 Good evening, everyone, and I would like to thank my hosts, of course, the Australian National University, the US Embassy in Canberra, and the US Studies Center for bringing me here. It's always fun to talk about a controversial topic, so I look forward to all of your questions and comments. In November 2011, of course you all know that President Barack Obama announced that his administration would shift its strategic focus away from the wars of the Middle East to the Asia Pacific. And this new strategic balancing, rebalancing or pivot to Asia, as it came to be called, has evolved. It has come to include a mix of diplomatic, economic, and security-related initiatives. It really was not initially a comprehensive, coherent strategy. In fact, I would say that there was really no strategy document that was guiding the implementation of strategy. But it really has evolved into being much more coherent. My organization, CSIS, was actually tasked, the Defense Department commissioned an independent assessment of US force posture in Asia under the mandate of Congress. And CSIS was asked to produce a report that was released last year, and it focused on how to align US force posture to overall US national interests in the Asia Pacific region. And so that study primarily had a military focus, but my colleagues who were engaged in that study told me they went looking through the drawers of the Pentagon for the strategy document and didn't find one. But the origins of this strategy, I think in the rethinking and the rebalancing, can be traced to really before President Obama took office. I know that Secretary of National Security advisor Tom Donilon is quite fond of telling the story that advisors to the president before he was actually inaugurated would get together and talk about what their priorities would be after they took office. And they asked the question, where is the United States underweighted? Where is the United States overweighted? And it's very clear that the United States has spent a great deal of resources and energy in the Middle East and was very much underweighted in Asia, which was increasingly the most economically dynamic area of the world. Now, although I use the terms rebalance and pivot interchangeably, most US officials do prefer the term rebalance. But the word pivot really, I think, sort of took on the life of its own in Washington. Even President Obama has used it. It's generally considered to represent an abrupt move. So if you're pivoting in one direction, then you're pivoting away from something else. And our European friends and allies in particular did not like the term pivot because they felt that they were being short-shifted. And I think even our allies in Asia felt, well, if we could abruptly pivot in one direction, then we might pivot away. And we still hope that that won't happen, although there I think still some uneasiness that exists throughout the Asia-Pacific region. But I think also it's important to underscore that the pivot or rebalance was not just from the Middle East to the Asia-Pacific or the Indo-Pacific, but even perhaps more importantly, is a rebalance from north to south within the Pacific. And that is that we have been so concentrated, especially militarily, but also to some extent diplomatically on northeast Asia. And there has very much been an emphasis now on southeast Asia in this region and the broader Indo-Pacific. And I'll talk a little bit more about that later. So I'd like to discuss a little bit about some of the individual components of the rebalance strategy. And I'm going to start by talking about the economic component, which I think is a very underappreciated part of the U.S. rebalance to Asia. 60 percent of American exports go to the Asia-Pacific region. And by 2025, Asia is projected to account for almost half of the world's economic output. It is certainly clear when President Obama came to power and was facing the global financial crisis that he had to think about where the United States was going to look to to increase our exports and to increase American jobs. And President Obama announced in March of 2010 that the United States would seek to double its exports to $2 trillion in five years. And this further highlights the importance of the region to the United States economically. The economic component, actually, of the pivot, in my view, evolved very slowly. The Obama administration really didn't have a trade policy per se for the first couple of years. But it has evolved to put a great deal of emphasis on the Trans-Pacific partnership. And the United States is working with other Asia-Pacific economies, including Australia, to create the TPP based on a shared commitment to high standards, eliminating market access barriers to goods and services, and addressing 21st-century trade issues and respecting a rules-based economic framework. This is very much a platform for regional economic integration. It is not, of course, the only platform that are being developed. There are others, ASEAN plus three, China, Japan, Korea, many bilateral FTAs and the RCEP. But these are not mutually exclusive, not necessarily in competition either. I think that all can contribute in various ways to promoting trade and regional economic integration. Another economic component of the U.S. rebalancing strategy to Asia is to become more involved in the economic life of the region and support very specific economic projects. And I'm just going to mention a couple of those. The U.S. established the Lower Mekong Initiative, which seeks to strengthen cooperation in the areas of environment and health and education, infrastructure development in the Lower Mekong region. There's also a food security project in Myanmar. And the United States is also seeking to promote trade with some of our important partners such as ASEAN, where we have created what we call the E3, the expanded economic engagement that is designed to expand trade, investment ties, create new business opportunity, and jobs in all 11 countries. I want to move now to talk a little bit about the diplomatic components of the rebalancing strategy. And I think that the most important of these is really multilateral regional institution building. And in my mind, this is one of the newest parts of U.S. policy towards the region. Of course, the United States has been a member of APEC. We've been participating in the ASEAN Regional Forum. But under the George W. Bush administration, there was a discussion within government about whether or not to join the East Asia Summit as it was established. And the decision was made that the United States would stand apart from that organization and be an observer and see what happened and determine sort of later whether or not we should become a member. And when the Obama administration took office, there was a very early decision made that the United States should be involved in shaping the institutions of the region. And so the United States signed the TAC and then joined the East Asia Summit and wants to basically leverage these institutions to promote adherence to international laws and norms, respect for freedom of commerce and navigation, and commitment to resolve disputes peacefully and without the threat of coercion. Of course, the United States also established the U.S. ASEAN Summit. So regional institution building has been a critically important part of the rebalancing strategy and will remain so going forward. Secondly, and I won't go into all of these at length because there are other things that I want to talk about, but I'll just sort of briefly outline what some of these components are, strengthening our alliance, our alliances in the region, Australia, of course, Japan, Korea, the Philippines and Thailand, increasing diplomatic coordination and strengthening our security cooperation. The third component is forging deeper partnerships with emerging powers and India and Indonesia, I think are the most important in this regard. The fourth component I will speak at greater length about because that is strengthening our ties with China. And I think that there has been a great deal of misunderstanding, including in China itself, about China's role within the rebalancing strategy. Certainly, the United States seeks to build a constructive relationship with China while shaping China's rise. And I want to say first, we've heard from many senior U.S. officials that the United States strategy towards China is not one of containment, although there are many people in China that seek to characterize U.S. intentions towards China as suppressing its rise, seeking it to prevent it from realizing what Xi Jinping has called the Chinese dream, the rejuvenation of the Chinese nation. The containment strategy as implemented against the former Soviet Union doesn't in any way apply to China. We have massive trade with China. We have, of course, enormous immigration and people-to-people contacts. U.S. presidents, including President Obama, web welcome Chinese emergence as a successful, prosperous and peaceful nation. And I think it's important to note that a containment strategy, if the United States ever wanted to have one against China, could never succeed. There is no country in the region that would want to get on board such a strategy, least of all China's neighbors, who very much benefit and continue to benefit from China's economic rise. China is almost every Asian nation's largest trading partner, including Australia's. And so for the United States, in order to achieve the objectives of our overall rebalancing to Asia, we have to get China right. Or we will not have close relations with our partners and our allies. Moreover, I would argue that the United States itself needs a stable, productive, and cooperative relationship with China. I referred earlier to our national security adviser Tom Donilon, who was given two major speeches on the U.S. rebalancing strategy. The first one was last November, which he gave at my institution at CSIS. And in both of these speeches, he identified cooperation with China as one of the pillars of the U.S. rebalancing strategy. Getting along with China, working together where our country's interests overlap are truly imperative to advancing broader U.S. interests. And I know that here in Australia, there has been a debate over the recent defense white paper and the different languages that was used in 2009 regarding China and the language that is used in the current white paper. And I must admit that what I read through this current white paper, what really struck me is that a lot of the language that's used regarding China really echoes that used by the United States and indeed by President Obama. Both the United States and Australia welcome China's rise. Neither of our countries believes that any country should be forced to choose between China and the United States. Neither of us views China as an adversary. And our policies are aimed, as your white paper says, at encouraging China's peaceful rise and ensuring that strategic competition in the region does not lead to conflict. The U.S. and China relationship is really unique in many ways. It is indeed both cooperative and competitive. I remember in 2007 there was a report on the, it was the Colbert report, one of our great comedians that satirized China and called China a frenemy, both a friend and an enemy. And there's really a great deal of truth to that characterization. The U.S. and China are extremely interdependent economically. We share many interests in common, but we remain quite, I think, wary of each other's long-term ambitions as well as intentions. The most worrisome aspect of the U.S.-China relationship, I think, from the American point of view, is in the military realm, although also in the economic realm. But I want to talk about the military realm first. It's this emerging struggle between China's development of capabilities to deny the U.S. access to the region, to the seas around China in a crisis, and the U.S. determination to ensure access, to come to the aid of our allies, if needed, to operate in the region with our Navy and our Air Force in order to defend peace and stability in the region. And I think this really began in the mid-1990s, but it's a far more serious competitive aspect of our relationship now that China's military modernization has made much more progress. China is shifting from a land power to a sea power. It is paranoid about foreign intervention, which is explained by its history of invasion by foreign powers in the 19th and 20th centuries, a period that China refers to as its century of national humiliation. Now that China is wealthier, it wants to be a stronger military, it wants to have a stronger military so it can defend its interests. And this is a major point of the 18th Party Congress work report as well as the recently released defense white paper in China. So I also want to mention in the economic sphere, we have, again, U.S. and China, very interdependent. We have a great deal of trade. United States has an enormous amount of investment in China. I will spare you the figures. But we have a growing problem on the cybersecurity area and cyber espionage, where we have entities in China that are stealing intellectual property. And so our president has called for a level playing field with China. And U.S. companies are not the only companies to suffer from that kind of challenge from China. And indeed, the United States is working closely with our allies and friends in the cybersecurity area. Another worrisome problem is China's assertive behavior in the region. We really saw this begin in about 2009, where China was seen to be putting greater pressure on some of its neighbors, particularly those with which it has territorial disputes. I believe that this in part resulted from an assessment at the time in China that the United States was facing a great deal of pressure economically, is the global financial crisis. U.S. power was seen by many as having peaked and potentially in decline. And I think that there was some hubris in China about narrowing the gap very quickly with the United States and some testing of the waters and putting pressure on some of its neighbors, some of which are U.S. closest allies. And the example that I would point to was in 2010, when there was an arrest of a Chinese fisherman by the Japanese and the Chinese sought to curtail the export of rare earth minerals to Japan. It turned out, I think, to be a rather counterproductive action. But we saw similar economic coercion used by China against the Philippines last year in the Scarborough Shoal incident. And so I think there are worries in the United States about how China's going to use this great leverage that it has over other countries, particularly in the economic realm. So I want to speak very briefly about the military elements of the rebalancing strategy, which many people believe are the sort of core of the rebalance, but I think it's just a portion of it. And as I said, the United States Navy sailed over and under the seas without challenge for centuries and is determined to maintain its access to international waters and preserve freedom of navigation for all seafaring nations. And so the U.S. is seeking a broader distribution of forces in this region while maintaining presence, of course, in Japan and Korea. We are enhancing some of our access arrangements in our presence in Southeast Asia and here in Australia. We are increasing the flexibility of the U.S. defense posture, again to ensure that the U.S. forces can operate freely and strengthening our partners capabilities. And that is a very critical part of the rebalancing strategy to work with other nations, provide more training and more exercises. One example is in the Philippines, which is a country that has been very internally focused in terms of seeing its threats and recently is looking now more outward, wanting to have more situational awareness to maintain a defense of its own waters, including its for its fishermen. So of course, President Obama announced here that a marine expeditionary unit would rotate through Australia. And of course we are beginning to deploy literal combat ships in Singapore, up to four of them. We deployed the first one a few, I think, weeks ago. And U.S. forces are talking with the Philippines also about rotational presence and enhanced access. And our defense secretary at the Shangala Dialogue last year declared that the percentage of our Navy ships deployed in the region would increase to 60% by 2020. That's in that increase, I think, of about 22 platforms. We should note that Chinese ships will probably, by 2020, increase to three or four times that number. Our Air Force capabilities will also increase in the Asia Pacific. And while budget cuts for U.S. military deployments will certainly take place in other parts of the world, and we can talk about sequestration, if you wish, though it would certainly put me to sleep. President Obama has pledged to not reduce money spent for defense in Asia. So if I were to sum up what the United States is doing in this region militarily, I would say the overarching goal is to win the peace. So as President Obama stated, I'm here in Canberra, U.S. goals in the region are to sustain a stable security environment and a regional order rooted in economic openness, peaceful resolution of disputes and respect for universal rights and freedoms. To achieve these goals, the U.S. is clear that we have to have greater economic engagement, we have to strengthen the multilateral architecture here in this region and our partnerships, use more of our soft power, in addition to executing a military rebalance. As I said today, almost every country in the region is somewhat apprehensive about China's rise. Every country in the region, I think virtually every country wants closer ties with the United States. This is something, again, our national security advisor, Donald, refers to as the demand signal in the region. It had many, many leaders, senior officials, come to Washington, talk to our president, our secretary of state and our secretary of defense and urge the United States to be more present in this region because there is uncertainty about China's growing power even as no country wants to have to choose between the United States and China. Probably the most important foreign policy goal of the 21st century is to figure out how to work together coexist with China in the Asia Pacific region. This is a great challenge for the United States. It is extremely important that the U.S. cooperate with China in the region. No country has risen to great power status as rapidly as China has in its history. It rivals and surpasses the rise of the United States in the early part of last century. But China's rise is different in many respects. China rises to great power status with still a very large percentage of its population living in poverty with a determined set of economic goals and objectives and still some ambivalence about what sort of role it wants to play on the international stage. I think we continue to see China's leadership as basically insecure, concerned potentially not only about threats externally but perhaps even more importantly threats internally. But I do want to underscore again the United States welcomes China's rise but we do hope that it will emerge in a peaceful way. Not threaten the interests of its neighbors and contribute in positive ways to addressing regional and global problems. One of the challenges that we face with China is that it actually, I think it continues to be a rather selfish or self-centered power. China has risen or is rising to greatness very quickly and is very concerned about meeting its own goal of building comprehensive national power. Again, the Chinese dream, the resurgence of China as a nation and is very reluctant to take on greater responsibility regionally and globally. And ironically, although some people again say the US wants to exclude China or we want to contain China, the reality is that we have been trying to encourage China to take on greater responsibility and some of you may have heard in the prior administration under George W. Bush, his deputy secretary of state, Bob Zelik at the time, encouraged China to be a responsible stakeholder. And that's something that even though we don't use that language now under the Obama administration, probably that's because new presidents and officials come to power and they hate to use the same lexicon that was used by their predecessors but the reality is in private Obama administration officials continue to use that goal in dealing with China. We want China to be a responsible stakeholder. We would like to see China act in ways that will strengthen the international system rather than undermine it. We hope they will assume greater responsibility, especially for promoting stability in this region. China has in fact been freeriding in some ways on others and so we hope that they will contribute more. I think America's vision is for a China that integrates into the global community in such a way that there are shared norms, values and procedures. And I think that there is willingness and openness in the United States to continue to modify and perfect, improve the international system with China as a participant in that process. And that's something that I think US officials are always conveying to Chinese officials as well. So this is very much a work in progress. And I would close by saying that the importance that the United States attaches to the relationship with China is very clearly demonstrated by a decision that was just made by President Obama and announced a few days ago to have an early summit with Chinese President Xi Jinping. Initially, the plan had been that our two presidents would not meet until September on the sidelines of the G20. And there were many experts in Washington, including myself, who strongly advocated in early meeting between our presidents. It is important, I think, between any two countries to have a rapport between leaders, but particularly between the US and China, because China is really very much of a top-down system. And if you can have a consensus between your leaders, you can give clear instructions to your bureaucracies, identify some things that you're going to work on, then this can really build momentum. And so I think it's especially important early on in since Xi Jinping will be ruler in China for 10 years. And Obama, of course, is serving his second term in office, there is so much that we really need to do together with China. There is no problem in the world, as I think President Obama said in his first term, that can be solved exclusively by the US and China. But whatever problem there is out there, global climate change, proliferation, certainly North Korea and Iran being two very important examples, the US and China need to work together in order to help to address those problems. And so I'm very much reassured that a decision has been made for our two presidents not to just meet for an hour on the sidelines of a multilateral meeting, but to sit down for, I believe it's a day and a half of meetings in California, a real in-depth discussion about all of the issues in our bilateral, regional, and indeed, increasingly global relationship. And I think that it will have the effect of not only strengthening the US relationship, but also perhaps reassuring people around the world and countries and leaders that the United States takes this relationship very seriously and that we understand that the rest of the world is watching that this is a relationship that we need to manage well. And so with that, I'm happy to take your questions. Thank you.