 The issues that Minister Komar and Dave Scheer introduced before the break. The first panel is going to look at the security challenges that the alliance between the U.S. and Japan are likely to face or may face or could conceptually face in the years ahead. And then we'll have a second panel chaired by Ralph Kossa with Rich Armitage and Nogami San that will reflect on this panel and offer ideas about whether the alliance is ready for these challenges. What do we have to do? And for both panels, we'll open it up for Q&A as well and welcome questions. But also, I think this is an opportunity for people to flag threats, challenges. We should be thinking about, get reactions from our panel. And then for the next panel, things we need to be ready for or work we need to do on the alliance. So to my right is my colleague here at CSIS, Dr. Kathleen Hicks. Kath is Senior Vice President and the Henry A. Kissinger Chair. And she directs the international security program at CSIS. We collaborate a lot between the Asia program that I'm Vice President for on a whole range of issues from nuclear weapons to forward presence in the region. Kath is a Returnee to CSIS. In between, she spent some time in the Pentagon and her last position was as the Principal Deputy Undersecretary for Defense Policy. So she had responsibility for things like the Quadrantal Defense Review, big strategic assessments, and then regional strategy and policy, including but not limited to Asia. We'll ask Kath to look at the non-Asian, some Asian, but non-Asian global transnational other threats we should be thinking about. And then Yonno Takahara Akiyo, Takahara Sensei is a Professor of Contemporary Chinese Politics at the Graduate School of Law and Politics at the University of Tokyo. He received his D. Phil from the University of Sussex and is one of the leading experts on China in the world and certainly much listened to in Japan on developments in China and U.S.-China relations. And I may ask a few questions of the panel before turning it over to the audience. So we haven't actually decided the order, but should we do inside out or outside in? Why don't we start with the global and other regional challenges we should think about then we'll turn to Asia and China and then open it up. So thank you. Thank you very much to Mike and it's a pleasure to be with all of you today. If you bring in somebody like me who works in international security and ask them to talk about challenges in the environment, I think I literally could go all night because that's what people like me do. We come up with more and more challenges that exist. So I do suspect the list could be endless, but I will try to contain myself to what I think are some of the biggest issues to be thinking about. And also when one gives a talk like this, always you have to start with the caveats about the future. And I think no one has said this better than former Secretary Bob Gates who had made this statement that's rather famous now and made it in 2011, which is when it comes to predicting the nature and location of our next military engagements, since Vietnam, our record has been perfect. And his point here is we haven't predicted one correctly. So with everything I'm about to tell you, I'm sure something else will happen in the environment that none of us here today in the room expect to happen exactly the way it does. But that doesn't mean we don't try to think about those challenges in the future because in fact many of the, as Mark Twain said, history rhymes. Many times we're on the right path in the right trajectory of challenges even if we don't get the exact timing and location, right? So some of the things I would just mention, first off, a little bit of a bias from me, which is I think that the system that we exist in today I would describe still as unipolar, and I think we're going to stay in a system roughly like that for some time to come. And that means that the United States has the ability to exercise leadership as a superpower if it chooses to do so in that system. And if you were to ask me what I think has been the continuous strain of U.S. grand strategy since the end of World War II, I'd say that is the theme, which is that the U.S. has by and large had a consensus domestically about retaining U.S. leadership, a lot of challenges below that level of statement about what it means to lead. But again, you have to come into a discussion of challenges with some kind of assumption about how the U.S. will choose to interact with other nations and with the world, and I think that will continue to be true in the future too, that the U.S. will, generally speaking, want to be seen as a leader on the international stage. How it chooses to invest itself in that I think is the real challenge going forward. But having said that about U.S. wanting to lead, about the U.S. remaining as a superpower, I think the other big noticeable shift in the environment over the last 15 years, and particularly in the last five or so, is the opportunism of states in the system. In many regions of the world, though not all, and I will talk in a minute about differences among regions, you're seeing smart states be opportunistic. In many types of strains of activity, let's say energy policy, economic policy trade, environmental policy, states will not feel that they need to align exactly with where the U.S. is at all times, and in fact, might not align along traditional, even forgetting the U.S. along traditional routes at all. And so you start to see interesting bedfellows, as they say, interesting alignments of interests in various areas, and a disaggregation of partnerships into specific streams of activity. I think to the extent that we choose to disengage from particular issues or regions, that obviously will feed that sense of opportunism that states have, that they can kind of go a different way from the U.S. in various streams of activity. And even more complicating, although I say we're the superpower, I think that power is hollowing out, if I can use that term, which is to say that the traditional strengths that the United States can bring into the international system, military, economic, diplomatic, cultural, they in many cases can start to feel less relevant to the challenges that we face. Again, this varies by region and by issue, but the most obvious example of this is happening today in the Middle East, where we can see that our traditional sources of conventional military strength, for instance, state-based diplomacy, long-term development aid that's based on a state-to-state relationship, these are very difficult tools of power to wield effectively against the challenges facing the Middle East. And speaking of those challenges, I think you will continue to see the Middle East over probably about a 10-year period have significant challenges to internal stability. I think you'll continue to see state fragility. I think you'll continue to see challenges that are terrorism-related. ISIS is the most recent manifestation. It's probably not the last, and I do think those are along a trajectory, if you will, an evolution of terrorist threats that speak to a mindset of radicalism that you're going to find throughout the Middle East. Obviously, exactly how Iran evolves in the region is a huge shaper for our allies in the Middle East and our partners. The Gulf states are very concerned about the trajectory of Iran, particularly its destabilizing activities besides the nuclear threat down to the level of its support for destabilizing activities throughout the Middle East and North Africa. And I think how the United States interacts with Iran and then also in a reassuring way with its Gulf partners will matter significantly in this region. In the Levant, I think Syria, sadly, even if it were resolved tomorrow, if you will, in terms of some kind of ceasefire, peace deal, you're still going to see, again, another probably five to 10 years worth of recovery in that region. And I think given that we're not at that stage, it will probably be more like 10 years as that shakes out. And that matters for folks looking at the Asia-Pacific in the sense that the U.S., whether it chooses to be deeply engaged or only somewhat engaged, well, at least in time and attention of its leadership, be focused on trying to help resolve issues in the Middle East. And that is a drag, if you will, on the power of the United States. But it is going to be a region of continuing interest to the U.S. despite the growth of U.S. energy independence. I don't want to talk much about Asia, but I will just say I think it's different in Asia. I think some of the more traditional factors that make U.S. power relevant are there, are in place in Asia today, and probably are for the foreseeable future. And that helps to bind us in terms of our alliances and in terms of how we look at the region in a state, particularly through a state lens. Europe, somewhere in between the two. Particularly these days, Russia has helped move it more toward an East Asia model in terms of countries in the region, some countries in the region, trying to understand how to balance or assure and deter, if you will, but sure the allies and partners and deter, in this case, Russia. But it's not nearly as clean. I think there's not the same consistency of viewpoint on the challenges that Russia poses. I think the economic interests are a huge driver for some Europeans to view Russia as not. As threatening over the longer term or as the current issues with Russia being an aberration rather than a continuing trend. So I think Europe is a region where the United States has a lot of work to do to try to bring coherence politically across the NATO alliance in particular. And my overall view is that none of the states that we worry about, Russia, China, Iran, North Korea, I don't think any of them are seeking to precipitate a war with the United States. I don't think that is the concern. But wars can occur, as we all know, mostly through miscalculation. And I think one of the real challenges that the world faces in this period beyond Asia, but to include Asia, is making sure that we are signaling that all parties are signaling effectively in order to prevent escalation of conflict. And that will be true, as I said, in Europe. It will be true in the Middle East with Iran and certainly true within Asia. For purposes of defense planning, which is sort of my background, China is clearly the pacing military threat. And it paces most areas of military capability for the United States, and I think that will continue. Russia obviously matters in a significant way for our strategic capabilities, and by that I mean nuclear, space, and cyber. We also have, at the same time, as I've talked about, the non-state peace globalization of the economy and of our culture. And that's creating both weaknesses and strengths. The systemic weaknesses is the brittleness of the system. And we've seen that through issues like pandemics that can break out and be uncontrolled. We've seen that certainly in the world economy. But of course, there's a potential strength in globalization, which is that it could, in some instances, tamp down the desire for armed conflict and drive conflict into a below-armed status in order to create protection for constituencies and states. Also, at the non-state level, we've had complete atomization of power, power shifting downward, ever downward to smaller and smaller levels. And that's helped significantly by the information technology revolution and, of course, weapons proliferation. Not only, but create significance, including weapons of mass destruction. And that's creating the means for small groups and even individuals, in some cases, to exploit poor governance and fragility for their own purposes. The growth of megacities, which is not a huge factor today, but will be a massive factor by mid-century, that can create lots of opportunities for poor governance, safe haven environments, if you will, that these small groups could exploit. And it would be very difficult for outside powers to help those states who are having trouble controlling the populations in their large cities. I think you're gonna see a continuing existence of the alliance structure. I don't think you're gonna have a collapse of the alliance system, but that said, I also think we will see what we see today in terms of lots of use throughout the international system of impromptu coalitions. As a matter of fact, we've seen this just this week with Yemen. Groupings where there's a coalition of the willing that has agreed on specific aims, back to my point about opportunism. They may not agree on a lot of things, but they are gonna find opportunities when they can agree to work together. And that will exist alongside longstanding alliance commitments, and we have to understand how to fit these pieces together. So I think there'll be a certain flexibility in states' use of the frameworks that are available for security. And climate, I think climate is an issue that will grow in importance over the decades. Today, it's not a massive security issue, it's more of a potential inflamer of issues, but you're going to have probably ice-free summers in the Arctic by mid-century, and countries are gonna start thinking about how they adapt to shifts through energy, through food security, through water security, and of course, new modes, as I said, in the Arctic of commerce and trade. And those could be good for security because it may provide opportunities for us to come to agreement with different countries in ways that maybe we didn't see common interest before, but of course, that could also open up channels of potential conflict. So let me just close with a couple of takeaways of what I think this may mean for the U.S. and Japan. And this is really recapping things I've said. The first is that I think the U.S. is gonna remain in a position to exert leadership. The real question is, does it want to? And how is it going to exert that leadership? The second is that the problems that the world faces, the U.S., Japan, those who share our common interests, they will be very broad-ranging, high-end threats, low-end threats, and I'll say so-called, because I think for the most part, you're gonna see a mix of different challenges. We see this today in so-called great area threats and sticking outside the region. I just point again to Russia, which is putting forth challenges in the cyber domain, energy domain, political subversion, use of proxy forces. We've seen this before. It's not new to today's day and age, but the number of tools available to actors has grown and the globalization of the world has made it more difficult to extricate these political tools from the military tools. And this gets to the next piece, which is pretty much all problems that I've just talked about have to be taken on in multilateral domains. It's very, very difficult for any one state to act on its own to meet these challenges. And so for an alliance like the U.S. and Japan, it's incredibly important that we have common approaches to how we think through many of these problems and that we bring others along with us. And then just to repeat what I said before, the sources of our strength, the power that the U.S. can wield, for instance, may not always seem applicable to the challenges that we face. So real imperative in the next 10 years to develop and hone a set of tools that we think can meet the challenges of the security environment that go beyond these traditional ones that we wanna retain. And I'll stop there. Excellent, terrific. Thank you, Takahara-sensei. Thank you very much, Mike. It's great to be back on this podium in such an honor. But it suddenly occurred to me that, in a similar vein to what Dr. Hicks just told us at the outset, why is China experts must avoid talking about the future? So should I have declined this invitation? Maybe so, but I suppose you, I'm here now, and you have to bear with an unwise China expert for the next 15 minutes or so. Because at the end of the day, what we envisage the future scenario of Asia, there's little doubt that when we do that, the largest uncertainty in the region is China. China has been going through a complex process of industrialization, urbanization, and marketization. And it is still in the midst of a massive social transformation. And just imagine how much you would have gone through if you had lived in China in the past 40 years. That's from 1975 when Mao Zedong was around, and the Cultural Revolution was still going on to 2015 when China is asking the US for help in repatriating the hundreds of corrupt millionaires and billionaires now living in this country. China has come a long way, no doubt about that. And both Japan and the US have generally played a very positive role, I would say, in its transformation process. However, uncertainty about China, about China's future, arises partly from the lack of a clear vision by the Chinese and a sense, a lack of the sense of direction of the country. And I would say this has been felt in China sharply since Xi Jinping became the leader, the top leader in 2012. Well, he has presented a lot of slogans and new concepts such as the China dream of realizing the great rejuvenation of the Chinese nation or the comprehensive deepening of reforms. And some of them are good and commendable, but some are rather abstract and others seem to be contradictory to each other or contradictory to what is actually carried out in reality. So in my view, there are two basic issues, one internal and the other external. First, the Chinese leadership is trying to push forward with economic liberalization and further deregulation, but on the other hand, it is increasingly tightening its political control. This is as if you're moving your right foot to your right, but your left foot to the left. In fact, I lived in Beijing for about half a year from last October to mid-March, and the impression I got was that the Chinese people themselves are anxious about the future, partly because they do not have a sense of direction to which the new leadership is taking them. Well, people can live with contradictions if the economy grows well and their income keeps on increasing. I suppose the usual way to draw scenarios would be to think of a high growth rate case, low growth rate case and a medium case. But we know from the recently adopted term, new normal, that the Chinese leadership themselves knows that they can no longer expect the high growth rate to continue. I am not going into discussing how quickly the growth rate will falter. Let me just say that for the rest of Xi Jinping's rule, that should be seven to eight years from now, it is likely that China's economic growth rate will remain higher than those of the OECD countries, but its decline will constitute a basic factor in social instability. Even last year, the Chinese Academy of Social Sciences reported that there was a notable increase in social protests and labor disputes. As long as the central government has the fiscal resources to deliver, the basic stability of the society should be maintained. However, with the economic downturn, no doubt, the Chinese Communist Party will be pushed to come up with new mechanisms for the coordination of conflicting social interests. But for example, can the labor union really represent the interests of the workers in China if it had to remain under the leadership of the party? That's not very easy to say the least. Thus, the more unstable the society becomes, the reformists in the party will increase their voice and argue for substantial political reform. However, judging at this point of time, it is most likely that Xi Jinping will refuse any measure that would relativize and in his mind weaken the party leadership. His option then is to continue with what he has been doing that is to clamp down on any seed of dissent and whip up nationalistic sentiments to enhance party unity and national integration. If this classic operation is intensified, it will have a great impact on China's external relations. Especially, I'm afraid to say that the relations with Japan have already been badly affected, as you know. Yes, it was very positive that Xi Jinping and Shinzo Abe met on the sidelines of the APEC summit, APEC leaders meeting last November, and that discussions have resumed between the two governments on establishing and implementing communication mechanisms and other means for avoiding accidents and crisis management in the East China Sea. That's very good. I get the impression that Xi Jinping is serious about avoiding any clashes with the Japan-US alliance at this point of time. However, the Chinese official media has not ceased disseminating the image of Japan and its prime minister as a dangerous creature that attempts to revive militarism and topple the post-World War II order. While living in China, I became aware of the very serious perception gap that exists between the Japanese and the Chinese about the relationship. For example, a prevalent view in China holds that Prime Minister Abe thinks that the decline in relations with China works in his favor. Overall, I do not think this is the case. Opinion polls tell us that while over 90% of the Japanese do not have a good image of China at the moment, 70% think the relations with China are important, and 90% consider the present situation is worrisome and needs to be corrected. And when Abe met Xi last November, Mr. Abe had the following to say, quote, with President Xi, I would like jointly to explore how Japan-China relations should be formed in the 21st century from a broad and long-term perspective. I personally think cooperation at various levels over four issues is especially important, promoting mutual understanding between the peoples, further deepening of economic relations, cooperation in the East China Sea, and the stability of the security environment in East Asia, end of quote, fantastic. The problem is these positive words out of Abe's mouth do not get reported in the Chinese press or in the Western press either for that matter. And it is difficult to expect a balanced reporting because by demonizing Japan and its Prime Minister, the Chinese media gained commercially and the Chinese Communist Party benefits politically. But such propaganda is self-intoxicating. Now the misperception and misunderstanding in China about Japan has proliferated among the people and also amongst the officials who should know better. Of course this could happen with other countries too, for instance with certain Southeast Asian countries if the friction in the South China Sea intensifies or nationalistic sentiments could be targeted towards Taiwan, depending on who will be the next top leader there. On the other hand, there is another scenario. That is for the Chinese leadership rather to promote cooperation with the outside world to overcome the internal difficulties. I sense that such consideration was also at work when Xi decided to meet Abe last November. And at the same time, my experience in China tells me that the people there are changing. If you inform them of facts, although it will take a little time for them to do away with their prefixed ideas about Japan or Abe or whatever, many will come to see the reality. And this provides us with a ray of hope and tells us the need for promoting public diplomacy. Well, by discussing the linkage with the internal issues, we have already covered some ground on the external front. Further questions on this front would be, besides the domestic need for China to boost the national prestige and satisfy the people, for what and how China will use its increased power? What are China's intentions? And will the intentions change with the increase in its capabilities? I suppose we should start from looking at reality. The Chinese talk about solving international differences through dialogue and peaceful means. That's what they talk about. But what they are doing in East China Sea and the South China Sea tend to betray their words. For example, as we all know, China keeps on sending their patrol boats into the territorial waters and the contiguous zone around the Senkaku Islands, as Mr. Komala told us, and is reclaiming land and building potential bases around some shoals that they control in the South China Sea. So it seems genuine that they would rather not have hostilities at this moment. However, they seem to believe that by increasing their presence, they can eventually win the control over the Near Seas without fighting, which is the best way to win according to the Art of War by Sun Tzu. That is to say, many in China tend to believe that by increasing the physical presence and by enticement through economic means, the neighboring nations with claims over those waters and islands eventually will give in. However, my friends from those Southeast Asian nations tell me and I have heard them tell the Chinese that when it comes to territorial issues, it is a completely different matter and there is no way of concession. Therefore, if the Chinese continue with their current act and behavior based on pure realism, it is highly likely that tension will mount with those neighboring nations and with the United States. In this case, there is a possibility that ASEAN will lose its cohesiveness and be divided between those that are pro-China and others that are anti-China on these issues. Well, from what we discussed, it is obvious that the uncertainty in China's future poses a huge challenge to Japan and the United States and to our alliance. Is there anything we can do about the possible rise in China's social instability? How can we close the information gap which leads to serious misperception and misunderstanding held by the Chinese about us? And how are we going to respond to the growth in their capabilities and assertive acts and preserve the rule-based order that has been supported by the presence of the US forces in the region? I am afraid I have no immediate clear answers to these questions so I will leave them to the wiser people who will be talking after me. In fact, Mr. Shear, who spoke earlier, provided some very good answers already. What I can say is that Japan and the US must maintain close communication and work closely about the situation in Asia and keep on tackling the problems inherent in the alliance such as the consolidation of bases in Okinawa as Mr. Shear also told us. Well, I'm not an expert on that topic so let me try to be wise and stop here and thank you very much for your attention. Takahara Sensei, you are a wise China expert and I always learned something when I hear you speak, that was interesting. Let me ask one or two questions to get us started. Listening to you both explain the security environment we're facing within East Asia and globally, seems to me that the US and Japan are very closely aligned on the sustainment of American leadership and even, I would say, unipolarity, which was not always the case. In the early era of unipolarity, in the 90s, there was great friction between the US and Japan, especially on the economics, because unipolarity was seen by many, I think, in Japan as threatening to Japanese interests. I think we're past that. And Mr. Hatayama's effort to create a sort of counter-unipolarity with the statements about East Asia community without the US and so forth were a flop. And I don't see any Japanese leader going there again for some time, and the polls show pretty broad support for the idea that American leadership is important now. And I also think the US has aligned quite closely with Japan's view of the China challenge as a strategic problem. I would not have said that, say, two years ago. I think there was some debate within the administration in the second term, but now I think, and you can see it in the preparations for Prime Minister Abe's visit, we're pretty closely aligned, not perfect, but pretty closely aligned on our views of and strategy for the rise of China. The problem I see is the way that we in Tokyo and Washington look at the relative importance of the rise of China and the global challenges. The history of rising powers, whether it's Germany or Japan or even the United States, suggests that rising powers free ride globally and act revisionist regionally. We did it with Monroe Doctrine, the Germans did it with Bismarck's strategy to consolidate the German-speaking people. Japan did it in East Asia. It's a fairly classical pattern for rising powers to free ride globally and then see what they can get regionally. And I think it's fairly safe to predict we're seeing that happening to some extent now with China. And the problem there is that as the U.S. looks at the very challenging list of issues that Kath described, for some of these, we need China's help or at least need some room to deal with them. But if you look at it from Japan's perspective, in the neighborhood, the Chinese revisionism is immediate and pressing and should be the highest priority. So what are your thoughts, I'll begin with Kath on how do we as allies align, we're aligned on the specific issues. The question is, can we align on the relative importance, can we align our global concerns and Japan as a global power too with these immediate regional challenges with China? Start with Kath and then Dr. Haudenosaunce. Sure, as I indicated in my remarks, I think just as you said, the U.S. and Japan have many common interests across the challenge set and that's a good thing because the challenge set requires us to work together and to work with others, not just the two countries together to work with others. That said, I think it's fair to say that the U.S. as a global power thinks globally and most other states don't. Most other states are focused generally speaking on their immediate neighborhood and I think that will come into play here. Some of the factors, maybe this is going a little bit different direction than you wanted it to but I think one of the key factors which you hit upon is the free rider globally piece which is something where I think the U.S. can try to help shape that. I think Japan can help as well but you can find ways to make clear to the Chinese why the free, to acknowledge the free riding that they are gaining good out of for instance, U.S. power. The most obvious example is a flow of strategic resources out of the Middle East which is secured in large part by a strong U.S. naval presence, maritime security in and around the region. That's something that benefits China and hugely benefits Japan as well, Korea and others but to help bring a consciousness if you will to the Chinese of what they get out of the international order that has been built largely on a U.S. model and the more we can get that across and get hopefully some buy-in, the revisionism instincts start to go down and those two pieces, the global piece and the regional piece obviously start to come into play because you cannot separate those regional interests from the global interests. That's particularly true today where the world is interconnected and it's very hard to just focus regionally and not be thinking about the ramifications globally because there are trickle effects. We see, let's just take a negative example for the U.S. I think the U.S. reaction on Syria red line, we've talked about this mic and I've certainly talked about this plenty had ramifications far beyond Syria and we can see those ramifications potentially depending on how you view the issue today in the East and South China Sea, today in Ukraine and Crimea. So this is an example where things that seem like regional issues have these global ramifications and I think we need to bring that home to the Chinese that there are these ramifications to them globally for acting in ways regionally that don't work well and I think that's reassuring hopefully to our allies to include the Japanese in the region who are seeing those regional effects but bottom line is helping the Chinese to see why the international order that exists and the rule of law is in their favor ultimately I think is the best way that we can work together maybe a different way of taking without shots fired. Maybe there is some prospect of helping the Chinese recognize that there is a value that they would have in the rule of law. First of all on unipolarity, I'm certainly not against it but we should also remember at the same time that if it entails unilateralism in the way the neocons implemented it in the early Bush days I don't think many of the rest in the world would like that. Secondly on how to deal with China I do understand the need for cooperation. We benefit a lot from cooperating with them on many fronts not only globally but also regionally we've been cooperating around the North Korea nuclear development issue. We have been cooperating them on a lot of issues regarding non-traditional security things like the air pollution in China is so bad now that it is affecting the region. It flows to Korea, it's coming now to the western part of Japan so it is a real threat to human security in other parts of the region so we all need to cooperate on many many issues but at the same time the aspect of competition certainly exists so I think this situation is shared by all of us including the United States and South Korea or any other nation that is neighboring China and I don't really have a very good answer but I fully agree with what Dr. Hiss just said that as I mentioned in my presentation there is a ray of hope and the Chinese people are changing they are becoming more internationalized as it were. Many do come to understand the importance of shared values or transnational, transcultural values so through an increase in exchange in personal communications in talking to the students in particular the young people are very flexible in China. I gave many many lectures in China and told them how Japan-China relations for example is seen by the Japanese, what sort of tax we know on our side and generally my talk was very much welcomed by those so I have hopes. Thank you, it is an important distinction between unipolarity and unilateralism the US has to earn its position by being inclusive although I would point out that I was there at the beginning of the Bush administration and we didn't have meetings where everyone raised their hand and said I have an idea let's be unilateralist and the charge was leveled against the Clinton administration before us then Obama after us but the point is well taken because I think one lesson here is that given what Kath said about coalitions and alliances and multilateralism not just meaning multilateral institutions I assume but you mean multilateral partnerships and coalitions the US is going to have to pick up its game in terms of being inclusive listening and aligning our strategies with our partners I think that's important. And we have had some small setbacks recently with the AIIB the Asia Infrastructure Investment Bank where our European allies broke ranks in ways that I think surprised the administration certainly surprised me it was so sudden. I think it's a tactical setback it's not a strategic setback but it's an indication of how important it is not just to have a US Japan position on the rules of the international system but we need to be working with Europe and other core members of the post-45 system. Let me turn to another issue which Kath briefly mentioned the so-called gray zone problem which it's not new historically but it's somewhat new for our alliance and somewhat new for NATO. The idea that Russia and Ukraine China and East China Sea will stay well short of conflict but use mercantilism, white hull, Coast Guard ships, proxy forces and so on and so forth cyber to make it very hard to swing back and to change the facts on the ground in irreversible ways that are detrimental to our interests and our allies' interests that's a big problem and we're spending a lot of time Kath and I contemplating a strategy for counter coercion. Let me focus on the Chinese piece in the East China Sea. Takahara sensei is it possible for us to deter and dissuade China? I mean the Chinese have been building military or paramilitary facilities in these six rocky areas that are not quite islands but are now islands with reclamation of land and so forth. It's technically legal. You can't really shoot at them. You know, we're in a bit of a challenge. Do you think that Beijing is calibrating these kind of actions based on what it sees in terms of U.S. cooperation with Japan, with Australia, with other countries? Can we shape this or do you think this is really driven by things that are now very hard for outside players to try to influence dissuade shape and then I want to ask Kath about the toolkit. The direct answer would be, I don't know, to be honest. This is a think tank. You're not allowed to use that answer. I'm just being honest. But because certainly as you suggested there is an internal dynamics that urges Xi Jinping to proceed with these actions but if the outside world did nothing in response that will be taken as a very bad signal from our point of view. So I think we should express our unhappiness by a certain action and that is not too much, that is not too less. Now what would be the best way to express our anxiety and our unhappiness and the fact that we are watching very carefully and there is a certain limits to what we would allow these things to happen? I don't have the right answer as I mentioned at the very last part of my presentation but I'd rather leave that to the security experts because if it is an overreaction then it could backfire. So it is a very delicate question I would think. Good segue. Sure, look, I think they're calibrating beautifully, unfortunately, I think they've found the right points of distraction in terms of where the US's head is right now and have it calibrated in a way that probably they're able to tune a little here and there but don't seem to need to at the moment. So unfortunately, I think this is a quintessential gray area approach. Toolkit I think is what you wanted me to talk about. I mean, let me just say on the, there's obviously an entire diplomatic toolkit which I am going to assume is being deployed but I'll leave to other experts to comment on. The military toolkit, you know, back to the point about not being precipitous and not provoking conflict, you always want to be doing the military toolkit before a crisis occurs because if you attempt to do it in the midst of a crisis it looks like an escalation to the crisis and so we find ourselves in this position in my opinion where the US has not been as assertive at least as I would like it to be on issues like freedom of navigation, particularly on the seas. I think we've done okay in the air. Routine exercises and deployments, the rapidness of the cause and effect, if you will, that would help to make this non precipitous for us to do something now. That said, I still think there are things the US could do beyond what it is doing today that are legal, that are completely in norm of what we do elsewhere in the world particularly on freedom of navigation that we choose not to do because we are overly concerned that it will be seen by the Chinese as precipitating conflict. I think there's a lot that you have to couch that in and I would say in particular I think we need to do that which is to make clear that we exercise freedom of the seas and that we abide by the international law and we believe all states should. Obviously the US having a support for the international maritime treaty, excuse me for forgetting off the top of my head, the name of it, Freedom of the Seas, Law of the Sea, I think that would be a huge advantage if the US pushed forward on that as well to sort of put our money where our mouth is in terms of, thank you, UN Convention on Law of the Sea. I think that's something that the US could also pursue that's more on the, if you will, diplomatic side that would help our case. Takahara sensei's point that the Goldilocks, it needs to be hot but not too hot. You don't wanna provoke a response. The way historically you become too hot, too, as you put it, too precipitous, is to not set markers early and then suddenly in a crisis, set markers that are unexpected and that is how miscalculation happens, that's how conflict happens. A little bit of robustness now saves you a real crisis later. Seems to me you also have to consider what cost imposition options you have while continually considering what options the other side has for face saving for outcomes that are not seen internally in that country as a strategic setback and that's a pretty subtle game and you have to do it with your allies. One cost imposition strategy is external alignment and I think the US and Japan are doing that to some extent with Australia supporting capacity building in Southeast Asia, although frankly a lot of that is still on paper and the work has to be done and the other aspect I would argue is allowing no seems to appear between the US and Japan on these issues or other key allies. All right, we let North Korea drop between the cracks so let's do that and then I'll open it up. North Korea. Let's start with Kath, just in terms of the proliferation problem and the nuclear on North Korea with ballistic missiles potentially within this administration capable of hitting Japan, potentially in the next administration of even hitting the US, what does that mean for the threat environment and for our stability? And in many ways the fact that it didn't come up here is much like occurs often I think in the US which is North Korea has been a challenge for so long and the actions of the North Korean leaders over time become so seemingly ridiculous if you will that we become a nerd to it in the US and that's something that I often talk to folks about when they ask me what are the big things that keep you up at night which everyone gets asked and I always talk about North Korea because I worry that we take it for granted way too much and you have a really dangerous situation there. The fact that the proliferation of nuclear capability to North Korea has occurred that there is a continued emphasis and actual capability development that we see occurring on the nuclear side is a significant concern. Obviously we always worry too about collapsed scenarios and then again how any one of those scenarios trickles out into broader regional dynamics. I think my experience is that the US and Japan at least have had a very strong dialogue on issues about North Korea but there is still obviously space there that could be exploited and that very much gets back to the difference between living in the region and having your home base the United States outside the region so I think that's an area that we have to work on and I think the US and China just as in the maritime domain we need to greatly increase our communication. There's to my knowledge very little communication that goes on today at the political level between the US and China about how to manage potential scenarios and crises with North Korea and if we can talk about that now with them I think that greatly helps both of us manage better such crises in the future. So since at least 1994 we've heard that China is on the cusp of changing fundamentally changing its North Korea policy and that's what we thought in the Bush administration, it's what the Clinton administration thought, it's what the Obama administration thinks we're always right on the cusp of China fundamentally changing its North Korea policy and there have been little changes and we talk about North Korea with the Chinese very differently than we did 10 years ago or certainly 20 years ago and yet we're still on the cusp of China changing its North Korea policy. This is an interesting one because this could be a kind of confidence builder between the US and China. We killed two birds with one stone. We'd have more purchase on the North Korea problem and we would have more confidence building with China as we deal with a serious regional threat. On the other hand, this could be a real source of strategic mistrust especially if the North Koreans start falling apart and a rivalry between US and China. So is China still on the cusp of changing its North Korea policy? How do you see the Chinese view unfolding? I cannot pretend that I know much about the Korean peninsula but it seems to me that what's very clear is that Xi Jinping doesn't like the North Korean new leader very much. It prefers the leader in South Korea more but at the same time, how much do we, as you just mentioned, how much do we, are we really communicating with the Chinese about North Korea because I, as a layman, also get the impression that things are changing in North Korea. The economic situation seems to be getting better for some reason but why? What are they, what is he doing? What's going on? Do we know much about that? I personally haven't heard very much and I'm sure that the Chinese are one of the best people who know well about what's really going on inside the country. Okay, thank you. There's still plenty of scary stuff left but we also welcome questions. So the floor is open. You can put out a scenario or an issue and get comment or ask a question. Kato-san, the distinguished looking gentleman from Ahasahishinbunin. Thank you very much for a great presentation. I really enjoyed it. I have a question to Dr. Hicks. You talked about U.S. tool of statecraft being irrelevant, losing relevance to deal with the newly emerging threat but in order for the United States to maintain your unipolarity, you have to deal with this, right? You have to readjust your toolkit and I want to know how you're doing it and this adjustment or toolkit is also a challenge for Japan and Japan alliance because in 9-11, 24 Japanese nationals were killed in New York and after that, several people killed in Algeria and just recently two hostages are killed in by ISIS but Japan couldn't do anything nor could Japan use alliance and I wonder this toolkit losing relevance syndrome may apply to Japan as alliance too and I wonder whether the current ongoing guideline review is good enough to really deal with this losing relevance of the toolkit. Thank you. Sure. So yes, my comments were exactly that which is I think there's no other country demographically, economically, militarily that can be used in the United States that can catch up to the United States in the next five, even 10 years that can call themselves a superpower so I think the US is essentially left alone as a superpower but to the very point you're making my point is that how significant is that really if we can't effectively use our power or we choose not to use our power to advance our interests so I think I'm leaving that as really a question but I do have thoughts on the toolkit so I think there are areas where we are getting better and areas we have to get better areas we are getting better is certainly on the economic toolkit of statecraft front which is to say hopefully pursuing on trade all the right things to include TPP but also on the other side the stick side as opposed to the carrot side of economics is the sanctions like trying to get better and better at understanding sanctions policy and how to wield that tool effectively and I actually think it is a useful tool I think it can't solve all ills but you can use it quite effectively and I think we've done some good work on that with North Korea, with Iran, with Syria, with Russia, et cetera. On energy I think the US at least has been working hard on energy independence I'm not gonna get into a debate over the tools of energy independence is not my area but I will say again I think that's an effective tool for the United States to have which is reducing its vulnerability to coercion that said the energy market is global in nature and we can't actually remove ourselves from that we're still affected by the global marketplace on energy but I think to the extent that we can work with allies to increase their resiliency to energy disruption and their ability to avoid coercion by powers who might be inclined to use that tool that will help as well on the tool set. On the if you will the counter-terrorism or the lower end proxy warfare piece building up that tool sets very important which is a range from good special operations forces that may be the very high end of those kinds of threats to information capability a lot of which is gonna come from the private sector and from individuals and groups outside of government in order to be effective in order to be credible I would point to the Asia Maritime Transparency Initiative which I don't think might necessarily think so as an information campaign but it's a perfect example of someone from outside of government doing something in a space that creates information that actually challenges a coercive approach by another country so actions like that certainly the Twitter fight if you will against ISIS can't be about the US government because that's not credible so to the extent that there are other voices that are out there that you're seeding other voices out in the world that helps the Gates Foundation on global health lots of private actors who can really help to shape the space so understanding how to harness that private sector energy those are some just a few of the things I would point to I think a lot more work has to be done on how all those types of tools first of all not only building out the tool set but then as I said before understanding how to use them inside the structure for us of the US government which is not designed right now to really deal with those let alone alliance structures back to your point on the guidelines NATO structure, et cetera these are outside of the conventional military dialogue that typically occupies those conversations and are the main purpose of those alliance structures these kinds of tools I'm talking about don't fit neatly into those structures and that's a big challenge as we move ahead Right here in the middle Thanks very much Adam Liff Indian University two decades ago 95, 96, 97 I'm almost positive that one of the major issues up for discussion at this very seminar held in San Francisco was Taiwan Strait cross-strait potential crisis of course in 95, 96 we had the third Taiwan Strait crisis after the two in the 1950s now present Moz support ratings are extremely low and it's highly likely that we'll see a DPP administration emerge next year but I wonder being on the outside I worry a little bit that folks in this town may have gotten a bit complacent over the last seven years and I wonder how much of it is really actively being discussed and so just to turn this into a question it's open to anyone but I'd be particularly interested in hearing what Takara Sensei and Professor Green have to say to what extent do you see cross-strait relations emerging as a security issue beginning next year re-emerging as a security issue and how differently do you expect China to behave toward this issue than it has in the past and what if any role do you think the allies have in responding to this? Thanks very much. Thanks to Jim Kelly and Ralph Kosa I was there in 95, 96 and 97 and yeah this was a big theme if you guys will remember the Taiwan Strait's very very troubling at the time. As I hinted in my presentation if Xiao Yin becomes the president and it really depends on what she will do what she will say and I trust that she will be very prudent on the certain sensitive issues but if she's not then there is a likelihood that a similar crisis could occur, could occur but as I said she should be very wise and prudent in her remarks and in her deeds that's my prediction. Is it fair to hang this all on Tsai Ing-wen? I mean Hu Jintao had a certain approach to Taiwan I think Xi Jinping has continued that approach but with some coercive elements still there and the missile buildup continues apace. Do you see a scenario where it takes two to create a crisis? It takes two to create a crisis but you think it's mostly the key variable is Taiwan not Beijing's view of its capabilities, its patience on unification and so forth? Well as long as prudence is maintained it will be very difficult for Beijing to act in the way that Jiang Zemin acted in 1996 that's what I think. Fine, the gentleman in the green tie we need more people with beards. Thank you sir. My question actually followed a bit up on that for Takahara Sensei. You mentioned in your, first of all my name is Jim Plattie I'm a Sasagawa Peace Foundation Fellow with Pacific Forum CSIS but you mentioned about the reduction in Chinese growth leading to some social instability also air pollution issues or the internationalizing views of younger Chinese and I was wondering how do you see this potentially affecting Chinese foreign policy particularly in the east and south China seas? Thank you. So the concern is that these social pressure mounts such as social pressure mounts and the Xi Jinping administration feel pressured. It could try and solve the contradictions through substantial reforms that is what we hope for. However, if that is not possible there is a likelihood that he will resort to the measures that he has been adopting till today that is to suppress whatever descent there is and to arouse nationalistic sentiments, create an enemy outside of China. So that's the bad scenario and it's hard to predict at this moment I would say because we don't know when the pressure mounts to that kind of a level and how. So I really cannot make any predictions further but I am much concerned about that looking at how Xi Jinping has been behaving in the past two and a half years. Chris, did you have your hand up before? Yeah. Why don't we do Chris and then I saw Jim. I know what you're gonna ask. It's important. So we'll get Chris and Jim and then we'll combine them. Chris Nelson, Nelson Report, thank you. Let's go back to our friends in Pyongyang for a minute. Mr. Takaharsan asked do we really know what's going on with the economic reform program and people who really focus on North Korea think they do. They point out that the dear young leader has actually instituted enough ag reform that when they had a bad drought last summer guess what happened? They had a food surplus. They weren't after us for more food and a crisis didn't occur. So it does show he's capable of instituting reforms and managing them. We're now being told there's quite a bit of domestic economic reform going on up there and we need to watch it. So here's my question. The Chinese since Deng Xiaoping right in the late 70s we since Mike was doing this stuff and I guess probably when Ralph was doing it we've been urging them to do domestic economic reform but at the same time now we have a declared dual focus by Kim Jong-un. He's doing guns and butter. He's not giving up his nukes and he wants economic success. So we're stuck. If we promote economic success with him we're promoting a successful nuclear power are we? And yet if we try to retard economic progress in order to punish them we're in a sense escalating the tensions. It's a sort of a classic dilemma of doing the right thing in one area is the wrong thing in the other area. What the hell do we do if we are now faced increasingly with a situation where the North Koreans are pursuing economic success and pursuing missiles and warheads that will eventually hit us and we're not really pursuing a policy that is either gonna really help the economy or retard it or stop the continued development. That's a very definition of a dilemma and a lands corporation conundrum that we have to figure out a policy for. I haven't heard it yet. I think he wants guns and cognac. But Jim? Yeah, thank you very much. Jim Foster from K.O. University. You know, I've been listening to the conversation and there seems to be a little bit of a disconnect I think from really what's happening in the region. You know, I look at things basically in the perspective of the internet and we see that, you know, right now Asia from a subscriber base is the center of the internet. More than half the people online are in Asia. By 2020, we're gonna have 80% of the people, Asia and Africa. And if you look at the internet it's really driving the economies. I mean, really, Asia is gonna become the center of the global economy. And it's Asia writ large. I mean, we've tended to look at this thing, Kathleen used the word unipolar. We've also talked about it in a bipolar sense as if the future of Asia is a competition between the US and China. We've also tend to look at this in a more traditional way of seeing Japan as being perhaps a third pole. And we've talked about rising powers, but actually what's happened is you're gonna have a multiplicity of rising powers. I mean, China's big, but when you look at the rest of Asia there's a billion people in India, 600 million people in ASEAN. China, you know, has, as we've talked before, Micah, a real security dilemma. And in fact, as it grows more, as it spends more on its military, as its military is much more visible, everybody else is watching that, they're spending more. And so I'd like the panel to address this kind of notion of the competition going on in the area of military modernization. It poses dangers for us, it poses dangers for China, it poses dangers for the region as a whole. And in that particular context, does collective security begin to make some kind of, as a topic, something we need to begin talking about? I'm not sure that the web of bilateral relationships that the U.S. I think is very effectively deployed in the post-war era is really going to be enough to kind of be a container of heat. But, Jim, can you clarify it, because we're gonna run out of time also. Sorry. Collective security. Do you mean collective security inclusive of China? Well, from a regional perspective, and in that particular context, I think you have a multiplicity of rising powers. How do you accommodate those tensions? Good question. Yes, so, how should I answer this question? What we are really hoping for, I suppose, is a kind of a symbiosis. We don't want confrontation to develop, and we don't want China to clash, I mean to crash, to falter. That's not what we want now. We, our, what's the word, the interdependence with China has reached to such a level that if China collapses, we are all in very deep trouble. So the stable development of China, both economically and politically, I suppose, is what we all want. When Xi Jinping says that the Pacific is wide enough to accommodate the two big powers, I asked my Chinese friends what he means by this, and some Chinese have told me that this is to allay the fear and the concern of the people in the US. And then I asked them, then can you say that the East China Sea and the South China Sea are wide enough to accommodate two powers? And they say that question is ridiculous. But if that's their response, I am greatly concerned because there will be a clash. But if that mindset can be changed, I mean, but it will take a long time. We need to develop our trust, and in order for that to happen, I suppose at the end of the day, maybe some kind of a substantial change in the political system in China is necessary. Well, I'll go, because that was a decent segue to North Korea, I'll do that and then go to the Asia piece, which is to say we face this dilemma with lots of countries, which is this idea of we want stability, economic growth can create stability, and that can be in our interest. And I think that is true in North Korea. We do want a stable North Korea, a stable as North Korea can be. And at the same time, of course, we don't want investment going into military capabilities that can threaten South Korea, Japan, and ultimately the US as well. So that's not unusual though. So I think it's a paradox that we live with all the time, which is how do we create stability? What are the tools that we can use to help support stability, including making sure at a humanitarian level that people have food. And at the same time, how do we discourage investments and capabilities that are in the case of nuclear against UN resolutions that are signed up to by the international community? That's where sanctions, for instance, come in and how well can you target your sanctions? So absolutely a dilemma, but not a dilemma that's unusual to us. Asia overall, I completely agree the region is growing in importance. We actually think we're part of that region, we in the United States. And so, you know, that's part, that's why we have a strategy in the United States to rebalance and it's essentially, despite the name being relatively new, it's a strategy that's been going on for, I can't count my years, 30 plus years, I'll say 30 plus. So completely agree that it's beyond China and the US, it's about the region, it's about the importance of it to the world economy, among other things. There is a time scale issue here. I was focused primarily on my remarks on the next five to 10 years, but absolutely as time goes on, that role of the United States as if you will a sole superpower, I think can be eroded. I'm not going to say it will erode, but it can certainly be eroded just through the dynamics that we can see today developing on economics and military growth among others. And completely agree on collective security, little C, little S, meaning not a major alliance of everybody in Asia, but we work very hard, Mike and I actually on this very issue set, we happen to call it federated defense because our boss, John Henry likes that term, but we talk a lot about how to build federated defense capability throughout Asia to include in some issue areas with China. In some cases it's not because of the way in which the issue is scoped, but humanitarian and disaster relief, information sharing, counter-proliferation, counter-terrorism, these are all issue areas where we can work with a broad swath of actors to include China in the region and hopefully build up those networks of cooperation, those webs and fibers that can create collective security if you will from an organic sense up rather than from an architected security signed treaty down. Excellent, Kath, you broke out of our, broke us out of our bilateral alliance East Asia bubble and you got us to focus on China's development on its own terms, and that's great, we solved no problems, which is why we created a superstar panel to end with Ralph Casa, well, be joined by Rich Armitage and Noga Mason to answer all of these problems that we have completely left unresolved. So give us just a second to rearrange the panels and join me in thanking our panelists. Thank you.