Book Launch: China Steps Out: Beijing’s Major Power Engagement with the Developing World

hello everyone good afternoon I'm Michael Green senior vice president for Asia here at CSIS and a professor of Georgetown and but what I'm most famous for is the back cover blurb that I gave for this excellent new book by my friends and colleagues who are here today Josh Eisenman from UT Austin and Eric Higginbotham from MIT are going to discuss their new book China steps out Beijing's major power engagement with the developing world and in a discussion that will be moderated by Bonnie Glaser of CSIS senior advisor on Asia and director of our China Power Project which has found innovative ways to assess China's power in different domains put it in comparative perspective perfect person to moderate so I'll turn the mic over in a moment to Bonnie Bonnie will be the security officer for you which we now anoint before every major program we do in case we have to flee the building and she'll be in charge but you will go back out the first floor exit that we're now on and in theory reconvene at National Geographic although I suspect if we all have to leave the building people will just go home so do what Bonnie says as soon as I step off the podium this is a terrific book it's the second edition or the or the or a new version I should say of a book that that Joshua and Eric wrote in 2007 which was an in-depth look at how China was advancing its interests interacting with fundamentally changing in some cases different regions of the world the Middle East Latin America South Asia these guys were well ahead of the rest of the academic world in defining this new phenomenon in finding the best scholars to come together in an edited volume to to unpack it and figure out what was happening come across come up with some cross regional themes and what we're seeing in Chinese behavior that was in 2007 they've done a new version and what was in 2007 the process of putting together bits and pieces of evidence and comparing it across regions in 2018 is a holy cow China is everywhere a study and so that dynamic is very very different we know more China's not ten feet tall anymore we've seen many flaws in China's approach in terms of its diplomacy at soft power but fundamentally shaping the dynamics within regions sub regions in ways that perhaps Eric and Josh didn't anticipate in 2007 that might be a good question for them it certainly is dynamic when I was the senior Asia official on the National Security Council staff in 2004 five the senior director for Latin for Western Hemisphere Tom Shannon came to see me because he said in our region this 2004-5 our ambassadors or Chiefs of mission our mission directors for AI D they're asking for instructions from State Department and from AI D on what to do about China because the China's presence was suddenly becoming an important part of what they were seeing within their region within their countries I had East and South Asia I could clearly have to see it happening there's a long history of China's interaction with Pakistan and India but then the senior director for Africa came and we ended up in late 2004 early 2005 doing I'm now unilaterally declassifying this I'll probably be arrested but in late 2004 2005 we did a series of deputies committee meetings in the NSC in the sit room where each regional senior director presented with their state defense AI D Treasury colleagues what China was doing in these regions and we went into it open-minded it was 2004 and 5 we didn't have the concerns about China we have today we tried to assess it the senior director for Africa said you know this is this is not necessarily bad you know Africa needs more infrastructure needs more development money but we're worried about corruption we're worried about undermining conditionality for World Bank or European or American aid there were different assessments of what was we came up with a series of instructions we sent out to post to report more on this but honestly we didn't have a strategy yet and I wonder if we do today so it's really an interesting topic you were you know talked to two of the first out of the gate identify it as a major trend in international relations and capture it in their first book and then in this book so thank you both for coming I'm gonna turn over to Bonnie do you want to go right to the first speaker do you want to I will just very briefly introduce their title so everybody knows okay let me just thank you then turn over Bonnie okay thank you Mike we will just have some brief remarks by each of the leading authors and editors and then have a brief discussion just among ourselves and then we'll turn it all over to you for your Q&A but we'll start with Josh Eisenman who's a senior fellow for China studies at the American foreign policy Council as well as a citizen professor at the University of Texas Austin's Lyndon Baines Johnson School of Public Affairs and then his the co-editor Eric Higginbotham whose principal research scientist at MIT Center for International Studies and a specialist in agent security issues so with that we'll start with you Josh great thank you so much Bonnie well it's great to be here thank you so much Bonnie thank you to Mike and you know let me just say thank you to CSIS right because this project actually would never have even happened without CSIS as I'm looking at Derek Mitchell here in the front row who was actually worked on and was a co-editor on the first volume most of the discussions for that volume took place at CSIS and actually the contributors for that volume at oarsmen raff pantucci and others were CSIS people so it's really fitting that this book be launched here at CSIS because CSIS was the real was the birthplace of the original book of course I want to recognize the authors Evan Ellis Derek Mitchell and ambassador David shin who did great work on this volume and we're very grateful for your help and of course Eric who is an just a great person to work with on this project and brought a lot of the knowledge especially in the security sphere that I lack and I'm very grateful for and of course I would be remiss if I didn't thank my wife iris who I'm grateful is here today and my mother for watching our kids so she could be just a couple of observations I want to start off off with so we can get into to a robust discussion and I want to kind of trace us back to the initiation of the project the first book here that I have in my hand and that was when I was a lowly analyst of the us-china economic and Security Review Commission and you know making phone calls to try to get people to testify and it was the early 2000s and nobody wanted to do it right the Commission had a bad reputation they're the evil Commission they're terrible you know what are you doing you're causing problems of the us-china relationship and so it was it was it was tough right it was like cold calling and at that point I would say that there were three primary ideas about the us-china relationship I just want to quickly put them out on the table the first one which I think man what's his name Jim man calls the soothing scenario is that China would become a liberal democracy right the China would over time evolved into a liberal democracy the second was that China would kind of muddle through with a collective leadership yeah a system right that there would be different leaders with different power bases and they would balance off of each other kind of as we saw during the who Jintao administration and then the third and I would say this is the minority view would be that the Communist Party of China couldn't survive and that it would fall and I would say that would be the minority view but it was still a view that was held by people who knew China pretty well what we did not hear during that period at least I can't find it in any of my notes or anything I read or anything I wrote or anything anybody else wrote is that we would revert back to the Chairman of all things mentality that we revert to a go from collective leadership to unitary leadership that we would have a leader who is clearly in charge of China in ways that we haven't seen in decades and so I think that we should start maybe with a bit of modesty right as sign ologists we got this one wrong pretty badly wrong too at that but I'm proud to say there's one thing we didn't get I remember Derek and I had a conversation we talked about the title for this book and we talked about this idea Beijing strategy for the 21st century and we is it is Beijing strategy for the 21st century really really the developing world at the point that we were thinking about this book in 2005 and six that was an open question as I think Mike said honestly and correctly um but I don't think it is anymore right with one belt one road now enshrined in the Chinese Constitution I think we can clearly say it is it is China strategy for the 21st century not only has the last ten years said that the leadership of China now says that and so we as I knowledge just got some things wrong but I'm proud to say we didn't get that wrong at least not the people in this room and so that's one thing I'm really proud of that we were we were early to this and we discussed it in a very serious way at a very early date and now I'd just like to put together you know it's three quick points to highlight from the book and in general the first is a concern that's being raised more and more and more and I want to put it out there and that's the issue of debt and debt driven growth in general in a lot of ways China's development model is debt driven growth what Chinese state-owned banks lent to Chinese state-owned enterprises they go round and round the state-owned enterprises lose the money then they clear the books and then they loan them all into another round and so now what we see in one belt one road is an expansion of this outside of China and so there's a big question is this going to work can you run this debt driven approach outside of your borders and there's been you know several recent reports that suggest that's problematic a one report that was released suggest that 23 countries are in jeopardy now and eight countries are in deep distress and that's problematic and it's a question for us to think about because there were so many people talking about the problems of Chinese domestic debt but for so long that has simply muddled through and not become a crisis I think it's right for us to ask whether the externalization of that process is problematic or not similarly we have long heard those of us who studied China that something about Chinese people makes them save more that chineseness equals but dude since 2009 that has not been the case and there has been a rapid increase in household debt such that your how a verge household in China now has a worse debt to income ratio than the average American household I can't believe I've said that but I have and it is true and so we are in a new normal as Xi Jingping calls it but an economic new normal and a political new normal and I think we have to be cognizant of these debt issues more than ever before but for different reasons than people were waving the red flag previously so I want to put that at on the table as an issue and it's an issue throughout the developing world in terms of China's approach to these countries second I want to put on the table the issue of China's party to party relations the Communist Party of China's relations with political parties certainly in Africa is something I've spent a lot of time studying but around the world and that's something that is stressed in this book by all of the authors it's a growing facet of the relationship and China is spending millions tens of millions if not billions of dollars every year to enhance these relations and I would argue there is purpose behind that and that they would be foolish to do it if there wasn't purpose behind it and then after 5,000 years of hosting foreigners and engaging with foreigners there is definitely something behind it and I think increasingly with the comments from Xi Jingping and others we're starting to see that there is a Chinese approach that is being proffered here and that is something that even a few years ago we didn't hear much about in fact when you would say something called the China model people would say nah there's no model these are not the droids you're looking for but yeah sorry can get the reference but I believe these are the droids we are looking for and so I think that this is a real moment where things are changing in terms of a recognition both on the Chinese and on the foreign side that China does have something to offer and is actually offering it and then third I'd like to kind of take my hat off to Beijing they've been really successful in this approach and we can talk more about what this approach is right unpack that statement but I think that they've been amazingly successful and one of the elements of this book is just is to suggest that they have been now that has not been without problems as Mike accurately said and we can talk at nauseam about all of them stakes and all the problems that have been made but I do think that we wouldn't even be here writing another book if this had not advanced if this strategy was not adopted wholesale pushed forward and in many ways been quite successful in garnering support from the developing countries of the world and so I think from a public public perspective as Americans we should be wise enough to look at what China's done and at least recognize its successes and if we can where we can perhaps even learn from them and that's all I've got to say so I'm gonna turn it over to Eric great thanks a lot for coming out and I want a second Josh's thanks to CIS CSIS rather for hosting us into bonny Glaser and Mike Greene and Derek Mitchell get this formulation right all of whom are young friends from long ago that's right when we published the first volume in 2007 China was in the midst of what was then called a charm offensive so the concern then was that China might make inroads by being more appealing in the United States and there have certainly been some constants in the equation since then but much has also changed Chinese leaders have become more confident in the pursuit of their national interests in part this is simply a function of increasing national power the growth of the economy China's economy gp's doubled in real terms since 2007 it's become the largest or became the largest trading state in 2013 and it's gone from being a niche player and investment overseas to being one of the largest today whatever the causes they're Xi Jinping and other foreign leaders and elites have largely abandoned Deng Xiaoping's dictum to maintain a low profile and they instead promote what they termed major power diplomacy with Chinese characteristics although Chinese diplomacy continues to slant heavily in the economic direction in terms of both objectives and means this is a much less true today than it was then political elements are more prominent and in some cases the pursuit of national interests has taken on a distinctly hard-edged the global financial crisis of 2008-2009 was a turning point of sorts it convinced many Chinese that its own model of economic growth as Josh said was largely correct and that the West was in relative decline it seemed to affirm China's long-standing view or assertion that the world was becoming more multipolar and democratic and it opened the possibility that China could to an extent accelerate that process and work with like-minded states to revise the rules of the game in 2016 deputy foreign minister who FA said said China is a central motive force in the reform of global governance and he said that China should work with other nations that seek a multipolar world and a democratic international order clearly many of those states are in the developing world and if the 2008 crisis showed that the West was in decline Beijing also interpreted that or saw that as an indicator of the rise of the developing world states in the developing world had become more important since then in Beijing's thinking and China's adopted a more nuanced approach and a more nuanced way of thinking about those states the Chinese lexicon now recognizes distinctions in that in that realm and it places special emphasis on new categories what it calls major developing States or newly emerging powers and these are developing states with particular economic and political heft and we can identify two or three states in each region that sort of fall into that category so China's role in the BRICS grouping its promotion of the g20 as an alternative a more important alternative to the g7 or the g8 are all consistent with that view and with their assumption of the value of partnership with major developing States beyond this all the chapters the vol make it clear that China's engagement with the developing world is what might be termed comprehensive I'll again borrow some language from who Yao Fei who said that Chinese foreign policy was multicentric multi layered multi pivotal sub networks of regional and international cooperation that are interconnected and inner woven and I think that's actually apt language like all countries their bilateral regional and global elements to China's approach but China's regional diplomacy as I think better developed than most China has either plugged into or created comprehensive regional groupings with which it engages on equal terms in all of the regions that we looked at first with Shanghai Cooperation Organization it's now plugged into a number of forums with asean in africa it's the forum on china african cooperation etc etc to be sure much of the actual work gets done at the bilateral level and I think Evan made great points in his chapter on on Latin America that about the extent to which that's true but major initiatives are often launched at the regional level and the framework is established there the other aspect of comprehensive engagement is the fact it's all-encompassing and it has economic political security and cultural aspects again that's true of all countries foreign policy but in the Chinese case it's much more self conscious and systematic in the way that it goes about knitting those together we've included white papers in the volume and if you look at any of them really but if you look at China Africa white paper in the back of the volume it talks about cooperation in seven domains political international affairs economics and trade etc etc and then it breaks that down into 25 specific areas or programs Americans might tend to view that as window dressing which in some sense of course it is but their programs and there's money behind each you know each of those initiatives in each of those programs and in at least some cases China has done a fairly clever job of putting these together in strategic ways so in 2014 and 15 pulled the fait accompli in the South China Sea reclaiming more than 3,000 acres of land on seven features and built very substantial military is there but as it did that it also pushed what it's called the two plus seven cooperation framework with ASEAN so the two were two political consensuses building trust is central to closer cooperation and economic development and cooperation should be central to the relationship and then the seven were specific proposals three were economic three were confidence-building and one had to do with cultural exchange and then if you look at the reaction from Southeast Asia with the states they're having a little prospect for reversing Chinese gain and with the prospect of receiving massive Chinese investment I think it's safe to say there has in fact been the response has been more muted than many of us might have expected and this is where I think the work of Mike Greene and others at CSIS is particularly important in highlighting and bringing transparency to China's action in the South China Sea and in other maritime areas there's no question that economic means still take private place but I'll end here with saying a little something about the growing military role is still secondary but growing role of military engagement in Chinese foreign policy in the developing world broadly speaking that falls into five categories the first is China's substantial commitment to international peacekeeping China's consistently among the top ten contributors of peacekeeping personnel in the world and it has the largest contingent from among the UN Security Council permanent five a second element is military diplomacy including fleet visits combined exercises high-level exchanges and educational exchanges the history of this is fairly recent and conducted its first combined exercise in 2002 many of these activities began with basically geographically so Central Asia first Southeast Asia and South Asia and have since expanded outwards to some extent a third element is the coercive use of force and I already mentioned the South China Sea China of course would define these activities as you know activities in defense of its own sovereignty and oftentimes it is reacting to the actions of others but it often does so in a in a scale and extent that's asymmetrically large compared to the activities it's ostensibly in response to fourth is the protection of assets and citizens overseas a goal that was established under the 2004 new historic missions it's conducted evacuation operations of its own citizens in Libya in 2011 and Yemen in 2015 it's now dispatched 27 task forces to the Gulf of Aden to conduct escort operations and now with its base very substantial military base in Djibouti it's in a better position to do this across a larger part of at least Eastern Africa and potentially at the Middle East and Indian Ocean area and then a fifth area is weapons sales in 2007 China was the 10th largest supplier of arms in the world today orally at least in 2016 it had risen to fifth place it's it's sales had quadrupled it sells to a limited range of customers mostly Pakistan Bangladesh and Thailand but that's a growing group and it exports a wider array of products than it once did so its major categories are ships aircraft anti-aircraft systems and missiles and I think if we look at these five areas I mean they're all important but arms sales in particular are likely to cement long term strategic relations in the developing world they come with an array of long-term servicing and parts requirement as well as trainers and the exchange of military personnel and military thinking so the ends just sort of scratching the surface and in a descriptive way but all close there great so one of the things that I really like about this book is in structure it's very well organized and it starts in the introduction making very clear what it's trying to achieve and what the questions were that were given to each author and it really looks in an evolutionary way at Chinese foreign policy towards the developing world and talks about some of the changes that have taken place starting with Derek Mitchell's great chapter really going back to sort of the dynasties which is very important to get an evolutionary census where did this all start and a key message that really comes across in this book is how China's interests have expanded and so it's we China's interests involve resources involve getting support from the developing world for Taiwan and the one China principle to push back against countries the criticize China on human rights for example at the United Nations and to promote China's image so that China can have some soft power may not have soft power here but it does in places in the developing world so Chinese interests are really really expanding and so what I'm going to start by asking and I'll start with you Josh is this issue of approaches so what are the means what are the approaches that China is using and what are the strengths and weaknesses of those approaches you alluded to the fact that China has been pretty successful so why is it working and what's working and what isn't working wow that's a that's a great question hard one to answer what hard one tans are in brief well I would say if we talk about strengths first one of the major strengths is the coordinated nature of the approach itself that you've got an economic political and military approach that is intentionally meant to bolster each other and so you've got military sales with their post an economic deal for Norinco but they're also they have a strategic game as well and then they have a political aim in terms of enhancing the relations with that country's political leadership and you know similarly we can talk about the party to party relationship bolstering and supporting Chinese state-owned enterprises and creating what China would like to see in terms of a stable environment a stable political environment so it can achieve its economic objectives so what I've in the past called a packaged approach tour a coordinated approach is probably the strength that China brings to the table it doesn't shy away from the fact that it is coordinating these approaches in fact that's part of the kind of overlapping interlocking nature of it similarly as Eric spoke about in his comments you do have this bilateral multilateral and global approaches which are also interlocking and China has created institutions where it had wanted them so it's created the China Africa cooperation form it's created similar forms in Latin America and other places and so and these are similar type of institutions where China is balanced off against an entire region you'll have a meeting in China and then you'll have a meeting in a country of the region right and so this enhances the asymmetry of the relationship in places China on par with an entire region and it gives China a lot of agenda-setting power when it comes to determining what you know what's going to be talked about and in what way now in terms of the negative side I would say where China's weakest is in terms of its civil society I mean you could argue if China even has a real civil society I mean that's a an argument that we could go over in circles chasing our tail on but when it comes to say educational exchanges or what China calls people-to-people exchanges these aren't really organic they are always political and almost always funded and intentionally driven by the party and what that means is that they're limited in terms of how genuine they are right when you force your rap stars to rap about how great she Jing ping is you shouldn't be surprised the global sales aren't high right there's a lack of genuineness to it and I would say that when we want to talk about where China is kind of weaker it's still weaker in terms of that personal interaction level I would say and especially on the educational front dealing with human rights organizations for sure dealing with labor organizations so in a lot of ways what China does externally mirrors what it does internally so if you look internally and say hey China's weak when it comes to these things I bet you most often they have problems with that externally as well so I would say that this if we look and we only use the the guise of I our theory to understand Chinese foreign policy I think we're gonna be really confused because a lot of what we see externally is a reflection of what goes on internally and so I would say one of the benefit one of the things we talk about in this book and elsewhere is is how Chinese domestic politics is an important driver of foreign policy great thank you Eric when si Jinping spoke at the 19th Party Congress and for the first time presented China's development model his economic model as an option for developing countries I think that was surprising for a lot of people just did that how does that resonate in the developing world do countries in the developing world want to be do they want to model themselves after China do they want to adopt this model and implemented for themselves another great question another question that's difficult to answer and I think it depends on the you know obviously the partner the potential partner that you're talking about but I think you know what has traditionally been called sort of a no-strings-attached approach or in in a certain sense a political approach to engagement does resonate widely in much of the developing world especially some of the poorest parts where governance is poor China clearly puts economic development and developmental model above you know governance reform and that's quite different than US priorities in its foreign policy in its engagement with much of the developing world so I think that does resonate you know there is pushback I think as Josh said the weakness in China's approach is the weakness of China's civil society China doesn't have you know it to an extent it's developing it but it doesn't have strong norms you know corporate norms of global citizenship so you know I think that hurts China's position and reputation in much the developing world when Chinese companies come in and employ Chinese citizens and don't necessarily do as much for local communities as Western companies do although I have to say much of that is new in in the Western context as well I want to ask a question to you Josh about China's involvement maybe even sort of interference in political activities in Africa we've seen this in Australia New Zealand some other places I was reading an article last week in The Diplomat that alleged there was Chinese backing for a political candidate from the all People's Congress who's running for the president in Sierra Leone and that really raises the question to me we know Beijing as long said it has a non interference policy that's changed over time but is this a new trend that we're seeing or has this been a an element of China's policy towards the developing world that has really been present for a while that maybe were just journalists and others maybe even experts like me have not paid enough attention to well yes I mean it has been around for a long time but it has changed in really innovative and interesting ways so the Communist Party of China's relations with Africa in particular which is something that actually just published an article about it during the Mao era so I've done a lot of thinking first let me say this again driven almost entirely by Chinese domestic needs for external legitimization of its own regime when you track the Meccan machinations of China's relations Communist Party's relations with African political organizations you see the Cultural Revolution for example is an important aspect well why would it be well it is because it's a domestic change right and then you have reform and opening-up and then that influences the way in which China's Communist Party interacts with African political parties so first point is domestic politics is always in the lead in terms of the the nature of the relations they've kind of ebb din I mean in the in the 80s and in the 70s you'd have the CPC building the headquarters for example of unep which was then the leading party in Zambia they would build a headquarters for them and you'd see regularly within the Xinhua press in the english-language press reports about grants and gifts being given directly cash donations to African political parties and that kind of subsides in the late 80s and 90s and then what we have is a rhetorical support right meetings are happening glad-handing that kind of thing and maybe maybes money changing hands but it's not public it's not openly discussed and but I would say more recently especially since she Jean Payne took over we've seen a change and that change has been that in the past China actually sent more delegations to Africa than it received more CPC delegations would go to Africa visit different African political parties and hold meetings since 2012 however that has flipped and more and more African political parties are coming to China spending time with the Communist Party doing cadre training you know cadre training is something the Communist Party is now putting good money into and we can ask why right if it's a political why are you doing cadre training right this is an important question but these issues of cadre training and you were talking about Sierra Leone I don't I I don't have a way to validate this but I read the article you did and some other local articles which suggested that there is a very close long-term relationship that has been developed and that you know China's supplying pins and buttons and Chinese nationals are showing up wearing the colours of this political party at their rallies and that I would say is is relatively new but I would also add to that the China's relations in African countries has a lot to do with the nature of the politics in that country if you are in a democratic African country their ability to influence or be influential is to some degree limited but in a place like Ethiopia for instance where ambassador Shin was ambassador and it was very well the Communist Party of China has had an extensive relationship with the epr do and in some of the Chinese writings I think some quoted in our chapter the P Party members call Ethiopia the greatest student of the CPC right and so we can see in a lot of ways a lot of the methods reflected in those students in those better students Rwanda has also been brought up but what was interesting is when ambassador Shannon and I were recently in have in China asking me this question they would say yes there are several African countries that are very interested but once you get below Ethiopia and Rwanda you don't get many more right so the question and I think it's an open question at this point is will this more assertive more involved we could call interference in some cases perhaps approach will it be effective will it be welcomed will it have backlash and pushback my sis Maya I suspect what we saw in Zambia with Michael Sata that there will be a pushback right and in Chinese you have a saying the top there is a policy and on the bottom there is a pushback so I'd be surprised if we don't see some kind of pushback as China gets heavily involved or more involved I would say in African political party relations so while there's question for you arc and then we'll open it up and I really wanted to talk a little bit about the us-china relationship and how it connects with the developing world and whether this is a source of friction in the future and in your concluding chapter which both of you co-authored you state that US and Chinese interests in the developing world are not zero-sum and intersect in some ways but you also say that Chinese activities in the developing world threaten peace and stability this may be a little bit of tension there in the Trump administration and the national security strategy there's been a new framing of the us-china relationship as you know China being a rival revisionist power and so there's clearly more strategic competition in this bilateral relationship so what does this portend for the developing world and the factor of the developing world in the US relationship is this something that we need to be more concerned about that we're not just going to have strategic competition in trade or maybe on maritime issues but that actually may be the developing world is going to be an area where we will see a lot more direct competition or is this going to remain very peripheral right you know again I think it depends on the region the extent to which our interests overlap or compete depends largely on the region so in Asia the United States has allies some of those allies have territorial and other disputes with China so in in in Asia is where our interest might collide most directly now it's also worth saying that in Asia China's interests are in tension with one another as well there's a second area or sense in which our interests are in tension and that is global governance and norms and you know we see that really across the board looking at the I wrote the Southeast Asia chapter of this as well look looking at Southeast Asia I'll speak a bit to the issue that that Josh just did maybe a little bit more in a competitive context China is clearly willing to engage everyone democracies you know really the gamut from democracies to a to fully authoritarian or totalitarian States I'm not sure that's necessarily an enormous disadvantage with the democracies depending on you know there's a specific case but clearly in an immediate at least a short-term sense it gives them a competitive advantage in vying for influence you know at the other end of that spectrum with the authoritarian States so you know again if we come back to the dispute over the South China Sea in China's activities there you know one of China's tactics has been to buy off you essentially create client states among the poorest states in ASEAN so the GDP of Laos is less than 2% of the GDP of Indonesia and yet within the ASEAN context it's it's consensus decision so if the vote is not unanimous a joint declaration is not made so China is able to pick off individual countries and sort of suppressing a unified reaction and it did that with Cambodia first a friend 2012 maybe and later with Laos when they held the rotating chair in ASEAN and to prevent the joint declarations coming out so in that sense I think you know there is a more more calculated political competitive element in its cultivation of those regimes to extent to an extent I would like to believe that that's you know maybe a losing proposition for China in the long term and that it comes to understand that and maybe this is where we should talk to Derrick who has been you know a very prominent promoter of American values in in Asia so if we have time I'd like to like to circle back to Derrick but okay we alone will take a couple of questions and then we'll both give you an opportunity so please wait for the for the microphone one of my fantastic members of my China power staff will bring you a microphone and then identify yourself right here in front Dan Lieberman I'm a writer yeah well yeah people are predicting the demise of China economically for quite a long time but most of the that is really domestic that they owe it to each other and they don't have too much foreign debt their household debt maybe forty eight percent to GDP but the u.s. is 78 percent so if you start looking at China debt situation compared to the US debt situation it doesn't seem as severe but my real question is I'd like to know if you have any statistics on China's engagement with Iran do they supply any armaments and what does their commercial trade woodchip up with Iran okay hold that I think I'll collect a couple of questions and then we'll come back to you okay yes johnathan in front let me seek maybe we do have some dance in the border yeah hi Jonathan's drum set from the Brookings Institution I have two quick questions one is you described a very coordinated approach kind of interlocking political military diplomatic my question is sort of what where is this all coming from within China I mean is it as simple as to say they have a one-party system so it's all coming from the party or how can we sort of think of the formulation of this grand strategy its sources and multiplicity a multiplicity of actors per se ii quickly for Erica since you you've mentioned Southeast Asia several times and you wrote the chapter I really look forward to reading it I'm just curious in your view is is Southeast Asia you know kind of an incubator for broader kind of approaches for China in more far-reaching parts of the world or is it possibly just very unique because it's the backyard and there's things happening there we wouldn't necessarily see in other parts in the future thank you great question okay we'll take one more before we go back to the panel okay thank you my name's Tom Crowl Simon retired from the UNESCO I'm curious in the the climate controversies and the Paris agreement China finally came up in the Paris agreement as a major actor and their agreement to start changing their previous policy of being a developing country was key to moving the Paris agreements forward since then China has become a huge developer and photo of Vail voltaics and other renewables in other words they're posed to play a huge role in helping developing States meet their requirements for a future renewable energies so I'm wondering do you think this is altruistic is this system.the an economic opportunity or how big will this part be to China's developments okay terrific and I want to let you all know that we will be selling books after the event so please do stay when we're finished and let's go back to the panel who would like to start Josh yeah and we will be signing them right that's a big deal that's right no shipping no tax alright this is a big deal and we've got other authors here who are happy to sign at a small cost right so great questions and and let me see if I can kind of touch on a bit so we can have another round hopefully if time permitting so yes people have been predicting the economic collapse of China for a long time I think there was even a book by Gordon Chang about that right a long long time ago and they were wrong and I would argue they were wrong because you had a part of the Chinese state lending money to another part of the Chinese state now whether that be a state-owned enterprise or a local government it's still a part of the Chinese state what's different now and this is where I would contest your numbers from what I've recently seen is that Chinese household debt from what I saw is that 106 percent and u.s. is at 105 percent which was the impetus for the article I saw written which see and that has happened very recently right that has happened since 2009 and you cannot although you can always transfer more money to another state-owned enterprise you can't transfer money to 1.3 billion Chinese people because you would end up with massive inflation you can't take 3.1 or whatever trillion dollars and just convert them run the press all day and all night and hand out money to all the Chinese people to pay off their debt and that's problematic because it means that the old tricks to resolving the old problems cannot be deployed and so I'm not predicting I'm not sitting here on camera predicting the end of the Chinese economic model but I am suggesting we are seeing new phenomenon in the model that need to be taken into consideration and that are more risky than what we see in the past I in the past have never said that China's coming collapse is coming I'm certainly not doing that now but I do think that this is something worth noting especially because a lot of that debt is really high interest debt all right I mean it's 20 30 if not higher and it's people who aren't gonna pay it back and there's there people who are getting on black lists who can't get on airplanes who can't get on so there's a social impact of this where you're creating an underclass I mean you're not creating debt or jail yet yet but you are creating different kind of social problems that hadn't existed before and that we at least have to recognize and and deal with and talk about I'm putting it out there more of an issue as a discussion then I'm soothsaying what it all means in terms of where is this all coming from and I think Eric hit on a very important point several of course but one in particular dealing with this issue of biding time and hiding capabilities which was done shall pains admonishment right keep a low profile but the whole idea of biding time in hiding capabilities which goes back to ancient Chinese thinking means that at one point you'll stop doing that right by the time and hiding capabilities isn't a permanent strategy it's a temporary one that one pursues while one is weak so in many ways we could consider this the natural evolution of China's engagement with the world peaceful rise has rise in it right and rise means that there is an intentionality to at some point be risen to be at the top and to not be biding your time in hiding capabilities anymore and I think that is a generally that is a general consensus what I think was interesting is the timing the decision by the Shi leadership to say now is the time and I again I think Eric is right 2008 2009 was the time when the as I saw in Ranjan Zoe's recent piece the West malfunctioned right the malfunctioning of the West was on display and that became a moment of strategic opportunity which then led us to today where we have this more assertive more aggressive China and I would say that a lot of the you know island building in the South China Sea a lot of things we can talk about traced back to this economic crisis that actually began here at began in Wall Street right and so I think that that is kind of the the inspiration for all of this and and then one could say that this is actually a long-term strategy a long-term project and I would I would say that's true now whether or not it's nefarious in the way that you know my friend Michael Pillsbury would talk hundred-year marathons and all or not we can that's almost a separate discussion but I do think that there has been a long term approach underway here and we're just seeing in many ways the kind of culmination of that approach now where China runs into some problems is it for a long time and even today in its rhetoric talks about the failure of the West in its treatment of developing countries the colonialism imperialism and trying to build its own reputation in part by tearing down the reputation of others who were Imperial and rightfully ought to be criticized for that behavior but in recent articles I'm saying I'm seeing a notion that China is now in this position and China will behave as other countries in this position have behaved right and that is a kind of transition where China is not saying you're bad and we'll never do that to China saying that was bad and now that we're there we may do a little bit of that too right and and so this is an interesting moment of history where we see the rhetoric and the reality kind of confronting each other I always think reality tends to win but we'll see where it goes the final question in terms of greentech you know I've been I've been to the wind farms I've seen the the solar panels I mean it's really impressive it's certainly not altruistic right I mean it's the future in many ways China is well suited with this very strong government approach to direct investment into the things that it believes to be the future it used to believe those things were semiconductors now it sees it as this green tech so I see it not as altruistic but as an important economic play as an important political play for the reasons you've said right as the u.s. is standing there tearing up the agreement China is there pushing forward the agreement but that being said I would I would hasten to dampen enthusiasm and the reason I would do that is in one of my research assistants is well she's from China and she and her undergraduate was doing research for a major coal producing province and she was asked by her professor to find out what was the total emissions for the province so she began by going to the five top emitters in the province and got the numbers and she wrote them all down and then she went to the Factbook from the Chinese central government and founded the five top emitters actually we're admitting double what the central government believed the entire province was a minute now what I mean not even the six that was on the list and it was already well above and and it's that kind of story which I think some of us have heard in other contexts which leads me to question whether or not you're going to be able to enforce not just enforce on paper not just get the you know people to say this is what's going on but actually on the grassroots level enforce the emissions standards from the climate change agreement and I hope I'm wrong about that right well all breathe cleaner air if I am but I think that that is an issue and as I said before there's a policy on top but there's always gonna be pushback thank you okay so just very briefly I know we've only got a little bit of time left but on this question of you know in Southeast Asia and an incubator it's a good term I think I used similar language in the chapter itself as a what happens in Southeast Asia is in a sense of harbinger of what sometimes happens later in other regions it's I think similarly true of Central Asia as well I mean if you look at go back to China's lexicon foreign policy lexicon again it divides the world into sort of three categories major states peripheral States the immediate periphery and then developing the developing world and you know that lexicons evolve we talked about the developing world the periphery language has all sweetballs so they now talk about the greater periphery so the periphery used to be you know Southeast Asia South it well East Asia South Asia and in Central Asia now it stretches out in in some versions to the Indian Ocean and and and Eastern Africa so it's gotten larger so I think you're going to see some of those issues cropping up outside of Southeast Asia to what extent is Southeast Asia or other parts of the periphery unique well yeah and then it that China doesn't have for example territorial disputes anywhere else you know it's got them in South Asian and Southeast Asia and I think that's pretty much it so we could ask whether it will have the same config you know conflictual relations that does with some neighboring states and I think the jury is you know out on whether it's going to sort of expand its horizons as far as its its demands and behavior elsewhere but if for example we look at some of its maritime behavior it's not just around the islands that it's made some fairly startling claims putting in terms of the the easies that it claims around small islands but it's also for example in in its naval behavior so when it operates the aircraft carrier it has in the past issued a statement that other ships should stay clear 230 kilometers that's not something the US Navy does the US Navy asks other ships to be cautious within you know two or three kilometers of the ship but if you go out 230 kilometers I think that adds up to maybe thousand or more square kilometers of ocean space and that's moving ocean space so we don't really know how China is going to behave elsewhere as its military capabilities expand on the economic side I mean we've talked about debt quite a bit China did diagnose in 2013 the fact that it has all kinds of structural economic issues I think there are other questions here yes people have been predicting the demise of the Chinese economy for many many years some have made professions of it but you know I think there are changes just because it has has adapted and and and made the necessary adjustments to date doesn't mean that it necessarily can or will in the future and we have a new type of leadership so prior to Xi Jinping we basically had engineers who were willing to make great sacrifices in order to do what needed to be done to tackle sort of today's economic issues oftentimes that created two new problems but hopefully those were smaller than the ones it was resolving at the time or at least less immediate but Xi Jinping has really I think shifted China's priority and put much more weight on China's international political position so it's a little bit unclear to me you know again it diagnosed these problems in 2013 and it has not in fact made the sacrifices that it would need to make to shift from investment to consumption for example to drive economic growth and then finally well I'll I'll stop there thank you can't remember with the third one it was the green one but I got oh actually yes I'm just very quickly on the green point question was you know is this virtue or China's narrow interests you know it's clearly not just you know doing this to contribute to the world but I think it's a little bit of both and this is a common you know this is a pattern we've seen for the last 30 years in China so China has severe environmental issues this is one way that it you know can get a grip on its own environmental problems you know it's tried to reduce the role of coal in the economy for 20 or 25 years now it's tried to crack down on illegal coal mining so by signing up to these accords I think you know to an extent it has expectations similar to those that it had when it signed up to the WTO in terms of you know furthering its its economic reform agenda so I think it's it's got to be a mix of both if I could just build on that one quick sentence I think that reform and opening-up have to go together you can't reform without opening up and it's the pressure that comes from the outside from WTO from joining the Paris climate change that pushes internal reform to happen and I think what I'm pleased that I think that the Paris climate Accord may do that but I'm equally concerned that on other aspects economic and other China is not opening up anymore than it is the China is closing in ways that prohibit it from having meaningful reform because that outside pressure is not taking place so I just want to add that to your coming well I promised to give ambassador Derek Mitchell the opportunity to say a few words so if you'd bring the mic up here and then I think we'll now we're gonna get upstaged and then we're gonna turn to your allow you to sign some books okay well first thank you for turning to me I want to congratulate my my colleagues on this and for taking it to the next step after ten years ago bringing it up to date I haven't been able to read the book yet because I haven't hand on it but I will get your signatures and I'd be honored if I would it raises the question again I haven't read your conclusion so I think it begs the question everything that you've raised so then what what should the u.s. do why does this matter so what and what could what should the u.s. do in response now there are various people that have written about the failures of the past and said well we got it wrong and I guess some people maybe mistook that that thought as being what we should have been the engagement policy was wrong I think that was probably over reading that that critique but it does then beg the question do we then go forward with concern about what China is doing around the world and then respond to China everywhere and be concerned about and really focus on China and what it means as a as a rival as a competitor whether its tariffs or whatever it is that you know what's going on in our administration or just generally in the world through our Pacific Command or otherwise do we just sell genesee or is there another vision it gets to your issue of values or rules you know is the best response not really about China but about ourselves about what we like to see in the world and how we build coalitions yeah I think you can tell by the question where I stand on this that in fact we may have the strength within ourselves what we represent we have a great deal of power through soft power by simply not caring so much about what China does but just doing what we do traditionally better which is actually the issue of competition competition in the economic terms is a good thing it makes everyone more efficient it raises your game is it bad to have competition around the world does that then force us to have to raise our game because we are not doing what we need to do in Africa we're not raising our game and then develop in development and assistance and all the rest of it so I think the prescription is going to be very important of what we do with this information just as it was ten years ago but even more so now when I agree completely with what you said about this moment the China seizes of opportunity they love getting in there I wrote about this ten years ago to when we trip they're in their next day and say we can do better and we will you know we can fix whatever ails you but countries I think you know we appeal traditionally to people of the country you know some differents but they all peel to that elite at the top to buy them off etc so what is it that we can do what is the prescription in your mind as you look at all the chapters and think about this for a responsible American approach to the China challenge ok brief response I think you're picking this one first well I'm an agreement with the premise of the question as well as I think where you were going with the with the answer I'm old enough to have been sort of a veteran of the you know Japan Wars where there was actually quite a bit of panic despite Japan's vibrant democracy about bans arise really at the time when Japan's GDP was 2/3 that in the US and we thought it would overtake that you know American GDP and we thought Japan would organize an exclusive economic bloc in Asia etc etc and there were all kinds of predictions that went along with that obviously we're all veterans also of the Cold War where we sacrificed a lot of our values in the interests of competition to me you know for a variety of reasons first of all the challenge I don't think rises to that level of the Cold War also I think we can do a lot more you know in terms of raising the level of our game it would require consistency it probably requires a larger government role to an extent we have been successful in you know we have some models successful competition if you will competition for hearts and minds values economic leadership certainly in Asia you know the changes in in in Burma are an example so they're domestic cases there's also they're also institutional examples so the fact that we got TPP through signed was an enormous success for the United States in terms of shifting the discussion you know about economic reform and really governance reform since they do go hand in hand and unfortunately we have you know opted to withdraw from that so I think yes we can raise the level of our game we can maintain a consistent position and the question is will we certainly I don't think we should sacrifice our values you know in the interests of sort of short-term competition with China you can see you know when China China does certainly step into the breach and it does score some successes but oftentimes those are reversed so you know we've seen this in the Philippines in the past we've seen this in Burma we've seen this elsewhere so you know I think consistency is the answer you know so I'm in a bit of a disagreement with Deric on one I'm not so sure the engagement strategy we pursued was entirely successful in fact it or that it should have been pursued in the in the blinkered optimistic way that we pursued it the idea that Iraq Afghanistan China want to be like us and that engaging a country that has engaged foreigners for 5000 years and thinking we're gonna change them to me that's hubris was from the start and what we should have done is accepted the fact that they're gonna change us as much as we'll change them and and that they may well utilize that engagement strategy to build files out on our people and to do a whole bunch of other stuff that I don't think we were entirely willing to accept because we had so many barbarian handlers which were so convincing like hefei and others and we just wanted to believe them so bad so I I'm not sure I entirely disagree with you but I wouldn't entirely agree with you I think that there was a more open eyed policy approach but it was a tougher approach and we weren't ready to take it and I I just hope we are now through the looking-glass on this so I think the very first thing we can do is stop being blinkered optimists you know in America being an optimist is considered a good thing almost irregardless of whether or not you should be or not but optimism about the Communist Party of China has not served us well and we should stop right if in a liberal sense optimistic I mean Xi Jinping may be optimistic that he can achieve what he wants to achieve but as a liberal being optimistic about the liberalization of the party was wrong and I hope that we're through the looking glass and we accept them for the authoritarians they are right and I think that if we start with that premise I think we're gonna be far better off in terms of our policy going forward so the first thing is be very open eyed about who we're dealing with and do not believe that the chain I'm changing I'm changing I call it the philandering husband routine right I'm changing baby I'm changing no you're not you are who you are and I accept you for that second values and rules I would I would agree with both of you here I think the US should be an exemplar right that if we are an exemplar nation and we are and we and we can do that and we're not now I agree for many reasons we could go on and on about but if we could do that put our values in the front and lead by example I think that that's really the best way to counter this rather than rolling out the map and putting the chess pieces out on the board in a cold war style but leading with our values leading with our norms leading with our rules the things we've fought for so many decades to establish and are now kind of eating away at on our own and then third and I'm gonna critique my own here as a political scientist we should stop using IR theories so damn much to try to understand China which it's you know we should stop saying they're a rising power and we're a status quo power and using that approach I think that has really failed us and it's allowed us to explain away the nature of the regime oh they're not doing that because of the nature of the regime they're doing that cuz they're a rising power and I think that that has done us great harm that what we need to do is study more about who they are and what they do and what they write and what they say this is from our mutual friend Randy Shriver write and then make policy based on that not roll out the Mearsheimer and say well Mearsheimer says the rising power will do this and thus and so I think that's almost insulting to the Chinese and it doesn't lead to very good policy and I think that successive administrations have adopted IR theory as a guides a lodestar and I think that has been a massive mistake it has allowed us to look past the nature of the regime and that was been wrong I'm the final point I'll make on this very quickly is that China traditionally believes in this concept of the shirt of the propensity of things that you go with the wind when things are in your favor you move when they're not your favor you don't move the right policy taking at the wrong time leads to a bad result and even a imperfect policy taken at the right time can be successful and so what we need to do is be cognizant of this in the nature of their thinking on this and do our best to make sure that they don't believe that they have that the the wind at their back right - - - how once they manipulate perceptions but at least manage perceptions in a way which don't lead them to believe that the field is wide open you know move forward as you will I think that'll lead to more miscalculation from them and it'll lead to more problems for us you get one minute just very briefly so we're really no I'm sorry just just I just want to clarify my last comments we're about engagement with with the developing world not China so in terms of our development and engagement with China I agree we've made mistakes I do think in terms of our values engagement with China we should focus on specific behaviors and you know where China maybe you know in have crossed lines but we should be very specific to those behaviors and not sort of it you know in some cases exaggerate the extent to which China may be an outlier you know oftentimes there are other countries doing very similar things we call out China and not the others I think we should focus on behaviors not China as strategic competitor and I'll just leave it at that okay terrific great discussion and I hope it's stimulated all of you to have interest in wanting to read the book yeah and so we're gonna move to the book signing and it will be outside on the table and apparently one person who came in picked up a book off the table if that happened to be any one of you please on your way out pay for it I'm really glad you want to read it though and please join me in thanking our and office bunny thank you so much [Music]

Channel: Center for Strategic & International Studies

Views: 6,928

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Keywords: csis, international, politics, diplomacy, washington

Id: 3EQK-wkpgOU

Length: 68min 7sec (4087 seconds)

Published: Thu Mar 22 2018