 It's a great privilege and a great privilege Hugh to be invited up. I think one of the very most terrific things about Hugh is his willingness to debate. I think Hugh is really exactly, as Brendan said, he has authored, I would go further than one in a decade paper, the most influential international relations strategic field anything in Australia going right back to that early period, the 60s I would say. It had a huge influence around the world and the degree of public support amongst public intellectuals in particular Hugh receives across Australia is matched only by the private animosity he generates in the corridors of Canberra and elsewhere including Washington and that's one of the fascinating things. There's two levels of debate about China. One takes place in the corridors, the secret corridors, one takes place out there and I think I've tried to sort of try and draw some of these conversations together in my work and this will be an opportunity to do that a little bit better than I have to date. Now one of the reviews that you didn't read out then was actually the first one and I think it's one of the most startling reviews I've ever read of an academic piece of work. I'm going to read it and you can tell me if you can guess the author. Professor Hugh White, this is September 11, 2010, Professor Hugh White of the Australian National University has done something remarkable. He has written the single stupidest strategic document ever prepared in Australian history by someone who once held a position of some responsibility to our system. It's an astonishing document and on it goes. You know who I'm talking about. Greg hasn't missed a beat. He's kept on in that sort of mode in the intervening five years. So one thing you cannot accuse Hugh of not doing is starting a conversation. He wrote this essay at a time when and he's absolutely right. He identified the big question that nobody, sorry, that's just me, that nobody was directly addressing how would China change the regional order as it grows and its ambitions grow? What would this more crowded strategic space look like? Now I sometimes think that Hugh probably doesn't give enough credit to some thinking that has been going on in the corridors for some time, but it was never brought to the surface except for a micro moment in Kevin Rudd's White Paper of 2009 and then perhaps another micro moment when China announced its ADIZ in the East China Sea shortly after the arrival of the Abbott government. In between we had an astonishing development where I think the public silence grew particularly under Kila and below the surface level Australia was moving into full hedge mode. We're worried about China, how do we deal with it? How do we hedge our bets? How do we respond to security riots? But on the surface it was the same old opportunity and pan-glossy and sort of your Pollyanna as far as I could see. I would say here that that conversation has finally started to come together and particularly in the last few weeks, excuse my rusty joints. And there's been some really important debates and people entering the debate publicly in the last two months and from different points of view but I really do applaud them for engaging with Hugh in public even if they don't name him by name but they all are talking about it. Michael Thorley here at the Australian National University back in July Dennis Richardson, Secretary of Defense a little bit earlier about South China Sea. My name is Ben Andrews to my world's prize. I had a very eloquent and interesting speech at Shangri-La in Singapore and most recently I think most impressively with Peter Varghese last week in his speech to the Lowy Institute. All of them in their very different ways from their very different angles and different strengths are starting to address publicly the very big dilemmas that Hugh raises in his essay and develops in his subsequent book his essays in my papers The Fairfax Presbyte in particular in the intervening five years. I have got some questions for Hugh. I also encourage you to think of what you want to hurl at either of us throughout the night. I'm not going to sit here and occupy the floor the whole time but perhaps I can begin Hugh by asking you to answer Brendan's question. What did you get wrong? Well, first of all, thank you all very much for coming. Thank you, Brendan and Andrew for organising this and particularly thank you, John, for taking part in this conversation. I can't resist the temptation to return your very kind component by saying that quality of John's journalism on China in particular has been one of the bright spots, the very bright spots in what is sometimes a rather gloomy picture about Australian public debate about these issues. So look, let me... The heart of the courtly essay was a series of six propositions. The first was that China's power really was growing and that it constituted the biggest, most fundamental shift in the distribution of wealth and power in many decades, arguably in centuries, perhaps actually in human history and certainly the biggest shift in the distribution of wealth and power since Australia was settled by Europeans. The second proposition was that as China's power grew its view of its own role in the international system was going to change, or perhaps one should say revert. That China, as its power grew, was going to seek a different role in Asia. It was not going to accept US primacy, it was going to seek a new model of great power relations and the phrase that Xi Jinping had not then used but now uses all the time, which would be a radical challenge to the order in Asia which prevailed particularly since the end of the Vietnam War because that order had been characterised not just by US primacy but by US primacy which is uncontested by any major power. The third proposition was that the United States would, if it continued on the trends that had clearly established, would resist China's attempt to change the regional order, would seek as with all the elements of American power as the phrase Barack Obama has used since I published the essay to preserve US primacy as a foundation for the Asian order. And the fourth point was that the clash between China's growing power and ambition and America's determination to preserve the status quo would lead to escalating strategic rivalry between the US and China and that that would have huge significance for Australia because our whole vision of our national future was that we would continue to grow rich on China's wealth and stay safe thanks to American power. And that model worked very well for us for the last few decades. All of this, certainly I would love it to last forever but that the further strategic rivalry between the US and China escalated the more the starker the choices that countries like Australia and Australia in particular would face as it found itself increasingly compelled to make choices between those. And the risk that we would be forced to make an ultimate choice, not just a small tactical choice but a really grand strategic choice would grow as the risk of an absolutely fundamental rupture between the US and China a conflict arose and not that I've ever regarded a conflict as inevitable or even very, very likely but it's a clear risk and the risk clearly grows as rivalry escalates. And the sixth point was that Australia therefore faced a huge set of policy challenges. Two really. The first was what we could do with others of course to try and avert the trajectory of escalating rivalry which I saw being set in train and the second was what could we do to prepare ourselves for the possibility that we would fail to avert it and therefore find ourselves faced with a catastrophic choice and living in a region which would be very different from the one we've known and loved, very different from the one upon which we base our entire international posture, one in which the US and China might be in conflict with one another or bitter, bitter strategic rivals, one in which the United States might, in fact, have withdrawn from Asia in order to avoid that. And that these set of policy challenges seem to me to be ones which Australian governments across the political spectrum had failed to effectively address. Now, are you going to ask your question what it is? Because. Allow me to say, not much. I mean, naturally, I may...examine one's conscience. Have I retrospectively adjusted the arguments I made in the essay to see what's actually happened? Will you be the judge? I don't think so. It's not that it was a terribly difficult argument to mount who would look to me pretty obvious, but I did get some things not as right as I might have. I underestimated how fast China's economy would grow. Even over that time frame, I think... I regret it for a while, but I think I put the data which China's economy overtakes America to become the biggest in the world at 2030. Well, if you believe the latest PwC estimates of PPP, measure of GDP, my students are very sick of these statistics, but by 2030, China's economy in PPP terms is already 30% bigger than America's. So it's not just that China's economy overtakes America's. It keeps on growing significantly faster than America, probably, but very probably, and therefore it requires a quite decisive margin of economic weight. The second thing I think I underestimated was how fast China's growing maritime capabilities would limit U.S. military options and how quickly America would respond and recognize that. And the third thing I underestimated was how slow the United States would be to nonetheless recognize the significance of China's challenge. I guess the biggest surprise I've had is how hard it's been to convince Americans that China is really serious about challenging U.S. primacy and therefore to start the debate about how the United States should respond to it. So I think you is more or less saying that his biggest mistake is he didn't go far enough. Yes, that's right. So let me play your devil's advocate for a little moment. So I think there are a couple of really important implicit assumptions in Power Shift five years ago, and I don't think they have panned out exactly as assumed. And essentially I think it is related to whether or not concepts like the Chinese have been examined closely enough. What is the Chinese? What do you mean? There's a lot of them, and you know, with very different interests often. And you also, I think perhaps, strip away a little bit too much of the peculiarities of the Chinese Communist Party and how it exercises power. At one stage you say that it's still Leninist, but it's thrown away all the old communist ideology. I'd like to know exactly what that is because I reckon the more things change, the more things sometimes stay the same. That's one question. And flowing from that I think is some basic philosophies of how Beijing exercises power. At the core of this essay is an assumption that the problem in coming to a grand bargain, a concert of power would be on the American side. I think it's more complicated than that. I would have to go as far as to question when is it in Chinese Communist Party history where they've shown a willingness to make an enduring, packed concert of power's grand bargain really on any level rather than an agreement to reflect the relative bargaining power powers of particular parties at a particular point in time as almost any bruised foreign business person in China will attest. And so why do we think that the way that the Chinese Communist Party exercises power in China where it is explicitly above any law, it's explicitly above really any values because it hasn't ever really defined consistently over time what it stands for apart from its own hold on power and loyalty to the system. Why would it impose a greater respect or respect a different set of norms and values including the idea of striking an enduring bargain when it left its shores? It's query number one. Two, I think the weakness in this argument and I think it's gone, become greater over time is what about all the two billion or so people in between? So what about how Vietnam sees the world? What about how Japanese people see the world? What about India with its, you know, sooner than we thought going to overtake China with its one billion plus population and to a lesser extent other countries in the region? And I think there is a bit of an assumption in this book, in this essay that these guys would naturally gravitate to where their bread is butted. They would gravitate to China as if it's almost an otherwise neutral choice or one power, country A, country B, the blue team and the red team. Let's go with the red team now because they're paying the bills. It hasn't panned out that way. I would say that if you look around the region of the maritime powers which we're really talking about what just states in every single case except for, you could probably argue over South Korea at the moment, in every other case the strategic game's gone the other way and so for all of America's strategic arrogance of which there is plenty of all the fact that nobody ever likes America as an idea unless they kind of need them and I think it's been astonishing how quickly all these states have flocked to the American security embrace and whereas it's depicted in this essay and I think it's some of you's further writings as a case of America pushing, prodding, working, forcing states to come into its orbit often it's been the other way around and for example just three weeks ago Admiral Scott Swift who's the new Pacific Fleet commander who prides himself on controlling the waters between Madagascar and San Diego I asked him do you want to have greater facilities in pre-Mantel and Darwin and he said to be honest we really can't be bothered it's kind of really costly to set up these things and when you've got every port in the region begging to have our ships to look after them for free why would we go and pay a billion dollars to deepen ports in pre-Mantel when they're so far away from the action so there is a huge new demand for an American strategic presence in the region and that follows I think from another questionable assumption at the start here and that is here we talk about she talks about that there's a spot here where we talk about Beijing would find that the more harshly it tried to dominate Asia the more opposition it would face from these powers it is therefore much more likely that China will see its interests better served by aiming lower and you talk about being unlikely that China would try to impose its will by force or political repression now we can argue about degrees but I don't think that's the case I think the reason that so many of these states I'm talking about in the middle are flocking towards each other and towards American security is because they've seen that China's not no longer just wooing them but there's been a threat explicitly or implicitly of coercive force so that's essentially my critique of the SA five years ago and I think empirically the model works in the abstract empirically I think the strategic picture has become much more crowded, congested and complicated as time goes on great, well no really a very good set of points so let me send a ball back across the net to you on each of those three points the first one's actually a complicated point the first point raises that who are the Chinese and what do they want well the first point to know is I know that much much much less well than this guy does he really knows China very well and I don't know China really at all but my argument, the basis of my argument about which as you rightly say is right in the heart of my logic that as China's power grows it will seek a bigger role in Asia is not based on anything that's distinctively Chinese or even anything that's distinctively communist it's that I'm just working on the hypothesis that the Chinese are normal that they want to do with their power what every other country has done with its power as its power has grown that China seeks what Britain sought as its power grew, what Japan sought as its power grew what America sought as its power grew what Russia sought as its power grew etc or for that matter Athens and Sparta and the Romans and so on now it's a very interesting question almost a philosophical question why do states and their peoples yearn for power like that but it does appear to be a very consistent feature of the international system that countries see their place in the system see their place in the order as terribly important to their prosperity, their security and their identity and their sense of themselves and that they will strive if they fear they have the capacity they will strive for leadership within it so my working hypothesis might prove to be wrong but my working hypothesis is that China will do what everybody else has done but it is worth adding a kind of an element to that because I just said the argument isn't basically isn't basically anything specific to the Chinese but it does seem to me that there are some things about China which make me even more confident of that judgement than I would otherwise be generically and that is that it seems to me that Chinese of our time think of it Chinese of my generation so I was born in 1953 if I was Chinese I would remember the Great Famine just to look, you know, I probably might remember losing family members in the Great Famine I would have a very vivid memory of the Cultural Revolution I would either have been out there feeding pigs somewhere and the burnies or I'd have been running around the cities putting dumpsters to catch on people or maybe worse my education would have been disrupted but I would have joined the workforce as I did here in Canberra in China somewhere in 1980 and within my professional lifetime I would have seen the whole deal unfold in front of me so what is it Chinese like that how does they see their present situation I see it, it seems to me through the lens of a very strong sense of China's remarkable history you all know that a very strong sense, perhaps exaggerated but not entirely of grievance at what was done to China as they would say and partly done by people like us in the 200 years since the Opium Wars a very strong sense of what China has achieved in their professional lifetimes they must immensely proud how proud would you be of what they've achieved and a cautious but very deep confidence in where they're going that seems to me to be a very potent brook of attitudes which turbocharges I suspect turbocharges what am I called a normal generalised point I make about so I don't know what Chinese think but I put it this way it would be a very heroic assumption to assume the opposite to assume that China as its power grew to overtake the United States and become the biggest economy in the world would be prepared to accept American primacy as a foundation for the age in order the way Japan did Japan is in fact I think the only historical example of a country not seeking a role in the international system can ensure it with its economic weight and Japan did that under very specific circumstances I think it would be a very dangerous assumption to assume it works that way as for the CCP of course to say that you know a lot more about China certainly a lot more about the Communist Party than I do when I found your writings on that really extremely fascinating but I wouldn't my point about the CCP is well partly that it seems to be what the CCP is really committed to is preserving its own position and that's why it's called a potential Leninist institution more than anything else so I think anything is available for compromise on that basis so I take your point whether or not that means that all of the other elements of Communist ideology have been thrown aside yet or are just susceptible of being thrown aside as the slay continues down the path there's an interesting question maybe the other elements were never that important well that might be it but I would just make this point it doesn't seem to me that there's any that this is going to sound a little bit strange or much flippant but I think I meant it quite seriously I don't think the future of the Communist Party is terribly important to the future of China as a strategic actor in the Asian strategic order I think at China which was no longer ruled by the Communist Party and was ruled by somebody else would still be likely to behave in largely the same way it's not that I think the Communist are going to maybe the Communist Party will survive maybe it will go but I think the idea that we have a that China is challenging the strategic order in Asia because of a feature of Communist ideology rather than what you might very broadly call nationalist sentiment is misunderstanding what drives these these things your third point is a really important one because we've got any reason to believe that China would actually accept a deal that was done with the United States part of my argument is that the way out of the dilemma that I've described is that the US and China should reach an agreement to share power in Asia and quite a lot of a bit of the essay and quite a lot of the book I've subsequently published drives the flesh out how on earth that would work and it's a really critical question to ask China to stick by that kind of deal and the answer is no of course you could China would only stick by that deal if it was very clear that by violating that deal would meet a devastating sanction that the shape of any international order is in the end defined by the circumstance the members of that order are prepared to go to war to preserve it and so if you wanted to the boundaries around China's power you're going to have to impose those boundaries on the basis of your clear willingness, clear to them that you're willing to go to war against them with all of the cost and risk that entails to prevent it to prevent them kicking over it so there's no part of my model of a concept of Asia which is what I've proposed that it should be preserved by sort of Kumbaya that sort of hold hands and be nice to one another just like a concept of Europe which was held together by the sure knowledge that if any country tried to establish primacy over the whole of Europe in the 19th century it would face the other four powers united against it that's what made the concept tick and if you want to see any such agreement in Asia it's not just that the four powers as I think they are would have to agree on the basis of that but they'd also have to agree with that foundation so I completely agree none of this should be based on the idea of trust, it's not trust it's tougher than that but as you say there are a lot of other powers and the question is how other countries in Asia see China's power as a really critical one I think though that this is I think this is simpler than it sometimes seems every power in Asia wants to avoid living under China's shadow and everybody in Asia knows that strong US role in Asia is the best way of avoiding living under China's shadow so everybody wants the United States to continue to play a strong role in Asia on the other hand everybody in Asia values their relationship with China enormously and everyone fears the consequences for them of a bad US-China relationship and nobody wants to be forced to make a choice between the US and China so everybody wants the United States to stay engaged in Asia but everybody wants the United States to stay engaged in Asia on a basis which does not drive escalating rivalry between the US and China and so while they want the United States to play a strong role in Asia I think they're much less fussed about whether the United States role is primacy whether the United States continues to dominate we all want the United States to stay in Asia to balance China we're much less sure we want the United States to stay in Asia to dominate China if that's going to drive escalating strategic rivalry between the US and China 95% of what we want can be satisfied by a strong US balancing presence the problem is that's not what America wants America's strategic objective in Asia today is to preserve US primacy why do you say that? because that's what they say look at the word leadership watch the way the word leadership is used for example the Dharma's speech in Brisbane during the G20 the most starkly anti-Chinese speech given by any American president since it went to China in 1972 I can't recall the count but the number of times the word America and all leadership is used is striking and I think that's it's that disconnect between America's objectives and the objective everybody else I'm agreeing with you they do want America to stay engaged but they don't want America to stay engaged to do exactly what America wants to do and the test for this comes how much substance is there to the alignment that we see between the US and other regional countries and you're absolutely right the other regional countries have been happy to reach out to the United States and say come and help us but what does that really mean? which of those countries is willing to sacrifice their relationship with China in order to support the United States in Asia let's take an example of random let's take Australia the pattern of Australian policy since the pivot was announced for example is that we talk big and do very little the the neatest recent demonstration of this was the moment at which the poor US official was unwise enough to suggest that B1 bombers were going to be transiting through Darwin and Tony Abbott even by his standards was remarkably agile to get in front of a microphone repeatedly and say that's not going to happen Australia's alliance with America is not directed against anyone he explicitly repudiated the explicit statement by the US official that the US forced deployments to Darwin were part of a US posture aimed at China's position in the South China Sea that is because in the end Australia is not actually prepared to see itself being signed up in an anti-China coalition with the United States it doesn't actually prepare to go that way that's why Barack Obama makes a big speech in Brisbane on the Saturday and Tony Abbott stands up and welcomes Xi Jinping to our parliament on the Monday of our sequence so these are empirical questions about what America means by leadership that the region doesn't want and I would argue that actually America hasn't shown itself willing to push really hard on what most of the region doesn't want most of the time and on that question of that particular weekend and I do remember how could I forget the headline Abbott Clueless on US and China swinging hopelessly between the two poles of China and the US I actually don't see it that way at all, I think that the alignment between the Abbott government and Washington on the underlying strategic play in this region not anywhere else is almost perfect and they do things differently Australia is small we actually talk pretty small most of the time and so we want to say we love you Xi Jinping when you come to Australia, can you sign my trade agreement but underlying I think actually that if anything Australia has been impatient to have more US military balancing in the region than less so I disagree just on the empirical You're right and it is an empirical question which inevitably our data is a little perfect but I think I would and it's a perfectly legitimate question which one just has to stand back interesting to see but I would just nudge back half a step by saying I see plenty of evidence that the Abbott government and for that matter the Gillard government before them is doing less for the US in Asia than the US would like that there is suspicion in Washington that Australia took a good line but is not in the end willing to stand by the United States in resisting China's challenge to US primacy and when for example you see an Australian defence minister say in words of one syllable that in the event of the US China conflict over Taiwan Australia is not part of it then if you're an American you think really what's this alliance been all about no one has had the experience of being subjected to rich armadage in full flight lightly forgets it and I do treasure the recollection of sharing a platform like this with rich armadage in which rich will end across and kind of grab hold of me and he is about three and a half people stuck into one suit and said you might have thought that if a small democracy offshore Asia is subject to Chinese aggression any other small democracy offshore Asia ought to be there to help them and I think that is remains a strong view so I think you're right it's a question on which the data is mixed but I think that the evidence is at least partly my way let me know who I should interview look one question and then I'm going to open it up to the floor if that's okay and let me make a small moderate sermon the question of whether China has prepared us to go to war which isn't really addressed in here because this is about cooperation and I think you present if the Taiwanese people of their own volition decide they want to join the mainland on such a basis why should the US object I think that's a bit of the Goff Whitlamese team or kind of formula because in Taiwan that's not the way it's going Taiwan is not volunteering to sign up to the mainland political program I think it's increasingly going that way but the question therefore is China's preparedness I think in your terms to go to war to get what it wants I think see something quite different I see the greatest kind of spending on fancy shiny hardware military hardware that the world's this region seen will ever really and you know the capacity to inflict terrible damage no question but and again this comes back to the political structures since the Korean war the Chinese military has never really fought a real war and in fact I don't think that there's anybody in China that really thinks in a serious position who really thinks that the military is there for an externally defensive purpose they just don't believe that anybody's going to invade China and you know that might have been a fear before they had nuclear weapons but it's not today and I've heard senior generals say that and so the question is are they really developing a military to project serious force in a way that could push back the United States in a sustained complex theater and I actually don't think so for one fundamental reason the way this system operates when it's allowed to you know different if it's a moment of a civil war and it was different in the Korean war but in the 67 years since it's operated incredibly siloed lines because that's the way the Leninus system is designed there's very little horizontal trust in the system and close to the top there's actually very little trust between commanders and deputies and if you think about just the examples the last 18 months we've seen the new generalismo arrest the top two previous generals Shu Tsai Ho and Guo Bo Xiong and so that's the amount of trust that there is in this system you know you die I live is the Chinese you know literally they're not talking about international relations they're talking about the cockpit and in that system where there is not very much trust at all except for that which is built up over huge amounts of time and these are family alliances these are factional alliances sometimes inherited two generations down the line unless you have that kind of established camaraderie it doesn't exist across silos and across factional lines which Chinese commander is going to trust a submarine what are they called drivers with a live nuclear weapon which is pretty much I don't know much about this stuff I really don't but the definition of a second strike capability I don't think it's really likely to happen which Chinese commander, Central Military Commission is going to actually trust his chief of staff to organise coordinated military commands which can unify the 1400 ballistic missiles aimed at Taiwan the separate military commands on the east coast there plus the East China Sea Navy plus the Air Force we haven't actually seen that happen which is I think a prerequisite for a sustained invasion of even what's defined as the fundamental military target Taiwan so I question I think the military is hugely about theatre it's about convincing and it does go back to this sort of stuff which they still kind of parrot as if it's relevant today and it might be it's about the theatre of convincing others that you're serious and you're led to kind of crazy hawks say these crazy things but you don't really mean it I hope you hope that they back down you hope to win the war without firing a shot I think there's nothing that Xi Jinping would not do to avoid a war a full war with the United States yes a really important point and the first point is to absolutely agree or rather acknowledge the very significant point you're making about how unknown is China's military capability and military culture even and I don't for a moment disagree with the point you make about how complex those questions and how uncertain they are I just make a point this is actually quite common in strategic affairs very common not to have a very clear sense of how good your adversary is you know it's a slightly theatrical example but think of Hitler facing the Russians for the Japanese facing the Americans not realising just how formidable these countries are now you're absolutely right the Chinese have got no experience of fighting serious wars for a very long time it is worth bearing in mind that the sort of war we'd be talking about between the US and China the Americans have got no experience of it either it's 70 years this month since there was a major power maritime war nobody knows what maritime war would look like nobody's fought it several new generations of weapons have emerged and nobody really knows what works and what doesn't now of course I have very high regard for the US military and so on but I don't think they're infallible and I have I think a healthy level of skepticism about new and emerging militaries but it's just a prudential judgment I think one would be unwise to presume that the Chinese can't make 50% of what they've got going work and 50% would be enough and that brings us to kind of an operational point here which is really critical but China is in a very real sense un-invadeable and the Chinese are actually right to think that and it's certainly un-invadeable by the United States United States is not a continental power and certainly not on the scale required I mean they proved that in Iraq so I think that is absolutely right but what China needs to do militarily in order to achieve its strategic objective is to undermine that is strategic objective undermining US leadership and promoting its own is to undermine the military foundation of US strategic leadership in Asia has been forever its capacity to project power by sea now the the Chinese have not and will not any time that need bother us acquire the capacity to project power by sea themselves against a country as powerful as the United States the United States is very easily capable of finding and sinking Chinese ships therefore the Chinese aircraft carrier is just a career opportunity for an ambitious young US submarine commander or Japanese or whatever but the converse is also true China has acquired over the last 20 years the capacity to raise the cost of Michigan United States of projecting power by sea against China to the point where that option has now more or less I think as a practical point of policy disappeared there is a solution to that of course America can regain the sea control required to sail the carriers and the Marines up close to China's coast and that is by running a strike campaign against a target set of pick a number maybe 500 separate targets in China stretch of the campaign stretching over say two months that would make the first week of operation first month of operation desert storm look like a picnic in other words a full scale war with China massively escalator which means there's not really a strategic option for the United States at all and even if the Chinese system turns out to be strong and a whole lot of stuff doesn't work their chances of sinking a carrier is still pretty good and that's and of course the real question is what effect does that have on American decision making now I completely agree China absolutely does not want a war with the United States and they only are interested in doing all of this stuff because they can in the best sense of tradition believe they can win the war without fighting so does America China believes it can achieve its objectives of displacing the United States from the leadership of Asia without fighting because it thinks the Americans are going to back off and America thinks it can achieve its objectives of sustaining its leadership in Asia just in the front of the face of China's challenge because I think China's going to back off now that's okay as long as one or other of them is right the risky thing, well maybe they're both right but the really risky thing is they both then have to be wrong and this is the point at which our present situation is a little bit like July 19, 14 what went wrong in July 19, 14 is that the Austrians thought the Russians were back down, the Russians thought the Austrians were back down, the Germans thought the Russians were back down, the Russians thought the Germans were back down everybody thought everyone else was back down so they didn't have to so if you're Xi Jinping you think America's going to back off so you can have a huge win without suffering humiliation and the Americans I fear think that the Chinese were back off so they can have a huge win and the risk is that they're both wrong and they both find themselves facing exactly the choice that people faced in the last week of July 19, 14 which is that they either do go ahead into a conflict or they have to suffer a really heroic humiliation so if the United States does decide to do a freedom of navigation transit over far across the reef and the Chinese do put a missile through a P-8 and the United States do then send in a destroyer and the destroyer is sunk I'm going to New Zealand well this is the point I mean this is of course it's very important to strike the balance between something which like one predicts, I don't predict this but acknowledging it is a possibility this is a possibility we have to deal with and it's a possibility that Barack Obama has to deal with President Xi Jinping and so I think it is although I agree the military is probably much less, there's much less to the PLA than meets the eye there's still enough to make this a very dangerous situation thank you Hugh he's certainly clarified what we need to think about in very important ways what we care about, what we're prepared to fight about I would love to get some questions maybe we've got time for a few I think have we got a microphone, we do so who would like to start off questions just got one here this is for Professor White you mentioned about just now you were saying that Americans if they decided to bomb the China 500 cities across in a conventional war the question is once a conventional war starts it will rapid escalation into a full nuclear exchange now 50 nuclear warheads able to reach the United States you're looking around 50 to 100 million Americans now if you are men in Washington in the White House would you want to do that and when it's all over and you still have Russia the mighty Russia they enough in the instant could have retrieved the United States so those times of crazy thinking not go to war with China unless for example they decided to initiate the first war the Hawaii or Continental United States but I can guarantee you that China is not interested whatsoever to challenge America all they want is what they preserve, what they have and what they think is the answer to the East China Sea in 1972 when the Japan and China agreed and those islands were the next generation so the question is how likely America is going to go to war for the South China Sea I think the point you raised is an important one the question is how do we factor and how do US and China's decision makers factor the risk of escalation across the nuclear threshold into their calculations in these sorts of situations and it's a very difficult question to answer because nuclear weapons are still only 70 years old they've only been used twice and most of the data we have about the way in which nuclear weapons affect the relationships all the data we have about the way in which nuclear weapons affect the relationships with great powers comes from one particular example one case study that is the relationship between the superpowers during the Cold War and that taught us lots but it was a very different kind of confrontation between very different kinds of powers and very different strategic including geographical circumstances so the real answer to the question is nobody on either side really knows what role nuclear weapons play nobody knows where the threshold is and therefore one hopes both sides are very careful about how they conduct themselves however I do think there is a risk of misunderstanding on both sides there continues to be a view I think in the United States I have no idea whether to so to speak the serious nuclear strategist the professional nuclear strategist in the heart of the Pentagon think this but there is a very widely held view in US strategic analytic circles that the United States continues to have clear escalation dominance over China in nuclear weapons which I think is a simple mistake I think China has lots of attractive options to deprive the United States of escalation dominance I don't think the Chinese have escalation dominance either I think neither side have it but if the United States believes they have it they will take bigger risks than I think they should so it should factor into the calculations on both sides it should of course impose a high degree of caution and rationality and probably 95 times out of 100 at will but one wants to be really careful of that 5% possibility that makes me very cautious you make a case towards the back end of it that because of Australia's position in relation to both China and the US we might be in a position to be like an interloper or sort of between the two in the five years since you published your paper how have we gone both maybe at an official level and maybe an involved level I think I didn't actually argue that we could be an intermediary between the US and China that is to get between them and kind of do the kind of Henry Kissinger shuttle diplomacy thing I mean there are circumstances on which that can happen but I don't see any future I don't see any situation in which Australia can play an intermediary role and in the end actually the US and China can and do talk to one another themselves quite effectively at least they talk but so my proposition is a different one it's not that we should be an intermediary it's that we have an immense interest in how their relationship develops and we should as a country be bold in asserting what we think they should now it seems to me the most natural way of us doing that is to talk to Washington we are after all the US ally and all of that but I don't think we should abstain from talking to Beijing as well and so my argument is that Australia should be going to Washington and going to Beijing and saying to Washington we think you should be willing to share some power with China we think you should accept that China is going to play a bigger role in the region but you should also be prepared to continue to play a big role yourself you shouldn't walk away and we should be going to Beijing and saying you should be accepting the United States will continue to play a significant role in Asia you shouldn't be aiming to push America completely out now you might say who's going to listen to Australia well a good point but actually Barack Obama chose to come here to deliver the big pivot speech and he chose to come back here to deliver by far and away his most powerful speech on China since the pivot speech I think they're trying to tell us something I think Australia is actually in Washington's view I think Australia is actually quite important in this I wouldn't exaggerate our weight in Beijing but the other point I'd make is we don't have to do this alone because the little sketch I gave in answer to John's point very important point before about how the rest of the region sees us does seem to me to have pretty universal application nobody wants to live under China's shadow everyone wants the United States to stay engaged but nobody wants escalating US rivalry with us alone I think we can go to Korea, Indonesia, Singapore India for that matter Japan's a bit different we can all start sending this message and so it's not an intermediary role but it is this is what I think to both of them and we should be pretty loud about it couldn't agree more that's where the games at in all the regional diplomacy if we've got some more questions up the back Jim is all I can hear you Roger my question is always about the South China Sea did you anticipate the China would start building solid aircraft carriers and how far do you think they'll actually push that to interrupt the sea waves or is it just all blunt? Do you want to have a I reckon nobody knows the answer to that and I think over here they're kind of if they have a war room they're asking exactly those questions and in Washington as well okay what is the actual strategic benefit of these is it just a sinkable aircraft carrier that doesn't move or does it change the ground now it doesn't change the facts on the ground in material ways allowing enabling force projection I think the single most difficult thing is it's really confusing you know the fact you have to ask that question is okay we believe in freedom of navigation okay now but in the past we've been actually implicitly as a means of courtesy flying doing detours around this island and this one do we change our which of these 40 islands you know 10 of which are new how do we you know so I think there's some very very detailed and complicated and confusing cartography going on trying to work out the answer to that question so at the very least it's confused the whole strategic preacher I think that I think that's right I mean they might be unsinkable aircraft carrier but they're not undestroyable ones as bases they're a very little use in anything of an intense war I mean they're just a target waiting to be excised I actually think my final way the biggest significance of those bases is the challenge they pose to America's capacity to stop them and I think America has walked into that trap I don't myself think they're a very significant challenge to freedom of navigation in any practical sense I think there are some legal questions there which are quite intriguing but I think in terms of is China going to use them to stop shipping you know shipments of iron ore from the Pilbara to oh hang on they've gone to China that doesn't sound right to me but I do think doing something which America obviously doesn't like by tempting America to stand up and say we want you to stop this and then America failing to find anything effective to do to stop them reinforces what seems to me to be the principle Chinese message which is America is not the power that it used to be and I think it's a failure of US statecraft to stumble into that which I think is what's happened I think that's a fair assessment could you Europe is not dominated by Germany or France but is sharing by different countries and same like Asia if it's only two giants probably it's too much tension so I think it may be better if you invite more other countries to sharing and it's released a lot of more tensions and stress but I think people from Beijing and also from Washington they know that but the question is how so probably like the policy from China that talking about sharing and road it may be that's a way to sharing but that's not not really about sharing it's actually another way of dominance so it's from other way not inviting more people to share in the game but actually excluding United States so what do you think about this look there was a time when the economic diplomacy was quite effective and but that was a time when China didn't seem to be demanding very much the game has changed and look I think anything is possible but coupled with the the militarized performances that we've seen in the last couple of years I think it's I'd be surprised if they get serious diplomatic leverage through these projects for a whole host of reasons including the fact that there's not actually a great history of successful offshore Chinese developments really in any sphere so I don't see why this would be any different particularly if it's being imposed strictly on Chinese terms but early days I think we there's close watching should we give a ride of a play up here Hi, good evening Rob Lee with the US Embassy I appreciate your thoughts and comments if you allow me just to speak briefly because I think you made some claims about US policy that frankly is just inaccurate so I feel it's my duty to actually accept the record straight in terms of US policy objectives that US ultimately is about dominance in the region and frankly I know you've had conversations with US officials as well and that's not really an accurate reflection of what our goals are and I would also encourage people to if you didn't read the Obama speech in Brisbane to read it for yourself because I also disagree with his characterization of it being the most anti-Chinese speech made by any US leader let me ask you which one was the most anti just joking but I think the Obama speech in Brisbane actually lays out again reiterates what US goals are and I think I would summarize as a lot of the discussion tonight is sort of a summary of the discussion I've seen over the past two years serving as a diplomat here and the question seems to be who should rule the Asia-Pacific and I think our point is really not who should rule but what the rules ought to be to make sure that the prosperity and peace we've seen in the Asia-Pacific will continue and did not President Obama say in the State of the Union address we should make those rules that's a quote we should make those rules well on the TPP there is a discussion about setting those standards that should govern the trade of the region so that's spoken in that context and also within the US domestic debate but I think there's also a visit that this evening of President Xi heading to the US and that will also be an important opportunity so there are a lot of discussions between US-China about managing this relationship which is vital to the United States it's vital to us economically it's vital to us strategically so I think that point is also often lost in the debate that the US has enormous interest at and making sure that we get the relationship right and I think the Chinese also recognize that as well so I think the picture isn't quite as grim as this battle between US and China over supremacy but that really it's a matter of getting the rules right because it's an outcome that will affect the entire region and I believe that the framework that's been established over the past 50 years has worked rather well for the entire region, China included in that there are ways to find two-nose rules to make sure Beijing's concerns are addressed but what we don't want to see is the use of coercive power to make gains to be able to dominate the region so that's something that not only the US is concerned about but really countries throughout the region it's a conversation that needs to be had to make sure what are the right rules to ensure peace and prosperity which is of interest to everyone in the region Australia, US China and all the citizens in the region as well. Thank you for articulating that position I think it is important to have that dialogue it is going to be an exceptionally important few days in Washington in the middle of next month we should all be watching that very closely I think we've really only got time for one or maybe two short questions, yes please I'm glad that you finally raised the Japan question earlier you made a point that nobody in this region really wants intensified rivalry between China and the United States I see that what Japan's Abe government is doing is at least seems to be exactly trying to trying to make the US even move toward a more hostile direction is policy toward China so I was wondering what's your Japan, yes what your view is about Japan's policy and whether you think Japan is doing the region good service or bad service I think I did say really good question, I think I did say at one point that Japan is a different case and it is I think Japan is in a particularly difficult strategic situation and its strategic difficulties make difficulties for the rest of us Japan more than anybody else feels threatened by China's growing power and I completely understand why and Japan more than anybody else feels dependent on the United States for protection from China but Japan is kind of walked in a kind of Newtonian contradiction there that the stronger China becomes the more they fear China but the stronger China becomes the less confident Japan can be of America's support for Japan in the face of China's pressure and so Japan finds itself in a position where it wants in order to feel more confident of US support it feels I'll put it the other way around it feels less confident of US support the better the US and China are getting on so it feels that security depends on tension between the US and China but just like the rest of us it can't live with tension between the US and China so it's a kind of a fundamental dilemma it seems to me at the heart of Japanese democracy I I think the only resolution of that I think it's a very tight dilemma and I think the only way out of it is for Japan to cease to rely on the United States as long as Japan relies on the United States for its security from China it will be very difficult for the US and China to develop a good strategic relationship because Japan will keep on pulling America back from it and I think there isn't I don't think that's the only thing that's driving escalating rivalry between the US and China I think the US does have a vision of the US strategic order in Asia which is incompatible with China's and vice versa but the Japan factor certainly amplifies it and if the US and China started to move more closely together I think Japan would very effectively get in the way so there's a strange very counter-intuitive but I think very hard to escape conclusion is if we want to stay with US-China relationship we'd be better off with Japan which is no longer a strategic client of the United States it's a scary conclusion but I don't see any way around it To spill that out, Japan needs to become a nuclear system If I was I would be very sympathetic I would understand that Japan would argue that if they became a minimum if they're quite a minimum deterrent they're right but that's a tough it's a very tough conclusion to draw the world in some ways would be a place if your countries had nuclear weapons but it's always worth bearing in mind that the real imperative is to minimise the chance that nuclear weapons would be used and it may well be there's a lower chance that nuclear weapons would be used if Japan has nuclear weapons in circumstances in which US-China relationships are stabilised or rather Japan doesn't have nuclear weapons in circumstances where US-China relationships are unstable so it's a tough call but it's a proposition I'm prepared to defend now, I think we've got time for one last killer question I'm no lawyer but I'm sure of it I think it would obviously be an extraordinarily traumatic thing for Japan to make that kind of transformation but countries do sometimes go through those changes only when their strategic circumstances get very dire but that might be argued that's exactly what Japan potentially faces perhaps not this year or next year but if one looks 20 years down the track which is not very long in this business I think it's conceivable that Japan ends up being forced to that kind of choice Last killer question Does the advent of from Worthington from the research school of computer science a self-serving question does the advent of cyber warfare change the equation do we have the advent that on the beach scenario countries will not know they're under attack who's attacking them and in this respect China has a capability perhaps as great of that as the USA will this destabilise the situation Very interesting question first point I'm not sure that China has a bigger capability than the USA Americans talk about a lot about what China does to them Chinese talk less about what the United States does to China so I don't know but I don't take it for granted that there isn't a pretty active US capability but the broader point is I'm I admit myself a slight skeptic about the business of cyber conflict as a strategic instrument obviously attacking the cyber systems embedded in people's kinetic military systems is a very important adjunct to ordinary old fashioned good old fashioned kinetic war you disable my missiles by disabling the computer systems that control but that's really just part of what you might call normal kinetic war the revolutionary possibility is that states can now achieve genuine strategic effects fundamentally change the behaviour of states by attacking one another's cyber systems now the argument in favour of that is that our societies are immensely dependent on cyber systems and therefore will be very sensitive to their disruption but that reminds me of the argument that people made in the 20s and 30s about the effect of aerial bombing that is that that once the air flits appeared over at national capitals and dropped tens of tonnes of explosive on national capitals the population of those capitals would rise against their governments and demand peace and it wasn't true Germans killed 40,000 British civilians British killed pick and under 500,000 German civilians and they didn't stop them let alone what we did in Japan didn't stop them fighting and I suspect you know there would be a real pain in the neck if you know Country X Camarion cyber warriors closed down the ATMs and I can't get the money out now I'm being a bit flippant but the thing about societies like ours is that their societies in general they're terrifyingly robust that will take an enormous amount of punishment without stopping and so I just I'm not sure that in fact I'm pretty sure that states could resist even very serious cyber disruption as a strategic effect could have a huge impact closed down the banks and closed down their traffic control system but compared to a full scale nuclear attack pretty small potato so I don't think it could actually change the strategic capitals I might be wrong I might be wrong about that You heard it first