 Ladies and gentlemen, if I could have your attention, please. Your Excellencies, ladies and gentlemen, I'd like to welcome you to CSIS. I'm Ernie Bauer, I'm the Symmetra Chair for Southeast Asian Studies, and it's a real honor for me to convene today's program, which is the fifth annual South China Sea Conference at CSIS. For those of you who've attended all five, or been around since the beginning, you'll recall that five years ago CSIS convened this group to talk about what the South China Sea issue was, and that vision really came from the gentleman on my right, Dr. John Hamry, who actually called me into his office months, a couple months before that conference, and he said, I think people need to understand the South China Sea issue. It's complicated, it's complex, there are a lot of moving parts, and we actually put together one of our first sort of multimedia presentations on the South China Sea, and at that time we were defining what the issue was. Who were the claimants? What were the issues? What were the implications from a foreign policy point of view? Well, since then, this conference and that discussion has, I think in some ways, been a dominant theme, not only in Asia, but globally, and it's become an issue of global concern. So we are truly honored. I want to thank my team, including Murray Hebert and Ben Contreras, Greg Polling, Kate Rostici for pulling together some of the world's top experts who will be with you today to talk about these issues in great detail. All of today's program will be live and on the record, except for our last panel, which is a simulation, and the CSIS simulations are fun, but they also, they actually simulate a policy situation, and then we have very serious people playing the roles of President, National Security Advisor, Joint Chiefs of Staff, and Head of Intelligence. So we don't put the, that won't be live, it won't be on the record because we don't want to cause any disaster or any events. Someone accidentally watching this online believes that there's a crisis, which there is not, thankfully. So today's event is online. Let me just say a couple housekeeping issues. The conference is live on the CSIS website. I know there's a very large audience online today. This conference was sold out within 48 hours of being posted. So we have over 440 people, I think who have registered today. We had to turn back over 500 people, and I understand there's a very large online audience. So really a lot of interest in the topic today, and then that's really due to the quality of the speakers that we have, I think, and the fact that we've been focusing on this discussion for the last five years. I invite you all to live tweet today's speech, or today's speech and the comments using the handles at Southeast Asia DC and at CSIS and the hashtag, using the hashtag CSIS live. During question and answer, we'll also accept questions from Twitter using these handles. So those of you who are out there in our virtual audience, we want you to participate and we do encourage that. I'm not going to give the emergency guidance. I'm going to leave that to the boss because he built this building and he knows it well, but I'd like you to join me in welcoming the man whose vision got us all here, Dr. John Hamery, the president of CSIS. So the first person who's speaking is supposed to give the safety announcement, and I asked Ernie, are you going to do that? He said, no, you do that. So let me tell you, when we have open events like this to the public, we always start with a little safety announcement, and I am your responsible safety officer. I'm going to take care of you today, but that means you have to follow me. If we have an emergency, I'm going to ask you to take the exits that are behind me. We've got three of them over here. The stairway down to the ground level is right back behind this one. So you'll just have to work your way around. If the problem's out in the front, we're going to go to the back and we'll meet across the street over in the courtyard of National Geographic. If the problem's in the back, we're going to go over across the street to the park and we'll take a head count and we'll get ice cream or something. We'll figure out. We'll take care of you. But do follow me, please. Everybody's going to be safe. I thought that's all I was going to do today, by the way. Nobody told me I was going to give introductory remarks. Ernie just said I want you to say a few words. Oh, okay. So I would like to say welcome to all of you. It was five years ago when we first started this series. I'm very, very proud of Ernie Bauer and his team, Murray Hebert and Kate and everybody. They've built up a vibrant program. Eight years ago when we first started this, you know, the Southeast Asia was kind of a faded out spot on the globe for most Americans. It was surprisingly little consciousness about a region that's so important to us. I'm very grateful that Ernie, Murray and everybody have built up quite a vibrant program, probably one of our most dynamic programs here. And it's a good thing because it's become one of the most pressing regions in the world. And certainly we've seen that during this last year. Since we last met, there have been some very important developments really of kind of, I don't want to call them epochal significance, but they're close. In Europe, Russia decided that they wanted Crimea back. And just simply unilaterally moved a military force in and took it. And we're seeing disputed islands in the South China Sea, where countries are making unilateral assertions of sovereign claims and building things on them. It's not just China. China, obviously, it's the biggest, most dramatic. Everything with China is 10x, you know. But it is big, but they're not the only ones. But nonetheless, we're seeing unilateral assertions of sovereignty claims. The problem about this, both in Crimea and in South China Sea, is they become large, visible symbols that's very hard for governments to then step back. How do you resolve a problem when you've just invested enormous sums of building giant facilities on tiny little atolls? How do you tell your own people you made a mistake? You know, this is the landscape that we're now moving into. This has a very dangerous dynamic. It's, you know, America's position has always been, we're not going to take sides on sovereignty disputes, but we are not going to let them be resolved in a climate of intimidation. We will be party to working out sovereignty disputes in a calm diplomatic manner. We'll aid where we can, but we're not going to let intimidation be the be the modus of solving these very fundamental differences between national entities. And here we are, we're right now in what I think is on the very edge of a very, very dangerous day, very dangerous time. So I think a part accounts for the interest all of you have in this region. I'm very impressed by the people that have come out today, both of you in the audience and also those who are going to be speaking. I hope we dig deep into this. This cannot be resolved well if it's going to be done on a unilateral basis with just power assertion. It just is not going to come out well. And that has to be the backdrop. All of us have to be committed, it seems to me, to finding a solution to these problems in a coherent peaceful orderly manner. It will go very badly, especially in this era, if it turns out violent. Now, the dynamic here is if we're left to our natural impulse, we'll look to the darker motives on the part of our opposite counterpart. That tends to be human nature. So the only way to counter that is through a conference like this, where we're talking with each other, we're arguing with each other, the argument is valid. But so are the opinions of the other person when they're offered. So I'd ask all of you today. I expect there might be some fireworks. But I ask all of you today to listen, not just talk. My mother used to say, God gave you two ears, one mouth, you ought to listen twice as much as you talk. And I hope that's what everybody will do today, because I expect we're going to have some shouting, but I also want to have some listening to. This is a serious time. It's a very big and serious time. And I count on everyone here to help us think through how we're going to make this a good time, not a disastrous time. Thank you all for coming. And I look forward to hearing the day. Thank you. John, thank you very much. Sorry to surprise you. But my own view is it's it's not a true Southeast Asia or true CSIS conference without a small sermon from Dr. Hamry at the beginning. Our next panel is going to set the tone for today's event. It is a panel on the recent developments in the South China Sea. And that will be led by my colleague, Dr. Scott Kennedy, the deputy director in the Freeman chair for China Studies. So may I call the panel up and ask you to to welcome them. There we go. Good morning. Welcome. I'm Scott Kennedy, deputy director of the Freeman chair in China Studies here at CSIS. And our first panel this morning is on recent developments in the South China Sea. As you know, the facts on the ground or the facts on the reefs keep changing. The purpose of this panel is not to find consensus. Rather, it's to take the temperature of the problem to see whether we are near boiling point or not. And if the South China Sea is as hot as Washington DC, we may be in a little bit of trouble. Secondly, we want to see where where there are areas of agreement and differences and have those shifted over time. And third to weigh the potential proposals and paths to addressing these various problems. We have four excellent panelists to help update us. Let me introduce them briefly, and then we'll turn things over to them. To my immediate right, Bill Hayton is a reporter for the BBC, who has been covering the region for many years. He's also an author and his most recent book is entitled South China Sea, The Struggle for Power in Asia. Bonnie Glazer is a senior advisor for Asia in the Freeman Chair in China Studies here at CSIS. She is also a senior associate with the CSIS specific forum and a consultant for the US government on East Asia. Bonnie is one of the world's leading authorities on Chinese foreign and security policy and US East Asian relations. To her right is Dr. Wu Shun, who is president and senior research fellow of the National Institute for South China Sea Studies in Haikou and deputy director of the Collaborative Innovation Center of South China Sea Studies at Nanjing University. An author of several books and many articles on the South China Sea, Dr. Wu's research interests cover the history and geography of the area, maritime delimitation, maritime economy, international relations and regional security strategy. And finally, Dr. Tran Trong Thuy is a research fellow and director of the Center for East Sea Studies at the Diplomatic Academy of Vietnam. Formerly with Vietnam's Ministry of Foreign Affairs, he has written extensively on maritime issues in the South China Sea dispute. Welcome all of you. Each speaker will have 10 minutes, and I mean 10 minutes, for opening remarks. I will let each of you know when we get to 8 minutes, and then when we reach 10, and then it will be time to wind things up. That limit is a little bit arbitrary, but I will be absolutely consistent with this arbitrary rule and fair to each of you. And I will ensure that we have enough time for our very bright and well-informed audience to ask good probing questions. Finally, let me return to the issue of temperature. It is hot outside, and it could get hot inside, but we'll do our best to keep things cool. So everyone think cool, cool, cool thoughts. And with that, welcome. We'll turn things over to Bill to get started. Welcome. Thank you very much. Thank you for the introduction. Thank you to CSIS for the invitation, particularly to Dato Ernebauer and to Murray. As a reporter in Vietnam, I was in awe of what Murray managed to achieve when he was a reporter there at a time when it was much, much tougher for foreign journalists to operate. And thank you to the staff here who put on another excellent event. I must begin with a disclaimer. I do work for the BBC, but I'm not speaking on its behalf today. Like the US government, the BBC takes no position on the computing claims in the South China Sea. I've been given a large brief and a small amount of time, so I'll begin with what I'm not going to talk about, namely the ASEAN China Regional Code of Conduct in the South China Sea. China is not going to agree to anything that limits its freedom of action. There's no point ASEAN agreeing to anything that doesn't limit China's freedom of action. So there are three possible outcomes. The talks collapse, they result in another pointless piece of paper, or they go on forever, providing subsidies for the luxury hotels of Southeast Asia. The best that can be said is that Georgia is better than World War. Can I get my slide up? Technology for the heart of thinking. You wouldn't know I was a journalist, would you? Instead, I'm going to talk about how China's construction of seven artificial islands and the start of legal proceedings at the Permanent Court of Arbitration have created an opportunity for peace in the South China Sea. Yes, peace. As we all know, there are two sets of disputes in the South China Sea. There are the small arguments about which country first stuck its flag in which island or reef. And there are the big arguments about whether countries should stick to the regime of international law that has over the past 70 years created humanity's most peaceful and prosperous era ever. Resolutions to both are within grasp if the players choose to reach for them. Before I explain how it's worth noting that concern about the wider implications of the South China Sea situation is spreading. Even the European Union with plenty of other problems on its plate is speaking up. At this year's Shangri-La Dialogue, its high representative for foreign policy specifically referenced a maritime order based on international law, including UNCLOS. With the EU, the US, and Japan all concerned about these issues, it's no surprise that the G7 has also taken them up. In April, it published its first ever declaration on maritime security, which included specific mention of the East and South China Seas and a statement that it is concerned by large-scale land reclamation and strongly opposes any attempt to assert territorial or maritime claims through the use of intimidational force. Australia used the Shangri-La Dialogue to make clear its opposition to any coercive or unilateral actions in the South and East China Sea. It then hosted Japanese troops at the annual US-Australian military exercise, Talisman Sabre. This year and last, Australia also took part in the US-Philippines Bale Khitan exercises, and Australia is about to transfer a couple of tank landing craft to the Philippines. And completing the picture, the Philippines and Japan held their first ever joint naval exercises in the South China Sea in mid-May. And Japan is delivering patrol vessels to the Philippine Coast Guard and is committing to upgrading Manila's surveillance capabilities. In the last month, the two countries formalized a strategic partnership. Last September, an India-U.S. joint statement specifically mentioned the South China Sea for the first time. President Obama, Prime Minister Modi, called for the resolution of the territorial and maritime disputes in accordance with universally recognized principles of international law, including UNCLOS. India has again ignored Chinese objections and invited Japan to take part in the annual Malabar naval exercises with the U.S. The three countries will also hold a trilateral dialogue at ministerial level on the sidelines of the East Asia Summit. So all around the region, security arrangements that used to be characterized as hub and spoke with the U.S. as the hub are also becoming peer-to-peer networks. Japan, India, Australia, the Philippines, Vietnam, South Korea, and others are gradually building new direct security and diplomatic ties with each other. There are some exceptions. Only the eye in bricks has spoken, for example, but almost every other country has directly or indirectly criticized China's island building and made specific calls for the principles of UNCLOS to be applied, which brings us to the Hague where the first hearings into the Philippines case against China were heard earlier this month. My article on this is in The Economist this week. The permanent court of arbitration first has to decide whether to hear the case, which is really a question of whether it thinks the territorial dispute should be resolved before it can make a ruling based on UNCLOS about what kind of maritime zones can be claimed from which feature. Assuming that it does decide to hear the case, and I would be surprised if it doesn't, then I expect the Philippines to win on almost every count. Of the seven Chinese-occupied features in the Spratlys, four contain rocks that remain above water at high tide, and three would be submerged in their natural state. Neither they nor the Scarborough Shoal can support human habitation. Therefore, at best, under UNCLOS, they generate a 12 nautical mile territorial sea and absolutely no exclusive economic zone whatsoever. So I think it's highly likely that the effect of the Philippines case will be for the tribunal to rule China's U-shaped line incompatible with international law. Now many people in this room will already be already be thinking, so what? China will just ignore the ruling. But let's have a little scenario. The Philippines needs new sources of natural gas to replace the declining Malampaya field, which currently provides about a third of the electricity used on the main island of Luzon. Seismic surveys suggest one answer lies under the Reid Bank in the top right of this picture. With the ruling from the permanent court that China has no legitimate EEZ claim on the Reid Bank, then the Philippines will be able to say that any expedition from its side is entirely lawful. If China tries to obstruct such an expedition, then its critics will term its actions a violation of international law. This would be the perfect opportunity for the United States if it's so chose to draw a line in the sea. Now is China willing to risk the consequences of that confrontation, which could be as little as two years away, or will it see the writing on the wall now? In essence the question is can the central interest of the Chinese Party State as a whole outweigh those of the various state agencies, military, coast guard, oil companies, fishing lobbies, coastal provinces, with their own bureaucratic agendas to advance. A key problem of course is the warped version of history that's taught in Chinese schools. This brings me to the Luconia Shoals. In early June the Malaysian Minister with Responsibility for the Coast Guard posted on Facebook pictures from an inspection flight over the shoals, which lie about 120 kilometers off the coast of Borneo. In a news conference revealed that a China Coast Guard vessel had been anchored there since August 2013. As we should all know by now, China's claim to the Spratlys and nearby reefs arose from a Republic of China committee in 1935. No Chinese official had ever visited the Spratlys at this point, so the Inspection Committee of Land and Water Maps simply took the existing British maps and translated or transliterated the names into Chinese. In 1935 the committee simply transliterated Luconia as L'Occangnia Tan, where Tan is the Chinese word for Sandbank. Luconia by the way is an old term for Luzon. It wasn't until 1947 that ROC officials decided to give the features more Chinese sounding names, Baikang Anxia and Nankang Anxia, North and South. Well, Kang means health, but it's more likely that it was simply an abbreviation of the transliteration. So the next time you hear a Chinese official say that China was the first to name the islands of the sea, please stifle a little giggle. I'm indebted to Andrew Chubb's excellent blog for some recent background. It seems to begin with a trip to the shoals by a trio from Chinese National Geography magazine aboard Malaysian boats in April or May 2009. You can read the whole story on Andrew's blog, but it does seem possible that the expedition put an idea into the heads of China's state oceanic administration persuading them to try and claim it as the country's new southernmost territory. China's actions have caused Malaysia to adjust its previous attitude of keep quiet and trust in the special relationship with Beijing, but under Malaysia's and under Malaysia's chairmanship, ASEAN has been resolute in criticizing China's island building and the country's officials have been working more closely with counterparts from Vietnam and the Philippines developing common positions both within ASEAN and as a trio vis-a-vis China. They may not say so publicly, but privately these countries have reached a common position. We talk about there's been increasing cooperation such as sporting contests on disputed islands in the South China Sea. The insiders point to language in the 2002 ASEAN-China declaration on the conduct of parties about not resorting to the threat or use of force to demonstrate that they respect the legitimacy of the existing island and reef occupations. Now question is could the same de facto understanding be extended to China as both a giver and a receiver of security? All that is required for peace in the South China Sea is for all the claimants to recognize the occupations of the others and to declare unequivocally that they subscribe to the spirit and letter of Enclos. There will be losses of course, Vietnam would lose the Paracel Islands but it will gain legitimacy in the Spratlys and with the end of the U-shaped line would be able to exploit hydrocarbons and fish without confrontation. China will lose the U-shaped line but it will gain legitimacy in the Paracels and more importantly drastically reduce the potential for confrontation with the United States. The Philippines would lose its claim to the remainder of the Kalyan Island Group but it will gain the Reed Bank. All of the pieces are in place. It's really up to China now. Could President Xi bring us all a nice surprise when he visits here in September? Thank you Bill, very much for getting us started. Turn things next over to Bonnie. Thank you Scott and thank you to our Sumitra Chair Ernie Bauer and the rest of your team for including me. I think I've participated in all of the South China Sea conferences and it's a privilege to be here. So I've decided to focus my presentation on one issue which I think has been really the most prominent and problematic development in the South China Sea over the past year which is China's transformation of submerged or semi-submerged rocks and reefs into artificial islands and I'd like to address the question of what could China's intentions be and for what purposes it could use these islands. Now China of course officially has emphasized the civilian purposes of these artificial islands while not denying that China might in fact also use them for military purposes. So Chinese officials for example foreign ministry spokesman has said that China seeks to better perform China's international responsibilities, search and rescue, meteorological observation, disaster prevention for example and this may be the case but even in doing so it would serve these functions would serve Chinese interests. So to begin with I think that the first Chinese objective is to assert Chinese sovereignty and administrative control. So of course civilian functions really serve these objectives other claimants including foreign fishermen cooperate with China if they avail themselves of the facilities on these islands then that will help to strengthen China's claim to sovereignty and jurisdiction. Of course China will also be able to assert its sovereignty by more effectively carrying out law enforcement activity which of course it is already doing. We see periodically China arresting foreign fishermen interfering with energy exploration particularly in the 2011-2012 time frame in waters that China views as under its jurisdiction. The facilities on the new islands including some we've already seen and the most recent satellite imagery that I saw posted on the web for July 13th I believe it is on Fiery Cross Reef shows an enormous amount of construction and a good deal of it potentially for military facilities. So this of course includes harbors the very long runway more than 3,000 meters on Fiery Cross potentially hangers for aircraft although I don't think we have seen that yet radars of other capabilities that will enable China to increase the size and the scope of its maritime presence. I want to talk a little bit about potential military purposes. One I think important intention that China has is really enhancing its maritime domain awareness knowing what is going on inside its claimed waters however large those may be. China wants to have I think the ability to monitor the air space as well potentially 24-7 so China currently I understand has about eight Coast Guard ships generally operating in the South China Sea at any given time and China has limited capability to conduct intelligence surveillance and reconnaissance ISR but those would increase substantially with the use of these artificial islands including electronic eavesdropping potentially operating AWACS. Now of course there is the potential for China to establish an air defense identification zone as it has done in the East China Sea and if it did so it could do so over a portion of the South China Sea or the entire area that encompasses the nine dashed or 10 dashed line. It's possible that in order to monitor and enforce such a zone effectively that China might really need more than one one way. Now it has one in the parasails and will soon have one operational in the Spratlys. The satellite imagery of subi reef shows the potential for building another runway there but so far we have not seen that materialize. Now the Shangela dialogue Admiral Sun Jian Guo who is China's representative there talked a little bit about this issue and he said whether there is a plan to set up an ADIZ depends on risks to our air safety and the degree of threat. So if China would like to interpret U.S. flights operating near its artificial islands as a threat we have seen recently of course not only our Pekong commander making statements about this not only CNN reporters on flights also Admiral Swift just a couple of days ago. So China certainly could say that the uptick in these kind of patrols poses a threat and could use that as a pretext if it wishes to declare an ADIZ. If China were to enforce an ADIZ in the South China Sea I think this would raise the risk of air accidents potentially we don't know if all commercial airlines would be filing their flight information with the Chinese and certainly military aircraft would not and this would heighten anxiety throughout the region in addition to raising the risk of accidents. Another military function I think the U.S. is quite concerned about is that these islands could increase China's anti-access area denial and general power projection capabilities. This of course depends what equipment what platforms China deploys. So potentially there could be surface to air missiles anti-ship cruise missiles not only manned aircraft but also unmanned aircraft and surface combatants which of course are already operating in the region but will then have a harbor at least one to use. And the runways of course will support refueling operations that will substantially extend the operational ranges of Chinese aircraft. Now some people really dismiss the military value of these of these artificial islands because they say they would be very vulnerable to attack in wartime and I think this is probably true. But of course in peacetime as well as in crisis they do have potential value. They could provide the capability to hold U.S. forces at risk at a further distance than at present. So U.S. access to the region could be hindered if the United States were for example seeking to defend Taiwan in a crisis and U.S. ability to maneuver within the region would be potentially affected. Another purpose that China could use them for would be to dislodge other claimants from their outposts in the future if China chooses to do so. And I we don't know if China will do that but it will have greater capability to do that. So it could interfere disruptory supply operations. We've already seen the Chinese try and do this with the Philippines and second Thomas Scholl. Of course there are other outposts that are vulnerable. And this kind of pressure could force other nations to abandon their positions. And then finally some people have written about the potential for Chinese submarines to use the South China Sea as a bastion much as the former Soviet Union use the Sea of Okhotsk. So China's current SSBNs are armed with the JL2 missile which according to the Defense Department's recent report I think have a range of about 4,700 kilometers. This is not sufficient to strike the western coast of the U.S. from the South China Sea. So the submarines would have to move out into the western Pacific. But undoubtedly China has plans to develop an extended range SLBM. And so in the future this could be a purpose for which the South China Sea in general could be used. So my paper I have a long list of policy prescriptions but I don't have much time here and so I'm really just going to mention two of them. My first suggestion is essentially what Secretary Ash Carter has proposed that is stopping further militarization of the outposts by all the claimants of course not just by China. And the Vietnamese already do have some artillery batteries that are deployed. But I think the real concern is about offensive and power projection capabilities. So if an agreement could be reached by the claimants to cap what they are deploying I think this could be useful. And then secondly it's my view that international law should play a role in the South China Sea. I support the Philippines effort to do that. Ideally all the claimants really should bring their claims to the to the International Court of Justice but of course we know that's really unlikely to happen. So in the absence of an agreement to use the International Court of Justice and other international courts I think the claimants should consider accepting what those of you who are international lawyers would know and I'm probably going to butcher the pronunciation of this but it's UT Posadaeus Urus so a concept I learned about from Ambassador Chas Freeman. And it means as you possess under law in other words maintain the status quo. So if all countries claimants agree to just stay on what they have. And then an agreement could be reached on the maritime zones that the various land features are entitled to based on the law of the sea convention. And this of course would then lay the groundwork for agreement on cooperative projects on what are the high seas waters that are not part of the territorial seas. Involving energy counter piracy scientific meteorological investigation and other areas. So I think at a minimum this would be a useful approach to management of the concept and then I'll leave you all to look at my paper to see some of my other policy recommendations. Thank you. Terrific. Thank you very much Bonnie. We'll turn things over now to Dr. Wu. Thank you Scott. Good morning ladies and gentlemen. I would like to thank the CSIS for inviting me back for this. Yes, South China Sea Conference actually is my third time to attend this event except for the first one and the last one. My presentation here today includes the following points. First, some activities considerably affecting the South China Sea situation. Second, China-US relations in maritime domain. Third, my personal recommendations on how to manage the South China Sea issue. Well, from a Chinese perspective current South China Sea situation can be summarized as stable and controllable in general but with growing uncertainty which could be attributed to various factors. One of the most notable is the land locomotion and construction work conducted by disputed countries. Take this opportunity, I would like to clarify and explain China's position and intention. First, compared with other countries China is the late comer when it comes to land locomotion in the South China Sea. Second, China has no intention to change the legal status of the insular features. Third, China needs to protect its legitimate rights in these waters. For this purpose, China's locomotion work in the South China Sea aims at improving China's capability to deliver maritime public services to maintain maritime safety and security to offer support for search and rescue and scientific research to improve the living and working conditions for the fishermen and other people who are stationed there on those islands and reefs. Such purpose benefits China's international and regional responsibility as a big country. According to the international search and rescue convention, South China Sea is an area for China's search and rescue responsibility. Therefore, China's construction work in South China Sea should be treated objectively, constructively and fairly. The second event I would like to highlight here is US surveillance and patrol in the splatteries. Let me provide some cases. Here, in late May, a US Navy pH-8 Poseidon surveillance aircraft flew directly over the Yongsu Jiao, the five-leaf cross-leaf in the South China Sea. Furthermore, at this year's Shangri-La Dialogue, US Defense Secretary Ash Carter also stated that America would maintain a substantial presence in this region and will fly, sail, and operate wherever international law allows. Another case is that just last Sunday, in 18th July, the commander of US Pacific Fleet, Admiral Swift, went to the splatteries by taking Poseidon aircraft. So, these US activities, in my opinion, causes to quite a larger extent the excretion of the tension in the South China Sea. The third expected influence of the current South China Sea situation is related with the activities conducted by extra-regional powers. Not only the United States, but also Japan has shown greater interest in interfering in the South China Sea issue to boost their military presence. This is well exemplified by the new Guard Alliance, US-Japan Defense Corporation, and the newly passed Japan Defense Bill. It was just passed last week by the House of Japan's Parliament and hopefully will soon be passed by the House of Japan's Parliament. In addition, the United States also strengthened its alliance with the Philippines and the military cooperation with Vietnam. Such practice indicates that the United States aims at containing China for its own strategic purposes. The fourth expected, I would like to just hear, is related to some unilateral activities by climate countries. Besides land reclamation, besides the land reclamation and construction and exploitation of natural resources in disputed areas, the arbitration case unilaterally launched by the Philippines against China is another notorious example. The last point is a very slow progress in the consultation process of COC, the code of conduct in the South China Sea. After the conclusion of the DOC in 2002 reached by China and 10 ASEAN member states, only very few incidences of bilateral or multilateral cooperation projects took place in the South China Sea. Hence it is likely that it will take a fairly long time to conclude the COC because of the complexities of this issue and the different intention of the countries involved. Despite the divergent perceptions between China and the United States on the South China Sea dispute, both countries share a lot of common interests in maritime domain as indicated by many existing cooperation mechanisms. Three agreements were achieved between China and the United States last year. In April last year, code for unbranded encounters at sea, the CUS was endorsed at the West Pacific and Naval Symposium. It opposes regulations on legal status, rights and obligations for naval warships and deals with maritime security procedures and communication protocols in case of unbranded encounters at sea. In November last year, China and the United States announced two MOUs between the two militaries. One is about the prior notification of major military activities. Another one is about the rules of behavior for the safety of air and maritime encounters. Another case about U.S.-China cooperation is that during the seventh round of China-U.S. Strategic and Economic Dialogue, which just was held last month in Washington, D.C., where the maritime cooperation was again emphasized by two sides. So these actions, as I just mentioned, are significant milestones in the confidence-building measures and mutual military trust, signifying both sides' determination to promote what Chinese President Xi Jinping calls a new type of military relationship based on these existing mechanisms. Both China and the United States should further improve the cooperation between the two countries. Finally, I would like to offer some personal recommendations on how to make the South China Sea situation just for your reference. I have three points to address. First, let me provide some humble thoughts on the shoot and the list for China and the United States for their future interactions in the South China Sea. A mutual respect is a fundamental policy for both countries to acknowledge the legitimate right and interests of each other. For the United States, a balanced policy in the South China Sea will reduce China's concerns on its being contained by the United States. For China, the land reclamation should be used mainly for civilian purposes and keep prudent about military facilities that go beyond defensive needs. In addition, China shall make only efforts to promote consultation on the COC in the South China Sea. Second point, it is time to initiate a regional mechanism on the consultation of many time affairs between China and the United States in line with the safety and the security of the navigation to reduce the risk of incidents at sea. Third, it is necessary to keep Japan from interfering with the South China Sea disputes. As a non-party to the South China Sea issue, Japan has been behaving very abnormally recently by deliberately interfering in the South China Sea issue, stirring up the dispute among regional countries and creating tensions at sea. Japan's move neither contributes to resolving the South China Sea disputes, nor protecting peace and stability in the South China Sea. For the United States, Washington shouldn't encourage Japan to conduct any kind of joint military protruding in the South China Sea with the United States in whatever approach. Now I would like to stop here and look forward to your comments and questions. Thank you very much. Sure. Thank you very much, Dr. Wu. Dr. Tui. Thank you very much, Kost. And thanks again CSIS for inviting me to this very important conference. As you see in the title of my presentation, we see a tendency of intensified strategic competition over an internationalized travel waters. So first, China is the most important player here. So I would like to first talking about China policy in recent time. We see after deploying the Arctic platform to the Vietnamese economic zone in 2014, we are facing a strong reaction from Vietnam diplomatically and physically on the sea. And also from international community, China withdraws the Arctic one month before planned. So we see this year some adjustment from China policies. On the sea, it simulates China refraining from confrontational actions but they continue to conduct unconfrontational but changing status quo activities. And you can see the changing from cable cutting or deployment to massive land reclamation and construction not only on Spratly but also on Paracels. And as you see, a lot of discussion already. And by conducting massive land reclamation, other countries can protest diplomatically but they cannot prevent China physically. So on other aspects, China continue with their dual-check approach. China renormalizing bilateral relationship with Vietnam after incident last year and also intensifying negotiation on bilateral maritime issues. With ASEAN, it's seemingly China appear more accommodating in DOC and COC negotiation. And ASEAN and China already adopted the first and second list of commonalities on COC. They agree with the step by step and on early harvest measures. And it's for China working with ASEAN is more comfortable than working within other frameworks with involvement from external powers or through third-party arbitration. It's very clear. On other aspects, the significant tendency is China advancing economic incentives towards other climates, towards other countries. Some of this economic activity is by themselves but of course consequences also influence on other countries position on South China Sea issues. For example, China upgrading, China and ASEAN is now negotiating for upgrading the China-ASEAN free trade agreement. And we see a lot of initiative from China including establishment of AIIB, the Maritime Sea Road Fund and also promoting one-belt and one-road initiative. And this kind of activity is especially the grand economic initiatives can be characterized as a game changer in the South China Sea. And more important as we discuss the land acclimation, that is actually the game changer because unlike other countries, land acclimation or construction, they are very small in scope and mainly for defense purpose and cost no harmful for other countries. China land acclimation on other hand can expand reach in the southern part, in the western part and eastern part of the South China Sea. And I fully agree with Boni analysis that China can increase their presence in the South China Sea and we can see the possibility of future confrontation if China repeat again for example the deploy the oil rig in other areas or preventing the supply rules or blockade other countries occupation. And by land acclimation, China also can increase the possibility and enforceability of possible air identification zones when and if China declare. And more important as you know, the policy of China is to expanding the area of disputes. And by that China interpretation of international law, especially the enclose, is that the future in South China Sea are islands. So therefore they can generate EZ and continental shelf. So by that they have to increase the possibility of interpretation that the islands is sustainable for human habitation. So by enlarging, by increasing this capability, the islands as a future can be characterized at not as rocks, but as islands. So here's a map in South China Sea. You can see if some islands can generate EZ and continental shelf, it can increase the level of the scope of disputed areas. So if China apply for example restriction on military activity within EZ of islands, you can see the big area restricted for U.S. military activities. So the consequences here we see China now commanding bigger stakes and bigger carols in the South China Sea so that is game changers. Turning to the U.S. we see U.S. is intensifying engagement in the South China Sea. Diplomatically we see presidents, vice presidents, defense secretaries and state secretaries and also other high ranking officials were concerned about China activity in the South China Sea and particularly about massive land reclamation. Militerally we see China U.S. also conducting more patrol exercises with other countries and as the famous epigel on CNN when U.S. Navy sending surveillance aircraft flying near the reclaimed features. Informationally we see more publicity about assertive and destabilizing activity in the South China Sea. Economically U.S. is also intensifying TPP negotiation and increased presence economically is the reason. U.S. also working with either like my these countries in capacity building for our science in conducting joint military exercise and increasing other countries play more important more active role in the South China Sea especially Japan. And U.S. also coordinating on bilateral and diplomatic meetings with other countries and coordination on Muntai-Lacier diplomatic forum especially G7 meeting. So we see the picture here the tendency and consequences is that the major powers competition become more prominent than competition between climate states. And second and related is that the strategic dimensions become more prominent than resources dimension in the South China Sea. And against that backdrop ASEAN is now more concerned about recent development in the South China Sea and as Ben Hightown mentioned Malaysia, Philippines and so on. And ASEAN first time in ASEAN summit in a position as I also express concern about China-Atlantic formation in the South China Sea and at the same time China ASEAN also escalating COT negotiation with China For ASEAN a more internationalized South China Sea can give them more leverage in dealing with China. But at the same time majority of ASEAN countries do not want to to take side and try to avoid the possibility of being dragged into U.S. China's growing strategic competition. And at the same time they also feel about a grand bargain between China and U.S. Yes, U.S. and China can trade up relating to the South China Sea not only on the South China Sea but also on the other areas of U.S.-China relationship but also relating to the South China Sea. For example, U.S. can trade up with position in the South China Sea with cooperation from China on Asia aspect in North Korea, in Iran for example. And we see despite declaring the intention of conducting freedom of navigation operation in the South China Sea American military versus ASEAN aircraft have not yet entered 12 North Kamai of low tide elevation under China occupation. As you see on the map we drew here just one feature that China reclaim can be characterized at rocks. Either six features was originally low tide elevation and under international law low tide elevation have no maritime zones so every country can fly or travel through just areas. You have just one more minute. Yes, okay, thank you. And China is using the whole government approach in dealing with the South China Sea issue and exploiting mutual independence to limit U.S. engagement in the South China Sea. While U.S. is concerning just two-minute South China Sea can negatively affect cooperation with China on other issue. And as recent SED dialogue we see no mention on South China Sea just only on cooperation on tsunami warning in the South China Sea and this can give more legitimacy for China is using this new reclaim islands in the South China Sea. And we see some analysis that U.S. halfway engagement during 2010-2014 was a way for China become more assertive because after testing probing U.S. China can come back again and in comparison we see strong commitment in the East China Sea can soften its approach. So we have some recommendation for U.S. but you can see on this slide. Thank you very much. Thank you very much Dr. Tui. I think we've that had an excellent start and everyone did excellent presentations. My interventions were highly limited far less than the Chinese government intervention in the stock market. So that's a positive to take away from all of us. We obviously saw some differences in terms of how the intentions of the various parties were framed sort of what the dynamic is between them and sort of who is reacting to whom. And we saw differences in terms of what are the likely sort of solution sets. But I was actually pleased that there are from everyone and ideas of ways to address this problem and even arrive at permanent solutions but there may be differences about how likely those are. All right. We're going to turn things over to you now and what I'm going to do is take about three questions at a time. And at CSIS it's really important that you follow our basic rules which is identify yourself, identify your institution and ask a question, a real question, a brief question, no speeches. We just heard the speeches. So if you follow that everything will be peaceful and there won't be any of the challenges that we have in the South China Sea. So I hope let's cooperate. Okay. Yes. Okay. Oh, there's a microphone right here. Andrew's core journal of political risk. I'm interested to know from Bill Hayden and Bonnie Glazer about your assessment of China's exception under article 298, I believe, for arbitration. Correct me if I'm wrong, Dr. Shikun. Next question. Let's go back there, the gentleman in the back. Stan Weeks, U.S. Naval War College. My question's for Dr. Wu and it regards your recommendation that we quote, need a regional mechanism on the consultation of maritime affairs. Many believe that with the annual RF intersessional meetings on maritime issues which of course include China, the U.S. and others, the new expanded ASEAN maritime forum annual meetings that there are in fact existing regional areas. So if you could elaborate on your recommendation as to what might be useful either to supplement the existing or to establish a new regional consultation forum for South China Sea, I would appreciate. And then we'll let you all answer and then we'll go back out to the audience. I'll address my question to Dr. Wu. In response to what it perceived as China's maritime expansion to the South China Sea, the Philippines has not only improved its security relations with its traditional ally, of course, the United States and has also fostered a security partnership with Japan. In its last visit to Tokyo, President Aquino and Prime Minister Abbas signed a joint declaration on a strategic partnership between the Philippines and Japan which should of course provide for closer security cooperation. After its visit, President Aquino announced a possibility of the Philippines and Japan signing a status of forces agreement wherein Japanese self-defense force will be given access to basis in the Philippines and of course a few weeks later you have a joint activity between the Philippine Navy and the maritime self-defense force wherein they have a peak tree Orion from the maritime self-defense force conducting rescue, you know, sort of a rescue operation in the South China Sea. How does China perceive it possibly? How would China respond to greater Japanese strategic footprint in the South China Sea? Of course, courtesy of its closer security cooperation with the Philippines. Okay. Would you all like to answer? Go ahead. I only have one question, so that's easy. Thank you, Anders. I'm afraid I'm going to pass the buck on that one to the tribunal. I think, you know, the permanent court of arbitration will decide whether the, you know, China's opt-out is valid. I mean, probably the best person to ask, you know, be someone like Paul Reichler who's, you know, steering the case on behalf of the Philippines. But I mean, just in terms of what is being asked of the tribunal, it's an in-principle verdict on whether certain features are entitled to certain zones. So I think that the tribunal will find that it's able to deliver that kind of verdict without, you know, saying who is the rightful owner of which we for Ireland. So I think if they can, if they allow themselves to go forward and constrain themselves to that particular point of law, then I think they'll deliver, the opt-out will be irrelevant. Obviously, there are international lawyers in the room who can do a better job with this, but the Chinese do have the right to opt out of compulsory arbitration. They did so when they joined unclose. So they are within their legal rights to reject participation in the case. Of course, it's an interesting way that the Chinese have chosen to quasi-involve themselves by releasing an official paper through the State Council that then the court then took into consideration, which is not quite as good, perhaps, as arguing your own case, which the Chinese could have done. But I think importantly, the findings, the rulings of the tribunal are binding according to international law. Of course, there is no enforcement mechanism, and that is the problem, but they are legally binding. And so regardless of whether China participates in the arbitration, the ruling is legally binding and China should abide by it. I would take my Philippine friend question first. We noticed that the Philippines president paid a visit to Japan earlier June, and the Philippines of Japan reached many consensus on the cooperation in the South China Sea area, particularly military cooperation. And Japan promised to provide more than 10 military vessels to the Philippines for enhancing its capability of the Philippines coast guards. So my point is that if the cooperation between the Philippines and Japan is aiming at China, and also it would make trouble to the South China Sea or affecting the peace and stability of the South China Sea, China is firmly opposed to such cooperation. The second question about the mechanism between China and arcing maritime cooperation. I would say the ongoing the COC consultation between China and arcing time members is making progress before the conclusion of the COC every country including China and 10 member states of arcing should fully implement the principles and the spirit and the provisions of the DOC to conduct such provisions as maritime search and rescue environmental protection and safety and security of navigation and crackdown maritime crimes as sea. And both China and arcing should speed up the COC consultation in order to deal with the absence of the crisis management and the dispute management in the South China Sea areas. That's why both China and arcing should speed up the consultation on COC issue. Thank you. Dr. Tui, do you want to comment? Yeah, no, no direct question. But I would like to comment on arbitration because if the tribunal decides that they have no jurisdiction it's going to be a disaster for ASEAN climate states and also for international community because China can advance own activity after that. But the Philippines finds a way to avoid China reservation according to UNCLOS by asking no question regarding sovereignty or maritime delimitation. They ask question on maritime zones and also about the NIDOT line. So I think the court will have to make a decision on this arbitration on just jurisdiction. And second regarding to the merits of the case if the tribunal decides partly or fully in favor of Philippines it's going to be it's going to encourage the country to follow the legal path because it's more enforceable it's more legally binding than just DOC and COC. And I agree with Bono is that that is legally binding for China no matter China participation or not because China's size of UNCLOS and within the UNCLOS there was a compulsory dispute settlement mechanism and that's legally binding for all members. Terrific. Thank you. We're going to come right here in the front. Microphone. Thanks very much Scott. Chris Nelson in the Nelson Report question for Dr. Wu and for Dr. T. Building on the question from our friend for the Philippines. Dr. Wu I'm a little confused. You talk about Japan's interference and then your response to the specific question of the Philippines leaves me wondering if it's China's position or your position that Japan and other major trading nations like for example South Korea and Australia have no legitimate strategic interests here. That seems to be what you're saying. And I'd be interested in the panel's reaction to that and if I've understood you correctly you're basically saying they should butt out of this. We kind of wonder about that and for Dr. T. You used the phrase the US has not yet gone inside the 12 mile line in a way that I wondered if your suggestion or sense that the US needs to be a little more if I can use the word aggressive in how it goes about freedom of navigation and surveillance activities or my misunderstanding the implication of not yet going in the 12 mile line. So two questions if the panel wanted to comment that would be great too. Thank you. Okay. All right we're going to come Oh hi I'm Dr. Donna Wells. I'm a mathematician I study international trade and I make predictive math models. Can we talk a little bit about the economy of the region? I study international trade so can we talk about specifically the manufacturing bases of the countries and the relative wages per country? Have you noticed any trends who gets the highest wages who gets the lowest wages in the region? Thank you. Thanks. All right let's go back over here all the way against the window with us your hands up. Hi I'm Prashant from the diplomat magazine. My question is for Dr. Wu. I was really intrigued by the proposal or policy prescription that you made at the end regarding a should and should not list for the United States and China and I was wondering if you could expand on that a little bit. So if the United States and China were to work on such a list specifically what would the should not list be for China? Because I think you mentioned some should nots for the United States. Thanks. This side. No questions or anything? Gentleman right there. Lauren Hershey retired attorney not an international lawyer. Serious question for Ms. Glazer or Mr. Hayden. Is there a possibility is there a likelihood that an island could be constructed that would match the capabilities of the artificial island that China has constructed? Might be an ASEAN managed affair might be some other collaborative affair. It's a serious question. I was thinking of Shakespeare's measure for measure. Yes, in the back corner. I'm Jiang from Chinese Embassy. My question is for the Philippine scholars. I'm just wondering in that would you please tell me you have been done this kind of a reclamation on the islands occupied by you from China for decades. But at that time you are not criticized by the US side or by the international community. And you are not criticized to say that you are expanding in this South China Sea. Would you please tell me why the Chinese are doing something in the same character? We had just followed what you did a few decades ago. And now you see we are expanding we are doing so many things. We did not set up missile base there. We did not do so many things for decades. But you say we have some aggressive action. Would you please tell me the difference between you and me? And you can see that the scale or the speed is different. But come on that it's the same character. It's the same nature. And that is we're doing the same. So could you tell me why the difference of the reaction? Thank you. Well we don't have a Philippine scholar on the panel but nevertheless I still think it's a good question for just the basic question is is there a double standard being applied? And I think that's a reasonable question. But we've collected a good series of questions so why don't we turn things back to the panel and get their comments. We'll start down to Dr. Twin. Do you have a question? Yeah. I'd like to answer on the I think two questions. First on the action and statement by U.S. regarding entering ternotocomized new reclaim features in just how China sees. Here my interpretation is that the U.S. sending a confused signal by declaring that they will fly and cells through ternotocomized. First those features are originally low tide elevation so they don't have any kind of ternotocomized. They have maximally only 500 master of safety zones according to U.N. Convention on the Law of the Sea regarding to artificial islands. So sending a missed signal of ternotocomized. And second it was declared that they will show and fly but it was have not yet fly through just ternotocomized so it's quite confusing signal. And according to international law every countries can enjoy freedom of navigation based on five methods of artificial islands. And I think the question regarding to land reclamation is for other countries. Here is a very big differences between China reclamation and other countries activities. Regarding to the nature of these activities other countries just building up the installation and building on the islands and the dry rocks not something submerged or low tide elevation. And second this is for defensive for defensive not for offensive and you know the scope and scale just for example Vietnam activities just about 1.9% of China scale of land reclamation and Vietnam did about within 20 years when China conducted just one year and you can see the massive difference. But difference here also regarding to the legal nature because for other countries you can reclaim over island but you cannot reclaim over submerged features submerged features belong to continental shelf of coastal states. And also no one blame other countries for environmental consequences of this kind of activity because they did not dredge the sand or coral system in the South China Sea. So a big and quite huge differences and also no other country activity cause no worry and no harm for coastal states or for other countries and cause no strategic consequences here. Thank you. I have two questions for my understanding is right. One is about the outside powers interested in South China Sea another one is about what China should do. In the South China Sea. The first one my answer is yes. The extra regional powers for instance United States even Japan South Korea you mentioned Australia do have their interest in the South China Sea. For instance freedom of navigation peace and stability are their interests that should be guaranteed and upheld by not only China but also the neighboring countries in the South China Sea. But the Japanese interference in the South China Sea is another story if we look at the history during World War II Japan occupied South China Sea islands parasols and splatteries which were then under Chinese jurisdiction and administration. So Japan's intention to interfere in the South China Sea from my opinion is to use the South China Sea dispute to contain China and then maybe to some extent make trouble in the South China Sea which might threaten to peace and stability in the South China Sea. Second question what China should do and the United States should do in order to enhance metacorporation in the South China Sea. For the United States I just mentioned to take a consideration of China's rights and interests in the South China Sea. Second to all its commitment of staying neutral not to take side with any party. Third not to contain China by using the South China Sea dispute. The fourth one is keep a restraint from conducting intelligence gathering activities which ends to China. For China what China should do number one to safeguard freedom of navigation. It is concerned by not only climate states but also outside the countries. Second try not to unilaterally declare ADIZ in the South China Sea which might undermine the mutual trust and the military cooperation between China and United States. Third to take a consideration to build more and more civilian facilities on those reclamation islands and the reefs. The fourth one is to as quick as possible to speed up the COC consultation to deal with the absence of the crisis measurement mechanism in the South China Sea. Thank you. To begin with Lauren's question on which I don't know if really is tongue in cheek or serious on collaborative island building I really would agree with Dr. Tui's point about the ecological environmental damage that has resulted from the dredging that China has undertaken in the Spratlys and there are really actually profound implications for food security in the region which a couple of people have written about and so I would encourage you to look at so I don't think that building more artificial islands is it would be beneficial to the region. On the issue of freedom of navigation patrols many of you may know that the United States has been conducting such patrols since the late 1970s. This is done very transparently. You can read online I think it used to be at the State Department and now as a defense where annually the U.S. is conducting such patrols. We don't single out specific countries because we have bad relations with them. Some of them we actually have very good relations with but we do the U.S. Navy does conduct such patrols. So far as Dr. Tui said the United States has not sailed within the 12 nautical miles of any of these formally submerged features. I personally think that that is something that should be under active consideration. We have seen at least some leaks in the press that it is. I believe that it would be reassuring to some countries of the region and would serve as a warning signal to China to not try to claim any kind of territorial zone around a formally submerged reef. And recently on this issue of whether China is just catching up this is very much part of China's narrative on the South China Sea. And of course we heard this from Dr. Wu. And it's true, China was late to the game in the in the Spratlys. That doesn't give it the right really just because it was late in the game to build up all of these islands. And indeed if you compare what Vietnam has done in terms of some land reclamation it really does pale by comparison. I think the pace and the scope do matter. It's important how the region perceives China's intentions. And so that goes back to my earlier presentation. Really what are China's intentions? And China has been somewhat clear about the civilian purposes but not so much about the potential military purposes. And the other issue here is the question of ambiguity of China's claim. I believe that the ambiguity of this nine dash line what it means, what China claims there's no geographical coordinates. People in China continue to talk about historical claims as a basis for exerting jurisdiction within the nine dash line. This in my view is a source of instability. And I believe that all of the claimants should be very clear about what their claims are and bringing them in line with unclose. And Don I'm afraid that you know this is a panel about recent developments in the South China Sea. Not about manufacturing in the region. So I don't know. Maybe there's some other conferences on trade and manufacturing. But I don't think this panel is about that. Bill. It's a panel of thoughts. Thank you. Yes. The simple answer to the question about the Philippines land reclamation is there hasn't been any. So what's the issue? Back in the 1970s the Philippines built a runway on T2 known in the Philippines as Pagasa which sticks out a little bit from the end of the island of both ends. That's it. That's the sole extent of Philippines land reclamation in the Spratly Islands. The largest piece of land reclamation before China got into the game in September 2013 was by Malaysia on Swallow Reef where they built a runway and a military base under a civilian diving resort. In 1999 the Philippines rammed a ship onto the Second Thomas Shoal. And partly because this was all starting to get out of hand ASEAN and China agreed the declaration on the Conrader parties in 2002 in which all sides committed not to change the status quo. And what's China done? Change the status quo. Can we trust China? Big question. Okay. Now, I mean Vietnam has changed the status quo in terms of was it sandy key? I'm looking at Greg here. Please. Sand. Sand key, right. Sand key, yeah. Okay. But as we heard before 2% of what China's done. Taiwan, Vietnam, the Philippines and Malaysia all have runways on different Spratly islands. It's worth saying. But these are all those are all natural islands apart from the Malaysian one. Okay. They didn't have to build land recreation because they moved first. They've been there since the 70s and the 80s. In terms of Japan strategic interest one killer fact one oil or gas tanker has to go through the South China Sea every six hours to keep the lights on in Japan. Okay. If China tries to change international law redefine international law to make the entire U shaped line it's territorial waters which in effect is what it's trying to do by arguing about historic rights and so forth. That's literally the hands around the throat of Japan's economy. No wonder they have a strategic interest in what's going on. And what surprises me about all of this is why China takes so many self-defeating decisions. All of these reactions Japan's interest Japan's changing in its defense status relations with the Philippines the build up of relations between Vietnam and the US the deterioration in relations in Vietnam and China these are all consequences of actions taken by China. Why is it that the central interest of the state seems to be being directed by people who aren't thinking about the central interest of the state but are only thinking about their own short-term interest and this to me is the biggest conundrum. Thank you very much. As you can tell we didn't arrive at any consensus but this has been beyond a civil discussion and even constructive because I think it's highlighted exactly where some of the areas of overlap and agreement are and clarified where the differences are. We're going to this but this is just breakfast. In 15 minutes we'll come back and we will start the next panel on legal issues. So before we do so though please join me in thanking our panelists for an excellent discussion.