to get Asia right.

The weak part of our strategy I would argue is we have to get TPP done, we have to be

clear about our vision for an Asian-Pacific regionalism. We have to get APEC right. A lot

of these China will be cooperative and some they won't, but we have to think about Asia

and not get pulled into a narrow view of US-China relations. But even as we do that, we

want to expand the areas of confidence-building and cooperation everywhere we can.

Tom: You did that in 43 seconds. That was very impressive.

Mike: Then let me add an addition.

[laughter]

Tom: Sophie Richardson, the clock has reset.

Sophie: No cabinet member shall leave Beijing without publicly calling for the release

of at least one imprisoned person, not only because it is the right thing to do, but because


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p.32

those people are incredibly important to the US formulating thoughtful policy on China

in the future. Ha-ha, I beat you.

[laughter]

Tom: Mike, I'd love to say you get a bunch of extra time but you don't.

David: I'll try and do it, do what, 27 seconds, was that about? Let me just say a general

statement and then a specific.

The general statement is I think the more we govern ourselves and run our own, get our

own house in order, the more effective we're going to be with the Chinese. What we're

seeing in terms of behavior of the Chinese is not unrelated to our own current difficulties,

either economic and/or governance.

Ultimately, I think we'll carry more sway in our model more attractive to the degree

where we're running our situation better. But the specific, I guess I would say is that we

should have as our strategic vision trying to develop inclusive economic and security

institutions that wherever possible include China in it, and I'm not limiting it.

But I would say for TPP, for example, I would do all I could to try to get them in within

the framework of the standards of the organization and so forth.

Tom: Thank you. We are so disciplined. Deborah Lehr. The last word to you.

Deborah: Difficult to follow my three very distinguished colleagues and be the end, but

at a recent meeting with Xi Jinping he talked about the need to create positive momentum

in the relationship, because otherwise the negative would dominate. Building on I think

what's been said here, I think really we have a unique opportunity to push China in aparticular direction, but the United States still has leverage with China.

I would call in addition to TPP, I think we need a much more aggressive bilateral trade

relationship with China as we had in the '90s that's focused on our core interests, our core

export sectors, and a bilateral investment treaty. Because it can be transformation in

pushing China in the right direction and bringing about much better behavior on their part

in the trade and economic sphere.

Tom: Well said, thank you. Before we wrap I know Ambassador Volker is going to say

a few words. I just personally want to thank you all at the McCain Institute for having me

here, thank the audience, and please give a very warm and deserved hand to the panelists.

[applause]

Kurt: Please join me also in thanking our terrific moderator, Tom Nagorski.

[applause]


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p.33

Kurt: I want to thank you also for taking your time to be here. Just also give a round of

applause or a show of hands, was this the most informative and insightful discussion of

the real issues of China that you've heard in a long time?

[applause]

Documents

CHINA: Is Engagement Still Working?