China’s Maritime Silk Road: Strategic and Economic Implications for the Indo-Pacific Region

good morning thank you everyone for joining us on what we are told will finally be a spring day our plan is to meet until it warms up outside and then let you go I'm Mike Greene I'm senior vice president for Asia here at CSIS and a professor Georgetown we have a report to explain to you today and look forward to your questions and our discussion we usually open our events when we're in this large hall with a few security announcements I am your designated safety officer if we have a situation where we need to evacuate you just go back down one floor and out the doors and our rallying point is the National Geographic building around that way just around the corner from n Street although this has never happened my suspicion is people will just go home so we won't know where you are but the key thing is you will tell you what to do we go out on the corner I'm get away from the building if we need to we at CSIS have done a lot of work as you may know on infrastructure in Asia particularly under a program called reconnecting Asia that my colleague matthew goodman leads that looks at connectivity across the eurasian continent and also our Asia maritime transparency initiative which uses unclassified open-source satellite imagery and analysis to try to make sense of what's happening in maritime Asia where we have spotted in recent years Chinese island building exercises and so forth and work we've done under Smith Richardson Foundation grant doing case studies of maritime coercion or incidents and trying to understand the lessons in terms of the tactics involved but also the larger geopolitics of China's growing assertion of its territorial claims in strategic waters and then the reactions of other states so in that larger body of work we decided to take a look at a new aspect of China's economic and geopolitical outreach in Asia the so called New Silk Road or maritime Silk Road which is associated with the Belton Road which grew after the Asian infrastructure investment bank which is new and significant in its own way because it as an overall framing for Chinese investment and strategy focuses on ports and facilities and infrastructure building in the Indian Ocean and the Indian Ocean is strategically important to a lot of other states not the least of which would be India but also Australia Japan the United States and so with some support from the Japanese government and our own research efforts on amti and reconnecting Asia we put together a team of our best researchers economic infrastructure military security to do some case studies and look at this maritime Silk Road to try to see what we can find in terms of that the economic rationale behind it there is after all a severe shortage of infrastructure funding in Asia the World Bank the Asian Development Bank Japan are not sufficient to cover all the infrastructure needs so there could be some economic rationale but also to understand the geopolitical and military implications of some of these infrastructure projects we looked at for infrastructure projects Gregg polling who is a fellow and runs our AMT I looked at CAC view in Myanmar an important infrastructure port Gregg is trapped on the mark do you make it Oh Greg had its own Greg had his own infrastructure experience I understand on the mark train I'm glad you made it and then hambone tota which is port in Sri Lanka and Jonathan Hillman there you are who does a lot of the work on reconnecting Asia an infrastructure looked at that case study so Myanmar Sri Lanka and then we had another author who's not here because he's in in Delhi right now but we had a grim econ wall who's an adjunct fellow with the Wadhwani chair here look at the Gwadar port in Pakistan and these are the four case studies not everyone is here then we had a look at the economic implications putting the template of economic development you know smart rational economically viable infrastructure development putting that template on it do these ports make sense and Matthew fillet from the China power report to my right and Jonathan Hillman from reconnecting Asia created a really useful and interesting template to look at these infrastructure projects and strategically sensitive areas to try to determine how much of it is explainable in terms of economic requirements infrastructure requirements economic viability mixed answer as you'll hear Zack Cooper senior fellow in Asia security here did a paper for us on the military implication so just looking at in terms of warfighting phase zero shaping gray zone maneuvering implications but also crisis or even war fighting implications of these facilities we couldn't get everyone up on the stage so we got a team that's going to look at some of the case studies some of the templates Andrew sure took a look at this from the perspective of the quad the US Japan Australia India we need a noun to go with those four proper nouns coordination forum that was proposed by Prime Minister Abe a 11 years ago and is now come into effect the major maritime powers that care about the indo-pacific becoming and remaining remaining and open the maritime domain and then we've asked Amy C Wright who didn't do a paper to come in and give us a fresh perspective and look at how ASEAN and Southeast Asian Nations in particular but also some of the other South Asian countries are viewing this are they viewing it as economic strategic is there a strategy is there a common view within ASEAN probably not but how does the entire maritime Silk Road look to the recipients broadly speaking of the funds and the security implications the overall conclusion is mixed the maritime Silk Road objectives are neither a purely military nor purely commercial and China's approach is evolving which is why the quad the ASEAN piece the u.s. policy piece matter because we came out of this project realizing that the Chinese views are not monolithic and are evolving and are shapeable if we think about how we respond to some cases perhaps cooperate in other cases set down some markers for this new dimension of China's geopolitical infrastructure strategy in Asia I want to also give particular thanks before we start to Senator Watson who started this project as a coordinator when she was with the Wadhwani chair here and then Nixon Cheney from the Japan chair who picked it up and got the project across the goal line Rebecca Shirazi who did a great job with our iLabs team on the visuals you'll see when it's up on the web today that the graphics are quite compelling and Rick Rosso our Wadhwani chair in India studies for giving us some good guidance so I think what I'll do is start with math Matthew and who together with John gave a provided a template for how to think about the economic implications then I'm gonna go to the West start on the West and ask Jonathan to talk about the Han bond torture case in Sri Lanka and then we'll go to Myung Mar with Gregg and then I'll ask Andrew to talk about the quad and how the larger powers are viewing this and might shape it and then Amy for how some of the smaller powers are viewing this and reacting to it so Matthew why don't you start us off and give us a template so we can look at these case studies with better accuracy all right thank you Mike and thank you everyone for coming out to help us launch this report today as Mike mentioned what what John and I set out to do with this part of the report was to outline some benchmarks that we could use to assess the economic viability of Newport construction associated with the maritime Silk Road and I'm gonna run through some of those we have to go over them kind of quickly there's more detail obviously in the report and that should help set the stage for some of the case studies that we're gonna go ahead and discuss so in a sort of broad sense what we did when we were looking at the maritime Silk Road was to take a step back and think about maritime trade networks through the indo-pacific region if you think about this there's a steady state right now right before the maritime Silk Road is even even as factor these states already trading with with one another so we can look at that and get a sense of what is already economically viable and where are there areas in places where there could potentially be improvement and from there looking at things in that way we can set out some criteria and there's three criteria that we looked at which I'll talk about and those can really be used to understand any new port construction project in the region right it doesn't just have to be associated with the maritime Silk Road these criteria can be used for any support construction project and then we applied them on top of the cases that are part of the report itself so the first factor the most obvious factor really when you're looking at this is is location right if you look at a map of the world and you're looking at trade networks in the world you probably want to plop down the new port that you're going to build along a major trade route that makes sense you can tap into existing trade flows and that's something that you can capitalize on if you are seeking economic economic motives with your new port construction the the important thing to keep in mind here right is that these are point-to-point logistics so there are these established routes that are designed to reduce costs right and reduced time from from origin to destination so new ports if they are seeking to be economically viable should be situated in a lot of cases along these major trading routes the the problem with that is that these routes have existed for a very long time long long before the maritime Silk Road was ever something that anyone was talking about so in most cases there are already ports along these different trade paths so what this means is you have to start looking at new poor construction in proximity to an existing or an established port and try to understand what a new port could potentially offer right does the establish port in the general vicinity does it have capacity issues is it inefficient are there logistical headaches and professionally safety issues for traffic moving through that space and if the answer to some of those questions is the affirmative then you can say okay well maybe this new port does make some sense maybe it is offering a new service or new types of traffic can move through this area we we focused looking at that factor at Sri Lanka and John's going to talk about that in a little bit more detail but the Porta Colombo which is very close to Hemant Oda obviously is one of the busiest container shipping ports in the world but is expanded its capacity to keep pace with traffic moving through the area so the economic motivations for Hemant Oda aren't exactly clear there might be other factors at play and that's one of the things we discussed in detail in the report and in John expands pawn in his section there's also the possibility that a new port isn't situated right along a new major maritime trade route and while that oftentimes raises suspicion especially if you look at some of the literature that's already been written about the maritime Silk Road there could still be economic motives at play there the idea being that you know ships don't just go from point A to point B right they're stopping at all these different points along the way especially on longer journeys in a particular port on that path you know a node in that network could suffer from the inefficiency issues that I mentioned just a second ago or it could be maybe not in the best position as far as a long sort of trade path is concerned so a new port construction project further afield from a major trade line could in time serve to redirect some level of trade flows for a particular type of traffic so again a situation that has an some literature raise concern there could still be economic factors at play in that last factor that really ties in with the sort of third component that we look at which Mike mentioned and I know John will talk about and a little bit more detail and that is how do these projects tie in with other infrastructure right it's fine to focus on the maritime space that's what we're doing doing with this report but as far as I'm aware most people don't live on the sea right they don't live on the ocean the goods that are entering into those ports they need to be offloaded they need to put on trucks they need to be put on trains need to be carried altom Utley to consumers so any new port construction project really any port anywhere needs to be tied in with the necessary land-based infrastructure to carry those goods to their real final destination and that is something that we also evaluated as far as the economic criteria are concerned the combination of a new port construction with the necessary in land-based infrastructure to support that new port could over time serve a long-term economic goal of servicing and developing an underprivileged area and a lot of these ports that we're going to talk about today and a lot of the ports associated with the maritime Silk Road are being developed in places that are historically underdeveloped so what would that what might that look like I'll give a sort of a quick example of that if you think about Goods traveling all the way from Europe to inland China I mean think about the journey that they're gonna have to go to going down and around Africa across the Indian Ocean through the Strait of Malacca across the South China Sea into Chinese ports and then they're traveling another several hundred miles on rail or on roads to get to their final destination so if you're looking to develop provinces in inland China it might make sense to fund a new port project somewhere in South Asia in Myanmar for instance which which Gregg will talk about so that Goods can enter the continent at an earlier point and if the appropriate land-based infrastructure is there it can carry those Goods say to their final destination save several thousand miles off the journey reducing costs and helping to serve the long-term development of the region so those in very quick and I know I sort of rushed through them but I don't want to bore everyone at 8:30 in the morning with methodology are really the three sort of factors that we look at we look at location in that location as there are two factors how close is a new port to an existing trade route how close is it to an established port and if it is close to an established port how does it compare as far as the services that it could offer and then the last is how does this new poor construction project tie in with other infrastructure to carry goods once they are now on land so for the Overland path and those three factors I think come up in all the case studies that we discussed to varying degrees there is obviously a lot more nuance in there and I hope that we can discuss that during the QA and there are quite obviously other factors that are applied but we had time constraints with what we were working on so we really only focused in on those three great let's look at the first case study honeyBun Tata and Sri Lanka thank you so I think what's really fascinating about the the ham in toda case is you know no one in Sri Lanka set out to build a port that they would then give control of to another country and yet that's exactly what happened and so I think we have to step back and ask why did that happen how did it happen and in this of the cases we looked at is probably the one that's the furthest along so perhaps it provides some some warning signs or some some lessons that might be applied to other both ongoing projects and you know projects that have you to be announced so I think the the one of the first takeaways is that this was something that was really driven by at least on the Sri Lankan side by a desire to develop we're talking about a port on the southern the southern edge of Sri Lanka and a district that has been historically very underdeveloped an area that was hit by a tsunami and you know this project was seen as as a game-changer for that region and as Matthew mentioned you know often many of the same things that make a project attractive as a game-changer quote-unquote for an underdeveloped area also pose challenges because you know those are areas that are not as well integrated with broader infrastructure networks and so that's something that the the Hammond todah case definitely illustrates as well I think another another important lesson is that there was really a lack of alternatives as the Sri Lankan government was considering who they would partner with to to make this project possible you know I think they did approach other potential sources of funding but at the end of the day they were they were negotiating with you know they were looking at one option or not doing this project at all and I think that ended pushing them toward accepting project terms that were not necessarily as competitive as they might have been otherwise so accepting higher interest rates and project conditions that project terms that they might have not accepted were a more sort of competitive process or if more more outside more outside funders were interested in pursuing a project another really important part here is that this became this project became a political imperative it's really you know it's very identified with not the current government in Sri Lanka but the previous government but it actually began even before that government this is a project that in 2002 was identified as being part of Sri Lanka's Development Plan and so it at least conceptually has existed for quite a while but you need someone to really champion a project like that and so the champion was the last government that had the head of the last government in Sri Lanka whose political support his base came from the area in which this port was going to be built and so you see evidence of those dynamics not only with this one port but with a whole host of projects many of them in that district many of them Chinese financed and also bearing the name of the former president and so I think this is another another dimension that Matthew and I explored and the economic look at this is that you know often the the most economically viable projects might not be building a new port they might be expanding an existing port but that doesn't often carry the same political payoff as building a new port and having you know the ribbon-cutting ceremony it's just the incentives are not quite the same you know one one last point that I'll make is that I think although this project was initially floated as part of a development plan it was never really integrated into becoming part of a development strategy and so you know it was pursued almost you know not quite in isolation but almost without regard to other projects that were underway at the same time and so that's important because at the time that Hammond tota was becoming a reality Sri Lanka was taking on loans and pursuing other projects and as you know know no single projects you know got their debt levels to 95 percent of government revenue but you know after a while after each project was too attractive to walk away from those levels rose and they you know they found themselves in a difficult position unable to pay back the the loan that they had taken and then reentering negotiations which alternate resulted in them giving equity and a 99 year lease of that port and so I think that that this is you know really a reminder that these individual projects have to be put into a larger development framework in which you're looking at overall debt levels you're looking at other you know related projects really as Hammett Oda was was going along and as the construction was happening there there were plans and activities underway to expand the capacity at the Port of Colombo and so really you know the the toughest Hemant Otis toughest competition came from within Sri Lanka economically so you know a broader a broader economic development strategy might have tried to reconcile and avoid some of those tensions so I think those are all those are important lessons I think that they're not unique necessarily to Hammond soda and so I think there are certainly worth learning from and watching in future cases thank you I think John gets the prize for the best title which is game of loans how China bought Hanuman Tata and the 99 year lease giving control of the port to China is ironically and deliciously evocative of the British imperial strategies that led to control of Hong Kong I'm wondering how many Chinese involved had that in the back of their mind as they created this quasi colonial approach to Sri Lanka we'll come back to some of these and unpack them a bit more let's go further east now to Gregg Myanmar kelp you it's interesting these are Sri Lanka the the coast of Burma llamada these are all locations as I think Kendra might explain that are also evocative of what the Royal Navy and the Royal Australian Navy and the US Navy dealt with in World War one and what we're trying to prevent Indian Ocean from becoming hostile territory so the geography we're talking about has a more than hundred year history in terms of how navies have thought about access to and control of the Indian Ocean right over to me on mark thanks and apologies for running at the last second I had a clever quip about me relying on on the MARC train and DC infrastructure but but Mike stole it from me so jump into chalk view you know one of the things that we have to recognize about Chuck view is it's one of these projects that certainly predates the Bri my number of years the idea that predates it by quite a while the original mo used for what is going to develop into the the Industrial Zone on an SEC and the deepwater port were inked and I think 2009 and they've had kind of been canceled and renegotiated over and over but since then they've been lumped into the larger umbrella of the Bri as a lot of these Chinese projects has throughout Southeast Asia it shares some of the same rationales as other projects but it has its own unique drivers so I think it's important to recognize so when we when we worry about potential military uses when we worry about you know economic rationales we have to remember that that there are drivers in the case of chalk - that don't necessarily apply elsewhere one of those as Matthew into that it started interrupts we we didn't have a map up apologies for that we're going to put a map up this is not an evacuation situation well I'm sorry I assume everybody's intimately familiar with where chalk piu is and yeah sure well so while that warms up the the two rationales that I think really drove the Chinese before there was a PRI to start looking at these projects in chalk view were one the ongoing perhaps inflated concern about the Malacca dilemma as the Chinese strategic tank result and call it the idea that an adversary the US or others could you know close the Malacca Strait and thereby cut off vital Chinese energy imports as well as commercial imports in case of a conflict and so the first thing that when in chalk view was the terminal for all flowed in oil and gas and then the Shui gas pipelines which now run from chalk piu over the border and then din could Ming where they're refined the oil pipeline just opened last year the gas pipeline opened a few years ago neither of them are going to prevent Chinese over depends on the Malacca Strait but they're not inconsiderable these do depends on number if you look at maybe 10% at maximum capacity of China this national oil demand each year could be provided by these pipelines so they certainly have a strategic value that is not reliant on the idea that the Chinese might use chompoo for military purposes or anything else the other economic rationale that I I think makes perfect sense and as matthew alluded to is the idea of shortening routes for commercial traffic to Southwest China so right now if you want to ship goods to Kunming really the way you do it is if you're coming from Europe you ship it through the Suez Canal across the Indian Ocean through the Makkah story all the way up to ports on the Chinese East Coast or the south coast and then take it by railroad hundreds miles into the hinterland as you imagine that is wildly expensive it's certainly not efficient if you build a large container port that Chuck view and you build a road and rail network over the border into kunming then all of a sudden you've taken what is thousands of miles and shaved it down to a few hundred five six hundred miles that has real potential for the development of China's Southwest provinces and it is a larger part of China's strategy in Southeast Asia to allow connectivity through other places Thailand Laos Vietnam to drive development of Yunnan in particular but all of of western China and so when we talk about chalk field let's not you know lose sight of the forest retreat here there are certainly concerns that are shared by other bi projects but these two overriding Chinese strategic goals predate the Bri and in a sense they make sense I mean certainly the malacca de level we might argue is overblown but in the chinese educated mindset this is a long-standing fear and it makes sense as they would look to blunt the impact of any closure of the strait now that said there are real concerns I think on on the side of outside powers and certainly on the side of the Myanmar about this project the first thing it's talked about most often is the idea that like Djibouti or potentially Gwadar or now we hear concerns about the Maldives that the Chinese could seek to leverage chalk view the commercial port that they hope to build into an eventual spot for Chinese military presence I think in this case that is premature at best I mean Burmese are famously they're not interested in foreign boots on on their soil let's say and the the Constitution that was written in 2008 and proven 2010 specifically bans for insurance from Burmese soil so the idea that you're going to have a permit or even a rotational Chinese military presence in chalk queue seems unlikely to me now that doesn't mean that the Chinese can't make port calls and use it for logistics or resupply or any of these things but that's that's not exactly the same thing and it's certainly not a concern I think it calls for immediate concern the bigger concerns from from our side and I think Bernie side is as with Hanuman tota that chalk view could turn into a debt trap so the Chinese have already signed the MOU for dredging a deep water port that the the figures i've seen are 7.3 billion dollars for the total price of the project the chinese have seventy percent of that which was negotiated down from 80 the government of myanmar has 15 and then a consortium where companies have the other 15 backed by by the me omar government so you put all that together that's about 2 billion dollars that the government of Myanmar is on the hook for if they split the joining special economic zone 5050 which they might do that raises the total investment required by the government Myanmar to about three billion dollars which as you and soon token Stinson senators pointed out is about 5% of mallomars GDP the only way you can imagine the Myanmar government paying for that is to take out Chinese loans we do this away then a lot of Bri projects get funded and as we've often seen Chinese loads are not necessarily userís but they usually come with harsher interest rates and terms and say ADB or world bank loans and so down the line this in combination with other projects and llamar could very well lead to an undue amount of economic leverage on the part of China over the government Myanmar especially as other partners Europe the u.s. not so much Japan yet begin to pull back and reconsider sanctions amid the ongoing ethnic cleansing and in Rakhine State and concerns about democratization the other concern is whether or not there's actually going to be any economic benefit to Myanmar because ultimately the port as the the planned commercial port as we've seen with the oil gas pipelines are to feed China it is to turn shock you into a way station for the transport of goods to the Chinese interior it's not going to create a whole lot of Burmese jobs it's not going to create a whole lot of benefit to the memoir economy what helps Myanmar is the adjoining special economic zone the idea that the Chinese are going to help manage this large industrial zone that'll you know create a local manufacturing IT sectors what-have-you and really bring jobs to the country the problem is that this is the Chuck view special economic zone if it actually gets off the ground is going to be last in a three-way race because you already have an operating special economic zone sales again gone run by the the Japanese at kilowatt and you had the large da Way project which has been moving in fits and starts for years now Co managed by the ties and the Japanese both of those are much closer to the existing commercial center of the country in Yangon so if you're a foreign company and you're looking at plopping a factory in Myanmar and you're looking to three special economic zones with relatively the same incentives why would you build one out in the middle of the hinterland in Rakhine State instead of building one a few miles outside of the capital that's the concern that you start hearing in Myanmar now that are we going to end up with you know basically a giant parking lot next to this port funded by China with no foreign companies other than a handful of Chinese s so ease willing to invest and so I'll wrap there um excellent thank you so you can see already that in each of these case studies there are plausible economic explanations there are more direct geopolitical security explanations but they're also as John pointed out diplomatic or political influence factors the the naming of the Hanuman tota port after the previous President and so forth so it's so it's a complicated stew and the implications are still not entirely clear potential implications are clear but the actual implications are not entirely clear and it's going to require some vigilance but it's also going to require a pretty diverse toolkit and a coalition of countries they care about the economic development security of this region and the four that are most prepared in terms of national power navies and interests are the members of the quad so Andrew Shearer actually has been working on the quad he's seen it rise die again come back from the dead and so without historical perspective and also the geopolitical side let's turn to Andrew for what some of the major maritime a lot of think and do about this thanks Mike and good morning everyone the the quad or the the US Japan India Australia Group really dates back to 2004 when those countries responded within a matter of 24 or 36 hours to the Boxing Day tsunami in the region and the key to why that group came together then I think lies in complimentary geography among the four countries capability and in particular advanced maritime power that those countries could bring bring to bear but also a habit of working together at least in the sort of US Japan Australia context increasingly with India but also values in the sense that those countries have a commitment to maintaining what is now coined the the free and open Indo Pacific and a commitment to delivering public goods if you like in that region but as Mike hinted when you when you look at this map I think what's really interesting is that these trade routes go back thousands of years so what we're talking about here is not not new there's nothing new Under the Sun and the fashion ability of the Indian Ocean is one of these things that adds and flows and it's it's back in fashion but when you think about the Indian Ocean it's really been the the absolute fulcrum of global geopolitics at least since Vasco de Gama and as Mike said you know during the Napoleonic Wars there was a lot of competition and activity in this region during first the First World War that the supply lines through the Indian Ocean were crucial again in the Second World War for the supply of the British fighting in the Mediterranean the resupply of Russia the lend-lease supplies I think about 40% of them came through the Indian Ocean and keeping China in the war through through Burma so this is an absolutely crucial region but there's not much new the revival of the quad of course in 2012 sorry in November 2017 followed a hiatus from 2008 when Kevin Rudd pulled Australia out of the court and that along with the fact that the and we talked about this in the report the fact that the readouts from the four chord countries are quite different of the same meeting that the history of the court and those different readouts and the sort of divergences and emissions might tend to feed any skepticism you have about the durability of the court as a as a longer-term institution if you like and I think there is some room for skepticism because the chord has to really prove itself and and get itself established the four members of the quad have somewhat different perspectives and interests of course and again that's to do with their different geography their different threat perceptions and also different dynamics in each of their relationships with China but if you look at the United States for example if you read the national security strategy the national defense strategy I think the quad and the quad as a vehicle for responding to the Maritimes and Silk Road initiative clearly fits within that broader construct of us-china strategic competition for Japan it's different again Japan of course is more of a frontline state when it comes to dealing with increasing maritime assertiveness by China particularly in the East China Sea but also Japan has a long-standing interest in the security of the sea lines sea lanes running through through this region of course and a broader interest in the rules based order and current challenges to that order Australia is interesting and here the to Australia is obviously been the weak link of the court hopefully that's behind us but Australia I think clearly has had a more ambivalent relationship with China and attitude to China than some of the other countries Australia's got a lot more strategic depth for example than Japan and the Australia China economic relationship at least has been less complicated than say the us-china economic relationship and for all of those reasons Australia's perhaps trodden a bit more cautiously but I think if you look at what's happening now with Australia both in terms of reports of Chinese political interference in Australia pushed back by the Australian government and a cooling in the diplomatic relationship and then just last week reports that China might be looking to establish a military base in Vanuatu about 2,000 miles from Australia lots of excitement and I think a sense in the Australian national security community of convergence with perceptions in in the other chord countries and then finally India which was the most reluctant country to sort of get the quadrilateral band back on the road feeling I think the risk of encirclement encirclement by the the maritime Silk Road dimension of of the belt and Road initiative but also the overland aspect of the initiative and and that that concern of course is fed by China's support for Pakistan and that very difficult relationship for India and the growing presence of the PLA in the Indian Ocean on any given day there are four or five PLA naval vessels in the Indian Ocean that's not a lot of ships in a very large body of water but there are now something like almost a hundred PLA naval vessels with the capability to range far into the Indian Ocean and so if you look at the trend there and the potential if you like for China if it wants to flood the zone India is becoming more concerned about maintaining the balance of power and stability in that region so looking at where the court goes how it can contribute I think there are some kind of guidelines that we should bear in mind I think key to the success of the quad will be to keep it informal and keep it focused very much on functional cooperation the quadrilateral is not going to be an Asian NATO anytime soon and it shouldn't shouldn't pretend to be I think it's important that the quad focuses on a robust security agenda and if you look at the issues that the first reconvene meeting focused on there were things like the rules-based order in Asia freedom of navigation and overflight respect for international law connectivity which has been talked about a lot here obviously maritime security non-proliferation and terrorism so there's the basis there of a pretty robust security agenda it needs to be backed up by increasing exercises the Malabar exercise has been the sort of center point there but there will be there will be more than that and building interoperability among these four countries so that they can successfully shape the maritime environment in this region and if necessary deter potential adversaries but a security agenda is not going to be enough in itself there needs to be a robust economic pillar the scope for these countries to work together on infrastructure and connectivity not necessarily in the way that China's doing it with massive concessional loans but by bringing our approach to infrastructure public sector private sector partnerships concessional finance and our standards for doing these projects openness accountability transparency and so on and coming up with an attractive counter proposition to some of the downsides that have been talked about today here from China's activity energies in other area there are two major energy exporters in the court and there are two massive consumers of energy those four countries have huge interest in maintaining market-based energy models in the region and there's the whole sort of online economy intellectual property protection data protection and so on where they could work together and then diplomatic coordination in the region and globally coordinating their development assistance activities much better in their capacity-building activities in the region coming up with approaches to countering coercion each time a country gets put in the sort of doghouse economically I'm very struck by the fact that they're basically left hanging out there to deal with it themselves seems to me that we should be thinking more about how we can support other countries that are that are put in that in that position and then just to other sort of principles that I think should guide the chord as it moves forward one is just proceeding step-by-step so not setting hugely ambitious goals and then being seen to spectacularly fail to achieve them I think that's really important and supporting India as the strategic lead in the Indian Ocean part of the indo-pacific I think is hugely important and there are lots of ways that the other three countries can do that and this can be if you like an economy of force effort for the United States Japan and Australia with with India maintaining a strong military leader strong diplomatic lead in the region I'll leave it there thank you so Amy the in between the larger maritime democracies that Andrews discussed the members of the quad and China are all of these smaller littoral states that want the money but don't want neo-colonialism don't have a even with an Aussie and a common view what's the zeitgeist the world view can they handle this are they organized internally or regionally to resist undue strategic influence or are they just lying vulnerable to to more malicious intent well first of all thank you for inviting me this was a really terrific report so I'm happy to be associated with it without doing any work on it but the first the first point to make of course is that ASEAN wants infrastructure and needs infrastructure the the Asian Development Bank has done a couple of studies on this and that these numbers are often cited that over the next 15 years ASEAN infrastructure needs for it to maintain its current levels of economic growth are in the range of 2.3 to 2.8 billion dollars which works out to about 200 million dollars a year of infrastructure needs and just for a comparative point the AIB is only capitalized up to 100 million so clearly the needs are large and the existing taking away China's belt and road initiative in the maritime Silk Road the other existing sources are limited so pretty much every country in the region welcomes China's infrastructure investment its overtures that it's made through the maritime Silk Road of course Xi Jinping traveled to Jakarta in October 2013 to launch the maritime Silk Road the the first half of the Belton Road initiative and you know if she Jean ping has put a lot of focus on President jokowi of Indonesia I think he really sees Indonesia as a critically important partner on the maritime Silk Road and jokowi has been willing to play ball and has has given a lot of support for the maritime Silk Road there's also been a lot of emphasis from Beijing on in addition to Indonesia on Malaysia and and Myanmar as greg's report has made clear and of course on the mainland side Cambodia Laos Thailand there's been a lot of focus from China on building up the transportation corridors the rails and roads that connect these countries to each other and to China so countries in the region welcome infrastructure these these the rulers of these countries whether they're less democratic rulers and one-party states or or rulers that come from more democratic societies they do have you know for them to retain their legitimacy the countries in this region have very much tied the legitimacy of the of the ruling class to delivering economic growth and so if you need infrastructure and whether you need to win an election or just maintain a reasonable degree of popular support in your country you're gonna have it's gonna be very hard to turn down easy money this is a point that John Hillman is made very well I think in a number of his writings now of course they have strategic concerns as well these are fiercely independent nationalistic countries that are jealous of their sovereignty but these but the true they're gonna examine these trade offs through their own sort of domestic political lenses but Mike you asked me specifically is ASEAN unified in its response and the answer here is pretty much know ASEAN has been trying to take a unified approach to infrastructure development it calls it connectivity and it includes not just hard infrastructure but what we call soft infrastructure as well the kinds of you know people-to-people ties and technology and other communications systems other kinds of things that are also important for connectivity ASEAN has been putting a tremendous amount of focus on connectivity it developed a an ASEAN master plan of connectivity in 2010 that looks out till to 2025 it prioritizes particular projects especially projects that link countries together and there's been a real focus on trying to bridge maritime and mainland Asia through a variety of these connectivity projects so ASEAN has been focused on connectivity and has tried to prioritize and come up with a relatively unified approach and yet when XI Jinping launched the one belt one Road initiative ASEAN did not come up with any kind of statement or unified approach to what was then called now called Bri so there's some passing reference to synergy between a bore and the osteon master plan of connectivity in some of the communique s that have come out between China Aussie on meetings and the big belt and Road summit that was held in Beijing but they're really just passing references there's been no attempt by ASEAN to take a unified coherent approach to deal with China as a region instead countries have been dealing bilaterally with China president jokowi has been talking to teaching paying about various projects as has Prime Minister Najib and all the way down the line so China has taken a very bilateral approach in these countries have have have been sort of comfortable with that the the the final thing I'll say is that you know there I think there is a with the way these countries view this is a little bit different among mainland countries and maritime countries because in the mainland Southeast Asian countries you know there is a concern about over dependence on China because China has been so actively engaged in economic activity especially in countries like Cambodia and Laos and increasingly Thailand and Myanmar and all of these countries at some level have concerns about becoming too dependent on China and what that would mean for their independence and their own national goals and they're also very focused on the Mekong River and issues around the Mekong River the need for transnational coordination on a number of issues related to the river and and there and just having shared boundaries and China has really stepped in at a time that unfortunately the United States and others have not found a way to really maintain a strong effort in trying to promote coordination and cooperation in the Mekong the United States had launched a Lower Mekong initiative it never really lived up to its potential China has stepped in in a really big way through its long kong Mekong initiative and when I travel around those countries in the region I hear a lot of concern about where that is headed then of course you have the maritime countries that have been very focused on China's behavior in the South China Sea and many of them have disputes with China in the South China Sea but even countries like Indonesia that don't technically say that they have a dispute they're not technically claimant states they have a lot of disagreements with China about China's behavior and a lot of concerns about China's assertiveness so they look at China through a very different a very sharp lens they're deeply worried of China strategic motivations and intentions and so you know I think all of these countries are really trying to have their cake and eat it to of getting projects funded that are important to them particularly the rulers that are either seeking reelection or just seeking to maintain popular support while being clear-eyed about China and I think they are looking at cases like Sri Lanka and as a as as something to avoid and I think we are seeing some evidence that some of these countries are bargaining pretty hard with China to try to make sure that they don't fall into that kind of debt trap thank you so these case studies help to unpack some of these questions there are others we didn't do for example Vanuatu which Andrew mentioned wasn't on our radar when we started this project and now you have the Australian Prime Minister warning China that it would be a red line for Australia to have a military base there which clearly means the Australian DF at our intelligence services are seeing clear evidence of Chinese intentions to build a military base Malcolm Turnbull wouldn't wouldn't say something publicly otherwise and elsewhere in the South Pacific you have not as part of the maritime Silk Road nominally but you have Chinese infrastructure projects coincidentally going into exactly the places where the Defense Department plans on building new facilities for the Marines in the Air Force as part of the so-called Guam lay down an effort to distribute forces away from Okinawa and you know if you talk to the Pacific Command exactly where the Air Force divert runway is going to go or the cores new landing facility there's suddenly a Chinese company offering to build a thousand room casino on exactly that land so there's a broader pattern and then if you go to the West to Djibouti China has a base there for counter-piracy operations like the US like Japan there are reports I think quite credible reports that the Chinese military forces are violating their agreement with the government by engaging in live-fire exercises and other reports that Chinese firms are looking at buying the commercial port at Djibouti away from Dubai World ports which would give Beijing control of the larger infrastructure of energy water and so forth so we've only just kind of picked a couple of the examples it's a broader geographic story as Andrew suggested by bringing up Vanuatu which really wasn't on our radar screen when we started so who knows where the next case study might come up the I don't know if any of you have seen this new Chinese movie wolf warrior or wolf warrior - I saw it on the plane back from Beijing it's a kind of very popular movie in China it's kind of a Rambo like movie have you seen it yeah it's it's great if you like action shoot em up movies on the airplane I it's great and but the and it's basically a Rambo type movie where a Chinese infrastructure project is under assault in a in a civil war and and so this Rambo like Chinese action figure comes in and rescues everybody but the opening and closing scenes are the most striking the opening scene is a u.s. Navy led task force I think there's an Australian frigate maybe a Japanese destroyer fleeing and going into port is a Chinese PLA Navy task force steaming you know at 25 knots or whatever and then the last scene is a message which says Chinese citizens around the world should know that wherever they are the PLA is ready to rescue them should they be in danger it's a pretty pretty bold statement of of popular support in China or popular expectations in China that the PLA will be able to come in rescue them anywhere and of course China has had to do non-combatant evacuation operations in Libya and elsewhere so that's another dimension of this which coincides with the the the incentives we've talked about I wanted to ask you know there was an interesting point that came out of Greg's paper and discussion that there may be some economic logic to the to the pronouncing it wrong that chop you port facility if it's connected to energy and other lines going to China and so you know using Matthew's template that would be economically viable so the question is would it be good so I wanted I want to ask first Matthew and then and then Greg and and and maybe John for this first round if if these ports which are isolated in many ways are actually just the beginning of a whole new network of infrastructure which might be more economically viable is that a good thing or is that going to create even more problems and when we start with you Matthew and see what your reaction is you know I think that there's a sort of follow-up question to answer a question but the question is you know good for whom right if if you're talking about development of inland Chinese provinces looking at the Myanmar case you could say that it's good for that particular outcome and there could be knock-on effects for that right as development if it goes smoothly in an area that can improve can improve other conditions for the people in the area can improve safety in the area so there are benefits there my the concern that I would raise with really any of these projects and if they are connected with infrastructure or not it's kind of a secondary component is there are economic motives and we lay out some of these economic motives but it is not clear to me at least and other people might have other views on this if those economic motives are going to in ninety percent of the cases just support China right whether or not it's going to support broader connectivity between the other states that are going to be touched by the maritime Silk Road Amy mentioned this you know and I think and I think Andrew mention it as well you know South and Southeast Asia is particularly not well connected to one another right there is not a lot of intra-regional trade between between these economies and a project that's economically motivated to build up ports in that region and elsewhere could serve to boost connectivity between those states but as it stands you know I think if you're looking at it critically yes there's economic drivers at play those economic drivers may be good for China those economic drivers may serve other political and strategic interests as well right you know if we build up a port and has a deep channel that's that's great for large tankers that need to come in that's also great for a large military vessels that might also need to service themselves at that port so we I'm surprised that no one actually used the phrase yet it's probably good that they haven't yet but oftentimes we talk about dual use facilities and dual use capacity at these port projects and if you're a Chinese strategist and you're thinking hey we're gonna invest heavily in this port there are some economic benefits it would be silly for you not to also think about what the potential strategic and military implications are for those port buildups as well and I think once you start thinking about all those follow-ons and all those Nikon's it becomes a little bit less clear what the benefits are what the good as Mike put could be for other countries in the region that there aren't China so Greg you raised this issue is there a scenario where the development of infrastructure from Chuck your port up to China for energy in particular their scenario where that benefits the Myanmar economy and the people of Myanmar and is it the kind of thing that the rest of us could start flagging and saying this would be a checklist of what would make these investments not just good for China's military access and energy access but make it good for Laos gan Mar Sri Lanka and in the memoir case what would that be is it is it is there a scenario where this is actually we could you think of things that would they would make this a much more credible and viable case for the people in Yama and the economy of nama yeah so there I think it's it's helpful to put these projects on a spectrum you know I wanted maybe you have projects that seem to only benefit China or in hmmm Toto don't seem to benefit anybody and then on the air side you have have projects that that actually are creating economic incentives in the countries that make perfect sense and we shouldn't you know knee-jerk fashion react to all Chinese investment as if there's it's it's a stalking horse of some kind in Myanmar you know when the Shui gas pipelines first opened 2013 maybe it's 2014 you know the vast majority of that gas is going to kun Ming the Chinese were the ones who were using the gas but they did build a plant for natural gas in chalk cue some of it's being used in Myanmar you could imagine that kind of sharing helping us the sec builds up which was kind of the idea the biggest problems with the project aside from the financing which i think we should all be deeply concerned about us as we should be with all the bri projects is one transparency issues you know who is benefiting in the case of Myanmar as in the case of a lot of Southeast Asia these projects are being done between Chinese kazooie's and you know military-run s so easy to Myanmar it's unclear how much of the benefits going to go to the overall economy to with local communities you know the Shui gas pipelines run through deeply troubled regions on the border through areas controlled by the kitchen among others there were deep concerns among local communities that they were being steamrolled and that the Showa gas pipelines could actually help become a trigger for future conflict land rights are a big issue and one of the things I couldn't cover in the paper because it opens up a whole different kind of warrant that we should remember is that the entire Muslim community of choc pew was run out of town in 2012 during into communal violence and so a large amount of the land being used for the sec among others might very well be feel and that was you know the result of folks being driven out by their neighbors and a military enforce campaign and we've seen similar things over land rights and in areas like the mone wall copper mine let the dong which led to a couple years long a series of protests against the Chinese investor the myths own damn issues of land rights was a big concern and helped lead to the cancellation and so there are a whole bunch of issues of transparency of equity of land rights of who actually benefits that we're not seeing grappled very well if because the way the Chinese is investing in mainland Southeast Asia is usually the Chinese government health broker a deal between the Chinese SOE and a either a major you know business conglomerate that's well-connected or an SOE in the country it's all done with you know behind closed doors often the terms are unclear even after the project signed and all the local villagers are kind of told don't worry this will work out for you there's not very much recourse if it doesn't but don't worry trust us it'll work out for you you know it's you you unearth another really interesting dimension to this which is in in number right now of the 11 ethnic group conflicts there are I think ten perhaps eleven ceasefires there are no resolutions and part of the reason is the underlying question of control of natural resources and economic benefits so what you're pointing to actually makes mallomars future or less certain and creates potential for instability that would actually be against China's interests in addition to everyone else's John how would you answer this question for the Sri Lanka case sure so I think I think both what Gregg has said what Matthew is it gets to this broader point about if we're looking at the economic value of these projects we definitely have to do more than just count cargo ships right and so I think you know there's a whole host of criteria you have to look at you have to look at really from the very beginning who is getting an opportunity to participate in constructing these projects we have a database of about 2,300 infrastructure projects that with the reconnecting Asia project and something we did is we compared about a hundred Chinese funded projects versus 180 B and World Bank funded projects what we found is that in the in the bucket if the Chinese funded projects perhaps not surprisingly 90% of the contractors were Chinese in the World Bank in ADB projects it was around 30 percent so you know Chinese companies are still very competitive and more open processes but that's a big disparity and a lot of these projects including the port at Hammond tota are promised as part of the sales pitch as development projects is that they're going to benefit people who you know local workers local companies and I think there's there's evidence that those benefits are not always delivered when I visited Hammond soda in January there was a group of about 70 former workers you know on him now unemployed standing outside the Port Authority office protesting and certainly you know the the promises that had been made initially with the project or that not only would they be employed but many others would too and so I think that's that's one dimension of this you know there's a whole bunch of other components I think you have to look at both not only who's participating in the projects but are these projects meeting you know environmental and social safeguards so that's you know a question for the miramar case for example and you know are the right procurement practices being used all of those it's a very complicated set of issues but I think all of those make up part of this question of economic value let me I want to fly to issues for Andrew and Amy and try to get a quick answer so we can get some questions and comments from the audience the first one is going the other way not the economic indicators but the military indicators what's the red line so clearly a military base in Vanuatu was a red line is militarization or dual use of Gwadar port in Pakistan or Chuck view a red line what would it be and you know is the quad for example capable of deterring China from moving towards a more explicitly military exploitation of these bases and then the other one is and you can answer either or both you know the interesting case with Hambantota is you know the previous government was in my view in Sri Lanka that was suppressing civil society was denying visas to NGOs in other words there was an ideological alignment between the previous previous Srilanka government and Beijing and the very unfavorable terms of the loan from Matata like the loan in allow us in other cases in Bri and MSR was pushed through in a very non transparent process and so there's this potential you know confluence of ideology and influence and the read the countries that are not allowing full debate on these projects that don't have well-functioning civil societies accountability and Free Press they're the ones that are getting these lousy deals and in a way I think it's not an exaggeration to say that Beijing is encouraging that political approach of suppressing civil society not allowing open debate so should we the u.s. the quad be countering this to some extent or trying to shine light on it by supporting civil society is it possible that you know democratic politics will cause a backlash and we won't see more humble Tatas or Lao skills you know there's an ideological or radiational dimension to this - that's pretty important so the military peace and the occasional peace and you can answer either or both or none you know we've been sort of struggling with this project with you know which bits of this and military and which which are commercial and I think what we should really do is take a step back you know if you think about my hon he he talks about maritime power and this is about maritime strategy we tend to fixate a bit on the naval component of that but equally important in his writings is the countries you know commercial fleet its Merchant Navy and this sort of infrastructure and if you think back about the history of American colonialization you know it was about coaling stations for merchant ships but also of course the naval ships you need to protect them and I think what what China's doing here is is it's a maritime strategy it's a maritime play as they perfect anti-access arrangements near home they're gonna they've said this they're going to put more weight on what they call FARC's protection and they're basically building an infrastructure to sustain an increase you know merchant presence around these trade routes but also in time and increased naval presence to be part of presence operations and shaping the way that that countries have done in this region for hundreds of years so you know I think that's what it's about and and I think it is important to be sort of very analytical about which parts of this a really problematic and which parts are myself I don't really care if China wants to sink a whole lot of money into non commercial ventures around here and the other thing I would say about the sort of maritime and Overland parts of this I'm not an economist but my understanding is however many pipelines they build to get gas and oil to China over land it won't cut it they'll need to see they'll always need to see the volumes just don't work overland so I think the maritime piece of this is going to be really important and I think yes it's the answer to the court and the values piece I mean I touched on it briefly but I do think the quad should find its way into an agenda around democracy promotion the rule of law supporting civil society in these countries and encouraging transparency I think that absolutely should be part of the agenda it's another example of why shouldn't just be a military I don't have too much to add I first of all in terms of red lines in the way that ASEAN members see it I mean we we we've seen with the South China Sea the Chinese militarization the building up of these artificial islands and the militarization of them as military outposts did not prove to be a red line for ASEAN so I wouldn't expect there to be clear red lines in terms of neighbors perhaps Cambodia offering access to to Chinese military forces and that may look like it was it's leading towards something looking like a Chinese military base you know ASEAN in its history there's always been a movement there's always been a number of members who have pushed hard Indonesia being one of them to to have a collective agreement not to have any militant foreign military bases and our allies Thailand and the Philippines have long pushed back on that so because of that legacy it's a little difficult for countries like the Philippines or Thailand to complain if Malaysia offers port visits or other things to to Chinese military assets but in terms of Mike your your question about kind of transparency and values and and what the US role should be to promote transparency and shine a light on some of these I mean I think we've seen a number of cases where there has been domestic backlash including in Myanmar the Mia stone dam project it's a case in point we're seeing a lot of criticism in Malaysia of Prime Minister Najib in the projects that he's launched joint development projects he's launched with China and criticism of jokowi and in terms of the rail project from Jakarta to Bandung I think these processes even in countries with less robust civil societies are important and we've seen a number of cases of them the Philippines it's important to note has received a lot of promises from China of infrastructure development but nothing has been launched so it's so so there's been no cases of domestic concern or pushback but we also haven't seen a there haven't been cases to really test yet you know I just think I think on the one hand as Andrew mentioned it there is a role for the United States to play I would say better to play it in conjunction with other allies and partners as Andrew mentioned with the quad - to put forward a the best way of doing development and these infrastructure projects with responsible lending practices and high standards for social and environment and other things I think that's that's a really valuable role to play I would be careful though about taking an approach that seems to reject any Chinese funded infrastructure through Alton Road you know I would I don't think the United States should go around the region lecturing these countries that all of the things they're doing with China are are bad for them and are going to have negative outcomes because that would be seen I think just as our debacle in the AIB case showed that it just looks like the United States is concerned about China doing anything in the region and as I started my remarks with the their Chinese investment in infrastructure is a welcome development in the region there are concerns that these countries have and I think we can help them better understand what the concerns should be by by by having an approach that throws some transparency on this and puts out a better way of doing things perhaps but I do think it's it would be you know we should not make it into into a black and white issue that looks like the United States is just an opposition to anything that China's doing I think that's a very important question about the AIB and the Obama administration's pressure on allies not to join it bad move I think everyone involved now retrospectively agrees was a bad move I would put a sharp edge in answering my own question I think we should be not only sustaining but expanding support for civil society I'm on the board of the Asian foundation so I'm conflicted or bias perhaps but I would go further I think that the at the US Australia other countries should have a rather deliberate information campaign to get information out through social media and others ways not to say Chinese infrastructure investment is all bad Davies point but just to to encourage greater scrutiny then on the red line you know red lines what is a red line I mean you know if you're gonna attack China if they build a military base in Pakistan no of course not but I do think we need a sharper edge there as well and with respect to Gwadar himoto Djibouti I think the quad countries and others NATO Canada should have a well-coordinated and those countries should know that if there are Chinese military facilities built then it will directly affect economic development and other things that countries like Pakistan need from us and Beijing should understand it will lead to a very deliberate increase in what the quad does militarily I think we're at a point where to shape this in a more benign direction we've got to be on our game I don't know if the panel would agree or disagree but I'm gonna ask the audience to ask questions now and make comments and we can react to that so we have microphones and welcome your questions we do have microphones right yeah we'll go here first thanks Mike John Mullen McLarty associates I see very interesting panel for the quad how is the United States organized for that are there designated people in state and and and defense taking the lead on it how is policy being developed so in the in the form that the quad reconvened in it was a foreign ministry layered meeting so state has the lead but separately there's a there's a pattern of military and broader security cooperation where where the Pentagon you know leads in terms of the exercise program for the year and so forth so as usual responsibility is kind of shared and that reflects the fact that this has to be like a whole-of-government enterprise I guess the challenge for the United States is to start fleshing out this free and open Indo Pacific concept which at the moment frankly is a bumper sticker I think it's a good one I think it's a really you know a useful framework but what we need to see from the administration is is flesh on the bones and frankly my perception thus far is that you know there may be some work going on in the bowels of different buildings around Washington DC but people are a little distracted by other things at the moment it it seems and and this is where other members of the quad I think can usefully step up Japan's been doing this feeding in ideas shaping American thinking and policy even the name free and open indo-pacific is Japanese but Australia could do more in that regard I think bring some ideas to the table and hopefully into you too over time thank you hi my name is Angelina my question is with regards to the u.s. playbook and the China playbook because from what it looks like the context is that China pretty much wants the global monopoly game I want to preserve this piece of that piece of that and everything and then he has been beefing up his military for the past 40 years to reinforce that concept but the underlying issue is that China seems to prey on vulnerable economies and there's plenty of human rights issues in the economies in the countries that China goes for and that also goes with my question for Missy right because I mean Philippines itself has so many underlying issues of human rights and all that but and then with regards to the u.s. playbook we've been playing global police for almost like how many decades which our focus have been under global police and then the victor casualties of the u.s. actions in terms of Afghanistan Philippines China have been preying on that terror and then the humanitarian relationships we have with countries I don't think we have really been leveraging on that I mean even altruistically and then my question for rigorous required is that I mean there is also underlying issues because China is like the guy that you don't want to offend because he has the money and US has that tariff I mean put in the tariff issues with China Japan is the third largest economy and they have that biggest 350 or 450 billion trade with China so you wouldn't want to offend China for that third Australia also has already some underlying discrete negotiations where China in terms of treatises and then fourth India has been a victim of the China loans where they find it hard to repay so now they have this experience of the silk trade economy is kind of like we're gonna go through the whole top 20 GPS in the world but your question is about the ability of these countries actually do something given their economic interdependence and let me David when we get a question over here then we'll we'll do the with the yellow tie and then we'll let the panel have a last word before we wrap up thanks I'm William Bri from a DynCorp international Amy mentioned a soft infrastructure maybe because I'm a former diplomat I think China is really playing the long game and their investments are really aimed at developing a web of social cultural economic linguistic familial media ties which in the long run is gonna bring them into the region and push out the West let's do I still have to two comments on that and one's gonna send a little bit academics hopefully it's not boring but that that is that you know we have to be cautious when we're analyzing anything that China is doing in the same way that would be cautious and analyzing the same thing that any states doing so is China expanding and looking to expand its influence across indo-pacific like yes okay that's fine but it's really how they're doing that that matters and that's what we really need to be analyzing there's nothing that's inherently unsettling about any state with the geopolitical gravity of China looking to secure its overseas interests right if those are energy interest as those could be infrastructure interests there's any number of ways you can looking at that and what we do and part of the report and I think we also mentioned on the panel its how those policies and how those interests are really secured right if they are collaborative with other countries in the region if they're supporting civil society in those areas I think that the quad would actually welcome them quite a bit but if they are undermining you know democratic Democratic movements then that can be be an issue in of itself this sort of one other mention as far as a soft our thing is concerned it just raises a bigger question as to whether or not China establishing these cultural and linguistic all ties necessarily means it's a zero-sum game in which Western soft power also can't be a factor in the region I think it's a it's a broader issue and it's a complicated issue and I'm not sure there's necessarily a clear-cut answer to it so to your question you know the the fact that these for the most part recipient countries of these PRI projects me the infrastructure is so bad is exactly what makes them so open to this kind of economic pressure right in the same way that payday loan lenders only work because people desperately need the money and have no other options so the simple answer is obviously the quad needs to provide alternatives the hard part is only one of the four members of the quad actually provide any alternatives Japan is the only country that provides substantial infrastructure investment any of these countries um India does something the notion but when it comes to Southeast Asia the Indians have been building the road to Mandalay since the 1990s and it's not complete yet they had the deal to dredge sittwe the port which is also in record state in your chalk people nothing's happening and so the one thing we can do quite easily I think is get a lot better at talking about what Japan and and to a less degree the rest of us are already doing and you know in the Philippine case the the narrative under the DTA government has become China is a see economic vortex we simply can't escape and yet last year Chinese total investment FDI into the Philippines was less than 30 million dollars Japanese investment was six hundred million dollars he wasn't nothing with 160 China is the number like 11 provider of Oda in in Philippines some like this and so certainly countries need this money but the idea that there are no alternatives is not entirely accurate and then to the the second question which I had some important and I'm already forgetting I'm sorry all right yes so the only thing I would say is I I always kind of cringe at the idea that the Chinese have some infinite vision into the future and they're playing a long game that the rest of us can't comprehend I think that in China's case just like in every nations case China is certainly trying to plan for the future we are all trying to all kind of trying to lay the groundwork for you know our strategic future but trying to make mistakes just like everybody else and you know 20 years ago we were talking about the charm offensive and it was in tatters by the end of the odds by it by 2009 we had the good neighbor policy in 2013 which was in tatters within six months and so yes China right now is certainly ascendant when it comes with soft power in the region but just as often it's not trying to comes into these countries sharp elbowed like a bull in the china shop and and ruins that soft power and so I don't think it is a foregone conclusion that the Chinese are somehow going to you know assert their cultural will throughout Southeast Asia and there's nothing anybody can do about it the question about economic dependence on China I mean yes just about every country in the region has China as its number one or number two trading partner and that includes includes the members of the court I mean the interesting thing though is that despite all of that sort of gravitational pull of the economic level the government's made the decision to reconvene the chord and what does that tell you I think it tells you that even though as I said very briefly those countries have different threat perceptions and a range of different interests there's enough underlying kind of structural concern about China's increasing assertiveness and the the threat frankly that is posed to the liberal order by some of what China's doing to bring those countries together in this way so I would see the the reconvening of the quad as a signal of the sort of underlying current of events and on the question of Chinese soft power just picking up on what Greg said you know China makes mistakes and and I think looking at Australia right now is a really good example of this you know you've got a situation where they've got an incredibly strong economic links China's the equal largest source of migrants to Australia very successful diaspora lots of people-to-people links and yet they can't help kind of overreaching and you know the United Front organization comes in and starts mucking around with Australian politics and that's generated a huge backlash the most significant thing that and in Australia China relations for a long time are the media revelations of very deliberate political interference in Australian politics and that's generating a real concern in Australia that wasn't there previously so I just want to back up what Greg said I don't disagree with anything my colleagues have said I think it's a very interesting question you posed I mean China has hard power and soft power and sharp power which is increasingly being looked at China's use of manipulative kind of non transparent means to affect domestic debates and shape outcomes China has sticky power which is a term coined by Walter Russell Mead in the way that it kind of lures countries into the relationships economic people-to-people ties other things that then that that that seem very attractive and appealing and upfront but end up having very adhesive qualities to the to the transactions so China's got a lot of power now yes China makes mistakes but China also has been learning about many of some of the mistakes that's been making so I wouldn't be too complacent about it and I think what it really should do is have us up our own game on you know the United States and other members of the quad yeah we've got tremendous power and many of those categories - especially soft power and to your point I mean I would just reiterate you know about human rights and civil society I would just reiterate what Mike said that there's still a lot of appeal that the United States and other members of the quad have in terms of models of development and democracy and we should be doubling down on our voicing support for those values and ideals and and doing work where feasible to try to promote stronger civil societies and democratic institutions but what the difference I think is that China has unbelievable focus right now and is putting real resources into it and it does have a long game even if it's not a perfectly worked out coherent strategy it does have a long game and the United States right now is distracted it lacks focus we're doing scoring a lot of own goals were very inwardly focused and not particularly willing to put resources into initiatives some countries in the quad like Japan are stepping up some countries in the quad like Japan and Australia are working with other like-minded countries to do things like launch TPP without us India is stepping up in a sort of in its own way to some degree but the United States is not and I that causes me great concerns I would look at all of China's varieties of power and agree that China has vulnerabilities and will make mistakes but I wouldn't be complacent I would use that to up our own game so I think I think it's a great it's a great point to try to think through you know what are the shorter term implications of this versus some of the longer ones and I think at least on the infrastructure and you know there's there's a lot going on that that could have some longer-term risks and so I think you know these these projects are incredibly complicated you know even in the best business environments they're usually late they're usually over cost they usually don't deliver as many benefits as they're promised and China is operating some pretty difficult places and so I think it is possible and in fact we should expect that some of these projects will not work out as to how many though I you know I can't say but there's there's certainly I think some risk that China has taken on that that could come back later on the political payoff that was already apparent I think that's clear you know there's there are representatives from 110 countries and international organizations that went to the Beldon road forum last year and I think country and about 70 or so countries that have signed up to the Belden Road now signing up is one thing and actually you know getting benefits from it is another thing but I think that it speaks to the fact that this is an initiative that has a political appeal in large part because it's a positive economic vision and it's getting people to sign on to it because development is often the number one priority for many of you country's so I think the best US response though isn't you know opposed opposed the Belton Road at every turn but you know put forward our own positive economic vision and so if that's the indo-pacific you know free and open ended Pacific that's great the Belton road goes other places too but I think that's probably the most important area and I think the Belton Road it's more than infrastructure right it does include trade agreements the u.s. the u.s. approach the US response its own vision I think should be broader as well I think there is there should be no doubt that that China has a strategy a long-term strategy Xi Jinping explains it and it clearly has zero some dimensions for the US and Australia and Japan it clearly has military dimensions but it also has economic benefits for some of the countries in the region as we've heard but if you think about it two years ago three years ago we were debating the a IIb then there was a board then there was Belton Road now there's New Silk Road then it's maritime Silk Road Beijing is making this up to a large extent as they go along and I think we have been a little bit complacent and sometimes stupid but the fact is we and the countries who are learning from what happened to Sri Lanka and Laos about these debt traps are gonna are gonna learn and then the Chinese are gonna learn it's going to be an unfolding process and with this modest report we wanted to shed more light on it we're doing that with our amti reconnecting Asia work other think tanks and scholars are doing this work and I think there's room for a lot more and hope this helped and appreciate your participation and your contribution please join me in thanking the panel and thanking all of you for joining [Applause] [Music]

Channel: Center for Strategic & International Studies

Views: 18,194

Rating: 4.218935 out of 5

Keywords: csis, international, politics, diplomacy, washington

Id: YCJEsmyULzo

Length: 92min 37sec (5557 seconds)

Published: Thu Apr 12 2018