 Ambassador Armacost is next. You may stay right here. Maybe I should start with a baseball metaphor. I think we feel like we're in the eighth inning and a lot of batters yet to come to the point, so I'm going to talk real fast. I was asked to address the Japan component of our Northeast Asia strategy. I'm happy to do that because I think it remains the pivot of our geopolitical and economic position in that part of the world. Let me begin with a proposition I expect is unexceptionable. Over 10 years or more after the Cold War ended, our alliance with Japan remains critical and dispensable indeed to the pursuit of a variety of pretty critical American interests. I would mention three. It's a lot easier to maintain peace in Asia if the two most powerful countries in the region remain friends and security partners. And I would remind you that Japan, for all the talk of China, still accounts for two-thirds of the output of Asia and still has the most technologically sophisticated military capability. The second, we both gain a lot more security at lower cost through defense cooperation. For the US, it's a very efficient means of projecting our power into the Western Pacific thereby playing our own role in the regional balance of forces. For Japan, it permits them to maintain security with forces that are a lot more comfortable to their own people and to their neighbors than those they would find adequate without the alliance. And I dare say it's a source of reassurance that we maintain this connection to not only the Japanese people but to all their neighbors. And finally, of course, the alliance is crucial to the pursuit of our non-proliferation objectives in the world. In fact, I would argue that Japan's our biggest post-war non-proliferation success story. So how would one describe the current status of the alliance? I'd say there's good news and bad. And we'd start with the good. For one thing, I think our overall relationship with Japan is pretty fair. And I would attribute that primarily to three broad, salutary trends. One is the Renaissance of American power. This is quite important in dealing with a country whose diplomatic tradition for 100 years has involved aligning itself with the most powerful Western nation, Brits, Germans, Americans. The rise of China has been a salutary reminder to Americans and Japanese alike that there is value as an insurance policy in this alliance. And the premiums for it are reasonably modest. And third, Japan's related embrace of administrative reform and economic deregulation is gradually dismantling major regulatory barriers to free our trade and thereby reducing some of the economic frictions that have beset the management of other aspects of our relationship. Second favorable trend is that since 1995 or so after a pretty patchy period in our security relationship, all the problems down in Okinawa, we have stabilized our security ties. And both governments have reaffirmed the value of the alliance. Opposition to it has been vastly diminished, particularly in Japan, as the left has tended to collapse. We are now operating with new guidelines for defense cooperation. Those have been agreed upon and the enabling legislation has been passed. We're cooperating more actively in developing ballistic missile defense technology. Both Tokyo and Washington have exhibited a fair amount of flexibility in managing base problems, not least in Okinawa. And as Bill mentioned, we're consulting very closely in designing our respective approaches for dealing with Yang. The third, I sense a new mood of realism in Japanese thinking about its own security, particularly among the younger generation of politicians. A year or two ago, the Japanese awakened to the need for legal authority to deal with intruding vessels in their own waters, and they have secured it. The formerly taboo subject of constitutional revision is now open for debate. The mid-range defense procurement plans have recently earmarked funds for aerial refueling tankers, for helicopter carriers, for a more autonomous and satellite surveillance capability. The Japanese authorities have utilized sanctions, including the suspension of aid, as a means of registering their opposition to Chinese nuclear tests or Feng Yang's missile launches over their territory. And they're pursuing more active defense consultations with neighbors, even as they're competing, rather energetically, for influence that threw out the area from Russia in the north to Myanmar in the south, and virtually all points in between. So that's the plus. And finally, I think the security environment in Asia is currently more benign than threatening. I think the prospect of conflict among the major powers is reasonably remote. There is to be sure uncertainty about how the Chinese will use the power that they're steadily accumulating. And in fact, the relief of that pressure on the northern border from Russia has permitted them to divert their attention to the coastal and island areas of China, where their interests conceivably could collide more frequently with ours in the Japanese. But China still poses no immediate military threat. They continue to accord priority to their modernization. They know they need our help to accelerate that process. And they are busily at work improving relations with their neighbors and with us. The bill has spoken about Korea. I likewise see opportunities there will be it with the residual problems. And the Taiwan Straits, while a cross-strait dialogue has proved to be still elusive, nonetheless, there's a lot less cyber-rattling there than there was a few years ago. So I think these are pretty favorable trends. It's not the only news. They would single out two or three negative things. One is, I sense, without having been involved, of course, for many years that aside from Korea, the high-level security dialogue we have with the Japanese has atrophied in recent years. And more seriously, when we have confronted crises, as we did in the Asian financial crisis, and when the Koreans launched missiles over Japanese territory, we did not respond to those with a particularly collaborative spirit. Secondly, if you listen to Japanese, they complain a lot about American inattentiveness, which they describe as Japan passing. And they seem particularly vexed a year or two ago about the pursuit of a strategic partnership with China. They asked themselves a lot of questions, I think, about what this partnership was for and who was it designed against. And on the American side, of course, there are questions about implications of Japan's prolonged economic stagnation and the apparent lack of urgency and decisiveness which they have confronted their own domestic and international challenges. And people wonder, what are the implications of that for the equality and the scope of our own security collaboration in the future? And for that reason, I suppose, that a well-known commentator in the Asahi newspaper entitled his recent book, Alliance Adrift, I think that overstates the matter, but I don't think there are many grounds for complacency. So let me comment briefly on a couple of specific questions that Dick Solomon asked that I respond to. The first, how can the new administration best strengthen our alliances with Japan and South Korea in anticipation of a more benign security environment in the region? I would say a couple of things. First, you need to start broadly, rather than starting with all the details of the infrastructure defense cooperation, need to get the relationship itself right. And that means addressing the economic issues, addressing the diplomatic cooperation in Asia and beyond, as well as looking at the innards of our alliance. I believe that means resuscitating a serious strategic dialogue. I think it means that Bill has suggested paying a lot of attention to the way in which we continue to consult on Korea, even if the approach to Korea undergoes some refinement or change. Some would argue that with the growing realism in Japan, the discussion is curious to find time to undertake a basic restructuring of the alliance. Now, there's no doubt when you compare what we do with the Japanese on defense, it seems quite modest in relationship to command arrangements, interoperability of equipment, joint planning, joint use of facilities, joint exercises, arrangements for intelligence sharing, all that sort of thing. It is not self-evident to me that NATO is the appropriate benchmark for measuring the progress of our defense cooperation with Japan. And I would tend to argue that rather than a fundamental restructuring of the alliance for now, at least, what's required is simply steadier and better management of it. I doubt that Japan's political leadership is prepared to step up to a broad, basic restructuring of the defense cooperation at this juncture, though it should be, I think, quite prepared to fill out the promise of new guidelines, to inject ourselves actively and publicly into their debate about constitutional revision with a collective right of self-defense, it seems to me, is just as likely to complicate as to facilitate the emergence of a timely Japanese consensus on these issues. And in any event, I think the most urgent business we will address, have to address with them, is likely to focus on economic subjects for our economy. And theirs are both tending downhill at the moment. And that could spell big political trouble for a lot of other countries in the region. I would be more modest and continue to hack away on these issues, but to not present a huge proposal with the expectation that they could respond immediately or quickly. The second question Dick asked me is, will public opinion in Japan support the ongoing deployment of US naval and air forces on Japanese soil? I believe, clearly, it will, so long as the Japanese establishment and their public perceive a basic convergence in our security aim, if they perceive the value of our enduring relationship, if they are persuaded that we are ready to do what we can to minimize the inevitable inconveniences a foreign military presence produces during a period in which the prospects for peace seem to be improving. We should, of course, return facilities to Japan insofar as those are no longer essential to the missions of the United States, particularly in Okinawa. I don't believe that the early months of the new administration are an appropriate time to foreshadow any dramatic reductions in our forward deployments in Asia. I think the current hints of peace and career to fragile the prospects of the cost rates dialogue to speculative the relation between the great powers to unsettle warrant that. But I do think it would be timely to resuscitate a practice that was introduced in the late 1980s, periodically every two or three years, reviewing the security environment in the region with an eye to tailoring our force structure to the changing requirements of the region. And to do that in very close cooperation with our allies, I think it produced effective results in 1989. We were prepared to go forward with some additional adjustments in 1992 until the Korean nuclear problem became acute. The third question, final question, took asked me to address this. Should we anticipate a continuation of weak political leadership, sluggish economic performance in Japan, and what might that mean for the future of our security partnership? Without a lot at the tail, I'd say the reality is that for decades, the bureaucracy has basically run the government, managed the economy, called the tune in Japan. A relatively weak political class is provided of a near policy direction and political accountability. But generally, they have done the bureaucracy bidding. A decade of economic stagnation and recurrent scandals has certainly demoralized the premier bureaucracies. And it has certainly diminished public respect for them. Yet the political class has not yet acquired the strength to fill the policymaking void. And therefore, it seems virtually inevitable that some drift will continue for some time. I don't see any early end to that. I would urge that we bear two things, however, in mind in assessing the implications. One is that Japan is undergoing really a momentous series of changes at the moment. Some would compare them to the two prior openings of Japan during the major restoration in the American occupation. That's not an in-app comparison. I think though now it is being fueled by globalization or amorphous forces rather than the pressure of individual governments. And naturally, the process of reform has been fitful. It's been painstaking. It's been slow. It's had its ups and downs. I'd say the outcome is somewhat uncertain. But while the Japanese are typically slow in forging a consensus, and they are this time, once that consensus is formed, they can act with considerable dispatch. I think that's a very good reason for us to be highly attentive to our relationship with them during this period of flux. The second point is that Japan has begun to take a more stand-up attitude on these security and defense issues. At precisely the moment in the last five years when its political leadership has enjoyed very low public ratings. And yet, any economy has been visibly weak. So there's no reason to take the issues off the agenda. It's just a matter of having realistic expectations and gauging our proposals to elements of the situation in which Japan sees its own interests engaged. Final comment, during the Cold War, we had a pretty simple task, which was to manage a global and circling alliance against fixed adversary. That adversary's gone. No one replaced it. And yet, we have emerged with a degree of preponderance in most important elements of national power that nobody expected even a decade ago. And that gives us new opportunities and also presents a new problem, namely how you swayed others from ganging up against us, which is what usually results for the balance of powers operating. And it seemed to me we're most likely to effectively manage that primacy and to preserve it for that matter if we concentrate on two tasks. One is the one I just described, solidifying the underpinnings of our most critical alliances in Europe and Northeast Asia. Japan certainly at the center of that. The second is striving to entice the Russians and the Chinese to bandwagon with us in consolidating what is, I think, a generally favorable political and territorial status quo. And the new administration can do that best if they conduct themselves with clarity of purpose and attentiveness to our close friends. And a certain humility when it comes to providing advice to former foes. And a readiness to continue shouldering a disproportionate share of the burden of common goods which are required in developing any security or political community in the Far East. If we do that well, it seemed to me we can sustain a solid relationship with Japan and we will reap benefits in the wider region. Thank you. Ambassador Armacost said he thought it was the eighth inning. He did very well with one at bat. Ambassador Roy, you're next. Thank you. 25 to 30 years ago when I would give talks in China, I like to begin with a quote from a musty old copy of the New York Times that I discovered. I can't remember the exact words, but it was to the effect that the American mind has difficulty coming to grips with China. This is the fault of the diplomats, missionaries, academics, and businessmen who have been fuddled on minds over the years. I find that that quote probably is just as apt today as it was 25 to 30 years ago. And in some ways, it may be deliberate. It ensures that in transitions, you always have a China challenge type of issue that the new administration faces. And indeed, that's the case in this transition. Curiously, both we in China are facing exactly the same challenge. And the way I would put it is the challenge is how to promote a stable and predictable environment in East Asia that can permit the very positive aspects of development that emerged over the last 25 years in East Asia to continue. And both of us are immensely important in meeting that challenge. And the second is how to avoid getting off on the wrong foot in our respective policies toward each other. And that's an area that matters because when we get off on the wrong foot, as we have periodically, we waste an enormous amount of time recovering our balance. It's a truism that all of our successive America administration seemed ultimately to have ended up with a largely similar China policy. But they start from all sorts of different positions. If there's any merit to that point, the new administration should consider why not begin where it's going to end up? And that's something worth reflecting about. Managing these challenges is important for a variety of reasons. China is changing very rapidly. And therefore, the assumptions that you bring at the beginning of the administration may change. But polls are showing that there is a strong expectation in Northeast Asia that over the next 10 to 15 years, China is going to emerge as the dominant power in the region. No country in Asia wants to contain China. They all want to deal with China through a mixture of engagement and having powerful friends, which is why the United States is a valued presence in East Asia. But they look to the United States for a subtle approach that avoids the extremes, the wild swings between cooperation and confrontation. So that in a sense, our challenge is how do we achieve that subtlety within the framework of our China policy? Because it's in nobody's interest to see a re-polarization of East Asia. The miracle of the last 25 years in East Asia was that we did away with the polarization of the earlier period. It's been the total engagement of East Asia that has opened up the possibilities for rapid economic growth and easing of political tensions that has occurred. Well, what is our policy and how do we look at it? I would identify four core elements in the policy and there's nothing particularly new here. Ensuring Taiwan's security, promoting ties with China that enhance U.S. interests, providing a counterweight to assertive Chinese behavior and fostering positive change inside China. Those are not ranked in any particular order of priority. They've all been consistent elements in our policy. But the interesting thing is that the area where we have the least direct influence is the last one, fostering positive change inside China. And yet that area tends to be the one that we use rhetorically to justify our China policy domestically in this country. And that creates problems because instead of laying out the totality of why we deal with China the way we do, we tend to concentrate our reasons for dealing with it in a particular area. And that has a tendency to give the appearance of the tail wagging the dog, which plagues successive administrations. I would advise the new administration to try to avoid following into that run. For a variety of reasons, the next four years are going to be very momentous times for China and for the administration in dealing with China. They have some immediate challenges. They have the issue of the NMD decision and how do we implement that in terms of our China policy? We have the Taiwan Security Enhancement Act that is lurking around in Congress. We have the issue of arms sales to Taiwan. These are issues that the new administration is going to have to come to grips with quickly, probably so quickly that it won't have time to fully understand the implications of decisions it makes. And that is one of the reasons why we have a tendency to have swings in our policy. It's not easy to make risk assessments when you don't yet have a full grasp of the total picture. But in the longer term, we have the implications of WTO Entry by Taiwan and the mainland, which is going to have enormous impact on the cross-strait relationship. And that's important and it should be factored into our policy. And we have a 16th party Congress in China taking place in less than two years. That's going to be a very important leadership transition occasion in China. And what comes out of that is important both for the future of Asia and for the future of our relations with China. So this administration is going to have to pay attention to these issues, and if it doesn't, it will find that things happen anyway, but that we have less ability to influence them positively. Now, one of the reasons why the Taiwan issue keeps plaguing us in the contract I will present to you, is that it's marked by contradictions, and the American mind doesn't like contradictions. We try to pretend they don't exist, but in fact, they do exist. In China's case, they want reunification, but they lack the military means to accomplish it, and they lack the domestic situation and the political system to lend any credibility to a persuasive approach. They say that they are going to let Taiwan run its own affairs entirely, but curiously, Taiwan finds that the offers from the mainland are easy to refuse. So we have an unresolved contradiction. Taiwan, of course, wants independence, but its geographic circumstances make this too costly, and it lacks the required international support, and it doesn't wish to abandon its enormous economic interests in dealing with a rapidly growing Chinese economy. And so it pursues the contradictory objectives of maximizing Beijing's distrust of its motives while pouring investment into the mainland, and trying to keep the common interests that are rapidly developing from exceeding a level that would compromise its freedom of political options. So we have contradictions here. The secret, therefore, to a successful Taiwan management policy by us is to understand these contradictions and to find the right way to deal with them, not to deny their existence. So we have a tendency to look at the issue in moral terms, to see democracy and freedom in Taiwan and repression and authoritarian government on the mainland, and this is not the right framework for adopting a subtle approach to the management of contradictions, and it makes us vulnerable to manipulation by the other players, and that, if you look back, has occurred at our expense. For a while, our China policy contributed to a relatively stable framework. We had put constraints in our arms sales to Taiwan. We had a one China policy that was endorsed in both Taiwan and the mainland, and we created an environment in which the incentives for the mainland and Taiwan on their own, behind our backs, without consulting us to open a political dialogue and engagement, took place, and that's what happened during the 80s. But several things changed, and you all know what they are. Tiananmen destroyed China's image in this country. The F-16 sale in 1992 in Chinese eyes negated the credibility of the August 17 communique, which was supposed to govern our arms sales to Taiwan. Taiwanization and democratization in Taiwan eroded