Thank you President Park, President Yang, distinguishedguests, friends, colleagues, scholars. It’s a great opportunity to be here atthis wonderful Forum, I want to pay tribute both to Fudan Universityand the Korean Foundation for Advanced Studies both for their commitment tothis dialogue and for this opportunity to think of a creative and imaginativeways to effect changes in the world. It’s especially a great opportunity for merecently, having left the practice of policy, to have a chance to organize myown thoughts and share them with you – particularly as the subtitle of theForum indicates, to think about the challenges of building a peaceful, stableand prosperous Asia for the 21st century. It’s also given me achance to reflect about history, my friend Zhu Min has given us some indicationof the sense of change here. I made my first visit to Fudan sixteen years agoin the company of U.S. Secretary of State Warren Christopher, when he outlinedwhere he thought the U.S – Chinarelationship could progress over the years. Two years later, I accompaniedPresident Clinton on his historic trip to Shanghai.Over the last nineteen years, I have had the chance in government to affect howwe think about U.S. – China relations and strategy and strategy of East Asia. Still, I would like to remark that my viewstoday are those of a private citizen and do not reflect the opinions of anyoneother than myself.
It’s acommonplace to talk about dramatic change in this region, but it deservesrestating. Few would have imagined forty years the political and economicforces that have shaped the region over this period of time. Yet, for those whohave an even longer experience than these twenty or forty years, or who havestudied their history, it’s also possible to recall how many times over thepast centuries that power and influence and economic powers have moved andchanged and ebbed and flowed across the Pacific and among the powers of theAsia – Pacific region. I make this caution because it is critical to avoidassuming that what we see today will be what will happen tomorrow, and toresist the temptations to make straight line projections from the currentsituation to future events. It is especially critical for policy-makers, whohave a responsibility to not only think about today and tomorrow, but alsofuture generations. Indeed, while predicting the future is impossible, what iscertain is that the unexpected is more likely than the expected.
It isespecially important to focus on long-term trends in East-Asia as we enter intoa year of leadership change in many countries across the region. 2012 beganwith elections in Taiwan,followed by Russia, and theyear will end with elections in the United Statesand South Korea.And, here in China,we will be seeing the Eighteenth Party Congress. Those are planned leadershipdecisions but there may also be unexpected events, as we have seen mostrecently in North Korea.While the future may be unpredictable by nature, I do believe that as we thinkabout the decisions and events of this year, they are just as likely to producecontinuity as change, but in any case, whether they do produce change or not,they will put in place a generation of leaders who will influence the policiesof change in this region for as much as a decade to come. These leadershipdecisions are particularly consequential because of the growing internationalattention to the central role of East Asiaacross the core spectrum of policy changes of our time, from global economicgrowth to climate change to economic security and nuclear proliferation andpublic health and the efficiency of global political institutions. Morebroadly, the choices made by the leaders assuming office in this region, or maintainingtheir power in 2012 will shape the political relations amongst states in thisregion at a time when these relations are in great flux. Decisions that aretaken in the coming years could affect and determine the stability of theregion for a generation or more. Each of the key states in this region, notjust the United States and China but also powers such as Japan, South Korea,Indonesia and increasingly India, are inthe process of defining their long-term regional strategies. It’s important to emphasizethat the choices facing the leaders in this region are not limited to mattersof foreign policy and international affairs. On the contrary, key decisionsabout domestic matters – budgets, fiscal policies, environmental and socialwelfare programs, will have equally significant consequences for the peoplesbetween states as well as within them. Indeed, in the minds of the citizens ofour countries, the issues of growth, equity and sustainability are at the topof the agenda.
Moreover,the paths chosen by each of our countries will not be chosen in isolation, butrather through an assessment of strategies of other countries in the region.Indeed, the domestic debates in most countries in our region are heavilyinfluenced by competing assessments of the intentions of key actors. In the United States that means primarily China,and vice versa. South Koreahas North Korea to consider,but also Japan, China and the United States. This is true on theeconomical as well as the political front, as our relations, as Zhu Min hasshown so eloquently have become increasingly intertwined and interdependent.Perhaps the most striking feature of the region today, and in recent years, hasbeen the relative tranquility experienced. In an area that has been wracked bysome of the bloodiest conflicts of the 20th century, the currentenvironment, though clearly facing important risks, is nevertheless run withrelative stability. This stability has been a critical enabler of theremarkable economic growth of the past thirty years. Maintaining this stabilityis essential if our economic growth is to be extended into the future. So inthinking about the choices facing the leaders coming into power this year it isimportant that we reflect a little on why we have enjoyed such a largely stableenvironment in the region during this period and what leaders in this region –especially the United Statesand China– must do to continue to promote this growth and stability.
Now, whenwe reflect on the sources of conflict and insecurity over the past century,familiar themes come to mind. Conflicts associated with decolonization andself-determination, with national identity and territorial claims, access tonatural resources and of course ideological competition. Although some of thesefactors have faded in importance, many remain today in the shadows as potentialsources of not only near-term stability, not to mention outright conflict. Taketerritory, for example. Some of the most dangerous situations we face in theregion come from unresolved national aspirations and associated territorialclaims – from the unresolved territorial divisions of Korea to the Northern Territories in Japanto conflicting claims in the East and South Chinaseas. Virtually every bilateral relationship in the region is shadowed byterritorial disputes. In many cases, these disagreements are closelyintertwined with that other perennial source of conflict – access to naturalresources with tremendous potential access to wealth in and around the sea.
But theseare not the only causes of conflict and friction. There are also frictionsemerging from issues ranging from trade and economic policy, to differencesover political and economic systems. So, in the face of these persistentunderlying sources of conflict it is again important to reflect on thecounter-intuitive fact that the region still remains peaceful. A short butsimplistic answer that is often given is that at least for the moment all majorcountries have a sufficient stake in maintaining the status-quo, and thatsufficient uncertainties about changing the status quo induce a cautiousness inleaders that supports stability. Chinese leaders in particular frequentlystress the fundamental importance of a peaceful international environment tohelp Chinapursue its long term developmental strategy. But this situation did not comeabout by accident, and what is perhaps more important is that there is noinvisible hand to ensure that it will be maintained, which is why policyremains so important.
The powerfulappeal of the status quo is most evident in the two places that post thegreatest threat to instability in the region – the Taiwan straits and the Koreanpeninsula. In both cases, on one level, the current arrangements are deemedunsatisfactory in the eyes of most of the protagonists. Here in China, the commitment to achieve reunificationwith Taiwan remains apowerful political force, while over in Taiwaneven the ruling Guomindang remains anxious over existing vulnerabilities to China’seconomic, political and military might. Yet the cautious route followed bypoliticians in the mainland, and the relatively clear-cut victory of Ma Yingjiuin the recent election shows that uncertainty about upsetting the balance ofthe status quo remains dominant. Similarly, on the Korean peninsula there arefew advocates on either side for retaining the current division, yet littleside that either side is prepared to undertake a gamble on a game changingstrategy. The same pattern can be seen both in the East China and South Chinaseas where despite occasional skirmishes and intense maneuvering to captureheadlines, in the face of any serious risks of escalation all parties havedemonstrated an inclination to seek a peaceful resolution of differences.
So whatcontributes to this stability? I think the answer is twofold. First, we havethe ever deepening economic integration so vividly described in the previous[Zhu Min’s] talk. Second, we have the commitment of the leaders of the United States and China to forge a constructive andcooperative relationship despite important differences between us and theinherent challenges posed by the dynamic that inevitably exists between arising and an established power. I want to emphasize this latter factor becauseI believe that history demonstrates that while economic integration can beconducive to pacific relationships, it is not enough by itself to secure it. Idon’t want to spend a lot of time on this issue [economic integration] today –we all know that information technology and modern transportation have not onlyfostered trade but also intensified the creation of global production networksthat increase nations’ exposure to and dependence on the well-being ofeach-other. Linkages are being fostered by an expanding lattice of bilateraland multilateral trade agreements that give even greater incentives to sustainpolitical relations in support of trade.
Virtuallyeverybody seems to understand that prosperity is best sustained by positivepolitical relations, which temper even economic conflicts over issues likecurrency and trade practices. The stability that comes from economicintegration is also bolstered by political practices. Amongst the region’sdemocracies, there is a clear understanding that political parties’ fortunesdepend to a very large degree on their ability to provide prosperity for theircitizens, and that is another constraint on risk taking. Even in countrieswhose leaders are not directly chosen by elections, including but not limitedto China,the government’s ability to deliver prosperity and a better life is critical toits ability to sustain public support. Yet as I suggested, this is no cause forcomplacency. As the early years of the 20th century in Europe showed so vividly and tragically, economicintegration alone is not necessarily sufficient to sustain peace and prosperity.Misperceptions and miscalculations, particularly at a time of shifting powerdynamics, have and will continue to threaten stability, even in this region,where the stakes for sustaining peace are so great. This cautionary tale [WorldWar I, World War II] should be on the mind of all our leaders.
To avoidthe dangers of instability and conflict will involve many different actors inthis diverse region, but I think it will surprise no one here if I say thatmore than any single factor, how the United States and China manage ourrelations will have profound relations not for our two countries but indeed forthe region and the world as a whole. It’s no accident that President Obama hascalled the United-States – China relationship the “most consequential bilateralrelationship in the world” The central importance of managing U.S – Chinarelations is inherent in the history of the region in the years following theend of World War II and the 1949 establishment of the PRC. During the periodwhen the U.S and Chinawere most at odds, the region was wracked with war and conflict. Withrapprochement and the normalization of relations in the 1970’s, the regionbecame more stable, although important conflicts still persisted, widespreadconflict has been avoided.
Themanagement of this relationship has been based on a more or less explicit setof understandings between the United Statesand Chinaever since normalization of relations began in the 1970’s. Despite ourdifferences in important areas, ranging from trade and economic policy to humanrights and democratic governance, American leaders of both parties havewelcomed in word and deed the emergence of a strong and prosperous China as apositive contribution to reaching global growth and prosperity. And China’sleaders have accepted that United States has and will continue to play acentral role in East Asia, and that our presence will play a central role inensuring peace and stability. These roles have been reaffirmed recently byPresidents Obama and Hu, both during President Obama’s visit here to China and President Hu’s state visit to the United States.Both sides have worked hard to sustain and expand areas of common interest andcommon effort, on key regional and global issues, ranging from climate changeand energy security to counter terrorism, anti-piracy and global public health.
But inrecent years some of both sides have begun to challenge some of the assumptionsunderlying this cooperative relationship, drawing on what they claim to belessons of history to claim that our two nations are destined to be at bestrivals, and perhaps even adversaries. On the U.S.side, proponents of this view assert that China’srise is inherently a threat to the United States. State to staterelations are seen as a zero-sum game, in which one country’s rise isnecessarily at the expense of the other. On the Chinese side, holders of thisperspective view America’spresence, particularly military presence as inherently antithetical to China’s security, and our security with othercountries in the region a thinly disguised effort to balance and contain China. Fromthese claims flow what their advocates call clear policy imperatives, for theU.S, to hold down and resist China’srise, and for China to seekto reduce and ultimately to eliminate the U.S. presence in the region.
Will itsurprise you if I tell you that I believe these diagnoses are flawed? And thepolicy choices that they are alleged to flow from are not only wrong, butself-fulfilling in a dangerous way? If China’sleaders perceive that the U.S.aims at containing and weakening China,then they will necessarily look at policies that seek to thwart that objective,including looking to eliminate U.S.presence in the region, and in so doing to invalidate the very thesis thatskeptics of a positive U.S.-China relations claim is the justification fortheir actions. Similarly, if U.S.leaders perceive that Chinaseeks to undermine the U.S.’sactive engagement in the region, and to intimidate its friends, they will seekstronger relations with our traditional allies to counter that effort. Eventhose in both countries who do not believe that conflict is inevitable aretempted to adopt precautionary strategies against bad outcomes, so called‘hedging’. In doing so they risk sowing mutual distrust, which can lead to aspiral of action and counteraction that also tends to validate our worst-casefears.
As I havesaid, I don’t believe there is an iron-law that says the U.S and China aredestined to become adversaries, but at the same time I also do not believe thatthere is a benign invisible hand that will steer us away from these rockyshoals. Quite the contrary, I believe that in the absence of any farsighted andcourageous leadership, the unhappy outcome is far more likely than the positiveone.
To avoidthis will take more than pious words and good intentions. Americans note China’srhetorical commitment to peaceful development whilst questioning whether itsactions square with its words. Similarly, in China,many challenge whether our policies are consistent with an oft-repeated supportfor a strong and prosperous China.It’s for this reason that our two Presidents have spoken for the need to build‘strategic mutual trust’ – and the first step towards building that trust isdialogue.
Over thepast three and a half years we have witnessed a broadening and deepening ofdialogue between our two countries on a broad range of issues, most vividlyembodied in the extraordinary three rounds of strategic and economic dialogue.Nowhere is there a greater need for dialogue than in the field of nationalsecurity. That’s why I am so encouraged by progress in military to militarydialogue and the establishment of a so-called strategic security dialoguebetween our two countries, which I was encouraged to co-chair in its firstmeeting.
Dialogue isjust the start, and can lead to disillusionment if not backed by action. Assome of you know, I’ve suggested that these ‘actions’ must come in the form ofwhat I’ve called ‘strategic reassurance’. Concrete steps that each side musttake to demonstrate that its intentions are consistent with its rhetoricalcommitments. Let me take just a minute to explain what I mean: on the economicfront, the decision of the United Statesto support and champion China’sadmission into the W.T.O. is an example of strategic reassurance. It takes stepby step moves to demonstrate the United States commitment to Chineseprosperity. On the Chinese side, the actions taken by Chinese leaders duringthe Asian Economic Crisis of 1998 / 9 and more recent global crises of 2008 / 9also show tangible commitments to global wellbeing. Today, Americans look to China to undertake the rebalancing of itseconomy and loosening of restraints on its currency as a tangible reassurancethat Chinadoes not seek to sustain its growth at the expense of its partners. China in turn can reasonably expect the United States to manage our fiscal problems in away that does not harm China’seconomic interest and investment in our securities.
On thesecurity front, we have important work to do to begin to build strategic mutualtrust through strategic reassurance. For example, we can both take steps tomake sure that our legitimate use of space does not pose a dangerous risk tothe space assets of the other. We can work together to build norms and practicesthat build confidence that our activities in cyberspace are not designed toharm or undermine the other’s legitimate security concerns or economicinterests. We can build on innovative past practices to eliminate the dangersfrom incidents at sea. Now, undertaking this process will not be easy. Trust ishard to build, and is not built in a day. We have real differences on importantissues. For example, we in the United Statesbelieve that our previous support for Taiwan’s defense and military needspromotes stability and cross-straits dialogue. China, on the other hand, and Ipersonally note this from repeated interactions with your leaders, “vehementlyrejects” this analysis. They believe that the contrary of this leads to peaceand stability in the region. Similarly, we view, as President Obama has oftensaid, our support for enhanced human rights in Chinais profoundly in the interest of China’s own prosperity andstability. Many in Chinaview this as an illegitimate interference in China’saffairs and a thinly disguised effort to weaken China.
We in turnquestion many of China’s militaryactions and military modernization as seen in the South China sea, which we seeas inconsistent for peaceful resolution of disputes – while China insiststhat this is merely the legitimate and natural assertion of an attempt to earnits territorial claims. We often talk of ‘managing’ the differences between ourtwo countries, but we need to do more. We need to address these forthrightly,and find ways to make sure that our honest differences, even on importantissues, are not misconstrued as matters of hostile intent. We also need to recognizethat in managing a bilateral relationship we also need to count the interestsand concerns of others in the region. The fear of a U.S.– Chinacondominium in the region may sound fanciful to us, but it is real in manyparts of the region. Equally real is the fear of getting caught in thecrossfire of a U.S. – China conflict, or being asked to choose sides,when most if not all countries in a region desire good relations with both the United States and China. Our ability to manage thisbilateral relationship will also be enhanced in our common commitment to buildmultilateral economic, political and security structures. These multilateralapproaches provide a framework to address the broad range of interests of bothlarge and small states, and to find solutions to avoid the ‘who won?’ characterof many bilateral engagements.
Hence, wesee today, from the East Asia summit in APEC to the regional efforts like theASEAN regional forum, the ASEAN defense ministers, and more informalmechanisms, including trilateral and other dialogues, there is a groping effortto establish a framework that will allow the positive development of U.S. – China relations to flourish evenmore.
I hope thatin my observations today I have succeeded in walking the fine line between anoptimistic belief in the possibility of long-term peace and prosperity in theAsia-Pacific with the realistic warning of the risks that we may not succeed inattaining what is clearly in our common interest. But I do believe thatmeetings like the Shanghai Forum and the dialogue that you engender will helptilt the odds towards a more optimistic outcome. And so I thank you for the opportunityto talk with you today.
