 We're back and welcome to the White House. This afternoon's panel is going to simulate an emergency meeting of the principles of the National Security Council to attempt to manage a crisis in the South China Sea. Today we have a distinguished group of former U.S. government officials who will play cabinet members and chairing our simulation and playing the role of national security advisor, his former National Security Senior Director for Asia, Mike Green. As you know, Mike is CSIS Senior Vice President for Asia and Japan Chair. He is the bearded one just beyond Chris here. Next to him is the former Assistant Secretary of State for Political Military Affairs, Andrew Shapiro. He'll be playing the part of Secretary of State. Andrew is now the founder and managing director of Beacon Global Strategies. Next to him, former Assistant Secretary of Defense for Asia Pacific Affairs, Chip Gregson. He will be playing the Secretary of Defense. He's now with the Center for the National Interest. And at the end, former National Intelligence Officer for East Asia at the National Intelligence Council, Bob Sutinger, will be playing the Director of National Intelligence, and he's currently with the Stimson Center. On my right, and the briefer for today, is our senior advisor and freeman chair in China Studies, Chris Johnson, who has briefed the real deal many times in his career. So I'm going to leave stage because it's not appropriate for a non-cabinet member to be up here. And over to you. Good morning, gentlemen. Let me provide you with an update on what we're seeing going on in the situation today. Over the last 72 hours, we've seen a rapid escalation of tensions in the South China Sea between China and the Philippines. Three days ago, the Philippine Coast Guard reported arresting a dozen Chinese fishermen for allegedly poaching in waters near Half Moon Shoal in the disputed Spratley Islands. That shoal lies just off the coast of the Philippine Island of Palawan, and is under Manila's effective jurisdiction. It's been the site of run-ins between Philippine forces and Chinese fishermen on multiple occasions, as you know. Beijing demanded the fishermen's immediate release, but in this case Manila refused. Then, approximately 48 hours ago, Chinese authorities in an apparent retaliation told their Philippine counterparts that Beijing was instituting a complete air and naval blockade of the Philippine troops occupying Second Thomas Shoal effective immediately. Second Thomas, called Aung Yen in the Philippines, is another disputed reef in the Spratley Islands. It's about 105 nautical miles away from the Philippines, and has been under Philippine control for 15 years. As you know, in 1999, the Philippines intentionally grounded the BRP Sierra Madre on the shoal as a means of maintaining a military presence on the feature and blocking further Chinese expansion following the 1995 occupation of mischief reef. Beijing protested that the grounding, but Manila has refused to remove the ship. The Sierra Madre is now a little more than a rusted-out hull, but it still houses a rotating detachment of about eight Filipino Marines. Chinese Coast Guard vessels also began stepping up patrols near Second Thomas in 2012 and have maintained a constant presence around the shoal since at least mid-2013, regularly harassing approaching vessels. Run-ins with the Philippine Navy have been frequent and have forced the latter to rely on civilian fishing vessels to ferry supplies and replacement troops to this Sierra Madre. In early March of this year, Chinese Coast Guard vessels blocked a ship carrying supplies and replacing troops from reaching the shoal, as you all are aware. The Philippines managed to airdrop supplies to the garrison three days later, but were unable to rotate out their troops for the rest of the month. On March 29th, a civilian supply ship with replacement troops managed to reach the shoal despite being pursued by a Chinese Coast Guard ship that repeatedly approached dangerously close on several occasions and crossed the vessel's bow and killed its engines, nearly causing a collision. The Philippine ship escaped only when it entered shallow waters that the Chinese vessel could not traverse on its own. After that, things have been relatively quiet near the shoal until yesterday. Since announcing the new blockade, the Chinese Coast Guard has scared off civilian resupply vessel headed for Second Thomas. It also appears that China is reinforcing the number of ships near the shoal and has aircraft regularly patrolling overhead. The Philippines has decried the Chinese blockade, as we might expect, which is calling an act of aggression and is now asking the international community and especially the United States, a treaty ally, for support. Regarding U.S. assets in the region, our closest are two littoral combat ships based at Changi in Singapore and a guided missile destroyer currently visiting Subic Bay. We also have B-52 bombers and RQ-4 unmanned aerial vehicles based at Guam, and further away, there is an amphibious ready group in Sasebo, Japan, and a full U.S. Marine Corps complement on Okinawa. The USS George Washington and its battle group is currently operating in the western Pacific about three days sail from Second Thomas. That's all we know at the moment, and we certainly will keep you guys updated going forward as we get more information. Thank you, Chris. It seems to me that while we've dealt with a variety of tensions and growing interactions between China and our neighbors in this maritime domain, including our own forces, this one stands out for several reasons. The arrest of Chinese fishermen is going to put enormous pressure on Beijing to take actions that could be deeply problematic for our interests, and the complete air and naval blockade by the Chinese side is going to force action on Manila's part, and as we've heard, the expectation of steps on our part under our alliance with Manila. I was just in the Oval Office with the president. This issue has his focus. He asked me three questions. First, what's happening? And then he asked, do we have a dog in this fight? And then he asked, if we do, what are we going to do about it? I told him we'd be meeting, that we would formulate options for him, that we would get back to him by 5 p.m. tonight for a possible NSC meeting with him tomorrow morning. So with the limited time we have, I'd like to ask, first, the DNI to answer the what's happening question. We heard the tactical picture. What's your take on it? And in particular, what do you see as the drivers for Chinese behavior for the Philippines? And how is this looking in the region? And then I'd like to turn to the Secretary of State and Secretary of Defense for the questions of what's at stake for us. Do we have a dog in this fight? What are the outcomes we want? But let's start with the intel picture with the DNI. Thanks, Mike. Just a couple of quick questions to follow up so I have a better sense of what the tactical perspective on this is. When you say a full air and naval blockade of the Philippines forces in the region, are you talking about the PLA Navy and the PLA Air Force, or are you talking about more Coast Guard and fishing administration vessels? So far it's more civilian oriented. And the aircraft are also not military? That's correct. A couple of points is that even though this does represent yet one more step in what some Chinese government commentators have called their cabbage strategy of sort of involving leaf by leaf further steps toward enforcing their maritime claims, that this does not necessarily represent a wholesale change in the perspective. Another question that I have is really where are the Chinese fishermen at this point? We don't have much information on that because they're very difficult to track, obviously, but our sense is they've largely left the area given the blockade. Okay. Why are the Chinese doing this, of course, is the question that everybody wants to know. And I think the obvious answer to that is that because they can, they hold the preponderance of military force as well as fisheries force and any other kind of measurement you want to take in the region. They have been arguing these issues over time for many years and they are simply taking a step, one more step, it's not an unprecedented step, but one more step to enforce and to get the world to recognize their territorial claims in the region. The Philippines has been among the most vociferous of those denying and countering those claims and the Chinese are taking a step to kind of reinforce their position with respect to the Philippines and to make it clear that they can take further steps in order to make things even more painful for the Philippines government. Why are they doing this? You can ask a variety of questions about the nature of the regime. You can ask strategic questions about whether or not this is really aimed at the United States. I think that kind of the baseline judgment on this is that this does represent an action that is a little bit more typical of the kind of approach that Xi Jinping takes toward politics not only internationally but domestically as well. This is about power and power is the coin of the realm. Inside the regime in Beijing, Xi Jinping has been accumulating it. He has been using it fairly ruthlessly against people who are perceived at least to be his opponents domestically and I think that we can assume that over time he is going to continue to use Chinese power as it is within his purview and within his remit to do so. So I think that this represents not an overwhelmingly strong challenge to the international order in the region but it certainly does represent another step in making sure that people understand that China is a power to be reckoned with, that this area whether you want to delimit it legally or any other way is within China's sphere of power. And they are going to act in that sphere as they choose to when they choose to and according to their own rules. How will the region react? I think the region is going to become even a little bit more panicky. They are going to look for the United States to reassure them that these steps will not go unnoticed or unresponded to. I think there will be more and more calls for ASEAN to begin to understand what its responsibilities are in this area but as always there will be countervailing approaches taken by the economic forces within every government saying no, we are increasingly reliant on the Chinese economy for our own well-being and therefore we need to damp down this crisis as quickly as possible. I turn to Andrew. Thank you and to answer the President's question about what is our dog in this fight. This administration has made the rebalance or pivot to Asia one of its core components of its foreign policy and so instability in Asia causes the United States to have direct interests that need to be addressed. There will be a number of different audiences who will be in Asia which will be closely monitoring how we respond to this crisis and how as part of our rebalance what does that mean? What is the content of that rebalance? How deeply do we plan to be engaged? So for example our treaty allies like the Philippines but also Japan will want to see to the extent of which we are willing to stand by our commitments. The ASEAN nations who are both concerned about Chinese overreaching in their territorial claims but also have deep economic relationships with China so they want to make sure that we don't mismanage the crisis in a way that could deeply impact their economies. The Chinese will be looking to see how we will respond and whether the aggressive behavior will be responded to. And then finally it's a key component of U.S. foreign policy that these types of disputes should be addressed through the rule of law and not through the use of force. And so any attempt to solve these types of issues through the use of force has to be challenged lest it turn into an arms race as determining who will be able to have access to certain territories in the South China Sea and in the Pacific more generally. But it's also important for our global goals. If we're asking that maritime security issues be traded according to the rule of law but we don't live up to that then in places like the Arctic which is really turning into a place where maritime claims are going to be more relevant as global ice recedes and there's more and more ability to have ships go through there. If we don't have a rule of law framework then it will be a mad rush there as well which would be detrimental to U.S. interests. So I think that we need to show that we can responsibly manage a crisis such as this in a way that reinforces our core policy goals of a safe, stable, secure Asia-Pacific region which addresses crises through the use of legal instruments not through the use of force. Thank you, defense. Let me stipulate that the Secretary of Defense is in full agreement with my colleague, the Secretary of State, sometimes an unusual occurrence in the White Dust syndrome. The options that we have on the defense side are a bit complex and it might be easiest to frame it at the two extremes and then walk back towards the middle. One is do nothing. I don't recommend that for all the reasons that our alliance credibility is at stake here not just with the Philippines but with the rest of Asia. The other extreme is to respond immediately with a massive force flow, repositioning of ships, airplanes and things. I don't necessarily recommend that either, but somewhere in the middle we have to make sure that we can react. We are not without assets in addition to the forces that were mentioned by the National Security Advisor. We also have the first battalion of the First Special Forces Group on Okinawa and we have other assets in the region. Since it is primarily civilian vessels that are enforcing this blockade at the moment, it is probably more attractive to use civilian vessels, Philippine vessels to affect any resupply or rotation of personnel. I would recommend that we have appropriate U.S. personnel on these ships so that we have solid communications and develop a solid picture of what is happening. I also recommend that the assets that the National Security Advisor mentioned that are days away from the Philippines be sortied so that they are closer but still over the horizon, not visible, but still ready to react as one of our objectives has to be being able to control escalation and to be prepared to counter Chinese escalation if it should happen. We need to be able to make sure that we maintain the ability to act in our own interest without having to wait. Let me push both secretaries. I think there is a clear consensus that we need to take steps to ensure that the use of coercive tools is not successful and that rule of law and diplomatic processes to resolve these kinds of issues become the norm including for the People's Republic of China. We need to avoid escalation. That means having a deterrence capability, as Secretary of Defense said. It also means thinking of off-ramps or ways to deescalate. I think the President is going to ask us though whether in this specific case we are trying to return to a status quo ante. In other words, demonstrate that the air-enable blockade of the Philippine forces has not succeeded if it is enough to get back to the status quo ante or whether this is a significant enough escalation by the Chinese side that we need to impose a cost that in order to restore deterrence and dissuasion, ensure that coercion is not tried again, we actually have to make sure that there is some price paid diplomatically or otherwise by Beijing for this. So that is the thing I think he is going to ask us. Are we simply trying to keep the access of the Philippines to their facility or are we trying to actually impose a cost on China for escalating? The second thing we need to figure out is what is our position on the Chinese fishermen, which it seems to me will put enormous pressure on Beijing to demonstrate that Manila will pay a price for using domestic law to arrest Chinese fishermen on what the Chinese will argue and will be forced to confront domestically that under the Chinese position politically and in policy this is Chinese territory and the Philippines are now arrested under Philippine domestic law Chinese citizens. So there are two dimensions I like to get a little bit more of a comment from you. Do we need to take steps that cause the Chinese escalation to fail or do we have to go further and impose a cost and if so what and how do we do that and secondly how do we avoid escalation by China or should we not interfere on this question with respect to the Chinese fishermen the Philippines now have and presumably will prosecute under domestic law as seeing things now appear. State? Well I think we need to understand that this has become a very emotional issue in both countries and both China because of the arrest of the fishermen and the Philippines because of the blockade and I think that if we were successful in having the air and sea blockades standing down that would be a diplomatic accomplishment which would also send a signal to the Chinese that this type of behavior will not be tolerated that there will be a response and that they do not get the benefits of this type of behavior. There's a risk in trying to impose additional costs in that it could cause the emotions to then become even deeper and harder to overcome. So my recommendation would be to try and get out of this crisis as quickly and as smoothly as we can and then use the lessons of this crisis both regionally and multilaterally to put additional pressure on claimants in the region to follow a legal process rather than the use of force. And so on the Chinese fishermen I think again it's gonna be an emotional issue for the Filipinos but at the end of the day if we can demonstrate that the Chinese tactics did not work there may be in me encourage greater flexibility on the Filipino side. So for the Secretary of Defense feel free to weigh in on these questions but how can we cause or do we have the means as we understand the situation to convince the Chinese to stand down on the blockade or to cause it to fail because the Philippines are able to in spite of transactions continue supplying their personnel. It depends on how much the Chinese are prepared to commit to this. The Philippine assets are limited. So far we've had no exchanges of lethal force. I don't know in a scenario if you postulated water cannons or any of that nonsense but there's a couple steps to take before we get to that. There's a high possibility that even if the National Command Authority in China is not encouraging violence that incidents will take their own course and emotions will take their own course in the area and that's why I emphasize that we need to be able to dominate the escalation ladder at least initially to discourage it from going higher. So bottom line, can we break the blockade with the Philippine assets? It depends on what the Philippines have available and what to prepare to commit. We need to be prepared to commit US assets if necessary to break the blockade and to have enough force that is visible to the Chinese but not visible locally that we can dominate any escalation that China decides to take. Does the DNI have an assessment on Chinese counter steps? Well, before I get to that point, I'd like to ask the Secretary of State whether, I mean, these are fishermen. One other recourse that might be considered would be to just confiscate the catch and kick them out. Is that something that the Philippine government is willing to consider or is this an issue on which they are prepared to go to the wall? I just, on the basis of the information that's been presented so far, I don't know the answer to that question but I would like to have it considered. Well, my sense is, as I mentioned, this is a very emotional issue in the Philippines right now and as long as there is an air and sea blockade, it will be challenging to convince the Filipinos to give up the fishermen but in the context of an agreement where the blockade were to end, if the fishermen were returned, that may offer a diplomatic solution that while not necessarily satisfying to either side may provide a way for both sides to de-escalate. It seems to me that we have the objectives of deterring Chinese escalation and dissuading China from thinking this kind of action will work and avoiding escalation. And avoiding escalation is gonna involve some of the deterrence options the Secretary of Defense mentioned in terms of other US assets in the region. But also, it seems to me that avoiding escalation may involve us talking to our friends a minute about steps they can take that prevent the Chinese side from taking further steps. We know from the Japanese case, for example, in the Senkakus that when a much stronger state or the much more capable military arrested Chinese fishermen and began to prosecute them, the Chinese response was pretty ferocious. So it seems to me we might wanna consider options for the President that involve a combination of reassurance to Manila, including some of these deterrent steps, a willingness, as the Secretary of Defense said, to help them reinforce their forces on Second Thomas Sholl, declaratory policy that makes that position clear and ask quietly that Manila take some steps to help de-escalate with respect to the fishermen. Does that seem like a framework that might achieve the objectives and use the instruments you mentioned? I think that's right. I think that for the Philippines to be able to show that they didn't cave in this crisis will be important and that a reaffirmation of the US security commitment to the Philippines through a variety of measures along the lines of what you discussed can enable them to then say that they have the flexibility to take de-escalatory steps for this crisis. And along with that, we might want to consider the messaging on the release of the fishermen that we are not we, our ally, the Philippines, is not maintaining custody of these so we're incarcerating these fishermen with no reason unlike what China does internally and make sure that message reaches the Chinese people in whatever ways we can get it across. No, I agree. We would have to handle discussions with Manila about the steps to be taken with respect to the arrest of Chinese fishermen with great delicacy because it's a matter of internal domestic Philippines law but under Philippine law as I understand it and consistent with a country that respects rule of law, there could be some initial procedural steps taken and they can be released. There are two other aspects I think we need to consider for the president. If this approach is effective, it will help de-escalate and it will help restore a certain level of reassurance for our allies and deterrents but the Secretary of Defense mentioned and the Secretary of State, we may need to take other steps given the nature of the Chinese moves in this case. It is a degree higher than what we've seen and granted we've had a series of sort of gradual escalatory steps in these kinds of incidents but we may need to think about longer term measures that we take as the Secretary of State said after we've de-escalated to demonstrate the futility of this kind of course of approach. It seems to me something where we work with other allies in the region to help Philippines with their maritime patrol and maritime domain awareness capacity perhaps Australia, Japan, maybe Korea might be on order. Some sort of work with ASEAN to solidify support for the Philippines. It's always hard with ASEAN but try to get some common position, not just calling for code of conduct but something a little bit more perhaps and maybe changes in our exercise schedule. I don't know but let me put that on the table. As a finalist I think we need to resolve for now. What are the next steps we need to take once we've helped to de-escalate to ensure that we've made these kinds of incidents less likely going forward. And I would add in that it's difficult but we need to push for confidence building transparency with the PLA and with the Chinese paramilitary Coast Guard forces, not just for us but for other maritime states in the region. So I welcome some closing comments at this point on those next step or near term to long term options. Well I think you hid it on the head in that we do need to take steps in the region to demonstrate our commitment to our treaty partners as well as demonstrate that this type of behavior will not lead to benefits, that there's actually costs to this type of behavior. One aspect of it will be our regional positioning. We should work with our partners and allies, Japan, Australia, Korea and others on making sure that this type of behavior is denounced and perhaps joint exercises and the like that show that our commitment to freedom of navigation. I think we should work through Ozzy on trying to multilateralize this as well and there's been some success in the past in putting pressure on the Chinese. I think we have to recognize that the Chinese have been less likely to succumb to multilateral pressure than they were perhaps a couple years ago but that doesn't mean we shouldn't continue to try and to make that clear and it also helps build support for the United States within Ozzy on for the principle of freedom of navigation according to the rule of law. We should think about, we just signed this agreement with the Philippines, how do we take advantage of that? What type of exercises or deployments enable us to take advantage of that? Is there anything with Marines in Australia exercises or the like that also demonstrate our commitment there as well? So there's another number of things that we could do with our partners there that can show that we're, because of this behavior, we are ratcheting up our engagement. If the goal was to pressure us to withdraw, it's actually leading to the opposite result, we're actually gonna be even more engaged. I think one of the things that would help on the defense side is to understand that the concept we're working with here is the rule of law and what is bedeviling us is our inability to enforce the rule of law due to lack of access, lack of assets, not access and lack of maritime domain awareness. I think we have the technology, I know we have the technology, but I think it'd be advisable in the wake of this incident to immediately start with maritime domain awareness and with cooperative partners in Ozzy on put installations all along the coast of the East and the South China Sea that would give us a complete MDA, maritime domain awareness picture of surface traffic, whether it's fishermen or whether it's naval combatants and make this public on a publicly accessible website on a daily basis so that everybody knows where everybody else is and that when we get one of these incidents with the illegal fishermen, everybody will be able to be in the jury so to speak to know who is moving where and who started the incident. Secondly, we should accelerate efforts already ongoing within the strongest forms of our alliance over there, the US, Japan, Australia access and vastly integrate the capabilities of our forces. This means doing those things to create the conditions of interoperability so that our forces when we're operating together are much, much more effective than operating separately. The conditions that apply with the air and missile defense pertain very much to this. We can't be flying our airplanes inside Japanese airspace without detailed tactical level integration on a split second basis on where everybody is. Demonstrating this type of integration particularly in the naval context here, no, it's not naval is the wrong word, maritime context between forces or among forces in the air on land and at sea of our alliances starting with the foundation US, Japan, Australia and then extending it to the Philippines while we simultaneously build up their forces capability, our force presence in the Philippines and most importantly the capabilities of their maritime safety and maritime security agencies, the civilian equivalents. I think a greater presence of the US forces that we already have in Asia, a greater presence of those forces amongst all the nations that are willing to accept this presence on a rotational for training basis, temporary deployments in other words, vastly increasing that so that China sees that as a result of their assertiveness and their aggressiveness that what it is doing is pushing our allies and the United States closer together, not just the hub and spoke our allies with us but hub spoke and then the rim around there were for example we have Japanese forces training in Australia which they've already brought up, Japanese forces training in the Philippines and that's not a reach anymore because of the effect in the Philippines of the Japanese efforts in Typhoon Haiyan where they were the second force in there right behind the United States. This type of thing will I think demonstrate a degree of dissuasion at the same time I think it provides a much higher degree of reassurance with our allies which will in turn make our allies I think feel more comfortable at for example finding some way out of this thing where they arrested these fishermen now they have the problem of what do we do with them without looking like we're caving in. So I would recommend at this point we have the PCC or IPC take this approach and analysis and meet tonight and formulate a briefing paper for the NSC meeting with the president tomorrow we'll have the senior director for Asia the assistant secretary of state for East Asia Pacific Affairs and Paul Mill ASD for APSA and the NIO Free Stasia lead on this because as we all know they are the most outstanding and respected members of the U.S. government and never fail to come up with the perfect briefing memos at two in the morning. So with that I think we're in good shape although I understand from the situation room that we have an update from the Intel community so maybe we should hear that before we break. That's correct sir, get comfortable in your seat. We've just learned that the Philippine Navy attempted to resupply the Marines at Second Thomas Shoal via helicopter as it did in March as the chopper approached to within about 12 nautical miles of the Shoal ignoring radio warnings to turn back to Chinese Coast Guard helicopters repeatedly approached dangerously close to the helicopter. The Philippine chopper was forced to turn back to avoid a collision. Meanwhile aerial surveillance has confirmed a rapid increase in the number of Chinese Coast Guard ships surrounding the Shoal including several larger colors dispatched from Hainan and the presence of several PLA Navy vessels People's Liberation Army Navy vessels at mischief reef near 20 nautical miles away. Manila now has no good options left to resupply its Marines aboard the Sierra Madre who are reportedly dangerously short on food and fresh water. Defense and foreign officials in Manila are quietly asking through our various diplomatic and intelligence channels there if the United States would be willing to intervene possibly by breaking the Chinese blockade as you've been discussing before the situation escalates any further. That's all we have for now sir. All right, well this is what in the National Security Committee we call not good. A number of concerns I'm gonna turn to the DNI first to try to make sense of what this escalatory step means before we take a second look at our options going forward and the implications. I don't know if we know this but I assume that the Republic of the Philippines effort to reinforce Second Thomas Shoal the helicopter was done unilaterally. That is correct. Okay, that is deeply problematic in terms of how we both showed a common front for purposes of deterrence and how we avoid escalation. We need to consider that. The presence of PLAN, Navy, PLAN surface combatants 20 miles away is not good, is an escalation and obviously there's pressure on us because Minola's call for help spotlights our actions for the entire region. Let me turn first to the DNI and see how the intelligence community assesses this new development. Well from a very quick and dirty perspective this does not necessarily constitute an escalation. There was an effort to resupply which presumably the Philippines would declare was within their right to try and do. That was turned back as one would have expected there would be efforts to turn it back. So unless there are further steps that are taken this really represents only a slight increase in the levels of tension that are already present in the region. So how we and the Philippines decide to respond to this is really gonna be the key to where this situation goes from here. This doesn't, the presence of the PLAN Navy they're not ever very far away so I don't think that necessarily implies a threat to try and resolve this through the Navy. I think that if the People's Liberation Army Navy does become involved or if the People's Liberation Army Air Force does become involved then you are talking about a serious escalation of the nature of this crisis. So it is certainly within the realm of possibility but we ain't there yet. So I think the question still comes around to how do you send messages, how do you signal in ways that don't create the perception that we are escalating this crisis. And that seems to me, the DNI is not in a position to make policy recommendations but certainly we do need to monitor the perceptions of all sides to make sure that whatever efforts we make whatever steps we take are perceived clearly as an effort to resolve the crisis rather than to make it worse. So I think we should include in our assessment of the situation, the DNI's observation that the respective moves by both Mil and Beijing are within the balance of what one might expect and does not necessarily represent a strategic level escalation. However, it's moving as quickly down the path where we could have escalation that does serious damage to stability and our interests and credibility in the region. So I think we need to think with a little more urgency about what our options are, Mr. Secretary. A few things. Given the Filipino attempt to resupply in the response, we as the United States are gonna have to now make sure that we are closely coordinating with the Philippines to avoid further unilateral actions that may further aggravate the situation, both because we don't want the situation to spiral out of control, but if it's perceived that the Philippines are mismanaging the crisis, they'll lose regional support and we'll lose the ability to bring in regional support for our position. So we will need to ensure that the Philippines do not continue to take unilateral actions in this crisis. We're gonna need to deeply invest ourselves in the resolution of this crisis and to work closely with the Filipino government. I think we're now at a point where we understand that these marines are close to starvation. So the clock is ticking in terms of how long they can stay there without resupply. And it seems to me that an option where they withdraw because they are out of supplies would be perceived as a victory for the Chinese in the region. And so we need to figure out a way to ensure that that outcome does not happen. And so it leads to what are our options for the potential to resupply and it may not even be that we need to, but indicating a willingness to do so may send a signal to the Chinese that this crisis is now no longer just about China and the Philippines, but it risks becoming a more serious one. And if we can credibly make that clear to the Chinese, there's a chance that we could come to a negotiated diplomatic solution that enables the Chinese to withdraw the blockade and the fishermen would be freed and returned to China. To clarify, you're talking about, in your second point, signaling publicly that the United States would be prepared? I would do it quietly with the Chinese. If you do it publicly, for now, if you do it publicly, the Chinese, then it puts them in a real public box. And so I would try and do it as I would make clear that we have the ability to do so and then quietly send the message that we're not gonna let these Marines starve as a result of the blockade. And if necessary, we'll use US assets, US ships or helicopters to do the mission? Exactly. Secretary of Defense. Concur, and we can widely publicize the next Philippine resupply attempt as a strictly humanitarian mission and start taking control of the narrative away from China. That this is not a military move, all those things, and that we're resupplying the all 12 Marines on the derelict ship there in the shoals as a humanitarian reason, and that they should stand clear and let this mission go ahead. If they don't, then we should have enough access to be able to force this through later. So that I understand so that we can explain to the President at the NSC meeting tomorrow. We would have to, I assume, be prepared to use force, if necessary, to defend our assets, even if they are engaged in the humanitarian mission resupplying the Philippine Marines. In other words, we'd have to be prepared to take this to the next level if our own resupply efforts were obstructed, and I understand from the Secretary of Defense a slightly different take from the DNI's view was that China has a proponents of naval and air power. I assume, Mr. Director, that was vis-a-vis the Philippines, but is it your assessment for both the DNI and the Secretary of Defense that we, the United States, would have the proponents of power at sea and in the air should we choose or be forced into a position of having to deploy it? Total forces, the Chinese may have more numbers but this shoal is an awful lot closer to the Philippines and our potential bases in the Philippines than it is to any bases in China, so I'm quite sure we could establish local air and sea superiority there. And if the President asks, you're prepared to tell him that while this would be an unarmed humanitarian mission, I assume, by a helicopter, by U.S. forces, if it comes to that, as I understand the Secretary of State's proposal, it's that we signal to the Chinese side quietly, we do not intend to let these Marines starve or be evacuated from Second Thomas Shoal and if necessary, we will use our assets to resupply them for humanitarian purposes, but the proposal is to get the Chinese to allow a humanitarian supply mission from the Philippines. But if that fails or if it's refused, we are prepared to undertake that mission but we're also unprepared to use compelence to ensure that it happens. And that is a potential escalator during the step. I just want to make sure I understand correctly because the President will want to know what he's getting himself into. Yes, that would be my position. Yeah, and I think our hope would be that that our signaling and willingness to take this step would make the calculus of the, change the calculus of the Chinese in this crisis. Remember, the Chinese still need for their own economic and strategic goals, the ability to navigate the Pacific and they view the one barrier to their continued economic success as a potential conflict with the United States. And so to the extent that we make clear that this is the line, our estimation is that they would not be willing to cross that line. I'll turn to the DNI for an assessment on this point we're looking at now. Do we have the ability to judge Beijing's capacity for de-escalation for off-ramps? Do we know enough to know what the bottom line is with respect to China's moves should we be forced down this particular avenue? No. Resounding definitive answer. Well, I mean, the point is that when you get yourself into a situation where you're in a public confrontation with China, forcing them to back down is usually not a particularly good option. And it usually isn't one that's going to work very readily. And unless you are prepared to actually take some kinetic action to take out one of their newly formed islands that they're making in the region or to take out a Coast Guard cutter or something like that, unless you're prepared to do that, you're really not going to get their attention because they do have what they consider to be both the moral right to be there and the physical capability to defend their interests. So by saying you're going to bring in a couple of helicopters and we're only doing this for the Marines, et cetera, et cetera, it's not going to be compelling to them. And all I'm saying is that if you're going to get a change in behavior, standing nose to nose with them and shouting at them that they need to back down is probably not the way they're going to back down. I agree with that, and which is why this needs to be managed very sensitively. It should not be public beating of the breast, that we're going to force it through and if you don't like it, try and stop us because that is a recipe for escalating this crisis and making it more difficult to solve rather than less difficult. But however, I think quiet diplomacy here has the ability to send the signal of our seriousness. I think quiet diplomacy would be appreciated rather than the public breast beating and that at the end of the day, based on the response we get to the quiet diplomacy, we can then decide what public diplomacy posture we want to take. But we should not immediately try and turn this incident into a worldwide media crisis because it'll be harder to solve if you do that rather than try and engage in quiet diplomacy. This is not the first use of coercion in a gray zone scenario by China, by any means, and it probably won't be the last. Is this the one where we draw the line? Is this the one where we are prepared to take steps with our forces to enforce a private signal that we are not going to allow these Marines to starve on this facility and that we are prepared to make sure that either we or the Philippines reinforce them? Is this the one where we have to draw the line? Has in effect, are we concluding that our efforts to date to dissuade this kind of coercion have failed and we need to be prepared to take a former stand? Is that the premise behind your recommendations? Yeah, I think so, and in the absence of an analysis that says that if we don't respond, a failure to respond will merely embolden the Chinese to be more aggressive in the future. And so they will continue to engage in this type of behavior. And if we decide, and the president decides that it's in our national interest to prevent the Chinese from engaging in this type of behavior and continuing to engage in this type of behavior, there has to be a point at which we are willing to say no. And when we have a close ally and partner of ours asking for help, a failure to support them will be noticed in the region and there could be quite detrimental circumstances if it's perceived that the U.S. is not willing to stand up to this type of behavior. I'm prepared to recommend to the president based on the principal's committee's discussion that we send a signal to Beijing that we will not allow the Philippine Marines to either starve or be forced to retreat and that we are prepared to enforce that position. Obviously a key part of the signal will be that we hope not to go there and that we seek to learn from this incident to establish more effective crisis management, de-escalation, code of conduct, and so forth. That the president also speak with the president of the Republic of the Philippines and convey the same message but ask for some steps to help us de-escalate the ones we discussed earlier perhaps with respect to the 12, I think it's 12 Chinese fishermen who are under arrest, that the Department of Defense prepare options for deployments, flexible deterrence options, and the parameters of humanitarian operation by our forces if necessary. The piece that's missing, it seems to me, and here the Secretary of Defense is going to have to help us, is I think the president will come back and say, are my options only allow this coercion to work or threaten U.S. forces? Is there something in the middle? Are there options to use U.S. capabilities, U.S. assets, U.S. intelligence to enhance the ability of the Philippines' own forces to handle this without us having a conspicuous role and in particular our military forces because these are after all still White hull, it's a Philippine Navy but it still is White hull, Coast Guard assets from the Chinese side. They have not yet sent gray hull or PLA and although we'd be engaged in humanitarian mission, our Navy and Marine aircraft would be Navy and Marines. So is there some sort of below the radar but effective capability we can use to augment the Philippines' own humanitarian operations, make sure their helicopters get through, make sure they have the right intelligence, the right support and so forth. It's possible that we could create a very rapid transfer of equipment and assets to the Philippines that has its own inherent risks. It also may not provide quite the under the radar effort that you're thinking about but in the short term, that might be one of the best opportunities that we have. All right, we'll have the tired and overworked Assistant Secretary's and senior directors and senior NIOs get back in the saddle and spend another sleepless night in their offices. The only other piece I think is we'll need the State Department in particular to come up with a diplomatic engagement plan and coordination plan vis-a-vis our key allies and partners. I think we'll want perhaps the ambassador to go in in Tokyo, Seoul, Canberra and perhaps even National Security Council, National Security Advisor or presidential or vice presidential calls to the key allies and we'll need a diplomatic strategy for other posts not only in the Asia Pacific region but worldwide because this is a strategy that I think will lead to de-escalation but it has the potential to make headlines in the next few days if it doesn't work we're prepared for that. We'll tell the president that. We'll see if he accepts that when we meet with him tomorrow morning. Thank you. NSC meetings are strictly confidential. That was fascinating, guys. James Manick from from CG. Just, sorry, James Manick from from CG in Canada. I assume we've one of the first ones you'd notified what you're doing in East Asia. Sorry about that. Was there any sense that your action here creates an expectation of the part of the Philippines that you will respond next time there's a gray zone contingency and an expectation of the part of China that you'll respond next time there's a gray zone contingency? I'll start if it's okay, we'll all weigh in. That is why I kept trying to look at the reassurance piece vis-a-vis Beijing and the escalation control strategy vis-a-vis Manila and why I thought the fishermen were so critical because we need some, for lack of a better word, face-saving so that Chinese side can de-escalate and some of the most important steps are gonna have to be taken by Manila. I was also concerned that the Philippine Navy unilaterally, this is a scenario, you know, there's a certain artificiality, of course, but unilaterally sent the helicopters in, my own personal view is that wouldn't happen that Manila understands how important solidarity is as a source of dissuasion because if Manila or in these territorial disputes with any ally gets ahead of Washington and Washington has to pull them back, that's embarrassing and it's bad for deterrence. But it happened in the scenario so I think that was a concern. I mean, I agree with that. I think these crises can often be emotional for the countries and you have to deal with that emotion in your, when you're trying to advise them on how to get through a crisis. But at the end of the day, they know that they need our support if they're gonna make it through this crisis so they listen very carefully to the advice that we give them and because they want us to continue to be there for them. So it's a balance and that's what diplomacy is all about is finding that right balance. Thanks. Sherry went from my says in this hypothetical situation if it comes to actually trying to break through the blockade and all that, how do you communicate to the ground commanders? I mean, with what determination do you try to do that? Yeah, it just seems to me as if the real tricky, I mean, the real tricky situation here is how much leeway do you give to the local commanders? How do you micromanage? Yeah, I just don't know how that is possible without, yeah. The NSC never micromanages. The whole process, but. I think one of the, as this crisis builds up, I think one of the first things that the commander Pacific Command would wanna do would get to deploy a capable planning and liaison element for lack of a better term into the Philippines to be able to coordinate from top to bottom also to provide eyes and ears for the NSC for the president, some ground truth observations on what's going on. In the longer term, the outside of the crisis, there's a lot of work that needs to be done to continue to build up Philippine capability, not just a maritime domain awareness, but also in the ability to respond to it. Incidents like this are a lot less likely to occur if the Philippines had the capability to move quicker than the forces that fall in on top of the fishermen, for example, in an area like this. The further on and heavy lifting diplomatically because it hasn't worked yet is some kind of agreement around all of ASEAN and with China on accepted fishery conditions. It's a matter of fact that illegal, ungoverned fishing has put virtually every fish species in the Pacific under severe pressure and the end of this story is not a good one. So there's numerous reasons to take this view and to work on some kind of regulation of fishing agreed to internationally and that puts us on the side of the angels but that's a long term thing that certainly won't help in this crisis. I am Paul Pham from the Federation of Vietnamese American Communities of the USA. Yeah, everyone like to work out the crisis or dispute peacefully and the United States access shifting to the Asia may provide the mean to maintain the peace and stability of the region. So when that access shifting policy will be completed and secondly, many American believe that in the future, sooner or later America will have the confrontation with China, why not now? Because it will cost less instead of later when China will be much stronger. Thank you. You know, I'm both a professor and a former policy guy and professors of international relations theory assume countries decide to strike that they believe in power cycle theories and these other things and make decisions to strike while they're still strong and so forth and I don't think in reality that's how it works. And so I couldn't imagine that being a serious, to be honest, a serious discussion in the situation of the White House, maybe in your administration. No, I mean, I'll just say, you know, listen, we as a country, you know, we just have, you know, just got out of Iraq we're getting out of Afghanistan. There's not much of an appetite right now in the absence of a true crisis for further military adventures. And I think that as a policy matter, you know, the hope is that we're going to be able to bring China into a rules-based system and a rules-based system, we have to live by a rules-based system and we have to live by that example. If we turn into, you know, might makes right then I don't think we wanna live in that type of world and the cost would be very high. So, you know, I think that, Mike's right that there's not very much of a constituency both in public opinion nor in policy circles for any type of military competition with China in this particular environment. There's a tempting option and I know that a lot of our friends and allies including Vietnam sometimes get frustrated with U.S. action but as Secretary Shapiro said, it's settled U.S. policy that we support the peaceful reintegration of China into the international system that enabled China's rise. At the same time, we are obligated, we have treaties with Japan and the Philippines, Thailand, Australia and the Republic of Korea to come to their defense. At the same time, we're obligated by law to take certain actions if there's coercion or aggression against Taiwan. We have a vital economic relationship with China. Every one of our friends has a vital economic relationship with China so this requires a high degree of skill and subtlety that has sometimes been difficult for us to show. Vietnam's under pressure from the oil drilling rigs that's understood. It's going to be a while before we work out of this. One of the things that I think that all of us can collectively do better is to make sure that we control the narrative, that we have information dominance, that we do not allow China to write the only story about this, this reactive assertiveness where they declare that they're sovereign over this island that we were playing in the scenario here and then as soon as there's some otherwise minor incident, the arrest of an illegal fisherman or fisherman plural, it suddenly escalates into a crisis and it's an insult to the sovereignty of 1.4 billion Chinese people. We need to get our story out there better. We need to make sure our story gets past the leadership and to the Chinese people so that the folks that do believe in the rule of law in China, the folks that do believe on a peaceful reintegration into the international system, let alone reaching the responsible stakeholder that Bob Zellick tried to characterize the relationship with some years ago is very important. There is, the spirit that's working now where nations in the region, in addition to the United States are working to build capacity in various nations, including Vietnam and the Philippines has got to continue and accelerate and it's not just military capability, it's foreign direct investment, it's other things and our friends in Japan are the number three, four, five depending on who you talk to, foreign direct investor in Vietnam, they're very high on the ranks of foreign direct investors in the Philippines, building infrastructure, building capability to be able to control what's happening on the seaward frontiers, to be able to react appropriately is going to be ever more important in the future and it's gonna require considerable effort, I think on all of our parts. Thanks, great discussion, Chris Nelson, Nelson Airport. Never let me play these games because I always end up starting a war because it's just more interesting but this is really much more interesting. Although I have to, the professor's question out there, that's the first year of the payload administration, that'd be the first question, but anyway. Commercial notes. Yeah, right, it'll be entertaining. One of the things I really got out of this morning discussion, which was fascinating, was how highly personal what China's doing is to Xi Jinping himself, his view of history and what he wants. And that got me thinking, things like hotlines and it got me thinking, president getting on the phone and saying, you know, Demetri, can't we work this out? Those of you who remember Dr. Strangeland. But I then began to wonder, Mike, you were on the NSC for the Heinan Island crisis, as I recall, right? You were there and you saw that one and it's not quite the conundrum that the scenario covered but it absolutely was a face-to-face US-China military confrontation. What is the role of the president in trying to diffuse something like this directly and not necessarily working through the assistant secretaries for weeks and months? How soon do we think in terms of the hotline and the conversation? What is the president's role in the modern age with all the mass communication and the speed of decisions that are required? Is there more of a role now for that kind of highly risky but very personal diplomacy? Or is it very, very process, which is I think what you guys were talking about, thanks. Maybe Bob will speak to the point on Xi Jinping, but I agree with the premise of the question. I think Xi Jinping is, in my view, not just responding to domestic pressures. He personally, and Bob alluded to this in his opening brief, has a higher tolerance for risk and a focus on power and on domestic and international politics ending up in greater power for him and for the PRC. On the EP3 incident, what we found was that the president was extremely important because nobody up to the level of the president had the ability to, in an authoritative way, discuss an outcome with the Chinese counterparts. Our ambassador in Beijing thought he could do it and he couldn't, he didn't have the right access. It was a case where the foreign ministry did not know, in some cases we knew more than the foreign ministry knew about what the PLA Air Force had been up to. And President Bush wrote this in his memoirs, but he had to call 12 times before he could finally get Jiang Zimian to pick up the phone. And in that case, the plane was brought down on Hainan Island and the crew was being taken care of. It was not a situation like we were talking about today where inaction or time was gonna lead to escalation. Today we face a situation where U.S. inaction was gonna lead to escalation. And so it was not as intense. But the mechanisms weren't there and my sense is they're no better today. And to be honest, Bonnie's nodding and I think she'd know well. I just don't think they're any better today. So if we did this with a little more time, one of the major disclosures we've seen is if we did this with a little more time, one of the major discussions and major efforts would be to think about how we use this crisis to try to turn lemons into lemonade and try to get a better mechanism with China. And maybe the somewhat tough stance we were discussing is what you have to do to try to get that across to Beijing. I don't know. I'll just weigh in in support of the question. I think that the notion of when the president should engage on this and at what level and what kinds of points he should try to make in the discussion one-on-one with Xi Jinping or through the interpreters is certainly something that should be considered early. And that it would be, I'm not sure I agree with the idea that things don't work better now than they did 12 years ago. In fact, I think that on the basis of the Sunnylands discussion and so forth, that there would be at least a prospect for not a breakthrough, but at least a civil discussion on the issue rather than allowing distant signals and messaging and so forth to take the place of conversation. Carl Thayer, Stern Defense Force Academy, University of New South Wales. I guess I'm speaking as a desk officer. And if we're going to approach, the U.S. is going to approach China on this, bring up that the BRP Sierra Madre is a commission ship in the Philippines Navy, despite its derelict status. And in a debarge to China, my recommendation for you, principles, is to separate the fishermen from an alteration of the status quo around Second Thomas Shoal and quietly tell the Chinese that treaty obligations, that is a warship in the Philippines Navy. And the status quo isn't going to be upset and those men are going to be provisioned. And I would also foreshadow that at some point, the Philippine Marines might invite the American counterparts after this is over to join them for a maritime reconnaissance mission where the U.S. and Philippines resupply them. Not changing status quo, but I mean, that's the line. It's a commission ship in the Philippines Navy. That's how they see it. That's no go for China. I agree. You've given us a good analysis and good recommendations about a crisis involving the Philippines. What difference would it make if offshore of the para-cells, the oil rig leads to a similar confrontation? I think it's harder in some, it's easier in some respects and it's harder in some respects. It's harder because there's no security treaty. And because the government of Vietnam maintains its own, it does not coordinate with us and would not likely coordinate with us. I think with Manila as a treaty ally, the scenario notwithstanding, past episodes notwithstanding in general, we can coordinate. It'd be easier, in my view, or only knows this better, it'd be easier because in general Vietnam has been able to exercise restraint in these crises and be a little more predictable than Manila. And has, the other reason it'd be easier is because Vietnam has a more capable military on its own. I don't, you know, the other piece of it is that one of the ways in which Vietnam communicates with the PRC is through the Communist Party. And so they could use that avenue as well to have discussions with the Chinese in a way that the Philippines, you know, the relationship is a totally different one. Well, on the one hand, Vietnamese nationalism is, it would be something that the Vietnamese government would have to manage. As we've seen over these last few months, at the same time, the history of, you know, communication through the Communist Party would probably provide some avenues for discussions as well. This gentleman over here. I'm Ian Henry from the Australian National University. You all spoke about the need to consider the reactions of allies during this crisis, particularly those in the San Francisco system, the hub and spoke system of alliances. Perhaps if you could talk a little bit about how you consider interactions within the US-Filipino treaty to be affecting those, because it also does occur to me that you might actually have divergent preferences amongst those allies. Tokyo might be looking for a quite a muscular response here. They might see a parallel with the Senkaku Islands, but it occurs to me that perhaps Seoul and Canberra might view this as the US being sort of goaded into conflict or dragged into conflict by rogue ally. I'll just say, you know, obviously different countries have different ways of perceiving the situation in the region and that's what a large part of our diplomacy is driven by discussions, dialogue, trying to come to common understandings of the security situation to explain how the United States is approaching it. If there are gaps to come up with ways to bridge those gaps, what I've found is that there is a broad desire for the United States to play, you know, a significant role in the Asia Pacific region by our partners and allies. They each have their own particular, you know, issues that they want us to focus on and some of them, you know, they want us there but they don't want us there too much because that could upset the status quo too much and it's all part of what is part of diplomacy is trying to explain, you know, your position, finding common ground, working together where you have common ground, trying to convince the others that, you know, your position is one that will serve both interests and that's why we have just, you know, robust dialogues with all the countries that you mentioned that, you know, not just at the principles level which exists but throughout the bureaucracies. It's a good question. I think for any US government in a situation like this as we would think through what outcomes we want to avoid, one of them would be splits and the San Francisco splits among US allies. I mean, the point of reinforcing dissuasion or deterrence against unilateral coercion by Beijing has to be in part that we're demonstrating to China that the more they do this, the more solidarity there is among other maritime states to not let them do it. So any policy would have to or strategy would have to, I shouldn't say have to, would seriously need to take under consideration solidarity among allies because an outcome where maybe we deescalate but we have splits, obvious splits would actually hurt us in a long-term goal. That said, and the recent utterances of Malcolm Fraser not withstanding, I personally think the Abbott and Abe governments would be in lockstep on this, especially if you look at the summit a few days ago, have no doubt about that. Korea's tougher, I think the Pukwini government has a sober view of China but also a hopeful view of relations with China. But in general in these kinds of things, Seoul has kept its head down. And so I don't think we'd see a quote unquote defection and we wouldn't ask for much from Seoul. I suspect in this scenario. But it would have to be a consideration, I think, to make the long-term effects of the strategy work. My name is Aaron, I'm from Hudson. I wanted to ask, you said that you think there should be more surveillance in the South China Sea to clarify things. Do you think the U.S. should have unarmed surveillance drones in order to help with that surveillance? And if so, do you foresee a kind of code of conduct since drones are a new development? Drones are very useful things. They might be useful in a situation like that but I'm speaking more of the system of radars that we put in the areas surrounding the Sulu and the Celebi Seas to shut down the migration of extremists in that interesting maritime triangle among the Philippines, Indonesia and Malaysia. We had prior to the installations of those radars been operating two ships out there, one a high-speed catamaran that we got from Australia another one a floating staging base for our special operations forces. And that was pretty expensive to be chasing people around without any information on where we were looking. We installed these radars and it shut down the traffic nearly completely because we knew who was moving where and the authorities in each country were able to cooperate with the other two without any violations of feelings of sovereignty or anything to shut that down. It occurs to me that with the continued prevalence of rule of law issues and their enforcement in the East China Sea and the South China Sea that may be making the same data available to every country involved might be very useful and this can be done with surface installations. Drones later maybe, who knows? I mean, that's a technical question but I think that it can be done initially anyway without getting to that question if that's gonna be difficult. I'd like to thank the members of the cabinet and the NIO and the National Security Advisor for briefing us today. You guys were good, you had a good sense of humor to take that on and I know it wasn't an easy exercise but I do think it does reveal at the end of this day of discussions about complex issues, how hard it is to think about and synthesize these inputs and then try to make decisions, make policy based on it. So I wanna thank you all and I wanna thank everyone in the audience for coming for the first day. I thought we had a great discussion. Thank you for the panelists. We will start again tomorrow morning. Registration I think begins at eight and the first keynote is at eight 30. So get some rest and thank you for joining us and thank you again, panel for your time. Thank you. Thank you.