October 8, 2014
Atlantic Council

The Future of US Extended Deterrence in East Asia

Welcome:
Jon Huntsman,
Chairman,
Atlantic Council

Moderator:
Barry Pavel,
Vice President and Director,
Brent Scowcroft Center for International Security

Speakers:
Richard Armitage,
President,
Armitage International

Kurt Campbell,
Chairman and CEO,
The Asia Group, LLC

Location: 1030 15th Street, NW, 12th Floor (West Tower),
Washington, D.C.

Time: 2:30 p.m. EDT
Date: Monday, October 6, 2014

Transcript by
Federal News Service
Washington, D.C.


JON HUNTSMAN: Well, I think it's probably time to call this gathering to order. Thank you all for joining us here at the Atlantic Council. I'm delighted to welcome, introduce our two featured experts today, Rich Armitage and Kurt Campbell, friends both, who will take us through the key issues featured in their just released chairman statement and in the Atlantic Council's report "The Future of U.S. Extended Deterrence in Asia to 2025."

Now, this report is a product of an independent and bipartisan Atlantic Council Task Force, convened by the Brent Scowcroft Center on International Security, to conduct analysis and make actionable recommendations regarding the challenges and opportunities to strengthen U.S. extended deterrence in East Asia over the coming decade.

Co-chaired by Secretary Armitage and Dr. Campbell, the task force was comprised of former senior U.S. government officials and observers both from the Department of Defense and Department of State as well as academic and think tank experts. The task force also engaged with thought leaders in East Asia to assess their perceptions of U.S. security guarantees.

Special thanks right off the top to the generosity of the John D. and Catherine T. MacArthur Foundation, the Taipei Economic and Cultural Representative Office in the United States and the Sasakawa Peace Foundation for sponsoring this project. And thank you as well to our partners, the Japan Institute of International Affairs and the Assan (ph) Institute.

Now, this discussion could not come at a more important time. The Asia-Pacific has become the focal point of U.S. strategy and defense policy following the release of the Obama administration's defense guidance in January 2012. The administration's decision to rebalance to Asia has prompted a great deal of reflection on what this means for U.S. relationships with both allies and adversaries in the region and around the world.

As the first U.S. administration since the advent of the nuclear era to declare the goal of eliminating nuclear weapons, the Obama administration must address how to advance these goals without undermining the perceived or actual credibility of America's regional nuclear umbrella. The administration's nuclear disarmament and arms control policies will have major implications for countries that rely on the U.S. nuclear umbrella, including Japan and South Korea in East Asia, as well as countries that are the object of deterrence, such as North Korea and China.

Meanwhile, improved and emerging technologies threaten to alter or even disrupt the strategic balance of the region, including the credibility of the U.S. presence. Increasingly sophisticated space and cybercapabilities, particularly by countries such as China and even North Korea, threaten to negate the technological advantage of U.S. weaponry or even disrupt the command and control of U.S. nuclear forces and anti-ballistic missile technologies.

These are the challenges the United States must confront and overcome. For that, I am delighted to have these prominent statesmen with us today to help think through these issues.

Rich Armitage, currently the president of Armitage International, previously served as the deputy – U.S. deputy secretary of state from 2001 to 2005. He is one of the foremost experts on the Asia-Pacific, whose deep understanding of the region is informed by a highly successful career in public service and business. Rich has served his country in key diplomatic positions, including as presidential special negotiator for the Philippines military base agreement, when I first got to know Rich, and special mediator for water in the Middle East. President Bush sent him as a special emissary to Jordan's King Hussein during the 1991 Gulf War. He has also served as the deputy assistant secretary of defense for East Asia and Pacific affairs in the Office of the Secretary of Defense.

Kurt Campbell is currently the founding partner, chairman and CEO of the Asia Group. From 2009 to 2013 he served as the assistant secretary of state for East Asia and Pacific Affairs, where he is widely credited as being a key architect of the pivot to Asia. In this capacity, Dr. Campbell advanced a comprehensive U.S. strategy that took him to every corner of the Asia-Pacific region, where he was a tireless and, I would say, brilliant advocate for American interests, particularly the promotion of trade and investment. His vision and leadership were essential in the administration's efforts to strength and security alliances and partnerships from Northeast to Southeast Asia and throughout the Indo-Pacific region.

Rich, Kurt, thank you both for being here today, and now it's my great privilege to turn this program over to Barry Pavel, vice president and director of the Brent Scowcroft Center for International Security.

BARRY PAVEL: Thank you very much, Governor Huntsman, for that introduction. It's a real pleasure to be here and an honor to share this stage with these distinguished statesmen with so much experience who have really dug in and given us a very I think important document that can help inform any discussions on the future of extended deterrence in Asia because the future is going to be different from the past, and I think sort of capturing the changes that are ongoing and getting ahead of those is absolutely critical. So I think without further ado, we will hear from each of our distinguished panelists, first from Dr. Campbell, then from Secretary Armitage. I may ask them a few questions, and then we'll open it up for discussion. So I think with that, I would love to pass it to Dr. Campbell.

KURT CAMPBELL: Thank you, Barry, and welcome to everyone this afternoon. I just want to take a moment to say thank you to the Atlantic Council for convening this group and bringing us together. We had a great task force. We met for the better part of six months. We explored every matter associated with challenges to deterrence and the American position in the Asia-Pacific region. I want to particularly thank Barry and our leader behind the scenes, he led from behind in every possible way, Bob Manning, for helping to both, first of all, conceive the project and then launch it effectively. Also can't tell you – I hope you all have opportunity at some point to have a chance to work closely with Rich Armitage. He is the godfather of our Asia-Pacific strategy. He's worked tirelessly, as Ambassador Huntsman said, for decades. To learn working with him is a true honor. And a particular thanks to Ambassador Huntsman, who was a great ambassador to China, a wonderful public figure, and we appreciate his role at the Atlantic Council and supporting this overall effort.

Let me just say I think the ambassador has framed it very effectively, but I want to put it in a larger context if I can. It's terrific to see a good turnout, particularly given how much news there is elsewhere in the international stage. And the truth is, despite just enormous challenges in Ukraine and Eastern Europe and in Afghanistan, in Iraq and the Middle East going forward, it is undeniable that the lion's share of the history of the 21st century is going to be written in the Asia-Pacific region, and the United States wants to play a major role in that history as it proceeds.

Part of that is making sure that we have the wit and wisdom to remain fundamentally engaged as we had been in the past going forward. But I think one of the issues that we were all in agreement on is though the United States has a very strong foundation in the Asia-Pacific region, what used to suffice no longer does. We need to step up our game comprehensive, step up our diplomacy. We need to have a comprehensive strategy that integrates every aspect of the Asia-Pacific region, engagement with China, strong work with our allies, bringing new partners like India and Europe into the region to ensure that we're working on issues such as the rebalancing of our military engagement, most importantly the support for our trade and engagement strategy commercially and also working to build multilateral capacity going forward.

I think we all recognize that our ticket to the big game in Asia has been our military capabilities now over decades – that have seen challenges during the Vietnam War, at the end of the Cold War, but that sustaining presence has given us remarkable capacity in the Asia-Pacific region.

I do not typically like European analogies as they're applied to Asia; almost always, when Asian friends hear a European analogy, they immediately turn off and think this is a person who doesn't understand Asia, so they're trying to apply wisdom from elsewhere to a very different set of specifics. However, I'm going to use one here because I think it's particularly apt. In the 1980s secretary of the – of NATO was appointed by the prime minister, Thatcher, in Britain, and he listened in 1983 during a particularly difficult set of interactions among the French and Italians and others. And they were complaining about the Americans as being difficult to work with, impossible. They don't listen. They don't coordinate. They go off on their own. And he listened for, you know, about 45 minutes to pretty substantial complaints about the United States. And at the end of this, he said, ah, alas, they're the only Americans we have.

And in many respects, that is the role the United States has played in Asia for decades. But undergirding that effective American strategy has been a seamless web of statements, doctrinal commitments, military innovations, troop presence and also response to challenges that has at its core underscored the American determination to maintain peace and stability. And as part of that is a strong deterrent quality, both conventionally and, if necessary, with the nuclear umbrella.

Over the course of decades, some have questioned that, and through high-level commitments, through specific steps in terms of our own deployments, we've tried to support our commitments going forward.

I think what Rich and I came to see with strong support of Barry and Bob was that there were a number of steps that are taking place, many that Ambassador Huntsman has already described, that are threatening the American forward presence, calling into question our capabilities – new military innovations, capabilities that go at our forward-deployed presence and provocations from North Korea that raise concerns across Northeast Asia more generally. And what this report has attempted to do is to lay out very specifically an integrated set of strategies: diplomacy, high-level consultations and working groups with our allies, clear-eyed engagements with Chinese friends, attempts to communicate directly with North Korea where our particular interests lies and what North Korea should avoid, and specific military and security steps in terms of investments in new capabilities and deployments going forward.

I think what you will find here, both in Bob's longer study and also in our executive assessment are somewhat we hope clear-eyed recommendations on the way forward that we believe will help support an enduring, ongoing commitment of the United States to the peace and prosperity of the Asia-Pacific into the 21st century. Thank you.

Rich.

RICHARD ARMITAGE: When you have a podium, you ought to take advantage of it, I figure.

Jon, it's quite a thrill to be introduced by you, and I thank you for it. Barry, good to be with you. Bob, thanks for (sherpherding ?) this through. And I'd have to note with some enthusiasm that Harlan Ullman is in the audience. Now, there must be something going on in Asia that brings Harlan out. Nice to see you.

You know, there are a lot of reasons why people who you'll see listed as task force members took part in this endeavor. Some of us were there because we recognize that any administration to some extent plays foreign policy like five-year-old kids play soccer: They all run to the ball. The ball right now is primarily in the Middle East, and we were fearful that people would overlook our equities in Asia. Other of us in the task force were worried about the rebalancing, which as a reflection of our strategic interests is in my view fantastic and right on, but the manner in which it's thus far been carried out is something lacking, and we wanted to give some impetus to that. Others were somewhat motivated by a speech that was given in Shanghai by Xi Jinping at the opening of the CICA conference, the Conference on Interaction and Confidence-Building Measures in Asia. And in short, what President Xi said was, oh, by the way, Asia is for Asians. That doesn't seem to leave much room for Americans. And this bothered some of us. It bothered me quite a bit. Others are wondering what China means when they say, oh, Asia is big enough for both of us. That's a true statement as far as I'm concerned, but if what China means by that is Asia's OK for the United States Guam east, and from Guam west it's OK for China, that's a different question. There is a question of the acceptance by the present administration of the Chinese formulation of a new relation, new type of relationships between great powers. We've accepted it. It might be fine. But it's never been defined. And when it's not defined, it opens questions. And it's opened questions I think in the minds of some of our Asian friends and allies. And the backdrop to all of this is the gray areas, which many of us have talked about, of coercion and provocation. So as I say – or tailored coercion, as our colleagues Pat Cronin would say. So there is a lot of reasons why several of us took part in this endeavor.

And it is left to me, as Kurt indicated, to, one, clean up – which is a joke; Kurt and I have been friends for 20 years, and the good news about U.S. – or Republican and Democratic approach to Asia is you – (audio break) – tell the difference generally from one administration to the next because we have the same views; in addition, we happen to be close friends.

Well, the first recommendation of the seven that we put forward in the chairman's report is to clarify the U.S. strategic doctrine. The Obama administration came into office saying that they wanted to eventually, over the long term, go to zero nuclear weapons. I didn't personally think that was a good idea, but it's a point of view you can have. But you can imagine that this opened up some questions in the region for people who defend on – depend on the nuclear umbrella. Now, I believe the administration has well corrected that, and they had a nuclear posture review in 2010 that made it very clear that the U.S. will maintain a credible nuclear deterrent so that risks outweigh benefits to potential adversary.

Second recommendation that we have is we really want to enhance the strategic dialogue with allies and friends. Now, that sounds like something we do every day. Well, not always. We've been without an assistant secretary to the Pentagon until recently, and we now have Dave Shaer there, and I think he'll do a terrific job for us in the Pentagon, really putting some oomph and some energy into these extended deterrence dialogue. At least that's the hope. But what we had in mind, beyond talking about the obvious nuclear and conventional forces and postures of the United States, we want to broaden it, extend that dialogue to cyber and to space, to BMD and, frankly, to contingency planning, where it's acceptable to our interlocutors.

The third recommendation was we really want to upgrade and update the U.S.-Japan alliance with what the Abe administration has brought about with the National Security Council and the Cabinet decision on collective self-defense and the ability now to export defense technology to third countries, it's opened up a brand new realm. We are now trying to do for the first time in 17 years update the guidelines for defense cooperation. In many of our views, it's no longer sufficient to just talk about contingency planning for today's issues. We're going to have real defense planning where we take a look at what we think the future is going to be and talk about the type of enhancements to our military posture and to our capabilities that we might need. And it's undeniable, it seems to me, that with the decision of the Abe government to open up to third country transfers of defense technology, that this opens up all kinds of rich vista for the United States and for Japan to cooperate together. And any potential adversary should have to think twice when you see the two most technologically advanced countries in the world cooperating together to solve common problems.

The fourth recommendation is we need to seek a comprehensive strategic – to seek comprehensive strategic stability to China. It has to be very clear, this – we do not have a good relationship right now with China. Eight successive presidents, to include this one, going all the way back to Richard Nixon, have desired a stable relationship. We've cooperated, each of those presidents has cooperated where possible and has competed where necessary. And we have to – if we're going to have this type of dialogue with China, we have to realize that there is mutual distrust. It is not just questions in the U.S. about China's motives. There are real questions in China's mind about our motives and their own view of whether rebalancing was directed against them, whether TPP, for instance, is really directed in some way against China, and we need to really work hard at a high enough level of make sure we have that type of strategic stability in our engagement with China. We don't have to agree, but it seems to me we've got to do the best we can to remove the distrust on both sides.

Fifth is we feel very strongly that we need to protect the U.S. conventional shift to Asia. Both Secretary Panetta and Secretary Hagel more recently in Shangri-La have said that by 2020 we want to have 20 percent – excuse me, 60 percent of our naval assets in the Pacific. Fact of the matter is we are far, far short of that right now. If you look carefully, you may see that only about 30 to 35 percent of our assets are in the Pacific. The reason is quite obvious: ISIS and the Middle East. And, at some point in time, we are, truly, going to have to pivot and move those forces out because to have said that we're going to have 60 percent by 2020 and then not to do it is not going to be a good thing for our own credibility.

Six: We have come up, the task force, with a view that the administration, engaged as they are in very difficult and weighty issues, still has to have the wherewithal and the desire to invest heavily into R&D – at least $300 million a year. This is something that can quickly be forgotten in a time of trauma, as we're now feeling in the Middle East. And there are systems out there that can be absolutely essential to us: electronic lasers, new generation electronic warfare systems, things of that nature. And, again, I go back to the recommendation on Japan – their technology and our technology, together, ought to make this a very doable thing and save us both some cash.

And, finally, our seventh recommendation is that we need to underscore the essential economic and energy aspects of U.S. engagement and deterrence. And I'm specifically here referring to TPP. It is understandable that countries who negotiate in completely good faith with the United States are going to keep their hold cards right there until they're sure we're going to get TPA. And I think if they were sure we were going to get Trade Promotion Authority, there'd be a lot more rapid completion of these negotiations for TPP. As far as I'm concerned, for us and the Pacific, TPP is the (Yale ?) game; it's the big one. It really, really matters.

And, likewise, energy: For 40 years now, we've had a policy in the United States about no export of energy, except from Alaska. But the lower 48 was not allowed to export. We've just now had a recent export of gas from Alaska's North Slope to Korea; the first time in 10 years. Just think how dramatically our own position in Asia as well as the confidence of our Asian friends – I'm speaking particularly of Korea, Japan, Taiwan, for that matter – if they had a much more dependable supply of gas from the United States. So both the economic engagement and the energy engagement, given our shale revolution, is something that we are really, really keen on.

So, with that, I will hush up. I'm delighted to be with all of you and particularly with my friend Kurt Campbell and will look forward to your questions. Thank you.

MR. PAVEL: Thank you very much to both our speakers. I wanted to ask a couple of questions and then we'll turn it over to broader discussion. First, of Dr. Campbell. I think the statement did a very good job of looking back a bit and also capturing China's present challenges to deterrence in the U.S. network of alliances. What do you think are the specific key challenges going forward? I mean, the effort looks towards the future of extended deterrence, and so, what do you think's the – there's a lot of excellent, substantive, specific things called out in the chairman's statement, but what do you think are the key ones in particular going forward?

MR. CAMPBELL: Thank you very much. And I just want to support the way Rich laid out the recommendations. I would say, running through our entire effort and the whole report, is a deep recognition that, at some level, how you project capabilities and credibility is as much about perception as anything else. And one of the things that we face this set of circumstances where there are questions and have been about American leadership. And that is not unique to this period, we've seen it in a number of circumstances. I would say the most important ingredient in ensuring that we have a strong position in Asia going forward has as much to do with American domestic performance now as any other period in our future – in our past. And I would say that one of the things that we've seen at almost a recurring level over decades has been questions about American staying power. The number of times that people have thought that we're down and out, we're on the mat, we're going to be dragged out by our heels – too many times to count.

I will say that people who've bet against the United States has -- have lost an enormous amount of money over time and that there are often elements of hidden strengths in the United States, both in terms of economic performance and very clear strengths associated with our system that I think will be enduring going forward. But I think in this particular period, when there are more questions about the durability of our commitments in Asia, reasserting those will be extremely valuable. And I will say that one of the things that I'm glad to do this with a Republican is that sometimes the deepest debates that currently exist are not between the parties, but inside them. And so it's going to actually take commitments and alliances between internationalist Democrats and Republicans to assert enduring capabilities going forward.

But to your specific question, Barry, I think we're dealing with a set of circumstances that more and more capabilities are being developed that basically go at the heart of American strategy. And the heart of American strategy really is how we fore-deploy from a very small number of bases and institutions in northeast Asia. And we believe that one of the most important things that we can do is to continue that process of diversification and investment in countermeasures going forward. Now, many people believe that aircraft carriers are hopelessly antiquated; I think we have some confidence in the capabilities of the U.S. Navy and the ability to innovate. But, over time, we're going to need to understand that those challenges of precision munitions anti-axis capabilities are real and they are growing and that the United States needs a national investment. And also along the lines that Rich indicated, closer partnership with friends and allies to create a capacity that not only anticipates these challenges, but a deterrent quality to those relationships going forward.

MR. PAVEL: Thanks very much, Kurt. Secretary Armitage, I had a – two questions for you, one traditional and one focused on your last recommendation, which I found fascinating. But the traditional one: You -- one of the recommendations is to pursue a comprehensive dialogue with China on strategic stability and, heretofore, many administrations have tried to pursue any dialogue on any aspects of strategic stability with China and not really succeeded too much. Is there a – is there a hope here? Is there a prospect for a framework? Or is this just something we just need to keep going at in the same way?

MR. ARMITAGE: I would take some question with your – the way you phrased the question. As I said, eight presidents have wanted to dialogue with China and they've done it. We've not had a war. We're working on something that's pretty much unknown in history, to have a country this size rising. It's every bit as important as the rise of united Germany was in the 19th century and perhaps rivals the rise of the United States in the 20th. So we ought to realize that there are going to be big differences of opinion and that's normal and it's understandable. But I think when I look at my own involvement with – dialogue with China, the most successful we've been is when we're completely honest – maybe diplomatic, but honest about what our differences are and there are some times in some quarters of our government – Republican or Democratic administrations – their desire – there is a desire to either tell people what they want to know or not be – or not be very clear about our own intentions, our own feelings in the name of diplomacy. So I think we've been more successful in this dialogue and it just – it has to be continued. Your second question?

MR. PAVEL: Second question was the last recommendation on economic and energy aspects of U.S. engagement and deterrence. This is very non-traditional – I personally find it extremely interesting and there's clearly a big work agenda ahead on how do we do a better job of folding in economic power and our newfound and increasing energy power into our deterrence and our network of alliances and partnerships and I would certainly open this up to Dr. Campbell as well, but I'm really interested in this and I think this is a really provocative new agenda item that both of you have laid out on the table here.

MR. ARMITAGE: Well, on the – on the economic power aspect of this – there is a relationship between energy and economics, obviously, but on the economic side, I think the first thing we need to do, as a people, is to take stock of where we are. I don't think most of our citizens have realized how far we've come in the past several years, out of a real recession. And it's about time, in my view, for the eagle to start flying a little higher, with a little more confidence. And if that happens, then I think we might have enough confidence to actually engage in meaningful trade discussions. The energy side – Joe Nye and I – Dr. Nye and I have co-authored three different U.S.-Japan studies and in the last one we really concentrated on energy. It was our feeling that – (a ?) Japan, in this case and, for that matter, Korea or Taiwan – who is confident of a decent and dependable and regular supply of energy will – and it will be cheaper for them, by the way; if it's our gas, it'd be probably four dollars cheaper per unit – they will have the confidence to not only engage in us and (in the ?) faith in us to have good discussions and close discussions, but it opens up alternatives for them in everything from their force planning, whether it's bluewater navy or air, et cetera, to the direction of their future energy needs and the future technology to preserve and project – or protect energy. So I think – and I was pretty ashamed, frankly, for the first two (Armitage ?) reports that we didn't take into consideration energy. It was so obvious to us when we finally got around to talking. Some – a little bit of self-admission.

MR. CAMPBELL: I'd like to particularly thank Rich and Bob Manning (ph) for really pressing us to get out of sort of a traditional responding with only specific military capabilities, a recognition that really American presence, prestige and engagement rests on a much more comprehensive assessment of American power and strategy, and I hope this report reflects that going forward.

I do want to say just a word about the U.S.-China relationship. I've worked a little bit on that. Ambassador Huntsman has as well. I personally actually have quite a lot of confidence in the ability of the United States to work through problems together, and I think this is a matter of time and energy and focusing on the right agenda items as much as anything else. And I would say that in the past, Rich talked about this attempt to establish a new great power relationship, and that was preceded by constructive strategic partnership and the like.

I don't have any, you know, necessary problems with those overall approaches, but I would say it is often the case that those frameworks create more questions than reassurance, both in each capital and as importantly among the surrounding neighbors and friends. My own personal experience – and I'd very much at some point like to hear Ambassador Huntsman on this – I think the most important agenda, task before the United States and China in the current environment is to actually work together constructively on concrete cooperation. And it's – we've spent too much time on these ephemeral concepts and not nearly enough time on the concrete work of building habits of cooperation in military arenas across the board in our aid and our diplomatic assistance. I will tell you, I worked very hard with Chinese friends over five or six years and previously to that in the Pentagon. There is a remarkable amount of hesitation in being seen to work with the United States. Some of that is bureaucratic issues. Some of it's distrust. I completely agree with what Rich said. The level of distrust is extremely high in China about the United States. That has to be overcome.

But it is also more fundamental, I think. And one of the things that has to be apparent in the American strategy is a set of very clear determined efforts to actually build this cooperation and make it difficult to have that be blunted or ignored or pushed aside.

MR. PAVEL: A follow-up to that last point which I think is very important, one of the variables that seems to be changing is President Xi seems to be consolidating power rather quickly in terms of how long he's been in his positions (ph). As that continues to happen, do you see the chances for us engaging and interlocking (ph) China in this sort of set of frameworks? Do you see that increasingly potentially or –

MR. CAMPBELL: It's a great question. I'd also want to hear what Rich has to say.
I would say, honestly, to be very honest, anyone who tells you a certain answer on this doesn't know what they're talking about. I think at a fundamental level, the jury is still out. And we are at a very early period of trying to understand how to work with President Xi and his administration. We know a few things. One is comprehensively, we are no longer working fundamentally with a – with a combined group leadership. We are dealing with a man, a leader who's consolidated power more rapidly, and in his own hands, probably than any other leader in China's recent history, number one.

Number two, as importantly, he has brought decision-making on foreign policy and national security very close to him, and so many of the interlocutors that we normally deal with are sometimes outside of the sphere and circle of advice and engagement, and so – and they have taken steps to make it difficult to penetrate and understand the circle of advisers around him in – (inaudible). That is the second.

Third, it does appear that his fundamental goals to date have to do with domestic performance. He's involved in an absolutely profound set of challenges domestically that are basically about trying to create a new model of growth to replace the one that China has followed for the last 30 years, which is essentially about export-led growth, and that is a very difficult siren song to resist. And I think one of the things that we're going to see in the coming weeks is this battle inside the Chinese government between those that are arguing that we need an immediate stimulus because of concerns about flagging growth and those that are saying no, no, this is going to be painful but we must stay the course on reform. That is a very fierce debate that is playing out, and that is his primary focus.

The question then is, in that environment, how do issues associated with engagement with Japan, with issues related to the South China Seas, with the East Seas – how do those animate the strategic perceptions in China? My own personal sense is we are seeing a China that is more assertive, more determined, probably more nationalistic. And I think what that means for the United States, as Ambassador Armitage indicates, we have to be very clear and very determined in our effort not only to convey our strong desire to have a good relationship with China, but be clear about areas that we're prepared to work together, which are many, numerous, sustaining the operating system of Asia that has been so good to all of us in the last 30 years, but be clear where certain actions risk threatening the peace and stability that have been so valuable to China over the course of these last 30 years.

MR. ARMITAGE: (As Kurt ?), I don't know what the future brings for China. I've got a suspicion. I often think – well, or sometimes think when President Obama gets up in the morning, he must just shake his head at the enormity of the problems that face him, whether it's in the Middle East or whether it's with a recalcitrant Congress, it's getting no credit for economic revival, a long of things.

But I'll tell you, the one who gets up in the morning and really, really has problems is Xi Jinping, because he's dealing with a huge, unprecedented number of problems at the same time, not – (inaudible).

At the end of the day, my own view – and completely agree with a more assertive, more nationalistic China – I think, ultimately, China is going to make their way through their economic doldrums. I kind of think they're like Lehman Brothers. They're too big to fail. And any of us who want them to fail is nuts, because the last thing we need is a fractious, bumptious China. So I think they'll perhaps stumble through for a while in some economic doldrums, but eventually they get to the other side. For us, as we appear to be on the economic ascendency, this ought to create some incentives, if we put them forward correctly, to have cooperation with China, which is going to need to have a little more wind in their sails economically, I think, but that will be for the next administration, I'm afraid.

MR. PAVEL: Great. Well, thanks very much. Now we'll open it up to questions from any of you. Yes, this gentleman over here in the middle. And please identify yourself and your affiliation.

MR. ARMITAGE: Barry, my ears are stopped up from a cold, so – (inaudible) – repeat it.

Q: My name's Dan Caldwell from Pepperdine University, in Los Angeles. And Kurt, we don't need a European analogy for this, like Putin going into Ukraine. If we think about 1989 and the Chinese policy in Tiananmen and apply that today to democratic movements in Hong Kong, what should the United States' policy be towards the democracy movement in Hong Kong, and what sort of effect do you think it will have on U.S.-Chinese relations?

MR. CAMPBELL: It's a great question. I think Rich will want to answer it as well, but let me just give you my own sense. One of the things that was – and thank you for the question. I appreciate your work. One of the things that always surprised me in government is, you know, you'd give a long speech on a variety of issues, and the next day, if you were demarched from friends in Beijing, more likely than not it would be on a passing reference associated with Hong Kong. And so, you know, it was often, first and foremost, in the thinking of interlocutors in the Foreign Ministry and others. And I think it does suggest a couple of things, both the sensitivity with which Chinese friends view developments in Hong Kong, but also, I think, something that was – that's been discussed more lately. I have been surprised in some of the interactions I had when I was in government at how much even the most wise and internationalist interlocutor -- how much they believed that the United States was often behind democratic student movements, democracy groups. And of course, there are some nonprofits and other issues, but basically, what is happening, as you know, in Hong Kong, is indigenous, largely, and has caught many groups and individuals off guard.

I think China understands the stakes here -- recognizes that, probably, no place is watching this more closely than friends in Taiwan, and understands that if things are handled in a way that creates larger concerns, it makes it difficult to implement the kind of far-reaching engagements that they hope for and are planning on with regard to Taiwan. My own personal view is that the United States should speak clearly about or values and our recognition that the process in Hong Kong was laid out quite clearly before the handover, and our expectation is for a process of a form of universal suffrage to take place over time.

I think we have to recognize quite clearly that we have some limited tools involved, and most of it is the bully pulpit and quite clear engagement with some people on the ground. But it must be done in a respectful way. We have to recognize that, in many respects, this is a window into China, as well as it is a window for the outside world. I have to say that I'd like to see the United States speaking out a little bit more on this going forward. I think it would be important, and I think it would be important, and I think it would help signal that we, too, have a strong interest in this process being handled peacefully.

MR. ARMITAGE: This is a pet rock of mine, so forgive me, because you did mention Ukraine. And I'm going to say something, and then I'll get to Hong Kong. In 1989, when we started our activities with Ukraine -- from then till now, Democrat and Republicans, EU, all have been guilty. We've been guilty of pouring tons of money into Ukraine, realizing that we were only feeding a kleptocracy and never demanding adherence to international norms and -- (inaudible) -- that is a correct statement.

There is no -- when we see all those young people in -- primarily young people in Maidan Square, it wasn't just a scream against Mr. Yanukovych. It was a scream against the entire political elite of Ukraine. And it is interesting to note that Yanukovych's government, as rotten as it may have been, was also democratically elected. So the specter there was of the United States actively working to unseat a democratically-elected government, as rotten as it was.

Hong Kong, as Kurt said, is quite a bit different. I am actually -- I have been a little surprised that China, who has such huge equities in this, has been as patient thus far as they've been in letting Hong Kong authorities handle it. I think, to some extent, our friends in China will be a little bit more careful about what they promise and say publicly as they indicated, by 2017, the people Hong Kong would have the ability to choose their own leaders. Well, that's not really what China meant. Under certain circumstances they could choose their own leaders.

From my view, the best way to go forward -- maybe it's not different what Kurt said. I believe that the United States should stand as a paragon of human rights, human values. I also believe that we often fall short in our own country. And the best thing that we can do for the world is to make sure that we are what we say, and we do what we say. So we can speak up about Hong Kong; we can speak up about anything. We have a view. But we ought to speak up in a way that makes it clear we have our views about human values and human rights; there are other arguments to listen to.

MR. PAVEL: OK. Thanks very much. Yes, here in the front.

Q: Thank you very much. My name is Vijavat Isarabhakdi; I'm the Ambassador of Thailand in Washington, and it's been a great pleasure to hear both of you, who have been key proponents and architects of U.S. policy towards Asia. Much mention has been mentioned about the pivot -- the rebalancing towards Asia, and I wanted to see how pleased you are with the progress that such policy has made, because we find that it's been several years now since the policy was announced; you still find people asking whether the policy is real, sometimes, and sometimes you find the administration backing up by saying how many trips the president and the secretary of state and the secretary of defense has made to the region. So whether there are other parts to that which you feel that more could be done, and a second follow-up is, you, Secretary Armitage, mentioned about the force allocation to Asia, that it's still not up to the level that is expected. But are there other dimensions, also, to the rebalancing other than defense only?

MR. ARMITAGE: Thank you, Ambassador, and we'll have a chance to follow these discussions up later. On the rebalancing, the idea was, I think, deeply held by the administration -- the idea of rebalancing to Asia, and it's completely and totally reflective of our interests in Asia, whether it's Northeast Asia or Southeast Asia, and part of the rebalancing was also rebalancing from almost a total focus on Northeast Asia to Southeast Asia. Having said that it was a genuine, real desire of the administration, my personal view is, it has not been done completely. We made announcements about X band radars. We made some announcements about Marines in Darwin; they're not going to keep PLA military planners up at night. I can tell you that.

But we seemed, for a time, to neglect the economic aspects. We got TPP going eventually, which is excellent, exchanges, no, foreign direct investment, not really. All of the things that I think Kurt, who is the real godfather of this rebalancing wanted, but from the State Department, I don't think you have the ability to run all the organs of this government which are needed, or the whole of government, as people say, to bring all their tools to bear at the same time. And I personally think that's a shame, that that's why there is -- we're so keen on force numbers, because, having said that, at least we have to do that while the other elements of our bureaucracy catch up, hopefully.

MR. CAMPBELL: Thank you. I like Richard's answer a lot. There's not much I can add, and I thank you for the question, Ambassador. But I will say a couple of things. So we talked a little bit about Europe. Margaret Thatcher, when she made the decision -- unpopular in her government -- that she was going to go to war in the Falklands at a time that they were completely unprepared and had very little in terms of resources, and it was, you know, a million miles away, from their perspective.

She gave a speech on -- at that time, national TV on the telly and kind of -- I remember I was a student at Oxford, and she said something that I always think about, and I think about it with respect to the State Department. She said, look, we don't have all the resources, so we must summon our native cunning, and we must find a way to motivate -- and that's basically what the State Department's all about. You don't have the resources. You don't have the capabilities, and so you've really got to summon your native cunning.

And I have to say that ultimately, this has to be -- and I believe it has begun -- this has to be a whole-of-government effort, and it has to be recognized as such. I -- the language, the perceptions today compared with four years ago are night and day. Much more understanding. Much more commitment. Everyone is saying to you, yes, look at all these visits. Those are positive steps, and the fact that they're trying to reassure, I think, is important.

I'm going to look for a couple of things going forward, and I'll just give you my list, if I could. I like Rich's very much. TPP is essential. But in addition to that, I think we have to also indicate for those nations that aspire -- that want to work with us economically but aren't quite yet ready -- we've got to make clear that we want a closer economic relationship. That would be number one. Number two, I think it is normally the case -- the usual playbook is, when the president goes to Asia, he gives a speech to Asians about the importance of Asia. What I would like to see is a president give a speech in the United States to the American people about why Asia is important. Right?

MR. ARMITAGE: Hear, hear.

MR. CAMPBELL: And so what I actually think is the most important sell job is not externally in Asia, but in the United States. And I will tell you, if you look at the number of speeches and statements and the time and focus that is spent on the Middle East and South Asia -- which is important -- we're not arguing to walk away from those commitments. In fact, if we did so, we would undermine the credibility that we need to operate effectively in Asia. But we must find the time and attention to enunciate our values and our approach to Asia a whole to the American people.

And if you look at that document and the number of speeches on the Middle East and the challenges of Afghanistan and Iraq, they're, you know, a giant, you know, stack compared to almost nothing about the importance of American comprehensive engagement in Asia going forward. For me, that is the most important articulation that the United States will need to do over the course of the next five to 10 years, and this is not one administration. It is several. My own personal view is that the great ship of state of the United States has shifted and that this is now a reality. Many things appearing beneath the surface that will not become as readily apparent over time, but I think will, in retrospect, be seen more clearly.

At the core of this, though, I also would say I'd like to see more in Southeast Asia.

MR. ARMITAGE: Just -- Ambassador, you mentioned the trips by the secretary of defense, state and the president -- very often, Republican and Democratic administrations, when they don't have something substantive to talk about, they count trips. It's like our press does with secretaries of state. They think odometers are equal to progress, and the number of miles traveled in a cylinder, not equal to progress, as we've seen more recently.

But I think, strictly, President Obama needs to get some credit for his trips. He has attended each EAS. He will be in APEC, and then in Burma for the EAS, and I think it matters when a president travels. It is the case, I think, that most observers would say our secretary of state now has a little difficulty in finding Asia on the map. Hopefully, as we move forward, that will be rectified.

MR. PAVEL: I'm so sorry, but we are out of time for questions. I found this to be a very provocative and engaging discussion. Please read the two documents that were produced, in particular, the chairman's statement, as well as the longer Atlantic Council report. Please join me in thanking our panelists, and please allow the speakers and Governor Huntsman and the ambassador time to depart, and then we can all depart as well. But please join me in a round of applause first. (Applause.)

(END)

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