 I'll quickly introduce my fellow panelists here. Phil Saunders runs NDU's China Shop, China Center. He's been at this for a long time. Tya Smith, who will speak second, is managing partner at Garnet Strategies, and she served as China advisor to Todd Stern, Special Envoy on Climate Change. And previous to that, she worked with Hank Paulson on the SED, which has, of course, since become the SNED when strategic was rehabilitated as a term and allowed to be used. So it'll be interesting to get her insights on how that contributed to partnership or elsewise. And Melanie Hart is director for Chinese Energy and Climate Policy at American Progress. She's focusing on science and technology development policies for energy innovation. So with that, I'll turn it over to Phil to start off. Okay, great. Thank you very much. What I'm going to try to do is set a little bit of context and talk a little bit about the security side of cooperation and partnerships, partly because my other panelists have much greater practical experience in some of the other areas. So let me talk a little bit about the why of U.S.-China cooperation. I'm not going to frame this within the context of the new type of major country relationship. Thank you very much. Because Stephanie will slap me if I do. But the why? I mean, first at a pragmatic level, because there's lots of issues where if the United States and China don't find ways to work together or coordinate our efforts, problems are just not going to get solved. Big picture things like climate change, big things like regional security issues, dealing with the Iranian nuclear weapons program, the North Korea problem. If the U.S. and China can't find ways to work together, important things are not going to get done and that's going to be bad for the United States, bad for China, bad for the region, and bad for the world. So there is an imperative at that level. I think a second reason which is maybe a little bit less understood is as you heard from the earlier panels, there's an increasing sense of competition in U.S.-China relations, of strategic competition both within the region on security issues and in areas such as cyber and strategic questions like nuclear weapons and military modernization. And there's the potential for that competitive aspect of the relationship to take over. What we have today is what I like to call a complex multifaceted relationship with lots of common interests and some areas of competition. And in order to balance that, it's important to find ways to manage the more competitive sides of the relationship and to find ways to cooperate in ways that matter to both countries. It's across the board on a range of issues, but it's also important in the security sphere because if there is a cooperative side to the military relationship, if there is a cooperative side to the strategic relationship, I think it helps balance and leaven the overall part and it helps to manage that more competitive dimension. So that's a second piece on the why cooperation matters. Let me talk a little bit about some of the areas and I think it's potentially helpful to think of things happening bilaterally within the region and then outside the Asia Pacific. Bilaterally, we're doing more with military-to-military relationships, trying to have a better understanding of how we each think about the world, about the region, about military issues. We're trying to build on that understanding to have better channels of communication and ability to manage problems and crises when they occur. And some of the tools we have, such as a hotline between our Department of Defense and the Chinese military, those aren't just tools of crisis management, they're also tools of cooperation and coordination and I think the same is true at the White House level, although my panelists can speak to that maybe more. So having those mechanisms at the bilateral level to be able to work together to define common interests, part of that is having regular dialogues, which we do when senior officials visit, which we do when different parts of the State Department have talks on regional issues. So the bilateral piece is important. Within the region, there's both traditional security issues that we're trying to deal with, some of those common problems like North Korea and their nuclear ambitions and bad behavior, some of them more contentious issues, such as overlapping maritime sovereignty claims. And even though the U.S. isn't involved directly as a claimant, we have interests at play, we have principles such as freedom of navigation, peaceful resolution of disputes, international law and respect for it, which are important. And those rub against the Chinese in the wrong way sometimes. So we are a player on those traditional areas and right now that tends to complicate our efforts to cooperate on security issues. Probably North Korea is the area where we've done the most, but that's a case where the U.S. and China approach the North Korean problem with a different perspective, with different priorities, with different sets of tools which we can bring to bear. And you'd have to say there's been a lot of cooperation on process but not a lot of results in terms of concrete security accomplishments, as Stephanie has written a lot. I think where there is more scope for cooperation within the Asia-Pacific region is on non-traditional security issues. And there's a host of those, whether it is dealing with counterterrorism, whether it's dealing with humanitarian affairs and disaster relief, whether it's dealing with tragedies such as the Malaysian airliner that's gone missing in efforts to find that. These issues are things that matter to real people in Asia and to countries throughout the region. They are not so competitive in scope. They're an area where the U.S. and China bring different capabilities to the table. And there's an expectation and I think a demand from other countries in the region for the U.S. and China not only to do more, but to find ways to do more together to be able to work effectively with each other and with other countries in the region. So I think there's a lot of scope there. And this is actually an area where we sometimes say competition is that a good thing or a bad thing. I think you can have it be a good thing. And in this area of non-traditional security, if China's building a capability to do more with other countries, to help other countries, that's a good thing. It's not a problem for the region. It's not a problem for the United States. And if it spurs the U.S. to try to cooperate better with countries in the region, I don't have a problem with that. I think that's a positive thing. And we have started to see the U.S. and China work together to learn how to do, say, humanitarian affairs and disaster relief operations. And that matters in the real world when there was the earthquake in Szechuan in 2008. The U.S. and China had done an exercise on disaster response in 2007. And that positioned the U.S. military to know how to work with China and to help do relief operations. So I think there's a great emphasis of that as an area in multimill relationships, less contentious, more scope for cooperation. And I think both the militaries are working hard on doing that. But still, when you think about it, within Asia, the contentious issues, the competitive ones, make it more challenging to cooperate. I think, therefore, the final point is if you look outside the region, I think actually there it's usually easier to cooperate. And you can think of examples such as the counter piracy operations that China's contributing to in the Gulf of Aden. You know, that's a new initiative for China. They're not necessarily directly working. There's not a shared command and control relationship. But there is cooperation. There have been exercises on how to do that mission more effectively. There's been information sharing. And as China has become more comfortable with that role, I think they've been more willing to interact with the other countries that are participating in counter piracy and share information and lessons learned. And I think in those kind of cases where there's not a direct security confrontation or a conflict of interest, it's a lot easier to cooperate. And it's also the case that some of the contentious issues such as operations within exclusive economic zones are not such obstacles because China doesn't have exclusive economic zones in other parts of the world. So it removes some of the contentious areas and sources of tension and allows us to focus on the more cooperative side. And I think part of the hope, if you think about it holistically, is bilaterally we'll have better understanding, better both crisis management and cooperation coordination mechanisms that'll help us work more effectively. We're in the region that we can work on the non-traditional security pieces where there is great scope for cooperation and demand from the region for us to find a way to do it and find ways to manage these more contentious parts and hopefully better cooperation outside the region can build habits that then come back and help ameliorate the problems within the region. And I don't like to use Cold War analogies, but it is an interesting fact that when the Soviet Navy started to be more active in other parts of the world, their approach on things like rules of the road and international norms started to change. That is what got us to an incidence at sea agreement which helped stabilize some of those maritime parts. And again, the U.S.-China relationship is not the Cold War, it's much more cooperative, but that notion that you can find common interests and cooperate outside the region on important issues, for example, on the Iranian nuclear program or counter-piracy in Somalia, and then use that to help manage the more contentious sides of the relationship. I think that part of it is a good model. We have good examples in the real world with U.S.-China cooperation. I think it's something we need to do more of so that talk-up partnership isn't just talk, but it's real action in real places solving real problems. Great, thank you. I have an informal name for this. I call it the Concentric Circle Cooperation Theory, which is the farther away from China's borders, the more ready they are to cooperate. Sudan is another example, Democratic Republic of Congo. When you get closer to the border, you have to rely on the Chinese panic factor, like, uh-oh, Afghanistan is soon going to be our problem, or they're lobbing shells over the Myanmar border, and then you can see a bit of that. Please. So I would just start with, I guess, affirming a lot of what Phil was just saying. When we think about cooperation with China, the first thing is why you're going to do it. And I bring it down, I'll bring to this very much of a practical, here's how we get the work done, because there's a lot of discussion about why we should do it, where we go, the importance of it, but how do you actually cooperate with this country, which can be really truly the most irritating country to cooperate with and to work with, but also one of the most rewarding. So all of us here in this room have spent time working on China, interested in China, and I would guarantee if you've spent time there, you'll find that it is a fascinatingly wonderful place to work, and you can't imagine working anywhere else, because things just move at a slow speed in the rest of the world, including our own, right? Including here. Horrifying to say. So the first thing is, well, why are we going to do it? I like to think, and saying different words, the same things that you were just saying, but first of all is we need to make sure that we keep our eye on the strategic relationship and the importance of it, and we don't let the kind of day-by-day crisis overshadow how we feel about each other. So multiple levels of cooperation become critical there. Ensuring effective communication. So you're saying when you've got a crisis, you need to make sure that you can pick up the phone and call someone, and if you don't have that background of working together, there's nobody at the other end to call, and you're not expecting your call. The third piece I would just say is leveraging the wider benefits, whether it be working in Sudan or Myanmar or other issues around, there's always something else that can benefit that might not be the direct focus of your cooperation. So when I look at China, the first thing we do is we think about we call the 360-degree approach. How can you work on something and have it be successful, guaranteed? And is it any business relationship or any government-to-government? There's no guarantee. So we try to do is ensure that we can make it. So that means you find ways to work with academia, you find ways to work with business community, you find ways to work with the government, you find ways to work all the way around the circle so you're actually able to move things in the same direction. And understanding how everything is interconnected in China is going to be the most important thing because it's what you're trying to influence. If you push in one spot and you had no idea so and so went to school together 25 years ago with another person who happens to be at a different ministry and they talk together and things don't work out, then you didn't understand the dynamics that you were influencing. Now when I'm in China talking about this stuff, I'll say, actually, you know what? The way it works in China is exactly the way it works in Washington. And it works the same way. Maybe we don't have as tight a connection amongst our schools and people have gone and spent a lot of time together, the way that you do in China. So the first rule of thumb when we're talking about cooperation is treated as though it was working in your own community and in your own world because all people are the same. So we say the U.S. and China are remarkably alike. The interests are really similar. Every single official that I've ever sat across a table from and been really frustrated and irritating, they have a family at home just like I do. They have children at home who want to know why they're never around. So I come up early that morning and prepare all these briefings exactly the same way that I did, but actually their system was even more stringent than our system here and that you had to write all this stuff and get approvals back and forth. And so as soon as you humanize the people that you're working with, it makes it a lot easier. Entrepreneurship, we talk about the Chinese dream, something that Xi Jinping has been speaking of recently. We think of the Chinese dream as actually quite similar to the American dream. There is an expectation the government will come up here in the U.S. And there's an expectation that it will move a whole lot faster. So take your conception of the American dream, put it on steroids, and you're starting to approach what the Chinese dream looks like. That would say the biggest difference when you just approach this is between how you value friendships. And to think about it, in the U.S. we often invite people back to our house and say, will you come and have dinner with us? But we don't really actually mean it. We don't just have lunch or dinner where they didn't follow up with the time and the place and what do you want to eat. People really do mean things a little more than they do here often. And this is a general stereotype for 1.3 billion people. But overall to treat people from a human perspective makes a difference. And it's also important too to remember in China when you do something to help people, they really remember it much more clearly than we do here. And that I've spoken with someone Chinese official, when he was just starting out 30 years ago, that Chinese official did not forget that he'd gotten some help from that person. And they come back for the next 30 years doing meetings and things, and you help each other out in a different way than we tend to think of here. So of course, this broader question is great, so you want me to treat them like people. We want to actually try to get something done, but can we trust this other side? And this is where when we launched the Strategic Economic Dialogue, which is the predecessor to the SNED, the Chinese talked about trust and mutual trust a lot. In the US, we were all thinking, oh great, how are we going to have some kumbaya moment, we're going to have trust, there's nothing that's going to be accomplished, can we move through this? And you learn that trust meant a lot, and this sense of mutual trust was really important because their side thinks the same thing about our side that thinks about them. It's really an opaque system. We can't figure out how to work with them. We don't understand what Congress is doing. Well, welcome to the, it's there. But there's a feeling that this is so complicated. So the CNOOK deal with New Call was the one that everybody speaks about, when you talk about how do you invest in the US. For CNOOK, they felt like they did the right thing. They hired lawyers in Washington. The lawyers in Washington should have done their lobbying. It should have been easy. There shouldn't have been a problem. They paid money, and that was unusual at the time. And it turns out that it wasn't enough. And then we talk about how you have to work the different levels of government, and they're thinking, this is just crazy. How can these people get anything done? So what have we done using this approach? Well, we set up a dialogue, the strategic economic dialogue, which was all based around the idea that we need to get together. Now in the SED, we got together so much that by the time the next administration came around, both sides said, Uncle, we can't do this every six months. We need to do this once a year. I would argue very much that regularly getting together, spending time together, is just like if you guys go out and play soccer. It's when you're spending time together in the trenches, 24 hours of negotiating for three or four days straight, and then you do it again in six months, you really get to know your partners. And this is how you're able to build trust and build common shared experiences in a new way. So the SED was a platform that was created to find ways for all of us to spend time together. And all of us meaning anything that could possibly be considered part of an economic relationship. Now the SED has continued that same idea. They've made it even bigger, but it's still the same concept that you need to work together. Now the key here is that when things got really tough, because everyone had spent so many hours talking together, and we would actually every six months also go on a retreat where we go hiking, checking out the market economy status and different parts of the US or in China so that we knew what we were talking about when we talked about market economy status as an economic issue. A lot of really interesting things together, but you know those same guys that I spent time hiking up mountains with, working out agendas, creating new outcomes for the dialogue, were the same ones that we picked up the phone and called and said, what, I just heard that you guys plan to sell off all your treasuries, is that true? And if you don't have those deep relationships, then it is very difficult to pick up the phone and call them and talk to them about it. So the 2008 financial crisis is an excellent example of how having a very intense relationship leads to benefits down the road. And again and again, whether it be from the top officials, our presidents working together around the first G20 meeting in November of 2008 where the Chinese was the first country that we actually reached out to to say, do we want to have a G20 meeting as opposed to it being the normal G7 or G8 grouping together? So when we reached out to the Chinese because we knew we could talk to them about it, they weren't gonna complain, they weren't gonna have problems, those relationships had been established over time. Then I say a couple of quick pieces that make it a big difference. So you build trust, you work together, you play together, you get to know each other, you get to know about each other's families, all of that's nice, it sounds fluffy talk. But there's also a question around clarity of your system. So it might be very difficult for Americans who have not worked or spent a lot of time in China to understand how the Chinese system works. Even people I know who work in the business community are very confused about how the government might work and how things are interconnected and how you really can work with people in both governments to make change happen effectively. But it doesn't matter if you don't understand the system, if you have clarity in your own hierarchy. And so one thing that's been confusing about the SNED as opposed to the SED and the SED, if you're not spending your life following these different dialogues, there was one person in charge of the dialogue at each side. So for the US side, it was Hank Paulson, the Chinese side started off with Vice Premier Wu Yi and then moved to Wang Shichan. In the SNED, you've got two heads. So we have the State Department head, which was Hillary Clinton, now John Kerry, and then you have the Treasury Department also leading from the other side on the economic side as opposed to the strategic. So there's not just one person to go to. So the only person where you really know is truly in charge has got to be the president. That system can work well. It does create some confusion. It's certainly on the Chinese side. And I would argue that some would suggest on the US side, even amongst US government, it also creates some confusion as to how these things work. The second thing I would say is, in addition to a clear hierarchy of how you're gonna progress and discuss issues, you wanna have really good communication channels. So you were talking about the hotline. Well, we actually set up a hotline between the Treasury Department and Madam Wu Yi's office. It was one of the first things we did. We spent a lot of time. It was really great. Everybody was excited about it. And then you realize with mobile phones, really isn't necessary anymore. But it's the idea. It's the fact that we want to go through bureaucratic pain in order to prove that we wanna talk to each other more often. And that has been very effective. But in this, if you're gonna put together a team to be negotiating, whether it be a track one dialogue with government to government or track 1.5 where you're mixing in NGOs and experts or if it's a track two type of dialogue, you wanna know who are your key contact people? Who is the person who's gonna be up all night to be able to answer the phone call when something comes along that's important? And that doesn't matter if it's a track two dialogue. You can have really important things happening and breaking at all times. So you wanna make sure that your communication is clear. You know who calls and how you work on it. So when I worked for Paulson, I was the one that got called because everybody knew you could find me at any time day or night. And Melanie worked with Podesta. Everybody knew that you could get a hold of Melanie if you wanna get a hold of Podesta. It's that type of thing. So I would say that your top guy is honestly often not your most important one. They might be the one doing the press statements and the rest of it, but they're not the one who's going to be on call at all times. And I can guarantee you when Melanie was working with Podesta, she did an awful lot of advising to him and suggesting here's how you wanna answer to the message that I just brought you. And so that's another thing to remember is that your staff are the most important people in your lives, though most people figure that out. So just quickly, you wanna make sure you can track your progress. We had in the SED and still do it in the SNED and kind of all of the dialogues, you want some kind of concrete written document which says here's what we've accomplished. So in the SED, we accomplished, for all of you, take the direct flight from Dulles Airport to Beijing. That was one of the outcomes of the first SED. And we're all grateful for it. It's one of my highest accomplishments. But that was something simple because then every time we got on the airplane, we knew, oh yeah, we're making progress. We have done something already. Commercial deals, we do MOUs to kind of show cooperation, but also using government programs. EcoPartnership is still a thriving program that allows different groups to be able to get government blessing to say, yes, you're doing great work. You wanna be able to look back. Mutual benefit and swallowing pride. So one of the really interesting areas with the SED was around the R&B and currency issue. So if you've worked in China, you know that the value of the currency is something that just is a critical political issue on both sides. And when we started off with it, we had to sit down with Wu Yi and say, this is an issue that I can't drop. And having a pre-agreement with her to say this is such a hot political issue, I have to talk about it in the press every time I talk about China. But let's take a step back and talk about what are the issues that we're really trying to focus on. So in that case, it was about financial reforms and China needing to rebalance its economy. Those are the underlying issues below the political one. And as soon as we could say, this is a political issue. It is important, but it's important on a political issue. And let's focus on how we can actually change things to help support you and help me in the long run. It makes all the difference. So Wu Yi said, yes, fine, you talk to your press. I'm gonna talk to my press too. That was fine. We knew she had to talk to her press and everybody had this common understanding of how to work it through. And the currency appreciated, 20%. It's not, it's gotten even better since then, but it's still, it's just an example of how you can actually work on things. Most important is no surprises. So if you think about it, the easiest way to undermine trust is to surprise each other. And this is where having communication, pick up the phone, whether you're in China, you're in the US, you live in Hawaii, wherever it is, and say, I just heard that this happened. Is this true? Or I know when your boss talks to my boss tomorrow, here's what they're gonna say. So we had long conversations. Every time state council had a meeting, I would get a phone call that said, here's what was just discussed in our state council meeting. Here's what might happen and how it will impact you. We would go back, think about it. I would call back and say, okay, this is gonna be our response. How is that gonna affect you? You're not ever not gonna do what you wanna do, but you can work together to be able to create a much better cooperative dynamic than if you go and surprise them. Sometimes we think that, oh, you don't wanna tell them because then they'll be prepared and they'll have all their statements out there. Well, the reality is if they're able to prepare and you can talk about it together, you can likely talk to the person who's writing the statement for the boss who's gonna say it and help them draft a statement in a way that's a much more constructive statement than if they had just gone on it when they were surprised and frustrated with you. And I say they in this case, because it might be us who's the they or it might be the other side. And the other thing is you always wanna make sure that people look good in front of their bosses. And I would do that here, working with people in the US, you wanna make sure you can help them. But in China it makes a big difference because their bosses help give them promotions and other things and there's nothing better than having the person that you're really good friends with working closely with you get a promotion because then they only can help you more the next time around. So I will conclude with that. Happy to talk substance, but sometimes especially after we've already had such a great overview of the world that it's nice to talk about some practicalities. Thank you very much. So I'll turn it over to Melanie. Sure, so I'll dive in and give a few concrete examples in the energy and climate space of where the US and China stand on acting as partners. We've seen a big shift in recent years in energy and climate changing from being what seems to be primarily competition between the US and China, competition over who does what under the UNFCCC, competition over energy trade issues, over oil and gas leases around the world to an area where it's very clear that top leaders in Beijing and in Washington see this as our biggest area of potential collaboration and our biggest opportunity to act as partners. A lot of that work started when TIA was at the helm over at Treasury, rolling out some great new initiatives like the 10-year framework, and that's only gained speed under the first term and now second term of the Obama administration. So I'm gonna touch on five issues that are really moving forward but still need a lot of work. One is joint research and development of clean energy technologies. One of our big problems working with China as a partner on anything related to technology is the lack of respect in the Chinese legal system for foreign IPR. That drives a lot of deals to a halt and that's sent a lot of US companies who originally thought that China would be a great opportunity, sent them coming back home, not only giving up on the Chinese market but going to their members of Congress complaining that working with China isn't in US interests. One thing that we really are going to have to figure out how to work around is how to be a good partner with China on technology issues while also protecting US interests, particularly IPR interests. And one of the path-breaking initiatives on that front is the Clean Energy Research Centers. That's a partnership between the US Department of Energy and China's Ministry of Science and Technology. And what they did is they picked three critical issue areas, clean vehicles, clean coal, and energy efficiency buildings and created a safe umbrella-like framework where companies and universities in both nations could work together, develop new technologies, and know that the joint product would be protected, that what they put into the program, both sides would be able to get out. And that is creating a great new model for how the US and China can partner on technology development. The problem is that model is pretty limited to those three projects. One of the reasons why it works is because the DOE is backing it on the US side and the Ministry of Science and Technology is backing it on the Chinese side and there's lots of heavy government involvement. And so we don't yet have a really great model for how we can break past that having your government overseers makes sure nothing gets stolen. But it's great to see that at least within a protective umbrella, US and Chinese companies can work together and do things that they probably could not have done on their own. That's very promising. Another area that I see huge hope for over the next few years is Chinese direct investment in the US energy sector. Taya mentioned the Chinese attempt to acquire UniCal which didn't go very well since then other deals have gone fantastically. The same firm that didn't do well at that first deal has changed their strategy and is now quite a success in the US oil and gas markets. Here in the US we still have a lot of work to do to bring some clarity to our FDI policies and help Chinese firms understand that they are actually welcome in this market and we do appreciate having Chinese capital come in and create US jobs but that those opportunities are going to be focused on certain areas of the market that don't touch on national security issues. We haven't done a very good job at communicating where those safe issues are versus where the security concerns are that's created a lot of distrust but I think we're starting to see the light at the end of the tunnel on that issue. The Obama administration has funded the SelectUSA initiative to do more work on clarifying our FDI policy and on bringing investors from abroad into the US market and that's a great way where the US and China can work together as partners. We can't do anything about China's IPR regime at home but what we can do is welcome Chinese firms to come here and operate within our own IPR regime within our own regulatory structure and if Chinese firms are able to succeed on that type of level playing field I think that's one of the strongest messages we can send to Beijing and perhaps some of the trade protectionism that we don't like might not actually be so necessary for Chinese success in the long run. Another big issue that's come up in US and China climate relations is the attempt to work together to phase down hydrofluorocarbons or HFCs. That was the big outcome of the Presidential Shirt Sleeves Summit at Sunnylands last summer. For people that aren't into big followers of climate change, hydrofluorocarbons, HFCs probably sounds kind of boring and small but actually that's one of the biggest things we can do to stop the pace of global warming and that's been a difficult issue for the US and China to work on in the past because in climate negotiations we've been stuck on opposite sides of a firewall. The US is a rich developed country, China is a still developing country and we've been at loggerheads over how our two nations are going to divide the responsibilities on taking action to slow the pace of global warming. The great thing about working on HFCs is it's sort of a sideline issue that can break us out of some of the current negotiation bottlenecks but also make great progress in terms of impact and we've come to initial agreement on that issue but haven't actually nailed down the kind of actions that our two nations can take together, so that's hopeful but still more work needed. A fourth issue where we are starting to work together as partners but not having enough movement on the ground is shell gas exploration. The US is a big market leader in shell gas. Initial estimates suggest that China may actually have more shell gas reserves than we do so China has much to gain from bringing US technology over and helping to bring those reserves out of the ground. We do have initial presidential level agreement on shell gas cooperation that was signed in 2009. We have very clear reasons to partner on this. The US companies would love to see China's own shell gas development go well if China doesn't have good environmental safeguards and that triggers big pollution crises in China that can impact public willingness here in the United States for to allow oil and gas companies to do drilling here. So there are many levels of reasons to cooperate. Unfortunately our cooperation thus far has been pretty superficial. We've had lots of Chinese groups coming over here doing tours of US sites, listening politely to US suggestions for how things might roll forward in China but a lot of the Chinese geographical information is still kept secret. And so it's very difficult to have a very frank conversation about what the market might look like in China and about how the US might be able to help and how we might be able to work collaboratively. One more issue that I'd like to flag in the energy space is security in the Middle East. The United States has very long been a security guarantor in the Middle East region and for sea lanes around the world to make sure that energy supplies are able to come to market and then move from Middle East and other producing regions to China and other nations in Asia. The US is fast becoming less of an energy importer and China is fast becoming the biggest energy importer in the world and that raises a question of how China will potentially become more of a partner with the United States in securing our global sea lanes and securing the Middle East stability writ large. That's a big open question. I know from as a taxpayer, I would appreciate having Chinese citizens share that burden but I know the US military might be a little, that's a difficult question to see how we can seed some of our current position to the PLA as China develops but that will be another big area where China could be a partner. And in conclusion, I think it's interesting that on these energy issues we have full realization on both sides of Pacific that these are our biggest opportunities to work together. We have very grand statements on all of these issues. We have lots of new agreements to cooperate on the table through the S&ED and other forums but when you get down to brass tacks we still have a lot of work to do in terms of actually having real impact. Shell Gas being one example where we have a presidential agreement on the table but we don't have access to China's geographic data so there's only so much that we can do to help. The HFCs being a much touted presidential agreement from the Shirtsleeve Summit but we still haven't managed to nail that down and make real progress forward. So I think we're at a really interesting transition point in US-China relationship where we see very clear reasons to collaborate. We've made great strides in actually putting some markers on the table on how we can get things done but we still need to bring the ball the rest of the way forward. Thank you very much. I think we'd be a bit more optimistic in Middle East than the like because it doesn't necessarily have to involve the PLA. If China essentially brings its diplomatic resources to bear Abbas Netanyahu meeting didn't go anywhere we don't need the PLA doesn't have to be part of it and their peacekeeping has been mostly non-combat as well. So with that I'm just gonna turn it over to questions from the audience. We have two microphones and they're, thank you at the top. Hi, David Sadney the question I guess is primarily for Phil in the terms of the kind of cooperative positive mill-to-mill engagement what kind of obstacle do you see the continuing presence of the restrictions in our law from the 2000 National Defense Authorization Act? I spoke to a fairly high ranking Chinese military official just a few weeks ago and he beat me up on that. I don't think there's any likelihood that the US Congress will appeal that but do you think trying to make an effort to change that law would be something that would help in the kind of scenarios you lead forward or is that something that we should just put in the past and forget about and ask the Chinese to do the same? No, it's a good question and I live under that law as all of our interactions with the PLA and counterparts have to be compliant with it and recorded. It is something that offends the Chinese because it singles them out as a specific source of problems and need for special concern and at that level I think they think of it as insulting. At a practical level within DOD I can't think of cases where it stops us from doing something that makes sense. It is a pain sometimes to go through all the procedures necessary to show that you're complying with it and that limits just because you're spending time doing paperwork and reviewing and getting approval. It is a sort of a tax on cooperation but I can't think of things where we think this is a good idea, something that we ought to be doing with China and they say but the law stops us from that. Sorry, I apologize for jumping in with a second point because of my prior responsibilities when I was deputy secretary of defense for East Asia. Unfortunately I can think of a number of such things and be happy to talk to you about it later. Okay. Well at least in my world I don't see cases because what the law has some flexibility in it says inappropriate exposure but frankly if you're not able to defend what you were doing before Congress you ought to be having second thoughts about it in my view. Well I'd just add and if you can't do it it's not going to be sustainable anyway. That's right. Hello, Fray Chan from American University. I have a question from Mr. Philip. It has something to do with my PhD dissertation. It's about Americans' expectation about China still during the reconstruction periods in Afghanistan because you know for almost a decade China has been trying to restore its steps in the whole reconstruction period process in Afghanistan but right now it seems that there are some signals that Chinese government trying to change its position over this issue because some Chinese officials believe that there's some kind of correlations between the terrorist movement in Afghanistan and the terrorist attacks in China's Xinjiang province. So for your opinions, what is the United States' expectation about China's drill after the withdrawal of United States troops? Thank you. Well I think it starts with that common sense that China is directly affected by what happens in Afghanistan. You share a border with it so there's a physical connection and as you mentioned the possible role of Afghanistan as a sanctuary for terrorist groups operating in China that's a big security problem. And this is a case also where I think the broad interest in a stable Afghanistan and a central government that has some degree, some ability to maintain security and sovereignty and an economic relationship that doesn't, economic conditions that doesn't create breeding ground for terrorism. I mean I think those are areas where the US and China share common interests and it is gonna be a difficult transition not only from a security standpoint as US and NATO forces withdraw but the economic piece of all that presence, all that aid is gonna ramp down pretty dramatically and that is gonna be a problem in Afghanistan. China, so China I think has security interests there, you have some economic interests there both in terms of the copper mine but other things as well. And so there's motivation I think for China to be more active and I think the US is looking for ways to help facilitate that, certainly not to obstruct it. As for what US expectations are, it's to do more and to do constructive things. That's right, yeah, go ahead. And just gonna say, of course a lot of that is to be worked out with the Afghan government but China's willingness to cooperate with other countries who are also donors, who are also trying to do positive things. I mean I think that's the area where China has been most standoffish preferring to do it all bilaterally and there is scope for synergy there because the US and China bring different things to the table in trying to help. I mean I think counter terror is an obvious issue area where you have all sorts of opportunities and reasons to cooperate. The Tianjin meeting is very, the Tianjin meeting of the heart of Asia or Istanbul process that's happening in August I think is a symbol of China's desire to play a stepped up diplomatic role but I would just add that the way trends are working with extremism especially in that region it used to be possible to sort of distinguish groups by which countries they were targeting. So China was a bit reticent to pitch in on cooperating against groups that weren't necessarily targeting China. Well what's happened is that's no longer possible. These groups are all intermingled, they're sometimes training one another. So the threats that come to any given country are coming from the same groups. So all of our countries have an interest in cooperating even if that's not a word even if it's just behind the scenes sharing information because groups that target China today have targeted yesterday the US or Afghanistan or other countries and they do it literally Monday, Wednesday, Friday they'll target one country Tuesday, Thursday and it's often the same groups and they have different hats. So the way things are moving I think will also force our two countries to play much more cooperative role in the region. This hand went up first. Thanks for the forum, this question I guess essentially is for all among you all. Could you give a sense or a survey of China's interest, economic interest in Europe within the past month? Mr. Xi was in Germany. Some agreements were announced out of that meeting so could we get your sense of their interests westward? Thanks. Yeah, I'm sure. So China is always looking for ways to reinvigorate their economic base. Europe has been the largest consumer of Chinese products. They have deep, deep economic roots there. Actually interestingly enough don't tend to have great relations with the EU because the EU is not able to be flexible and work with China the way that the Chinese would often like to be able to work. So if you remember probably three years ago there were some issues with France where the Chinese literally cut off all of their tourists who wanted to go to France and it had a big economic impact in France. The French changed their opinion and suddenly the tourists went back and everybody was happy. I would just say in the big picture Europe matters a ton to China and they're gonna be focusing on it as everybody's trying to get the economy kick started. Great, so we had one here and then right here in the middle. How much time do we have? Yeah, I'm Birdo from China Squamming Daily. Thank you very much for your speech. I have a question for the panel. So what's the implication or negative impact by President Obama's trip to Japan? We all know that during the joint statement there is clear input of the Diori Island under the Article V. So what's the implication or negative impact on US-China's cooperation or trust or even a personal relationship between Obama and Xi Jinping? What measures will be taken by the state side to deal with this kind of an impact? Well, I think what you saw the President do is a restatement of established US policy and China was not happy to have that restatement made at the presidential level. But the fact is that China has been pushing on maritime territorial disputes throughout the region including on the Senkaku-Diaoyu issue and it's not surprising that that has alarmed and concerned countries in the region and they've asked the US to clarify and to repeat their statement. So it's not something new but it's also not necessarily a US initiative. It's based on part of China's behavior and the concerns that that's caused within the region. So it's an interactive thing but it's certainly not the US changing its policy or doing something it needs to apologize for. Can I just jump in on that? Yeah, go ahead, sorry. I think that's exactly correct and if you're going to watch these ups and downs on a regular basis and who says what about things then you're just getting really pulled aside with a crisis of the day. The thing that's happened recently which I think really does fundamentally impact US-China relations is Gina McCarthy's visit to Taiwan and that's one where both sides had put themselves, the US said she had to go, MEP, the Ministry of Environmental Protection said that if she went they were not gonna be able to continue cooperation and that is the longest standing cooperation between the US and China over 30 years, the deepest connections between EPA and MEP that we've ever had with China other than the economic ties through the commercial sector and if that connection is cut off then that fundamentally changes how we are working together as two countries. The stuff through the foreign ministry and the State Department say it kind of moves aside quickly. So we really have very little time left. Can I just take three questions at once and then each one of you can choose the one you wanna answer. Yeah. Alfred Toussaint, Nova Technology Partners. So it's, there seems to be a zero sum gain posture in regards to China's South China Sea and East China Sea ancestral claims versus the counterclaims of its maritime neighbors. This posture seems to be going nowhere, clearly. In the spirit of partnership, has the Chinese leadership considered splitting the baby? That is, go to the Japanese, for example, and say, hey, let's split it, you know, 49, 51, 51, 49. One side will be called Senkaku, the other one, and there you, let's jointly develop and jointly benefit from it, while at the same time issuing peaceful coexistence going forward. Same proposition to each other neighbors. Why is this not an acceptable conflict resolution framework? So we're just gonna take two more questions up here in the middle. Thank you. Yeah, fine. Steve Winters, I was very impressed by your discussion of developing personal relations and trust with Chinese leaders and negotiators. But I noticed in the earlier discussions today from the other panels, there was a lot of talk, for example, about a consciousness of century of humiliation, victim status, and so forth and so on. I just wondered, did you have any observations of that sort of mentality or feeling in terms of the people you were dealing with, influencing how they were interacting with someone from the US? And how did you deal with that? Great, and the final question here in the middle. Adolfois Abogon. My question is about climate change mostly. We know from the scientific explanation that the Earth was covered by the sea and that with climate change, the sea regressed, leave space to the Earth. But today, we're talking about climate change all the time in media, in all conference and co-lock. And they never explained to us what was the matrix or the speed at which the climate was changing from the beginning of the Earth. And today, what make that change more dangerous, and we're talking about it, because to compare the climate change from the beginning of the Earth, it sounds like the climate change never happened and today it's happening. So I would like to know if you can comment a little bit about what was the speed of the climate changing, impacting the pollution or the pollution from the beginning. And now, since the beginning of the climate change issue and conference all over, so what is the difference? What is the matrix used and the matrix used to make the difference about that change from the beginning of the Earth because the climate was changing anyway from the beginning. And then now, what is the difference of speed and which make it dangerous today? Thank you. Let me be concise. China has in the past compromised on some of its land border disputes, but it's done so primarily when it wants to improve relations with neighboring countries to better manage instability or ethnic problems. And of course, with maritime disputes on all these islands, there's nobody living there permanently to be managed. And it's as much a political and nationalist issue as it is a territorial issue or a value of the resources issue in which case it's easier to divide the pie. And I think on these issues has gotten harder. There is the potential for joint development approaches which set aside the issue of sovereignty and try to find ways to jointly exploit and share the resources. That's part of China's policy, but despite a couple attempts, no successful examples. And the other main approach is trying to deal with this as a matter of international law and try to find a way to resolve the problems that way, which the Philippines is trying to do right now and China's very negative on the notion of taking it to a court when the judgment might not go their way. There are different views throughout. China's bureaucracy as well. It's more complicated. Yeah, I mean, there are a lot of people that are looking at, for example, clarifying the nine dashed line, certainly in foreign ministry in places where you've got a lot of lawyers, but the pressure is particularly created by nationalism, created by Xi Jinping's desire to become a maritime power makes it very difficult. So let's go to this one with a quick story. Probably about five years ago, a friend had come over for dinner and she's gonna make us a Chinese dinner and she told me what she wanted to make and so I go to pull things out of the fridge and she wanted an onion. I didn't have an onion. I was like, here's some shallots. That will work. And she just looks at me and says, 5,000 years, we've tried every combination. Onion is the best. I'm like, okay, sorry, I don't have the onions. So then a couple of years later, we were again making dinner because we all had fun doing that. And I'm like, okay, I've got all the different ingredients, but she said, oh no, that's okay. We can substitute this one now. It's not a problem. And I'm thinking, what's the difference? Well, the difference is that we spent time together and 5,000 years had produced the best, but she no longer had to do the best for me, that we could work and be more flexible together. So yes, have I sat in more speeches about how China is a developing country and how we need to be working with China and supporting China and they deserve technology transfer without having to pay for it, yes. But once you get through those speeches and you pursue and just keep going, you end up finding the people underneath all of that. Because honestly, a lot of people don't believe that, a lot more than people believe the speeches they make here when they're giving a Demarsha or other things. 5,000 years perfected culinary experience. They're pretty good. And you know what? I believe it. You get it. So I'll just make a quick response on the climate change issue. The complexities of different substances going into the air and how they interact with the sun to change our temperature is a very big question. But there are pieces of it that we can see very clearly and that we can figure out how to address one thing we can see very clearly is that when the US and China use types of equipment that puts soot into the air, so old cold plants or inefficient diesel generators, when soot goes into the air, a lot of it drifts towards the Arctic and black particles of soot land on the Arctic snow. The color black absorbs more sunlight than the color white. So that heats up the surface of snow and ice in the Arctic. It speeds the rate at which snow and ice melts. So we have disappearing glaciers and then the level of the sea begins to rise and we lose pieces of land along our coasts. The US and China are both nations with a very long coastline and sea level rise is a terrifying thing for some of our biggest cities, some of our most critical economic centers. So New York and Shanghai would be in very dire straits if the sea level rose by some of the predictions that we're getting today. And that gives us a very clear reason to try to work together to reduce the particles of soot coming out of engines in our two nations and around the world so that we can slow the rate at which the snow is covered by that type of pollution and the rate at which sea levels rise and threaten our cities. With that, Oriana's gonna give us the... Yeah, we're just gonna move right into our concluding panel right now. Thank you very much to our panelists. expresseshh