 Welcome to Future Shocks, Global Geopolitical Outlook Debate, hosted by DMI, I am Maya Hujayj and I'll be your moderator. To my left, please find carefully, our carefully selected guests and I will introduce them. This, initially we have Dr. Ian Bremmer, President of Eurasia Group, Young Global Leader and he is on the Global Agenda Council on Geopolitical Risk. Also Dr. Wu Qingbu, Professor at Fudan University People's Republic of China and he is on the Global Agenda Council on Geopolitical Risk as well. Also find the Honourable Kevin Rudd, Member of Parliament in Australia, Global Agenda Council on the Fragile States, in addition to Dr. Lisa Anderson, the President of the American University in Cairo, Egypt, who is on the Global Agenda Council on the United States. Welcome to this panel and welcome dear audience. We will start by defining what the risks are, the future risks are and the future shocks. We will start with you Dr. Anderson and then we will move on as we go. Thank you very much and thank you for having me. I think it's, from the perspective of Cairo in an event, I think the most important global issues are twofold, one of which is the changes that are taking place in this region. And in many respects the kind of tectonic changes that are, that we are witnessing in the Middle East represent something of the same quality of what happened after the First and Second World Wars but without a World War. So it's hard to really have a sense of the magnitude of this but I think it's clearly going to have a global impact on that same sort of scale. And the other thing, and I will leave some of the other issues to other panelists that I think we really need to be thinking about and again this region pointed out very dramatically the political consequences of climate change. All of this region is very vulnerable and I think that will become clear more and more quickly. Mr. Rad, where do you think we are in terms of alert? Should we raise the red alert or are we still at orange, yellow? How dangerous is it for the political views now? I would give it a middle shade of orange rather than anything more intense than that because that would just be dramatic and unproductive. Let me make a few quick points. I see three potential significant geopolitical risks in our hemisphere, the Asian hemisphere, three elsewhere and one what Nick Gowing would describe to us as a black swan event. The three in our part of the world are as follows. Number one, you may have been following the events in the South China Sea. I don't think anyone in the South China Sea actually wants conflict but I am deeply concerned as some of those followed this for the last 20 or 30 years of crisis and conflict through miscalculation, through the absence of competence and security building measures. Number two, and it's quite different, in East China Sea you've seen a lot of reporting of the competing nationalisms in China and Japan over Dyaudau or Senkaku depending on which side of that argument you happen to fall. This is quite different to the South China Sea. It involves quite ancient nationalisms and which have nothing to do with the South China Sea. It's China and Japan, a very rich and difficult history. And I sometimes become concerned that the management of domestic nationalisms could actually take those relationships beyond the tipping point. The third one I'd point to is rarely debated but rarely discussed. China now with its new leadership transition which I'm delighted about. I think the new group of leaders are a first class group of individuals. But they face a formidable challenge in changing the Chinese economic growth model. Is this a geopolitical risk? That's a question of taxonomy. But in terms of where that goes, if there is a failure in the implementation of the new growth model, the political implications for that within China and beyond are significant. Three quick ones in this hemisphere. Iran, we'll talk about I'm sure. The total irredeemable collapse of the Middle East peace process and where that leads and I'm deeply concerned about prospects there. Pakistan is this year when we reach a tipping point because if there is and never forget where we've reached to with our Pakistani-India relations. And in terms of Black Swan events, I would say we've all been focused on Superstorm Sandy. We can have a long epistemological debate about what causes these things. But the bottom line is extreme weather events are becoming more frequent, more intense around the world and they are likely to affect massive urban concentrations more. And therefore the possibility of this actually flipping us into an entirely different way of dealing with each other should be on our radar screen together with the software systems and political systems to respond. And where is Australia from that? Just south of all of those. So the great wonder for being Australia is that we're far enough away from everything not to be too concerned and therefore we seek to be creatively engaged in everything. Look for us, Asia is our home. The Asian hemisphere is our home. We are integrally involved in every institution within Asia, perhaps bar one. So for us, these three ones are big. The global climate change debate, which my colleague referred to before, affects us all equally, whether we like it or not. Therefore for us, as citizens of the world, as a middle power with global interests and with the regional interests, we are deeply engaged with that set of seven that I referred to just now. Dr. Chimbo as well, I would move the same almost question to you. But in the context of China, China is now raising, how do they see the global, let's say the geopolitical outlook and where are the future shocks? Well, coming from China, I'm very much concerned about the anxiety on the part of the United States and Japan vis-à-vis China's rise. The United States, the hegemonic power, they're very much concerned with China's economic, political, and security influence in this region. Although economically, they think they are both challenges and opportunities, but on the political and security front, I think if you look at US policy in the last two years in this region, pivot to Asia or rebalance to Asia, I think it was very much driven by the desire to counterbalance China's rising influence in this region. This not only has led to rising tension between Beijing and Washington, but has also encouraged some other regional members to take advantage of the US people to this region to push their agenda. So this is why you have seen more instability, more problems in this region when the US began to shift more resources to this part of the world. So that's my concern about China, US relations. Now for Japan, I think, I mean, as I noticed, as China surpassed Japan economically in 2010, this has caused a big anxiety in Japan. And some people believe that, you know, Japan will gradually drift to a more disadvantageous position vis-à-vis China in the future. So something has to be done by Japan, by laterally with the United States or unilaterally by itself or collectively with other regional members to really to reshape a regional security environment. You think that China surpassing Japan economically is what triggered what's happening now in the China Sea? Well, if you look at the China Sea issue, that's an old issue why, you know, the game is changing in recent years. I think some people in Japan believe that if Japan has an opportunity to push its agenda, that has been in the recent several years. The more time goes on, the more disadvantageous Japan will be in that position. So they wanted to push this issue, especially this year before China's leadership transition. So technically they think that was a good time for Japan to push their agenda. And also remember, Japan has had a very weak and volatile political leadership at home. The change promise almost every year. So if you have a weak political leadership, it's more likely the leader will become the hostage to populism and nationalism. And the leaders are likely to take a short-sighted view about its foreign relations. So this can explain why, you know, this old issue becomes so hard and heated in recent years, especially for this year. So that's why I'm concerned about, you know, China's relations with both the United States and Japan. Dr. Bremmer, do you agree with this issue in China and do you see it happening in other places around the world? Well, I think that the way to define the risk in Asia is broadly around China rising. It's not just territorial issues. And it does bring, I know Australia is far away. And if you define it very narrowly as territorial, then you get to skirt that issue. But of course, when the Australians are looking to the US as part of the pivot and American marines are showing up in Darwin, we understand that Australia is very much a part of this issue. And the concern of a United States, which still plays a dominant security role in much of Asia, while China is playing a much more dominant economic role in Asia, and those powers are shifting very dramatically. Japan is where this is playing out most dangerously. I agree completely with Shinbo. And I agree about it, because in Japan not only has the power balance shifted dramatically where the Chinese no longer need Japanese investment dollars and they don't need technology, they can get most of that from South Korea and Taiwan. And so they feel much more assertive. And the underlying relationship between China and Japan has never been promising. So unlike many other countries in the region where the Chinese feel they can sort of swamp them economically and then win politically, with Japan, China's strategy is one more of assertiveness and isolation. And the Japanese have nowhere else to go. So this is the third and second largest economies in the world. They've shifted places recently. And I think Shinbo's also right that the United States has really focused on this part of the world. Obama does not like doctrine. But to the extent he has doctrine, it is economic statecraft and it's the pivot to Asia. Both of those things are hedging against a rising China that might display behaviors the US doesn't like. Is it containment? No, but Obama just referred to China for the first time as an adversary. If those tensions continue to rise, it will look like China as containment. And a lot of countries will act as if it might be containment. And this is clear. There are risks in the Middle East, I think Syria is by far the largest. And there are risks geopolitically around Europe that are important. But the impact of China moving towards becoming the world's largest economy when it will still be an authoritarian state, a state capitalist economy, and it will be poor. By far is the largest geopolitical risk in the world today. Nothing else is close, including everything we see in this region. If I think you all agree about China's rise and being the biggest geopolitical risk around, I think we got everyone mentioning China, but no one has mentioned the European Union. Where do you see Dr. Anderson, the European Union from all this geopolitical risk? Well, I think one of the reasons why you see the uprising and the turmoil in the Middle East that you see today is partly because of the exhaustion of the older great powers. So when we talk about China, it's not merely China rising, it's also the eclipse of a world regime that had lasted for decades and decades. So from that point of view, I think it's as much what's not there as what's there that is shaping the way the world looks like. So the United States, because of the economic crisis, the preoccupation with domestic politics, the echo of the end of the Cold War, the United States simply doesn't have to care very much about the rest of the world the way it did, and it is focused on China. It is completely focused on Asia. The Europeans similarly are sort of preoccupied with their own challenges are not as globally active as they once were. And so that leaves an opportunity for local regional domestic dynamics in the Middle East itself. And then the question is really, will that draw attention from the issues of China's rising? And in that sense, I think China may be the most important in the long run, but I can certainly see everybody being diverted by problems in this region. Please, Zia. Just on the question of Europe which you pose, from our hemisphere, Asia, in geopolitical terms, Europe has become largely irrelevant. Just stating a fact. Europe is irrelevant, that's what he said. I'm stating this as starkly as possible because I happen to believe it's true. In geopolitical terms, Europe has become largely irrelevant for two reasons. Foreign policy terms, it's turned inward with the exception of Libya and parts of the so-called Arab Spring. Largely, it's foreign policy energies have been dedicated towards the expansion question and the management of challenges to its east, namely Russia. And secondly, to state the obvious of the obvious, the Euro crisis has further sapped internal European energies and frankly external confidence about the European, shall I say, foreign policy agenda beyond this continent. That's as we see it in our part of the world. The point about China, if I could just add to what was said before and I think to challenge a point which you used, you said China equals the rise of China, equals the greatest geopolitical risk. Well, for fear of incurring Roth in Washington, I just see it as, frankly, at least a challenge. I wouldn't actually describe it as a risk. It's the question of how we all engage this phenomenon. It is a natural phenomenon, rising economy, second largest in the world, 30 years in the making, it's there. The question we need to put to our Chinese friends that we constantly do is this. For a century, you've dreamed of becoming a great power, of becoming a strong and wealthy power. Now that that is becoming evident, how do you choose to use that power within the region and within the world, within the regional order, to the extent that it exists in Asia, which is very thin, and the global order which we've inherited since 1945, based on a series of assumptions and values from the victorious Western English-speaking democracies in 1945. But my last point is about to now take up a challenge from my Chinese colleague about the pivot to Asia. Let's just get down to some mathematics here. When people use the term pivot to Asia by the US administration, they prefer the term rebalance. What effectively it means is that in the context of a global drawdown of US military assets by a large order of magnitude, you will see a net significant net reduction in Europe. You will see the status quo in Asia. You will not see a net increase, you will see the status quo. The message which the US has sought to convey to the countries of Asia, which by and large they have welcomed, is that there'll be no net strategic withdrawal of the United States from the Asian Hemisphere and from the Asia Pacific in the Asia Indian Ocean region. That's quite a different matter. Visibly the Darwin point in Australia. We've been an ally of the United States since 1941 before people's China was ever founded. And it was founded as an alliance alliance against the Japanese for goodness sake in the middle of the war. In terms of military cooperation with the United States, this is what has fundamentally altered the global strategic balance. In the past, we had at any one time 1500 US Marines rotating out of Darwin every three months. Now we have two and a half thousand US Marines rotating every six months. Now that's got the double IWS reprinting the global strategic balance as a result. In fact, it's just a nonsense. It's basically as it was, not much different at all. I've just noticed that you're writing. Dr. Chenbo, you have something to say. Well, I agree with Kevin Root that China's rights in itself is not necessarily a risk, but really is how the other countries react to China's rights. So that's a big challenge. From a Chinese perspective, I think three things contributed to China's rights. China's open up and reform in the last three decades, globalization and peace among the major powers. I think China want to maintain all the three key conditions. But the real challenge is how other countries, particularly the United States and Japan, they can adjust to the rise of China. Don't you think that when Australia comes closer to Japan, that might ruin its security friendships with other countries like the United States? That's a very interesting question related to Kevin Root's remarks. I think Australia recently has become more proactive in regional political and security affairs and has conducted more security collaboration with the United States partly for two reasons. One is that they want to get the security insurance while economically they are doing much closer to China. So they want to keep a balance. That's what you said, economically China on security front in the United States. Another thing is what we call the mid power phenomenon. The mid powers, when they say the major powers play together, they are concerned to be marginalized. So they don't want to see this region to be really kind of a G2 region. China, the United States, they want to stay engaged, want to stay relevant. So they want to do something sometimes to draw the attention from the major powers and also to show that, hey, don't forget us, we are relevant. So Australia is an important factor in this regard for better or for worse for US-China relations. We discuss, every time we talk, we go back to China again. Does that make you feel that the, or do you think, and I know you have an opinion on this, that it's no longer monopoly, it's not a monopoly anymore, there's not one superpower. Will we see a rise of a new superpower or the power will not be clear anymore? No, well, in 10, 20, 30 years, life can change. But for the purposes of, I think, the perspective of this group, we're not seeing the rise of a new superpower. We're not talking much about the United States. We're talking a lot about China. This, of course, it takes two to tango. And in part, this is a problem of the United States and China. The order that was created after World War II that Kevin refers to is a US order. It was American friends and American allies, but it was created by the United States. The World Bank sounds nice and global, so does the World Series. There's a Canadian team, right? But it's an American institution. And the Chinese don't accept that. And they shouldn't. But the American perspective, I mean, if there's been a way to talk about China over the last few years, it's been this term responsible stakeholdership, which Robert Zellick, probably one of the most esteemed China watchers in the United States, coined. And the idea was, well, China, now you're becoming wealthy, so you need to be a responsible stakeholder. Well, the Chinese response is, well, wait a second, you want us to act like a developed state, but we're not. We're still developing. We can't expend the kind of resources that you do on the rest of the world. And secondly, you're asking us to play by rules and within institutions that you created. And we fundamentally don't accept that. So conflict is coming, right? I mean, you know, it was, I think it was Trotsky that one says, you know, you don't want war, but war wants you. Now I'm not suggesting there's going to be a military fight between the U.S. and China, but we know that there is a cyber war going on between the two countries, despite the mutual independence that exists economically. We know that if you talk to American CEOs, their views of China and Australian CEOs and European CEOs, and most importantly, Japanese CEOs, their view of China in the last year is radically different than it was five years ago, 10 years ago, in part because of size, but in part because there's a different system. There's not rule of law. There's opacity. It's state capitalist. I am suggesting that that is, yes, a risk. It's a risk. I mean, I don't care why you don't want to call it a risk. Like in America, Romney doesn't want to call China the biggest geopolitical challenge. He instead says it's Russia. It's like China's become Voldemort for some reason. It's the name that can't be spoken, right? But the reality is, if there is a risk out there, it's the risk that the rise of China upsets the global apple cart. It is bigger than Russia and India and Brazil and South Africa. All of those economies add them together. You still don't get China. There's no bricks. Stop with the bricks. It's China. That's what we focus on, and that is a risk. Ian, I don't dispute the sort of very clear analytical approach, but keep in mind that, again, every single American president since Truman has been surprised by something that happened in the Middle East and has been distracted. So it's from the 67 war to the oil price shocks to the Iranian revolution to the Iraqi invasion of Kuwait to the Arab Spring. There is all the analysis you can do. You still find that from the point of view of the United States in any event, China may be the big issue, but it's going to be eclipsed sometimes by things that are far more urgent. And I think the urgency, so when you do, as you know, risk analysis, some of it is going to be about urgency. And I have to say there is an urgency to the character of the challenges in this part of the world now. Before you speak, Dr. Chenbo, if you don't mind, we just need to welcome Al-Habib Ben-Yihya, the Secretary-General of the Arab-Mahrab Union, and Rabat, welcome, and he has just joined us. We were just discussing mainly China in the geopolitical risks, but that is not our aim. We're trying to move away from that. Dr. Chenbo, you had something to add. Well, two quick points. One is that to Ian's point, that China was not involved when the regional order or even the international order was created. But that doesn't mean that China totally opposed this regional order and international order. To be fair, as in China's development over the last 30 years has benefited a lot from this current regional and international system, especially on the economic front. So we don't want to overthrow this. We see some problems, and we want to reform it. And secondly, if you want China to be a stakeholder, you need to give us more stakes, right? Just give you one example. In 2010, IMF agreed to raise a representation to co-chair for the emerging economies. But so far, the United States has not yet approved it. So two years have passed. You are just not willing to give China more stake. How can you ask us to play a large role? And another point is you say, no breaks, China. In China, we don't talk about the rise of China. We talk about the rise of a group of emerging countries like India, like Brazil, like Africa. So we think this is a phenomenon largely created by globalization. And we reach out to these countries. We think that should be a help for a phenomenon. You make a bigger pie, and everyone will have a larger share of it. So that's how we view the world. We don't just talk about the rise of China. We talk about the rise of a group of emerging markets. This is a phenomenal change that we're looking at. And I respect our Middle Eastern colleagues because I think what's just been said is right. There's always this out of left field phenomenon which emerges. And it always has a capacity to, shall I say, affect the global order in one means or another, most recently through the international manifestation of terrorism and earlier through its impact on the global economy through the price of oil. So let's just recognize that as a continuum. My own list, the Middle East cluster, represents half of what we've got to be concerned about. And that's speaking from the perspective of Asia. But let's go to the global phenomenon and the regional phenomenon called the rise of China. This is a major global event. When China becomes the world's largest economy, which it will do in the next decade, this will be the first time since King George III was on the throne, that a non-English speaking, non-Western, non-democracy will be the world's largest economy. And that is a fact. Now, the question is, what do we do about it without Chinese friends? And this half decade to a decade, while that transition is underway, is the critical time to engage intelligently with the roadmap for the future how we manage this transition. The reason I object to the term risk to go back to what's used before is that in its use, the term, the language itself, implies that all the action, therefore, must occur on China's part to comply with the order. That's why I'm concerned about it. The truth is, as you said before, it does take two to tango. And in our view, despite the fact that it will offend certain Latin American dance classes, in Asia it takes several to tango. China, the US, and the rest of us as well, including these pesky middle powers that you referred to. Quarter of a billion Indonesians, 50 or 60 million Koreans, and one or two of us down in the South, but here's the challenge. In our hemisphere, what are people doing? They are hedging against this challenge. On the one hand, they want to engage with China, not just economically but politically, within the framework of the continuation of the post-45 rules-based order. They expect and hope that China, having benefited from that order, both in terms of peace and stability and global economic engagement and the rules of open economies, will sustain and contribute to that order, as Zellig said, through becoming a continued positive stakeholder. The hedge in Asia is this. Because China has not articulated its long-term doctrine of what we'll do with national wealth and power in our hemisphere and globally, other than use saccharine terms like Khosya Shijie, which means harmonious world, we all sit back and say, what does that mean? And so the hedge is this, that not just Australia, but Japan, Korea, the Philippines, Vietnam, Singapore, Malaysia, Indonesia, Australia, all are saying, well, what if this turns out badly? And what if, in fact, there are other forces which begin to, shall I say, exhibit a broader Chinese nationalism? So the solution to this is as follows. Our friends in China, under what I think is going to be a very good new leadership under Xi Jinping, do have a responsibility to take their foreign policy declaration beyond the current, shall I say, nebulous statements into something much more coherent and secondly then engage at least in Asia with the Americans and the rest of us in shaping for the first time a rules-based security order in Asia which we do not have. We don't have any confidence in security building measures, we have no hotlines, we have nothing. So when a crisis occurs, let me tell you, it becomes automatically potentially inflammatory. Before we move on to the next part, I would like to get Mr. Ben-Yahya's intake on this. Do you agree with Mr. Bremmer that the rise of China is the biggest risk we are facing in the geopolitical outlook or it's, you shouldn't call it a risk as Mr. Rat said? Well, thank you very much. I'm sorry to be a bit late. I traveled several times to China and we know what the Chinese are doing in North Africa. Excellent work. Most of the big project, infrastructure, port, facilities, airport, I mean the Chinese are in. So is the case in Sub-Saharan Africa. And I think you can rest assure that the major infrastructure project where there is a bidding system, you know for sure that the winner would be a Chinese company. And well, it's a competition and I think so much the better. And I think the second thing, the Chinese expert in the Maghreb in country, Tauq Arabic, there's more than 50,000 Chinese expert in some of the countries in North Africa. And they are fully integrated. And I think some of them even are very courageous to get married with Maghreb in girls. And I think this is, and last time I saw them it was in Mauritania, in the fishing business. I think they are in competition with a number of other countries including Japan and some European countries. And for the competition's sake, I think they are doing a wonderful job. So is the role in other Sub-Saharan African countries is essential. Whether we can get married whether we can appreciate the presence of Chinese expert in a number of African countries or Maghrebian countries, it's a question of political evaluation. May I be the devil's advocate here and say don't you think that there are just like little armies and construction army, fishing army, economical army? Well, I didn't see them wearing army suits. But they are, I mean, taken as civilian experts, being hired for their bidding capabilities. And they are competing with a lot of European and other Western companies. So their role is really appreciated economically, so to say, for the big infrastructure project. That's what I can say. Let's move on to the threats that might be facing. Do you think that we are running out of resources, Dr. Anderson? I think it's clear that there's a combined challenge in climate change and natural resources. One of which is, I think certainly for areas that are essentially arid like the Middle East and North Africa, I think there really is a significant concern about global warming itself and agriculture that is dependent on regular rainfall and so forth is likely to be more and more stressed. And so that's one thing. Secondly, I think there are going to be these black swan events. I mean, I do subscribe to the theory that the weather will be more volatile around the world as the temperature increases. I think we are completely unprepared for that as New York just demonstrated. And so I think there are going to be those kinds of challenges. And I think the tension that will arise around redistribution of resources and the likely rising global commodity prices as a result of changes in bread baskets around the world. I think all of those things are going to converge to create real, real stresses in the system. So yes, I think these, for those various reasons, I think we should be paying a great deal more attention than we are now to what the climate change challenge represents. Do you think, Mr. Rad, that other resources such as the human angle of the resources, if you look at the demographics, the unemployment, how do you think that will affect our geopolitical outlook? Well, in this body, the World Economic Forum, chair of the Fragile States Global Affairs Council. And one of the things we're looking at is if you look at those who would self-describe as fragile states or fragile situations around the world, one of the clear barometers is large-scale youth unemployment. We've talked about this, we've talked about this, and we've talked about it 1,000 times. But if there is one thing which is absolutely essential and policy terms to cause a fragile state to become a non-fragile state, it is using the mechanisms available domestically and through international intervention to create jobs at scale for young people in particular. I'm no Middle Easternist, I'm no Arabist, but if I look at, frankly, the magnitude of youth unemployment at Egypt, this I find quite frightening in terms of long-term trajectories. That's one dimension if I could simply back up what my colleague was saying just before about food security. This lapses into and out of global fashion ability, depending on which forum you are attending. But the bottom line is this, one clear impact of climate change over time is increasing unpredictability of food production. We speak of that as Australia as a not insignificant bread basket for a part of the world. We are large-scale net food exporters and have been for 150 years. We know there's impact within our country. If you look at the last crop growing season in the United States and what happened there with extraordinary drought, this is going to lead to a volatility in food security questions of, I think, a historic, we'll put this way, of historic proportions. Therefore, in our calculation for let's call it global strategic stability, whether it falls into the category of predictable black swan events, which is a contradiction in terms, but shall I say a slow-moving small B black swan event? The food security question shaped by climate change factors is, I believe, out there looming large. We measure this also by the phenomenal recent interest in inbound investment in Australia from China, from the Middle East and elsewhere, people desperately at a national level concerned about their own hedges about their long-term food security risks at home. Do you think that would you like to add to this? If anyone would like to add to anything when you're speaking, I'd like to get contradictory views if possible, but so far you're all agreeing that the biggest issue will be the food security, maybe. Do you think there are other issues that would affect the resources or other resources that would affect the geopolitical outlook? Well, if you look at the ongoing party congress in China and trying to tell where China is moving in the next decade, I think that China has somehow passed the stage when the focus was really on economic growth and the growth rate, but rather on the quality of the growth. So from the leader's open remarks, you can hear phrases like food security, energy security, environmental issues. So these are really the issues they are concerned and also about, of course, social security. So to some extent, China is also standing at a turning point from purely economic growth to comprehensive social economic development. This kind of adjustment in China's strategy will have a lot of impact on international market in the years to come. In that regard, and aside from the natural problems that we might have, don't you think that the technology as well, it might be another big source to reckon with in the future and it might have an effect in the shift of power or the geopolitical risks? Oh, it's very clear, though. I mean, one thing I would say, and I agree with the whole panel here on the question of food, but I think that the geopolitical backdrop for that food conflict is that countries do not have international transparency around the marketplace. You will see more resource nationalism. You will see countries like China and Saudi Arabia going out and buying land, and that will create recrimination in countries where, you know, when there are droughts, you're gonna export soybeans and we're gonna starve? That's not gonna work very well, but you're gonna have a lot of export controls. You're gonna have concerns with that volatility that will be politically induced because we don't have global institutions. Klaus Schwab made that very clear. I mean, when the World Economic Forum is one of the few places that truly looks global in terms of its outlook, that tells you that a lot of what you used to have over the past decades has sort of broken down. Clearly, that's a problem. On technology, it's a big topic, and there are a lot of ways you can take it. I'm not someone who believes that there is a revolution waiting to happen tomorrow in China. After 35 years of 10% plus state-directed growth, there are a lot of people who are more satisfied with the Chinese government in China than there are with the American government in the United States or with the European governments in Europe. We can say that, right? But China is trying to run a 21st century economy with a 20th century political system. And 350 million Chinese on Weibo, the Chinese Twitter, talking about Bo Shili and talking about Xi Jinping not being there for two weeks is anathema to the Chinese notion of governance where it's no business who we choose to be our seven top leaders. Well, that's a problem. And that will cause more risk aversion and it will make it harder for China to engage in the political reforms long-term that will make them more effective as a player. There are also, as I mentioned, there is a war going on in cyber. The United States is winning that war state versus state against China. The United States is losing that war with its companies against Chinese companies. And we don't talk about this much because American companies don't want to admit when they've lost a lot of stuff that's dangerous. Asian banks don't want to admit when they've lost but a lot of stuff. But the Philippine banks have just come out two weeks ago and said they've had unprecedented cyber attacks from China. So it must be bad because it's clearly going to impact the way they looked at the market. This is a growing danger. There was a story in the newspaper a couple of weeks ago about a huge institution being attacked for a small password that was probably for an email or an iTunes account. And this was just to show them that we can hack your system and that was a huge institution that could not be hacked. What do you think this will lead in the future? Will this help in the geopolitical outlook, Mr. Ben-Yahia? Or will it affect the geopolitical outlook? Let me ask, add one thing. As far as food security is concerned for the whole world and for China, the Chinese noodle are made of rice. There is no competition with Italian spaghetti. And I think they have their own system of dealing with their food. But I think with the increase of population it might be a problem of production for China and they're importing also a lot of wheat now. Maybe in the near future we'll see the consumption of wheat product raising because of the new system and the new fashion in food consumption. But as far as the issue of Chinese role in the world as politics are concerned, I followed the Chinese role in a number of countries where we see expert being more integrated in the system than any other nationality. And this has a very big impact of their acceptance within a number of countries. I'm talking about the continent of Africa and even in the background. And we see them not bringing a lot of workers but a lot of engineers because we do have workers and we don't want them to come with an army of workers to create an employment for other sectors. So that's the combination we reached with the Chinese when they have big project. For instance, a big channel built in Tunisia 96 kilometers to carry on the surplus of water in the north to the center and the south was done by the Chinese but with Chinese engineers and Tunisian workers. Thank you. Yes, you had something to say. I actually want to propose something about the role of technology which isn't sort of cybersecurity but I actually think that one of the things we're seeing around the world is generational shift. We all of a certain age will attest to the fact that it was our children who taught us how to use the next technology to program the VCR or to work the new phone and so forth. That has happened around the world. It has happened to everyone. And it has changed the relations of that generation who taught their parents how to do something. When you think about it, how many of us, as children taught our parents to do things, very few. But this generation has had that experience from the beginning and I actually believe that that is creating a different culture of a generation that has understood things before their parents did. They are less deferential to authority. They are more knowledgeable about the future than the generation that is currently in power. And I think that is creating, you see, honestly I think that's one of the things that's happened in this region. Keep in mind that mobile phone penetration in Egypt is 110%. This is a very highly savvy population in terms of these technologies. And it is that generation that not only adopted it but taught everyone else how to use it. I think that's gonna happen everywhere and I think it is going to change relations among generations and therefore among authority figures and the next generations coming up. Essentially within China and I think more broadly across the world, the debate of the next decade is essentially one between globalists and nationalists. If I look at China itself, you can see both scripts on offer. There is a script for nationalism and even mechanicalism. And it's driven by certain institutions within China and the security apparatus in China including the PLA are notoriously opaque but they contribute to this debate. But also it's not restricted to China. The security apparatus in other countries in the region often look at reality through that sort of prism as well. There's also a globalist script in China which is they recognize how much the country has benefited and they have personally benefited from being part of a global rules-based system based on open economies, increasingly open societies and dare I say, the possibility of more open politics as well. Two caveats though. One, the social media revolution in China cuts both ways. I subscribe to Chinese Weibo. Every night I tap out my messages in Chinese to my 700,000 Chinese Twitter followers and I get two sorts of responses. One is they like to look at my grandkids. Two, they think that my written Chinese should be improved but there's a third response. When there's a big event which occurs in sign of Japanese relations there is a ferociously nationalist response from young people. That's the first caveat. The assumption therefore that young people who are wired are automatically globalists has to have a caveat attached to it. The second point I would make is that this leadership which is being elected through the meeting of the 18th Party Congress in Beijing, my own judgment of it is that I think on balance it is globalist, on balance I think it is reformist, on balance I think it sees the future. The next challenge for the next five years is further reforms of the domestic economic model. If that succeeds, my own sense is because these are very smart people, they know that the forces of social and political liberalisation are at work in China through an increasingly open media and social media where the discussions about hitherto quite sensitive matters are discussed that I think in a second Xi Jinping term you may see the beginnings of structural political reform, not full-blown democracy but of a new level of structural political reform. Dr. Chen. Well, first related to this point. See in China you watch the debate every day about economic policy, social policy, politics and foreign policy. You know, you get a very different impression from people outside of China, they think we are this is opaque, you know, this is only one voice. You know, today China has become so probabilistic that any major policy issues you can hear a debate at different places. So that's the one thing. And the second thing is about this kind of technology issue and cyber security issue. Well, technology brings about progress and improvement but it also creates vulnerability. Cyber space security in China, we are, you know, China's computers, they suffer from attacks from both within China and from outside of China. According to the public source, to 2011 the attack on the computers in China increased by 200% then the previous year, then 2010. And among those attacks over 20% come from the United States. Now for the first half of this year, this has been increased by another 200% and from in terms of the sources of the hackers, US number one, Japan number two, Korea number three. So China is also a victim of this kind of vulnerability. So this issue should be put into a broad context of global governance because this is a new frontier, a new domain. We do not yet have, you know, international norm and institution for how to deal with the global cyber security issue. This is the right time to sit down to discuss this issue. The United States has the most advanced AI technology in this world. I mean, we know it established its cyber space warfare headquarters in 2010. We know what it's doing with Iran but that's just, you know, they publicize it. There are many things that the United States are doing. They're not necessarily made it public. So I hope that, you know, this is a time for countries, especially major powers to sit down to reach consensus on the cyber security issue. Going back to what Dr. Anderson said that there's a shift, a generation shift. Do you think that means that we will redefine the terms that we look at now and we will redefine the outlook in a couple of years or the risks in the future? Oh, I think we are redefining the outlook but I think that young people and the way that they consume information is not globalized in the way we expected it was gonna be. I mean, the Tom Friedman view of the world is that everyone gets more connected to everyone and so just wire the world and we'll all be together. And the reality is that young people consuming news consume exactly what they wanna hear, right? They're consumers and whether it's a government or it's a company like Google or Facebook or Weibo, they all want to maximize the experience that these folks have and they wanna make a lot of money. So they allow you to get only what you want. That is polarizing, right? That means that the average American who subscribes to a right-wing view gets overwhelmingly only media that confirms and bolsters that view and the same for the left. Now in the United States that's actually not that dangerous because most Americans don't care. Most Americans are much more interested in their hobbies and golf and cooking and politics is a hobby but frankly, we're wealthy enough, it doesn't really matter. If on the other hand your primary identity and the thing you consume most is whether you are Israeli or Palestinian, whether you are Sunni or Shia, whether you believe that the Americans are or aren't supporting a China versus Japan position, that is radically dangerous. The first billion people that got wired were basically rich and they were pro status quo. A lot of the people that are getting wired now don't like the status quo and for very good reason. That is not a positive trend for geopolitical stability. Let's be clear and wiring a billion Chinese is not likely, I mean, I think do a thought experiment. If you gave China democratic vote today and you let them vote, would they end up electing a government that is more or less well-disposed to the current world order and the United States of America, I think less and with good reason. So we're not gonna get the right to vote and again, if the United States had the right to give them the right to vote, it's not clear to me they would but they're not gonna get it and neither would the Australians. But, but I know, I know, I know, but you know. The fact is they are not gonna get the right to vote but they are getting on internet as the 700,000 followers of Kevin attest. They're choosing. They're choosing and what they're choosing is not necessarily going to be in any way attractive to the folks that support the status quo. One of the biggest things out there has been this gap in rich and poor which we see in the United States within China and the rest but that global gap matters too and that is facilitating the nationalism versus globalization point that Kevin actually made. We need to wrap up so I will just take your views on this issue as well, the redefining terms and we'll try to do it very quickly because I think we can wrap it up with the generation changing and we might need to redefine our geopolitical outlook. Please Mr. Ben-Yahia. I think getting into politics, don't forget that many Chinese are living in the United States, in Europe and a number of other countries and number is increasing and they are quite well appreciated. Some of those Chinese living in the United States for centuries are returning back to China as expert and are doing wonderful job. I think in perspective how China would be by the end of this 21st century is often for question but I think the system itself is adapted to more than a billion people and whether you want to have a western democratic democracy it's a question of maybe appreciation of the channel that are going through in order to let their people express more freely their opinion. This is happening if you compare what used to be last century, I think China is making a big progress. So I won't be just so categorical about making a judgment on the political system, whether there will be a spring in China that have spring rolls and they like what is going on in the other countries in the world and they learn very quickly. My own appreciation is that sooner or later the system will get more liberal economically it's already there but politically it's in the coming. As well, Dr. Anderson. I think the new technologies have empowered a new generation. I think this new generation is not necessarily cosmopolitan. I think it is often able to feed on itself and enthuse itself about more and more anti-authoritarian and anti-status quo positions. I think there isn't any doubt about that. I think it is true too that there are in essence no rules in this new world. So this generation is not only anti-authoritarian just sort of congenitally but there aren't really that many rules that govern how these technologies are going to be used and what is a productive as opposed to unproductive use of them. All of that's true and I think that will be contributing to considerable instability in and of itself, a volatility in the world. At the same time I am congenitally and fundamentally optimistic about this. I think the opportunity for new people and new ideas to arise through these kinds of conversations whether they're Twitter conversations or anything else is enormously valuable. There's an energy and a dynamism in this world that I think cannot but over the long run be productive for all of us. Mr. Rudd? Three quick points. One is what we're talking about with the management of the rise of China is one of the big global three. Maintaining global financial economic stability is number one. We're five years into this crisis and not get out of it. Two, peaceful rise of China within the framework of the continuing values of the international and regional rules-based orders and three is climate change and the associated impacts. On this one, the rise of China, so my second point, I go back to emphasize again the critical question of globalists and nationalists. The globalist script for national politicians in China is hard to explain because when they see its manifestations it is not dissimilar to what you see in the West. The rich guys who are earning a lot of money and driving Maserati's around Beijing, they're the globalists. If I'm comrade Wang down in Sichuan South and I am still basically worrying about whether I've got four pigs or five and I'm asked a question about whether all this is worthwhile, it's very easy for them to hear a nationalist script instead. Similarly, I've got to say in the West, the challenge in the West and the rest of the world is to explain the globalizing project in manners which actually cause there to be a net benefit to everybody. That's why I'm a social democrat, for example. I believe in globalism, but frankly, with a social democratic conditionality because people have got to have a buy-in, not just those at the top. And finally, on the China front, this is my third point, we in this decade have, I believe, a historically unique opportunity to shape the future. China, US and the rest of us in Asia can either repeat 300 years of disastrous European history leading up to 1945, or we can learn from that. I think our Chinese friends and the rest of us hopefully are smart enough to learn from that, but frankly, forums like the WEF and others like it now have a unique responsibility and opportunity to shape common concepts and agreements for the future. And like my colleague here, speaking from a Middle Eastern perspective, I'm equally a congenital optimist about the future of stability and prosperity in Asia. Mr. Dr. Chen, can we do it very quickly because we're running out of time, please? Well, I think in the next 10 years, the Chinese leaders will face challenges quite different from the last three decades. But I think the system and the leadership will be flexible enough to adjust to these challenges. And I also believe most people in China, they prefer stability, and they have a more optimistic view of the future. So on the other hand, I think that the power shift in the next decade will be much larger in terms of scale. And this issue has to be handled very carefully. And I'm glad to say that what economic forum is playing a very important role in generating a wise and intellectual debate on this very important issue. And I want to say it's continue to play this role ahead. Dr. Bremmer? I'm a congenital optimist because I'm here. But I am not in terms of the world order. And I say that because this extraordinary change, we think we've seen China rise, we haven't. The next 10 years will be radically more so than what we've seen. It is happening in a particularly difficult global environment. Number one, too many countries that matter to coordinate effectively. Number two, those new countries are both not particularly aligned with the old countries and they don't have the capacity to engage. Number three, America's allies are maximally distracted, Europeans in particular. And number four, the United States does not want to play as much of a role globally as it has historically. Watch the third foreign policy debate, the US presidential debate that didn't discuss foreign policy. If you put those four things together, what you are hearing is that you have challenges which are historically very significant in scale that the world is less capable to respond effectively to than it has historically. Human beings should be fundamentally and can generally optimistic because we're here, but we must be realistic that in historical perspective, the geopolitical risks right now are great and they have been the likely to respond less than it has been. And thank God we're now paying more attention geopolitical risk now here at the WEF. I'm delighted for that. We are on the cusp of a change beyond these imaginary borders, future shocks and redefined terms. Ultimately, we are witnessing a change in generation, bringing an urgency to adapt to variants we can no longer reflect on our past experiences. Should solutions arise? I hope we have discussed some of them or we have sort of discussed them today. I hope there will be a way to apply them in the future. Thank you very much, esteemed guest and thank you to the audience. Thank you.