 Good afternoon, everyone. Welcome to the Carnegie Endowment for International Peace. My name is Doug Paul. I think virtually everyone here knows we all know each other. But my name is Doug Paul. I'm vice president for studies in the Asia program. And it's my great privilege this afternoon to welcome a very old friend and colleague from Korea who has done a great many things in his career. Chung Min Lee has been a RAND Corporation researcher and PhD out of, well, you see it all in the biography, I think, but PhD out of Fletcher School, the master's there as well. And that'll account for his loquacious English that really stands out. And when you read the book, you'll be pleased to see some even more interesting verbal dexterity. He's a really accomplished writer. One of my favorites was trying to run the world so he ran into the world. He's written a book that has really done a lot to counter the triumphalism you get from a lot of the writing about Asia. I think a really bad example would be when China rules the world by Jax. But Kishore Mopobani in Singapore writes always about how we Westerners think we're so superior, but the Asians really have got it all done. And what I think you'll learn today from Chung Min is that there has been, there's a paradox in Asia. And he's captured it very well in the volume. Before I ask him to say a few words about what he's written and why he thinks it's worth all of you giving up such a beautiful afternoon to come inside, I'll mention this book, Fault Lines in a Rising Asia is now available on Amazon. So you can't get it easier than that. And it's a really solid and well-informed read. Chung Min, do you want to give us an introduction? It's really embarrassing because he's basically plugging my book in front of my very old friends. So it's a real pleasure, Doug. Thank you so much. I'd like to thank all the folks at Carnegie, especially their publications and communications department. I see many familiar faces in this audience. The reason why I wrote this book, which came out a couple of days ago, is basically a three-fold. And then I hope I can do Q&A with you as well as questions from Doug. And the first is, if you look at almost all of the airport books in airports in Barnes-Novel and whatever, 90% of the narrative on Asia's rise is what I would call the Horatio-Elzer story, the rags to riches, Japan rising, China rising, India rising, Taiwan rising, South Korea rising, everybody's rising. So it's a very big picture of Asia's economic success, which is undoubtedly true. And yet, I thought that something was missing. And so one of the first things that I looked into was, what is the other side of the Asian story? Well, the other side of the Asian story, unfortunately, is that it is the depository of the world's largest political, military, and security challenges. And so if you take all the good things about the world, technologically innovation, political stability, economic trade, it's all in Asia. But all the world's biggest problems in magnitude are also in Asia. And that's a facet of Asia that people just weren't talking about. So I thought, well, there must be an Asian voice that corrects the narrative. And the second reason why the second major victim in the book is I don't buy the argument that Asia's rise is synonymous with the demise of the West, the death of the West. Obviously, because of the US elections now and a certain candidate who shall remain nameless, people are having a great time mocking the American democracy, how it's falling on its face, it's sinking, it's horrible. But I think Americans are smarter than you think. But the key issue here is you cannot blame the West for all of Asia's ills. And I think that's a shortcut to intellectual, I would argue, very shallow thinking. And it is also politically wrong, because although it is expedient to blame everything on the West and the US, if you look at all the problems that Asia faces, they're all indigenous, whether it's historical, I guess, legacies, territorial disputes, political deficits, and the list goes on. So that's what I really wanted to say was that, I'm a huge believer in Asia's success and I'm very proud to be Korean, but I'm also absolutely convinced that the greatest gift I have as a Korean citizen is that I have the ability to say what I want to, without fear of persecution. Living in a democracy is a great thing. And as we know from last week, the ruling party lost elections in Korea, but that's the way the chips fall. And so democracy is not something that only quote unquote Westerners practice. Japan, Korea, Taiwan, they have shown that you can be rich and free in Asia. It is not something that somehow Asian values creeps in to the discussion. So that was my second major theme. The third major theme is this whole idea that Asia's rise is almost relentless. It's going to go on almost forever. Well, let's assume that's to be the case. Then what? What happens after Asia rises? Do you build more cars? Do you build more factories? And I would argue that after Asia rises, it's time for Asia to really look into global issues. How much money does Asia pay for climate change? What are the great big ideas that Asians have come up with that have resolved outstanding global issues? What contributions have Asians made to the ongoing Syrian debacle and genocide? And the list goes on. Now, obviously you have countries like Japan who really pay up to the UN and membership and so forth, but the rest of Asia, in my opinion, has remained terribly silent on a host of global tragedies. And this must stop. So if Asia wants to rule the world, quote, unquote, you must first make contributions to the world. So those are the three broad themes that I have in my book. And as Doug said, I think it's on Amazon, as we speak. Also available at Brookings Store, right? At Brookings Store, if you want. You can't wait for Amazon to deliver it. But the more I've, and when someone asks me, what background do you have that enables you to say things about Asia? Well, I'm Korean, of course, but since the age of four, I've lived in 10 countries. My father was a foreign service officer, so we ended up living in Indonesia, Singapore when I was working at the Lee Kwan Yew School for a couple of years. Obviously, in Japan, I've lived there twice, although as my students know, my Japanese is what I call Starbucks Japanese. I can order coffee in Japanese, but that's basically it. I've lived in the U.S., I've lived in Germany and France, and then Mexico, and twice in Africa. So I think I've been able to see Asia from a much more objective, I guess, perspective than most other people who are in my field. And so from that perspective, let me just stop now, and then- Don't stop, you've got all the time you want to expatiate on all this. But I think rather than telling you how great the book is, which is basically up to you, if you have questions on my argument, on the pitfalls of the argument as you see them, or to explain in more depth what my book is about. If I just go through the chapters one more time, I have an introduction. And then the first chapter, I look into the introduction, basically says, if you stood in Asia in 1950, no one could have said that Beijing, Seoul, Tokyo, Taipei, et cetera, Shanghai, would be world cities in 30, 40, 50 years. So that's the good side of Asia's rise. But the bad side of Asia's rise is all in those cities as well. And so then on chapter one, I look into, for example, the predicaments of strong states. And here I focus on Asia's political deficits. We have the world's largest one-party state, China, that is struggling to come up with some type of a modus vivendi, but I believe that we are reaching a very critical tipping point in the PRC. You simply cannot control the way people think when you've never had more educated, globalized, and outgoing Chinese people. You cannot monitor 1.4 billion people, even with all of their monitoring and surveillance equipment. Then you have a number of outliers in Asia, whether it's Pakistan or North Korea, with nuclear weapons, and democracies in transition, i.e., Thailand. You've had two military coups in 10 years' time. And you have two very successful, but aging democracies, Japan and South Korea. So there are huge political problems, even as we speak. The third chapter I focus primarily on what I call the new, I guess, game in Asia, which is a competition for supremacy. No one power is going to dominate Asia, as the Chinese did back in the good old days, or the U.S. right after World War II. So you'll see some type of a mismatch between the great powers and the major powers, and the middle powers. Then I focus on what I call a virtual arms race. Since 2010, Asia spends more money on defense than NATO. And so despite the fact that China's defense budget may go down a little bit, owing to a slowing growth rate, I foresee the fact that the next 20, 30 years, Asia is going to become the most hotbed for arms transfers and military modernization. Then the fifth chapter, I look into what I call the second nuclear age, which all of you know, Paul Bracken coined the phrase about 10, 15 years ago. And here I focus primarily on the Indian, Pakistani nuclear quagmire. And my final chapter, which I call the bomb next door, apropos of South Korea, is a nuclearized Korea. And in particular, how the Americans, the Japanese, and the Koreans have responded, or not in some cases, to a nuclearized North Korea. And then I end very shortly with a conclusion. So that's basically a walk of the land of my book. Truman, I forget who was the originator of the phrase, the Asian paradox, but it meant to capture the notion that on the one hand you have all this economic success and educational attainment and social development, and on the other you have this grinding military and nationalist conflicts in the region. I wonder if you'll like to talk a little bit about that. Right, that's a phrase that I use also in my book. I think I first read about this in the early 1990s. So the paradox simply is this, how can a region that is so successful economically minus outliers such as North Korea and Myanmar before she began to reform, whereas politically and strategically and otherwise, you have the world's most pronounced dichotomies and problems all at the same time. In other words, if you look at every single bilateral relationship within Asia, between China and Japan, Korea and China, Korea and Japan, and then the list goes on, there is a fairly deep repository of mistrust. And you have huge political deficits in all those regions. And so if you go from, if you take Singapore as the middle point, and the right side of Singapore is what I would call the right vector, that right vector is the Asia that we're all familiar with. The rising Asia, the megalopolis, technological wonders, Samsung cell phones and whatnot. But the left vector from Singapore all the way up to the subcontinent and on to, for example, Afghanistan, that's the very weak link of Asia. And that's an Asia that people simply don't pay attention to within East Asia proper. And so if you look at that, that paradox is something that Asians really haven't come to terms with. So in that sense, you know, we can talk about the good sides of Asia, but unless you understand the paradox of Asia, you simply will not be able to come up with regional or even global solutions. So that's basically my argument in a nutshell. And so then my daughter asked me that, if you could give us the elevator speech of your book, what would it be? So I said, well, Jean, I would say Asia has many problems. So she said, well, it took you 367 pages to say this. I said, well, that's what academics do. But seriously, I really wanted to show a different facet of the Asian narrative. And I think coming from someone who is Korean and Asian and was lived abroad, I believe, the lens credibility to the extent that it does on showing the other side of Asia's rise. I'm glad in your response to my question that you mentioned Myanmar because when you rattled off the names of all the cities that nobody would have predicted in 1950 would have great success. You left out the fact that everybody in 1950 thought Rangoon was going to be the future for Asia and or Yangon and Myanmar. My first visit to brought all this home for me in a funny way. It caused me to recall it now. I was in Rangoon for the first time on a government assignment and entirely coincidentally, a North Korean team came, a commando team came in to blow up. What year was this? 1982. 1982, okay. The Korean team came in to blow up the Korean cabinet who were there to visit Nae Woonch and will Nae Woonch in his government. And the great, wonderful Korean diplomat, Ibum Suk, was killed in that. The foreign minister, that's right, yes. And all of that came to bear at one place. And I think when people ask me, well, can Asians be both wealthy and free? Well, I say, well, look at Korea. I was a university student at Yonsei University for my undergraduate days. And I remember that at that particular time you could not speak about politics openly. You had to almost like in a hushed voice, David, you were there much longer than I was and you know the terrain better than I do. And today Korea has one of the most vociferous, open, political, I guess, environments. Some might say we're too noisy. But in a democracy you really can't choose who says what and which party loses or not. And that's a great thing about living in a democracy. And so it's inefficient. And there are other countries that really don't like that way of democracy. But I would say that that is the biggest lesson that I've learned growing up in Asia. So whether it's Japan or Korea or Taiwan or Indonesia even today or the Philippines for that matter, you can be economically successful and also have a liberal society. And if you look at what's happening in Hong Kong over the last several years or what's happening within China on the university structure, this really is a big step backwards for academic freedom. Well, it's a big choice. Clearly the most recent rulers in China have decided that their choice is to prefer control over the benefits of unleashing greater energy among the people, among intellectuals, political opposition even. It seems to be far away. They can't really allow people who've got this high level of development, middle class of over 300 million people and then tell them they're not gonna get information. I think if there's one emblematic event in the last few years that has colored the policies and actions of the Xi Jinping government, it was the arrest of Boasi Lai and the allegations back and forth of corruption within the leadership, which were all a proxy fight for real power. You're corrupt and therefore you're bad, but that's not really the point. The point is you oppose me and I want you out. And we see now that this Pentagon Papers, excuse me, Panama Papers. Panama Papers has seen it. Same thing, same thing in some respects. The Panama Papers have been published and implicated members of the families of seven of China's recent leaders. And none of this has been reproduced in many Chinese media, but everybody I know from China seems to be well aware of it. You can't stop this stuff. You know, in my book, I'm not a China specialist and I'm sure there are many people in this audience who are infinitely more informed about China than I am. But as someone who lives next door to China, what happens in China has a huge impact on my life and that of my daughter and hopefully in the future, grandkids like Chris. But the key issue here is this. As I was writing my book, I found out that there are 87 million party members of the CCP as of July 9, 2015. That's three million less than the entire population of Vietnam, which is 90 million. Well, I ask myself, if you have 87 million people in a party, how many people do you need to watch those 87 million? So you take a rough figure, 10%, we're talking 8.7 million, which is larger than most European countries. And you ask yourself, who watches those 8.7% that comes out to maybe about what I'd say, at least a good 870,000. And of the 870,000, who do you really pick and choose to run and give orders to the 870,000? Well, so on down the line. And it's come to the point where as you know, ever since 2008 or 2009, China spends more money on domestic security than on external defense. And that tells you that they're definitely concerned, not only about social upheaval and so forth, but the fact that the very model the CCP has produced and strengthened, I don't know how resilient this is going into the next 20, 30 years. I'm not saying that the PRC is going to do another Gorbachev type of meltdown. I don't see that happening for many reasons, but nor do I believe that the CCP will be in power forever. Nothing lasts forever, but they're at this crucial tipping point where you simply cannot control how people think. And regardless of how many people watch the internet, as I was researching my book, Doug, there are 2 million people who monitor the internet in the PRC, 2 million. And very soon that's going to be impossible because with Twitter and Instagram or whatever versions you have in China it's going to be virtually impossible to trace micro blogs and to say exactly what words or concepts or phrases you cannot basically find on Google or whatever it may be. Especially when you've got a language that's just heavy with homonyms. That's right. You can always find something to express what it is you're saying that sounds like, what was the frog? They had a frog phrase a while back that covered a whole bunch of suits. And I quote extensively a good friend of mine who just happened to write an article in Foreign Affairs but I won't mention his name, but it's the same name as me. I didn't get his first name. And he is one of those really great, I guess, flag bearers for the CCP. And I know him personally very well. And I think it's gotten to the point where I think he's very happy that the CCP has turned out good leaders as he says and for a country of that size, you cannot simply have a rambunctious democracy like India and so you need a strong state that basically churns out good leaders that are responsible to the state. But at some point in time I told him, what do you do for a 14 year old who doesn't believe in that dream for China? What do you do to a 16 year old who doesn't believe that his or her life depends on the imprimatur of the party? And that's something that people simply don't have an answer for. Now, if you ask countries in Asia that turned democratic before when they were authoritarian, whether in South Korea or Taiwan or whatever, you probably would have gotten the same answer. We need a strong state with great growing nationalism and so forth, but at some point in time, you simply cannot maintain that depth of control. And that's one of the big things I think I wanted to get out of the book, which is there's nothing wrong with Asians who want freedom, who want to live in a free society. And that's a very powerful message. And one other thing, Doug, that if you look at Asia, one of the greatest maps I have in my wall is a map of China. I think China shares borders with 14 countries, as I recall, 14 countries. 14 is right, right? Then the Maritimes are separate. And of those 14 countries since 49, not one is a natural enemy of China, which is a great feat of Chinese foreign policy. But at the same time, not one of those 14 states is a natural friend of the PRC. And if you look at what the US has done over the last 50, 60 years, despite all the ups and downs and pivot or no pivot or new balance or new pivot, if you look at all the treaty allies, all your core partners, people who really want to engage with the US, India, Vietnam, et cetera, that's a huge reservoir of soft power and goodwill that China at this particular moment in history in Asia doesn't have. And that's another message that I wanted to tell to the book that despite Asia's rise, how many Asians really like fellow Asians? How many Asians will call each other and say, look, you know what, I really need you to send troops to defend me because country X is going to invade me? And almost all of the Asian states, except as I said for outliers, will rely on the US if there is a huge, I guess, security problem. Now that should change, obviously. And I think one message that Donald Trump has said, I think the way he articulated it is very wrong and I totally disagree with him, but I do agree in some respects that Asians must assume much greater share of the common defense burden. And that's basically a fact of life. But if you look at the overall disposition of the Chinese way of friendship and the American way of friendship, I would choose the American way of friendship anytime. As I would tell my Chinese friends, and they're not very happy, and I would tell them if your best friends in Asia are North Koreans and Burmese and Pakistanis, that's absolutely fine with us. But on the other hand, if you look at America, despite all the ups and downs, you have Japan, South Korea, Australia, New Zealand, Southeast Asia, India, that's an amazing, I guess, collection of friends and people who really share in many respects similar interests and goals. You just made a point which I think is really profound and I try to do my own Johnny Appleseed kind of work on this to spread it around, but it's really underappreciated. And that is we tend to, in our thinking, our journalistic narratives, tend to write about bilateral relationships. It's always us against China, or maybe a Japan in the US against China. But we don't take the whole picture and see that the 14 neighbors of China never really want to get into a hostile relationship with China, but don't ever want to be subject to overweening Chinese pressure. And somewhere between those desires, there's a lot of partners, people who will, if China's behavior really does become offensive to its neighbors, the neighbors will be glad to work with us and others. So we have partners to do the kind of countervally work that may occasionally be necessary as China migrates through its future. And we don't conceptualize this broadly enough. And I think if we do take that conceptual step, then we have to ask ourselves, are we doing the right thing with Russia? Are we paying enough attention to Central Asia and a few other of the actors on the scene? And what's interesting is China has treated Burma with a very high-handed approach and they got the reaction that we saw when the government shifted and looked west. But the Chinese are not stupid. They've looked and they say, well, you know, we did score our own goals here. And so they invited Aung San Suu Kyi up to Beijing last year. I don't underestimate the point or the fact that China has made enormous strides compared to pre-49 days. And one of the most remarkable, I guess, developments in the last 30, 40 years is this. China produces incentives for the rest of the planet, whereas the Soviet Union never did. And so every single country in Asia, especially that are allied with the U.S., we're running into the so-called China dilemma. And that's becoming progress of the worse because almost every single U.S. treaty ally trades more with China than with the U.S. And so that means China has huge leverage which is economic or trade or commercial, technological, et cetera, a leverage that the U.S. has never had. And so if you want to craft a viable U.S. strategy in the next 30, 40 years, you've got to understand that China is a very different major great power than, for example, the Soviet Union. And that's something that not only the U.S., but every single major Asian country is now facing. How do you calibrate your China policy so that you will not really make them antagonistic to your goals, but at the same time, you want to also make sure that your ties with Uncle Sam remains robust, but maintaining that balance is very difficult. There's no real field manual that says how do you coexist between these two large humongous powers? And I think if you look at the map of Asia, there were two countries who really all are affected by this, but my personal view is that Vietnam and Korea are the two most countries on the opposite sides of the Chinese continent who really feel this pressure. How do you operationalize your fine-tuning, fine-tuned China U.S. policy? And I, as I was about to say a moment ago, the Chinese were scoring goals against themselves for a few years there. And you could argue they're still doing that the South China Sea, but they're Southeast Asian neighbors, but they're not passive. They have, in the last couple of years, had two major conferences on their peripheral relationships where they talked about how we gotta improve our game for China. And then secondly, they've operationalized it with the One Belt, One Road, with huge promises of infrastructure investments, market access, and then on top of that, the financial means by which to do it, the Asian Infrastructure Investment Bank. So we can sit back and observe this and stick to military activity, but if we're not engaged across the spectrum, then the competition's gonna be very tough for us to beat. You know, I'm sure all of you in this audience recall this. When the Chinese announced the AIIB, many people in Asia wanted to join, but they didn't want to become the first country to join because they knew that Washington was not really cheering the AIIB at that particular time. So I think if I'm not mistaken, Korea raised her hand after Britain said, I'm gonna join the AIIB. So after Britain said, okay, she broke the ice and the Koreans came on board and others. And yes, this is a new reality. That's a new normal that all Asians have to deal with. But that does not negate the fact, and that's one of the key lessons that I hope that I can deliver to this audience. It doesn't negate the fact that Asia has immense problems of its own, that China has immense developmental challenges, that India has enormous economic and social problems, that if you look at how Korea is going to reunify over the next period of time, there really is no road map in that sense. How does Japan cope with a shrinking population? Let me just give you one huge number. By 2100, according to current UNDP estimates, population estimates at the current fertility rate, Japan's population, which is about 127 million today, is going to decrease to about 85 million. But if you look at how it could even shrink even further, depending on what, so this is why I tell my students, it is absolutely nonsensical to believe that Japan is the next big threat. You know why? Grandpas and grandmas are not gonna drive tanks. You know, it's not gonna happen. And so all the rich countries of Asia, i.e. Korea, Japan, Taiwan, Singapore, Hong Kong, and so on on the line, are becoming what? Rapidly aging, shrinking in population with ballooning welfare costs. So the issue today is national security versus social security. And that's a dilemma that even China faces. Every single Asian country dug, you're going to see exponential increases in social welfare spending. And that would have huge political repercussions. Why? Every single political party is going to tell a lie, which is I will give you all the benefits without raising taxes. And I'll also give you all the other benefits. And that is simply not doable. It's not doable in Korea or in any of the other major democracies in Asia. And that's a problem that you have to really, you know, head up. Otherwise, you will find yourself in a huge financial and fiscal hole that you simply cannot dig yourself out of. But that's a problem that all the three big major players in Asia faces. I guess you can draw your lessons from European capitals on how to turn yourself into a gilded retirement home as these changes occur. I wanted to ask you about something closer to home being Korea for you. Right. We've got now a fairly well-developing security dilemma in the South China Sea, where China does something, they say, to defend their sovereign interests. And we and others do things in response because we're defending peace, truth, justice in the American way. And we're getting into this escalation process. We've got a potential security dilemma. I don't think the new Taiwan government is seeking to provoke one, but given the gap between the positions of that authority and the Chinese government on cross-strait relations, we could have a very rapidly escalating security dilemma there, too. And then now we've got one beginning in the Korean Peninsula, where the North Koreans have tested military systems and weapons. And the natural response for any democratic leader, Korean or American, is to take advantage of the technologies we have, in this case, high-altitude anti-missile defense, and we're now, the two governments are talking about deploying that in South Korea. And then China sees that as a threat to its second-strike capability because of the anti-missile character being so close to Chinese territory. Are we heading into another security dilemma on the Korean Peninsula? You know, I think there's a security dilemma in almost all facets of Asia because, and this is something that China really has to understand. The more she becomes a bit more aggressive in her power projection, whether it's in the East China Sea or the South China Sea. And if you look at the map of Asia, China today has the ability to constrain activities in the so-called first island chains. And their objective, I would argue, in the next 10, 20 years, is to have the ability to reach out into the second island chains. And if that happens, the American fleet, the southern fleet in the Indo-Pacific will face huge problems. Then the question is, which other country will be able to fill that gap? And this is why every single Asian country that really is concerned is doing two things. He is looking at the US for more security guarantees and increasing however possible it is its own military footprint. Going back to your question about that, this was the $64,000 question. And for President Park and her predecessors, every time North Korea tested a nuclear weapon or a long-range missile, we did two things, which is we want you to go back to the six-party talks and we will also apply sanctions. And none of those really worked all that well. So this time around, after the January nuclear test, the Korean government said enough is enough. We will now talk with the Americans on deploying the THAAD at some point in time, although a decision has not yet been made. And the Chinese have become really vociferously against such a deployment. They said anything about THAAD is negative. We do not want you to do it. And that's the Chinese position. And diplomats aren't supposed to intervene in each other's affairs, but the Chinese envoy in Seoul has spoken out publicly on many occasions why THAAD is detrimental to its own security. But from our perspective, short of going nuclear, what option do we have? If Kim Jong-un does a fifth nuclear test, if he miniaturized nuclear warheads, which he already basically has, if he develops SLBN capabilities, the only guarantee we have of any type of defense is, for example, a THAAD system. So that's something that South Korea has to really make a decision. It's a political call, it's a difficult call, but it's better than doing nothing. And so that type of political calculation is going to become much, it's going to become progressively more difficult because the Chinese can become overbearing on these issues. It was extraordinary to see Foreign Minister Wang Yi call your ministry and publicize that he called and opposed this. I'd never seen that in the history of modern Chinese diplomacy. It's quite overt pressure. I want to, before we open the floor to the audience for their questions and comments, I'd like to ask you, push you one more area, which is how do you see Russia in Asia? What's Russia's role? What's Russia's role? I have a short section on all the major powers in Asia and much has been written about the so-called Russian pivot to Asia. But if you look at almost all of the empirical evidence, it just isn't there. First of all, the Russian population east of the Urals is nothing compared to the Chinese. And so if you look at the longer term projections of white Russians in the Siberian part of Russia, it is not really a place for economic growth. Number two, Vladivostok was a major, I guess, seaport and naval base in the Cold War, it no longer is. And if you look at Russia's trade with Japan, Korea and the rest of Asia, it is very minimal. And so despite the rhetoric, Russia is a one commodity economy, natural gas and oil. And the largest importer of that is China. But outside of that, there really is no, I would argue, a bilateral or even a multilateral engagement between Russia and the other parts of Asia. So in a nutshell, Mr. Putin has done this for political reasons. They have tilted towards Beijing on a number of issues. But if you look at the long-term projections, Russians are getting very, very, very anxious because China will basically overwhelm them economically. And that is a prognosis that is very bad for Moscow's longer-term strategic interests. Every time you talk to a Russian, you get yes, but when it comes to this part of the world, one of the emblematic facts for me is that there's about, it's about a 2,800 kilometer riverine border between Russia and China. And how many bridges cross that river? I don't know. None, okay. But bear this in mind because you'll soon be seeing a reporting on Prime Minister Shinzo Abe's upcoming visit with Putin and Sochi. And he has long had an ambition to regain the lost Northern territories from Russia. And the Russians are suggesting there might be some give in this, and so I think you're gonna be hearing more about Russia's involvement in a construct, attempting to portray it as heavily involved and constructive in the next few weeks as this story plays itself out. You know, one final point, note on this, on Russia's tilt to Asia, Doug, in the book I mentioned the fact that perhaps, strategically speaking, it makes sense for Asians to actually support Russian economic development as a countermeasure to the rising Chinese economic behemoth that it is. But the problem is, if you look at the political discussions across Asia, it is not, Russia is no longer a key security factor. She is important in the context that she is, of course, a member of the Security Council, but if you look at their footprints, military and otherwise, it really is very weak compared to the Chinese, and of course, nothing in comparison to what the Americans have. The Russian defense budget in 1990 was $212 billion, and in 2000 it was 20 billion. That's right, yeah. So you can see where the trend lines went. Now ladies and gentlemen, I'm happy to take questions and comments from the floor. Mike Mozetic, in the fourth row. Just wait for the microphone please. So that the Chinese censors can hear what you have to say. Mike Mozetic, PBS online news hour. First, a couple points that you had made in the prelude. Ying, Ming Pao, the major independent Chinese language newspaper in Hong Kong, yesterday published a whole front page piece on the tycoons involved in the Panama paper. This morning the editor got fired. This morning. This morning. And secondly, one usually doesn't go to the magazine Foreign Affairs for Happy Talk, but there's a co-authored article with two unusual co-authors, Kishore Mabubani, whom you mentioned in Larry Summers, predicting, Kishore changes his line quite a bit. A nice fusion between East and West and the world is going to be better off. Sorry, now to my question, why do you put Singapore in the left vector rather than in the right vector? Is that geographic or something else? It sits there. It's just because it's right in the middle. So of course Singapore is part of the successful part of Asia, she's the financial hub and so forth. But if you draw a line West of Singapore, that's where I think the problem, more problematic like it's real estate of Asia lies. But Singapore is not. No, no, no, no, no, no, no, certainly not, certainly not. No. Microphone up front, please. It's over here, Chris, yeah. You got an intern from Asan Institute and so on. Oh, great, I'll see you next week. Thanks, Chris Nelson, Nelson Report. Attorney, thank you so much. I look forward to reading the book. I'm going to read it on the plane on the way out. So that'll keep me awake, because it's obviously so very stimulating. Or put you to sleep. Well, that helps too, yeah. That mellotone in two glasses of red wine. As a professor trying to help people organize how they think about these things, what's your advice to the upcoming G7 or for that matter the upcoming G20, leaders, how should they be ranking dealing with China in a positive way if possible to bring it into the world community as a, you know, as a Bobbizelic stakeholder? I think we all agree if China fails, we're all in deep trouble. So no matter how angry we get, we've really got to help these guys do it the right way. What things are we collectively not doing that you think we should be doing? What is the role of Korea here as a possible bridge on this kind of thing? I'd love to hear your thoughts on that. You know, that requires an entire new book, which I do not plan to write. Well, how about the elevator speech? Yeah, but the elevator speech is this. I think China's way past models that could take it out of these problems. In other words, nobody has a solution for what China faces. And nobody has a pamphlet that tells China this is how you should act to become a greater stakeholder in the world. And the reason is this, it is only their leadership who can basically tell themselves, you know, if you look at the world of 200 odd countries, how many are prospering politically and economically and socially? And they must understand that you cannot have this strange bifurcated model of a one-party authoritarian dictatorship of the proletariat who existing with a flourishing market economy. They think this can last forever, but again, Chris, that's the dilemma that only the Chinese can basically resolve. What role can we outsiders play for a small country like Korea? Not all that much. I don't think China considers South Korea as a bridge. She considers Korea as more of a province who turns out to be an independent state. So, but it is the US where the Chinese leadership is paying the greatest attention. And so I would argue that over the next 20, 30 years, much like the so-called strategic consensus America had after the Cold War, you need a new strategic consensus bipartisan on China. And that's a homework that only Americans can do. And that's something that I think the Chinese will understand and accept as a co-equal. But other countries, whether it's to EU or even Japan or even India, the Chinese will say, no, no, no, we don't want to hear from you. We want to hear exactly what the Americans will do in the context of this emerging new order. About 30 years ago, Jonathan Spencer wrote a really good book on China called Two Changed China, which chronicled all the efforts of all the types of people over the centuries who failed trying to bring their particular version of change to China. Larry Nicks in the back, in the second row, from the rear. Good to see you, Dr. Lee. Larry Nicks from CSIS and George Washington. Your reference to this issue of the Asian countries trying to balance how they deal with China on the one hand and the US on the other hand, civically as this debate politically in the US has emerged over the US economic relationship with China, especially what Donald Trump has been talking about, but also what 60 minutes featured in late January about Chinese theft of American trade secrets. This issue is not gonna go away, regardless of whether Trump gets nominated or not. It's going to go into the next administration. The relationship with China. As US dissatisfaction with this relationship seems to be mounting, is there any thought being given in the other Asian countries how to, well, I guess I would describe it, how to advertise themselves and their own economic relationship with the US? Get their input into the US debate. Make the point that, look, our economic relationship with you Americans is not the same as the Chinese economic relationship is. Is there any thinking going on in Korea or any of the other Asian countries about how to deal with this rising debate about US-China economic relations? Now I noticed Prime Minister Abe did have an op-ed piece addressing this to some degree, and I guess reading that leads me to ask this question, but it seems to me it's gonna be a dilemma for other Asian governments as we go ahead into the next US administration. Well, I think the short answer, Larry, is this, that TPP is obviously what President Obama wanted before he left office, but the Republican-controlled Congress will not give that to him. And I'm not really sure whether the next incoming administration will pass TPP as soon as the government comes in. In other words, that's a reality. You cannot trade with China on Monday and with the US on Tuesday and go back to India on Wednesday and then back to China on Thursday. That's not gonna be possible. So all Asian states have to trade with China and the US, but the key issue is this, for those countries that overwhelmingly trade with China, whether it's Korea, Taiwan, and other parts of Southeast Asia, the bad news is as China's growth rate dips below 6%, and if it goes down to, let's say, 4% or 5%, who will feel the repercussions? It's the South Koreans and others who depend on exports to the PRC market. So we've got to change our own economic strategy. That's much more important for Asians than somehow sending messages to the US. So the TPP is one major vehicle. The Koreans didn't get on board on the first round, but we're hoping to get on board the TPP on the second round. But despite all of the problems with the Chinese economy with slower growth, the fact remains that all Asian states are so intertwined with the Chinese economy that it is impossible to divorce yourself completely from the PRC economically. And that's a reality that I think even America realizes over the next 10, 20, 30 years. Larry, you mentioned at the beginning of your question, Donald Trump, in today's issue of foreign affairs, there's an article from a very unusual source, Eric X. Lee, who's a Stanford-trained capitalist in Shanghai, who's written controversially about the authoritarian lessons China can teach the world, where democracy might be making us weak. In this article, he dissects the Trump campaign as perhaps, maybe not rightly, as perhaps setting the basis for a new and more constructive long-term relationship between the US and China by being honest about some of the problems and directly addressing them rather than skirting around them in the name of protecting the elites. This is picking up on the campaign theme of Sanders. I haven't read that, but does Eric mention the fact that about at least in China, whether the transparency should also apply to the Chinese leadership in the article? Probably not. No, no, no, no, that's a different topic. You can be sure of that. Okay, third row here, please. Mark, did you already have that? Hi, my name is Kunio Kikuchi, and I'm with Washington Research and Analysis and formerly of the World Bank. Now, it seems to me, in ancient Greece, there was Sparta, which is a militaristic, unrelenting country, and Athens, which was, let's say, democratic and arts and everything else that's good about society. And sitting in Washington discussing China these days, everybody is focused on the Spartan aspect of China. The increase in military might and how to contain it, how nasty they could be with internet hacking and this and that. But if you go to Japan, you're overwhelmed by this sudden increase in Chinese tourists who are enjoying the heck out of the place. There are now, a few years ago, it was only three million a year. Now we're looking at six million. And by the way, in January, there were over a million Chinese, not counting the Hong Kong and Taiwan people, but there were only 900 Russians, by the way. So that's the kind of influx of Chinese people and identification. And it's not only that they're coming in, the Japanese are welcoming them. And when I went to New York the other day, there were lots of Chinese tourists. If you go to Vancouver, they're not only lots of Chinese tourists, but they're buying property. So it seems to me that there is almost a schizophrenic aspect of China. And we are focused so much on the Spartan aspect of China when we should be also paying us attention to the Athenian democratic sort of wish to become democratic thing. In fact, Xi Jinping sent his daughter to Harvard. I don't think she went there to spy on Harvard. I think she's going to carry some information from there. So I wondered if you had any comments on that. Well, obviously, China is a great civilization. And as Lucian Pai once said, China is a great civilization trying to act like a nation state. So the benefits that we have gained, the world and Asia from Chinese civilization is, of course, something that we all know. And as one Chinese academic told me, he said, you know, Cheng Min, if we had to, if you guys, the world, had to pay intellectual property rights on paper, on gunpowder, and whatever else we've invented, you'd all be bankrupt. So obviously, yes, we were all beneficiaries of Chinese civilization. But the key issue is you've got the differentiate with the Chinese regime and the Chinese people. And so whether it's in Korea, obviously we've got tons of Chinese coming in daily. They're buying things, they're engaging. Well, you have thousands of Chinese students studying all over the world here in the US in particular. And when they go back home to the PRC, I hope they'll bring back not just how great American burgers are, but the fact that despite all the, I guess, noise and disrespect in some ways and discomfort, this large 300 million society keeps on trucking. And there's got to be a reason why this happens. And it's because despite all the trumps of this world, there is a budding consensus that builds over time. And that's, I think, a great aspect of American society that I hope our Chinese students can bring back. So whether they're studying overseas or wherever else, they will compare the world as they see it and the world as a regime tells them as it sees it. And that's a dichotomy which the Chinese government cannot control. And that's a dilemma that I think will deepen of the PRC. Two things, Kukuchi-san. One, remember Athens made Socrates drink poison. There's some. No, no, no, no. Yeah. And secondly, I'm reminded that at the spring holiday this year, Japanese took back about a million heated Japanese, excuse me, Chinese tourists took back from Japan about a million heated Japanese built toilet seats. And there was some comments about why can't we make good, but I approve of that. I lived in a traditional Japanese house for a time. And these are wonderful inventions. Mark, the second row here. Mark Wall, former State Department now affiliated with the Global Studies Center at the University of Wyoming. Could you comment on China's relationship with its other big land neighbor, namely India? How do you see that playing out? And also, how does the U.S. fit into that? You know, throughout the Cold War, India was one of Russia's key strategic partners. Despite the monolite movement, Russia was a major supplier of arms to New Delhi. Moscow supported New Delhi on key foreign policy initiatives. And particularly under the Gandhi regime, in Delhi, American foreign policy interests were not always aligned with, of course, with India's because of U.S. support for Pakistan. But after the Cold War, and particularly today, I think the Russian influence on India is marginal. The defense relationship has basically tanked over the last 20 years, although the Russians are still supplying spare parts for the aircraft and so forth, no new orders have come in, really, from New Delhi. And so if you look at where India is planning to build its next, I guess, greatly forward in terms of military projection, it's naval capacity, naval capabilities, which the Russians are not supplying, although they have supplied submarines to Vietnam. And from the Indian perspective, it took them a long time, but finally I think they realize that they have more in common strategically with the U.S. than with Russia. And that paradigm shift took about 20 years. And I think Indian leaders today from Prime Minister Modi on down can say this quite publicly, without the backlash that existed even 20, 30 years back. You could not say 30 years ago, oh, you know, there are certain aspects of America that actually works, and it's beneficial to Delhi's interests. And so when you meet with, for example, the interlocutors in Delhi, I had a very good dinner with Jai Shankar, who is the permanent secretary, the foreign secretary, and one of Prime Minister Modi's right-hand men on foreign policy issues. He was very erudite. He said, look, we do not want to go into an alliance with the U.S., but as long as our interests are aligned, we'll work with America. And one of the real things that I mentioned in my book is this, that there's an office in the Pentagon that focus exclusively on defense partnerships with India. Can you imagine this happening 30, 40 years ago? That would have never happened. And that, I think, tells the entire story of how much you've seen a shift in India's foreign policy thinking over the last couple of decades. You'll learn a lot about that, Mark. If you dial into the newly opened Carnegie office in Delhi, where we've got, we've got an absolutely superb... Yeah, headed by a great guy, C. Rajamohan. Rajamohan is spreading that, and we would actually tell us from here as it's contributing a lot, especially on the security side of the debates. About two years ago, Shyam Saran came here, and I've always thought of him as about one of the most fiercely articulate people I've ever met. And he always stuck to the non-alive. Two years ago, he came here, had a visit next door, and said, I'm here to tell you that's changed. What you couldn't say for 20 years is now something that they're quite straightforward about. I can roll in the back. Hi, then. Thank you for being over here and greets to you guys for your presence. I'm at the American University right now, and I'm doing my research on Pax Asiana. So is the Pax Asiana possible? And my question to you in this regard was, first of all, is a cohesive Asian identity possible to achieve that Pax Asiana period from Pax Americana? Right. And the second question I had was, if that is to be possible, we also need the United States out of the region. So is a cohesive, not only a cohesive Asian identity, but is it possible for Asian countries to get together and manage themselves in a security manner without the supervision of the United States, especially when it comes to strategic triangles like India, China, Japan, or Asian countries with China and Japan, South Korea, Japan, China? So other than the outliers like North Korea and Pakistan, can these powers come together and form an identity in economics, in security struggles, in human security, in environment? So that was my question. Thank you. My short answer is no, no, no, no, no. In the sense that, again, Asian has made great strides, it's over 30 years, there is an Asian identity in that sense, but that is very different from whether their interests actually converge. I spent two years in Singapore, traveled all over Southeast Asia. I can tell you that the feelings between Malaysia and Singapore are not really all of that in unison on a range of issues. And so I don't buy the argument that you can have one Asia, one big happy Asia, because Asia is a figment of the imagination. You cannot tell me that somehow the Pakistani mindset, however one defines it, coincides with what's happening in Taiwan. There are very, very different regions even within one particular country. So Asia has made progress in certain issues there's a greater acceptance of norms on proliferation on human rights, et cetera. But this is why I believe Asia's future lies in accepting and adapting and strengthening universal norms. I reject the argument that Asian values is the future of Asia. That is simply not true. And there are people who shall remain nameless, who go around selling this wonderful medicine called Asian values, but they're all from countries that are either authoritarian, semi-democratic or don't want to be democratic. And so as someone who lived in a country that was authoritarian, but is now a robust democracy, I can assure you that living in a democracy is a lot more fun. There was a question. The other question. So I'm Anna Concom with USAID. Relatedly I was gonna ask what the role is in regional organizations like ASEAN, our regional initiatives like NAPKI and addressing these fault lines. The more you have alphabet soups, it's good because it constrains behavior and it also increases norms. But at the margins, they make key contributions, but on the big, big, big issues on political stability, political development, the future of North Korea, nuclear proliferation and the list goes on, the future of South China Sea. I doubt highly whether these multilateral institutions, including for example the ARF, will be all the defective. So it's a talk shop, it's a necessary talk shop, but if you really have to butt heads and resolve outstanding issues, those issues calls for major power diplomacy and that is something that these so-called multilateral organizations simply aren't equipped to do at the present time. Very perceptive observation. This is a persistent problem. To every year we have a wonderful, one of the Washington-based NGO sponsors, two students from each of the best universities around Asia, Korea, Japan, Vietnam, Singapore, Philippines, you name it. And they come in, these are really presentable, competitive people. And what takes over the conversation, not 15 minutes into it every time, is all the animosity among the different nationalities. Now you'd think these kids would all say, well, we're all interested in this kind of computer, let's talk about Apple and what's, very quickly this stuff comes to the surface and it's gonna be, if it's those young people now, it's gonna be around quite a long time. Any more questions or comments? Please send them a fourth row. Hi, Rudy Dahl, Global Holding Copers. We do a lot of international infrastructure development and you were talking earlier about how the Chinese were influencing people with finance and infrastructure development. That's turning. The reality is hit, Africa, Bangladesh, Philippines. And they find out that the money isn't always there and they're bringing in thousands of Chinese laborers and merchant people. And now it's turned back and people aren't putting the new, I wonder what impact that's gonna have back on China. As opposed to Korea, I'm introducing some Korean companies into these. And by teaming XM and K-Shure and K-XM, we put together stuff and they're not interested in bringing other than the management in there. They just want it because you don't have enough local labor in Korea. So what do you think's gonna happen with this? My take on that is that many people say, well, South Korea should be much more forthcoming in exporting its so-called successful development model. And there's a certain truth to that, but it will be highly presumptuous of Koreans to go to country X in Africa or Latin America or South Asia and say, well, this is how we did it. And so you follow our path. That simply is not going to work. I think you've got to be a lot more, there has to be a lot less hubris. This is something that the Chinese are now learning. It's not enough to go into country X, flood it with money and then say, we'll take you over. And so every country in Asia benefited from two things. One is its ties with the global market really helped it to what export itself out of poverty. And that's the model that the Japanese, the Koreans, the Taiwanese and even the Chinese basically adopted. And the second thing which people don't really think about all that much in Asia is the reason why Asia was able to do this was because writ large, you had security, umbrellas and ties with the US. And the US did this for its own intrinsic, non altruistic reasons, but the end result is Asians could focus on development because you knew that Uncle Sam was behind you in certain respects. And that is one of the key conditions for Asia's super growth from the 60s onwards. That cannot duplicate I believe in other regions. But going back to your China question, yes, China has to learn that it's not enough to go in there with money. And although technology is a cultural carrier, you've got to really impress the local people that you're looking up for their interests, not necessarily your own. I think this point about learning is important. I think the Chinese are learning from their mistakes. And there's a history to this. The United States in the 50s suddenly found itself all over the world in ways it'd never been before. And it wasn't long before we got called the ugly Americans because we had big feet and we stomped all over. And we had to learn a lot about local cultures and how to do business overseas. The Japanese followed us in a lot of clumsy ways in the 70s. And Korea did it in its own way in the 90s with the expansion of construction industries because you had built everything in Korea so you had to go overseas to keep building. And China's doing that now. My rule of thumb with China is if they say 40 billion, it's 40% of that. And maybe it won't even be 40% of that when we get down to it. But there's, my final point on this subject is 40% of 40 billion is a whole lot more than the 15 million we've got here and there. I'm not saying we have to go out and spend a lot of money, but we gotta get a lot more active in our representing our interests in these peripheral nations if we want them to pay enough attention to us when the time comes. You know, this has been a wonderful session for me, and all the more proud that we asked you to be a non-resident senior associate of the Carnegie Endowment and that you've undertaken this book when you first presented the pitch to me. I thought it was really onto something but the book itself delivers. Ladies and gentlemen, please find the book and read it and thank you. Thank you. Thank you. Can I just say one final word? Thank you so much. And to all my friends here in the audience from the US and from elsewhere, as someone who has benefited from Asia's rise, I think I should leave you with one final word and that is my relationship or my country's relationship with the US has really been a game changer and that's something that I'd like to really remind my American friends that the reason why Korea, Japan, other parts of Asia have been successful in many respects, despite the hard work and everything else is because of the fact that we have been linked with the US for the last 70 years and that's been a huge boon in the way that we have changed our thinking on key global issues so thank you for being there for the last 70 years.