A World Remade: The United States
and Rising Powers in the 21st Century

Leveraging US Strength in an Uncertain World
Stanley Foundation Conference on National and Global Security

Washington, DC,
Thursday, December 7, 2006

With China and India seemingly on their way to superpower status, the world may now be witnessing a shift in power dynamics unparalleled in the past 200 years. This panel, chaired by Nina Hachigian of Stanford University and the Center for American Progress, examines the phenomena of "rising powers" and US policy options for addressing changes in the dynamics of the international system.

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Post–Panel Summary

The following summary of the panel "A World Remade: The United States and Rising Powers in the 21st Century" was drafted by Sherif Hamdy. It has not been approved or reviewed by the panelists.

What has the rise of China and Russia meant for the United States?

China‘s rise has been multidimensional. It is rising economically, military, and through its use of soft power. Meantime, as China is becoming a stronger global player, US influence and economic standing in the region is diminishing, especially in terms of its soft power. Because of China‘s policy of working with other countries and refusal to interfere with domestic matters, it is harder for the United States to build coalitions in the region.

At the same time, China faces a daunting list of problems that will continue into the next decade: disease, poverty, abuses of power, pollution, and huge demographic shifts as China‘s population grows older and its labor force shrinks.

As China has cushioned its rise by working multilaterally, the United States should support those multilateral efforts and China‘s multidimensionality. Also, the United States should try to recover some of its soft power and maintain a balance of power in Asia.

Whether Russia will present a threat or opportunity for the United States depends on whether Russia will face outward or inward. President Putin has shown signs that point in both directions. Will it fully integrate with the international system with all the compromises that implies, economically and politically? Fifteen years after the collapse of the USSR there are economical isolationists in Russia who think that they can still "go it alone."

Russian elites say the United States is the major source of instability in the world—a rogue elephant that is arrogant and quick to resort to force. Partnering with the United States is therefore problematic because it is also viewed as unreliable. They believe that Americans cannot be ignored but may be contained.

In the long term, Russia will continue to move closer to India as it fears the effects of China, which is projected to become the second largest economy in the world.

Panel Transcript

This text has been professionally transcribed; however, for timely distribution, it has not been edited or proofread against the tape.

Nina Hachigian: Welcome to this discussion of America and major powers. I‘m Nina Hachigian. I‘m very happy to be here. I love this topic.

According to realist theory, there‘s bound to be trouble when a potential challenger to the dominant power in a system rapidly gains strength. Because the dominant power can never know this rising power‘s future intent, it has to assume the worst and will, therefore, try to preserve its lead and remain the top dog. Some go further and argue that it should or will actively try to slow the growth of the potential challenger.

Today the U.S. faces not one but two rapidly growing major powers: China and India. Another, Russia, is resurgent and two other power centers in Europe and Japan still play a huge role in the world‘s economy and politics.

A fundamental question is whether this realist model is still relevant today. After all, countries are now very interdependent, the nature of our global economy means the territory that one country might get from conquering another doesn‘t necessarily make its economy any stronger. We all share common threats in avian flu and climate change and terrorism and all major powers either possess nuclear weapons or are under a nuclear umbrella.

So of the powers I mentioned, Russia and China I think are the most neuralgic for the United States, Russia because it doesn‘t seem to want to play along with the Western order and China because it‘s playing too well and is quickly becoming rich and influential. The U.S. is uncomfortably dependent on both in different ways and neither, of course, is a liberal democracy.

So how do these powers really challenge vital American interests and how might they further these interests? And how do they envision their relationship to America and to the world order? And finally, what is the U.S. to do, especially given the fact that we really don‘t know the trajectories of these powers. If we hedge against them too aggressively, we might create the enemies that we fear. If we really want to work with them on solutions to mutual problems, we‘re going to have to give up some of our freedom to determine every facet of the solutions.

We have three experts with us today to help us sort through these issues and other issues. You have their bios. I‘ll make their introductions very brief.

Chip, to my right, Chip Blacker is the director of the Freeman Spogli Institute of International Studies at Stanford and that‘s an institution at which I also have the pleasure of being a visiting fellow. He served in the Clinton administration as a senior director for Russia in the National Security Council.

Harry Harding to his right is the director of research analysis at the Eurasia Group. He‘s also a professor at George Washington University and author of many books on China and the U.S.–China relationship.

Both these men are among the most respected scholars in their fields and have a rare and wonderful quality among academics, which is having a real passion and interest and proficiency in policymaking.

And the last on the far right is Michael Schiffer, a program officer at the Stanley Foundation who earlier worked for some ten years on the Hill as Dianne Feinstein‘s national security advisor and has recently spent a year in Japan courtesy of the Council on Foreign Relations.

So Chip and Harry will each talk for about ten or fifteen minutes; Michael will then respond and then we‘ll turn it over to all of you to have a conversation.

Thanks. So, Chip?

Chip Blacker: Thank you, Nina and thank you, Michael and the Stanley Foundation for sponsoring this conference and this panel in particular.

As Nina has said, the central question that I‘ve been asked to consider is what is Russia‘s trajectory? Is it on the mend and on the rise, or is it recovery, a transitory phenomenon and its decline inevitable?

Well, you won‘t be surprised when I say it depends on whom you ask.

Many within the Russian elite believe that Russia is back and it‘s back for the long haul, primarily because of its generous energy endowments. Russians who are inclined to think this way speak of the country as an energy superpower with all this implies, including enhanced economic prospects and growing geopolitical clout. They point to Russia‘s economic growth rate over the past six years or so, which averages about 7 percent per year, and they argue that this is just the beginning.

According to Forbes magazine, Russia now boasts some 33 billionaires, more than any other country in the world except the United States and Germany, and the Russian middle class has expanded by an order of magnitude over the course of the last ten years.

Examples of Russia‘s newfound affluence are everywhere and highly visible. Believe me – Moscow has never looked so good. Ever.

Nor are the country‘s economic good times confined to those fortunate enough to call the capital city home. Many of Russia‘s provincial cities are also faring well. The one that I know best, Yaroslavl, a medium–sized Russian provincial city about four hours to the northeast of Moscow, looks and is in fact more prosperous every time I visit.

Russia‘s hard currency reserves are edging to the $300 billion mark, notes The Economist, and its rainy–day stash, its so called stabilization fund, stands in excess of $50 billion.

Others, both Russians and non Russians alike, paint a starkly different and a much more pessimistic picture.

The economic recovery notwithstanding, the birth rate among ethnic Russians has fallen below replacement levels and the country loses population every year. And the population that it does have is getting older and older, and more and more infirm. Unless and until Russian women decide to start having more children, the problem is not going away. Some projections have Russia‘s population falling to approximately 100 million people within the next 50 years, or 40 million fewer than today.

Male life expectancy still hovers around 60 years versus 75 in the developed world, in part because of rampant alcoholism, a problem that has gotten worse since the collapse of the Soviet Union 15 years ago, not better.

HIV/AIDS in Russia continues to spread at rates comparable to those found in the developing world and the government has been slow to respond on either the prevention or the treatment end of the problem, although I should say that things are finally starting to change in a positive way. No one knows how many people are actually infected, but most studies suggest that approximately 1 percent of the population would test positive today if testing were universal. That number could rise to 10 percent by the middle of the next decade absent truly decisive intervention on the part of the government.

Tuberculosis is also back in the picture and not just among the prison population.

Finally in this context, the country‘s educational system, once a source of enormous pride among the Russian people, is on life support. Russian institutions of higher learning are under resourced and for the most part – for the most part, not entirely – unreformed.

So what does it mean exactly to speak of one‘s country as an energy superpower or a superpower of any kind when the educational system is in freefall, tens of thousands die every year from preventable and treatable diseases, labor productivity sits at historic lows and your population is not only graying, it‘s disappearing.

I don‘t know the answer to that. Optimists argue that all of the negative trends that I‘ve cited are reversible. Pessimists counter that just because recovery is possible doesn‘t mean that it‘s going to happen.

There is an old Russian adage that, at least to me, seems never more aptly applied than today and the adage is: Russia is never as strong as she seems; Russia is never as weak as she seems.

Is Russia a threat or an opportunity from the perspective of the United States? The answer depends on a host of factors but first and foremost is whether Russia faces outward or turns inward. In other words, whether it decides to make full integration into the international system an enduring priority with all the adjustment and compromise that such a step implies, or decides to go it alone economically in the first instance but ultimately politically and geopolitically as well.

Now for those of you who thought that this issue was resolved once and for all when the hammer and sickle came down and the Russian tricolor went up over the Kremlin at the end of 1991, think again. It‘s been at best a case of two steps forward, one step back, to paraphrase Comrade Lenin.

Fifteen years after the collapse of the Soviet Union, there are economic nationalists in Russia who believe that the entry price – the entry price – for full membership in the club, the international club, however that is defined, is simply too high and not worth paying. We can do it on our own, they argue, playing by rules that we and not they set. Now, they‘re in the minority at this point but they haven‘t left the political stage.

Putin, it seems to me, is straddling the two camps, tempted perhaps by the superficial appeal of the go it alone strategy but old enough to remember that the last time they tried this, it didn‘t work out very well.

It‘s unclear to me which of these tendencies will prevail in the end. I want to believe that it will be the first – turning outward – and Russia‘s admission to the WTO and ultimately its entrance in this context is very welcome news in this regard.

But the lure of playing an inside game, especially among those most likely to capitalize financially from any such turning away from the outside world, who include some very powerful people, is very strong. The danger here is that the more insular Russia becomes and the more self–reverential, the more of a problem it becomes for everyone else.

I think the most that we can say at this point is that there are arrows pointing in both directions.

What about Russia‘s relationship with the U.S., to raise a point that Nina raised in the setup?

The Russian elite sees the U.S. today as the major source of instability in the world. A true rogue elephant insensitive, at best, when it comes to considering the interests of others, relentless in pursuit of advantage, duplicitous, even mendacious, to the core, arrogant in both word and deed, and quick to resort to force.

If you‘re Russian, partnership with the U.S. is deeply problematic because in addition to all of the above factors – and they‘re important factors – the Americans, the Russians argue, are unreliable, even when the Americans are trying to do the right thing.

Americans, they argue, have miserable follow–through. How many times have we promised to repeal Jackson–Vanick, as an example, and we often can‘t follow through on our own policies.

Given their power and influence you can‘t ignore the Americans, my Russian friends tell me, but you can seek to limit your exposure to them and you can try to contain them, the same verb that Strobe Talbot used this morning, which Russia does by endeavoring to make common cause with other potential counterweights to the U.S. with only limited success to this point in time, but still a factor.

As for Russia‘s relations with the other major powers, especially Europe, China and India, it‘s also a mixed picture. The most important relationship remains the one with the Europeans for the time being, at least, and on balance relations aren‘t all that bad. They‘re not all that good, but they‘re not as strained and they‘re not as unsettled as our relations with the United States.

The energy relationship and the mutual dependency that this generates is obviously critical. Among its other consequences, it means that divorce – that is, divorce between the Europeans and the Russians – is essentially impossible.

Russia also finds that it‘s easier to deal with Europe as a cluster of bilateral relationships than with the Chinese or the Americans who are, after all, big, powerful and, in China‘s case, growing unified actors.

Relations with China are complex and indeterminate with regard to outcome. Russian rhetoric calls for amity and cooperation between Beijing and Moscow. In reality, there is no country in the world that over the longer term Russia fears more than China, and with good reason. The country has effectively ten times the population and is poised to become the world‘s second–largest economy within the next decade or two.

In part for this reason, Russians will persist in efforts to rebuild relations with India even as they do their best to guard against a decline in relations with Beijing.

Other actors of note from a Russian perspective, from Turkey to Iran to Japan, are essentially regional in character and thus less consequential than relations with the countries that Russia regards as the true, great powers.

And finally, what is the biggest mistake that we make in dealing with the Russians?

The first is the tendency to engage with them as though we have a better understanding of their interests than they do. This one drives the Russians crazy.

I don‘t care how many times we explain to our Russian interlocutors that they have more to fear from a nuclear–armed Iran than we do, they‘re just not going to buy it. They think they have a perfectly fine strategy for dealing with Iran, both short and long term, and who knows? They may be right about that.

Here I would note that the disease that is to believe that we understand their interests better than they do is bipartisan. It‘s absolutely clear that the Bush administration does it but so did we, meaning those of us who served in the Clinton administration.

The second mistake is seeing the Russians as either ten feet tall or as the equivalent of geopolitical ankle biters, which also contributes to our reliability problem. Ten years ago we were wringing our hands about Russia‘s precipitous decline, worrying about fragmentation and, in fact, the physical disintegration of the Russian Federation.

Fast forward to 2006 and a different crowd, albeit, warns against Russian designs to recreate the Soviet Union by drawing the former Soviet republic back into Moscow‘s orbit by employing every lever and every mechanism available to it, including intimidation and coercion.

The truth about whether they‘re powerful or impotent depends entirely on the issue at hand. This makes any attempt at generalization – they‘re this way or they‘re that way – not just difficult but counterproductive. Would that life were this easy.

The third mistake is to assume that tomorrow will look pretty much like today in dealing with the Russians. The internal political situation remains dynamic and fluid. Much can and will change over the course of the next half decade or so. The Russians are in the middle of a prolonged transition, not at some end state. We know where they started from but we – and more importantly, they – don‘t know where it‘s all going to end.

While it is perfectly reasonable to assume a high degree of continuity, some things can be reasonable and still be wrong. If we‘ve learned anything over the last 15 years it‘s that discontinuities, while very hard to anticipate, are hugely consequential when they occur and as such, they are the real engines of change in world politics.

In thinking about Russia, in other words, we need to consider and to the extent possible prepare for alternative futures.

Each of the issues that I‘ve touched on here, from Russia‘s energy bounty and demographic trends to the country‘s international relations, both near and far, certainly warrant additional consideration and I‘m happy to expand on anything I‘ve said during the Q&A session but in the interests of time, let me stop here.

Nina Hachigian: Thanks Chip, for that great overview. Harry?

Harry Harding: Thank you very much and good afternoon, everyone. These two presentations, Nina‘s opening remarks and Chip‘s presentation on Russia have been so fascinating and provocative that I‘m tempted to change places with Michael and be a commentator. But I do have to say a few words about China as a rising power and hopefully those remarks will be perhaps as provocative as well.

Obviously one of the same questions is relevant to China as it is to Russia and that is the future of China‘s rise as a major power. I‘m not going to talk about that issue here, as to whether China‘s going to continue to rise as dramatically over the next 25 years as it has over the last quarter century except to acknowledge the importance of the question. I‘m just simply going to posit that China faces a very daunting list of middle–term problems over the next decade, such things as pollution, disease, inequity, corruption, poverty and abuses of power, and then over the longer term it will also have to address the consequences of a huge demographic shift that will begin to occur around 2015 as China moves towards an older population and a smaller labor force simultaneously.

While acknowledging the importance of those questions, I‘m simply going to posit for the sake of discussion today that China is and will continue to be a rising power at least for the next decade, and to consider the implications for China and the rest of the world and especially, of course, for the United States.

My first point is – and I always stress this – that China is rising as a multidimensional power and in that sense it strikes me that China is more similar, though this will sound very strange, more similar to the United States‘ rise in the late 1940s and 1950s than to the rise of the Soviet Union in the 1960s or Japan in the 1980s. That China is rising on all three dimensions: economic, military, and soft power as the United States did, whereas Russia and Japan essentially rose as unidimensional powers, and I‘ll come back to that point at the end of my remarks. It‘s very important for the United States to understand this.

What are these three dimensions of power and why do we say China is rising on all three of them?

Well of course these days we focus perhaps most specially in New York, where I‘m now living and working, on China‘s rapid and sustained economic growth, averaging GDP growth over the last 25 years at around 9 or 10 percent per year, an extraordinary economic performance.

But it‘s not just the rise of China‘s GDP. Now we‘re increasingly seeing the rise of Chinese foreign exchange reserves, which have exceeded $1 trillion now, the accumulation of a very large capital stock due to a very high savings rate, and increasing signs that the Chinese economy is becoming more intensive than extensive in its growth. In other words, we are really seeing the way in which technological advance is increasing the productivity of the average Chinese worker.

Secondly, we‘re seeing the rise of Chinese hard power, at least to a significant degree. The modernization of China‘s armed forces, with an emphasis on building and maintaining a credible nuclear deterrent, creating some limited force projection capabilities beyond China‘s borders and its immediate coastline and the development of asymmetrical strategies to deal with the superior military capabilities of the United States.

China‘s aim at this point, in my view, is not to become a pure competitor of the United States in military terms, but rather to significantly complicate American calculations as the U.S. thinks about military conflict with China, particularly with regard to the so called Taiwan contingency, a conflict in the Taiwan Straits occasioned most probably by the declaration of independence by Taiwan.

Then third and finally, we‘re seeing an increase in China‘s soft power, a term that is associated with our colleague Joseph Nye of Harvard. A useful term but a very vague umbrella concept that has to be broken down into several of its components and let me simply tick off some of them here.

First of all, and I‘ll mention this first for very personal reasons you‘ll understand in a moment, the excitement surrounding China as a place to live and work. The land of opportunity now for many young Americans, Japanese and Europeans including my own son, who now lives in Shanghai, and relatedly the growing interest in studying Chinese by those who have not moved there yet. This is very related, of course, to China‘s economic power and it‘s why some people call economic power sticky power. It‘s a power that attracts; that excites rather than compels or creates fear.

Secondly, the attractiveness of Chinese culture, not only historical but increasingly, contemporary, with Chinese doing extraordinary work in film, in visual arts and in music, confounding those who believe that an authoritarian political system is incompatible with a creative contemporary culture.

Third, China‘s creation of so–called Confucius Institutes around the world to promote that culture as well as the study of Chinese language and in parallel, the creation and expansion of educational opportunities and training programs for various groups of foreigners inside China, ranging from college students and graduate students up to military officers and public officials from around the region and indeed around the world.

And finally, the growing interest in and the growing promotion by China of the so–called Chinese model of development and the increasingly explicit although still somewhat cautious and indirect presentation of that model as a preferable alternative to the so called Washington consensus or American model promoted by institutions like the IMF, the World Bank and the United States government.

So my first point is that China is rising as a multidimensional power and I‘m assuming it will continue to do so.

Secondly, every silver lining has a cloud around it. That‘s the pessimist‘s view of the world.

Now China is well aware of the potential downside or negative consequences of it‘s rising power status and it‘s the consequences that Nina alluded to in her opening remarks, that the emergence of a new, rising power creates suspicion, resentment and fear on the part of its neighbors. And it‘s interesting that Chinese scholars and officials have very clearly identified this problem and have developed an evolving combination of strategies to try to prevent those negative consequences from occurring. In general to try to persuade the world that the rise of Chinese power is no threat to China‘s neighbors. Let me give a few examples of how China is trying to do this.

The most simple and the longest standing are what might be called China‘s rhetorical assurances: statements that China intends no harm, poses not threat to other nations. You‘ll all, those of you who‘ve looked at China, studied China, know the rhetoric. China‘s rise will be peaceful. The development of the Chinese economy is presenting win–win opportunities for China and the rest of the world. China will not intervene in the internal affairs of other countries. China is interested in cooperative security dialogues with neighbors around the world.

All of these rhetorical statements build on but go beyond the longer–standing, generalized expression for omni–directional positive relations with the maximum number of countries so that China can gain the access it needs to market its capital and technology abroad.

Second might be seen as more active and more constructive diplomacy. China is trying to use its power on a larger stage, but it‘s trying to do so in ways that it regards and will be regarded by others as being constructive. The best examples include the Korean nuclear program and the cooperation with the other members of the P5 in dealing with the Iranian nuclear problem, and also a less well–reported but significant because of the American government‘s interest Chinese initiatives to try to persuade the Sudanese government to accept U.S. involvement in peacekeeping in Darfur.

And then thirdly there might be the – seen as the endorsement by China of a variety of multilateral regimes and norms in both the economic and the security spheres, everything from the WTO and APEC to various smaller–scale free trade arrangements and cooperative security mechanisms.

It is as if the Chinese read – I‘m sure many Chinese scholars did – John Ikenberry‘s magisterial book called "After Victory," which deals with the question of how a successful rising power can forestall what realists would say would be the inevitable tendency of other powers to unite against it to block its rise or in some cases, to try to weaken it.

And Ikenberry‘s argument is that the way that you do this is primarily to build or to join multilateral institutions, and that is what I would say the Chinese are doing. They‘ve learned that lesson very well and doing it with a very conscious awareness that, given their rise, if they don‘t try to engage in some kind of reassurance and confidence building, they run the risk that the realist paradigm would suggest.

How successful have they been? Well, actually, quite. The most recent BBC poll that I‘ve seen shows that China‘s influence is seen as more positive than America‘s in virtually every country surveyed now, with a glaring set of exceptions in Africa and a few scattered exceptions in Europe, such as Poland and Asia, such as South Korea.

China‘s standing is more positive than America‘s even in such traditional American allies as Canada, the U.K., France, Germany, Saudi Arabia and Australia, and even in India, where the United States sometimes likes to think we have finally found our natural ally and strategic partner, according to this poll the two countries were almost exactly tied in terms of who has the more positive influence.

So clearly the Chinese so far have avoided the realist dilemma of how you become strong without being feared and resented at the same time.

However, and here‘s my third point, despite this very conscious strategy and despite the positive results so far, China‘s attempts at reassurance and confidence building may not suffice. In fact one of the best summaries of the reservations that many still have about China is that contained in Robert Zoellick‘s famous speech in the fall of 2005 on China as becoming a responsible stakeholder in the international community because Zoellick ended that speech with a list of three concerns that are held not only I think by the U.S. government and many Americans but also by many others in capitals around the world.

First, that China engages in a mercantilist economic strategy despite its opening to international trade and investment and its integration with the international economy; that there are still strong protectionist impulses inside China and in fact, I would argue there is a rising economic nationalism in China as foreigners do better and better in the Chinese market. And there‘s also a concern, especially in Africa, that China‘s investment and trade activities abroad are not always as win–win as the Chinese would like to portray them. They aren‘t necessarily win–lose but they are sometimes we both win, but I win a lot more than you do, or at least that‘s how they are perceived.

Secondly Zoellick complained, as do many others, of a lack of transparency in Chinese strategic and military matters, actually an absolutely irreducible contradiction given China‘s emphasis on asymmetrical strategies to deal with the preponderance of military power on the part of the United States. The paradox is that the strong can be transparent because they have so little to lose and much to gain by revealing how strong they are. The weak have a lot to fear from being transparent because they are making their weaknesses more obvious and they‘re asymmetrical strategies more apparent.

Third, Zoellick complained about the lack of human rights inside China and this is indeed important to those who believe that authoritarian states are more like to act aggressively than democratic ones, or perhaps we should always remind ourselves more accurately, the statement is, that authoritarian states are more likely to attack democratic states than democratic states are likely to attack democratic states. So if you‘re a democracy, you may fear authoritarianism; if you‘re an authoritarianism, you may fear everybody.

In fact some of China‘s policies, although intended to be reassuring, may actually be counterproductive. Its reluctance to apply sanctions or to intervene in internal affairs, which it sees as reassuring statements of its view of international norms, may be seen as an indifference to human rights at best or a willingness to support friendly authoritarian regimes a little bit worse or worst of all, the unwillingness to take on rogue regimes whose actions threaten international security and peace.

Finally, I‘d also add that many who are concerned about the future of China promote to the promotion of nationalism as a source of domestic legitimacy as being of some concern. I‘ll simply highlight my conclusion that popular nationalism in China as seen in a variety of blogs and web sites among Chinese as well as conversations that one can easily engage in in Beijing and elsewhere, popular nationalism is far less modest, reassuring and confidence building than is elite and official nationalism as promoted by the Chinese government and portrayed in the Chinese press.

My final point before turning to the implications of that for the United States, beyond the present reservations that I‘ve just described, the most basic concern is that whatever its intentions today, China objectives will grow over time as its capabilities increase and its interests enlarge, and I think Nina also said in her opening remarks, this is the classic problem. Your intentions may change on a dime and if your capabilities have been steadily increasing, what is not threatening to us today may suddenly seem extremely threatening tomorrow if your intentions change, as they could, overnight.

So far, I think China‘s objectives have been relatively modest: basically, to create an international environment conducive to China‘s security and its economic development. But as China‘s power and capabilities grow on the dimensions I‘ve mentioned, what might change?

In fact, we‘ve already seen some clear changes so far in the foreign economic sphere reflected in the policy that some call going global, or the Chinese simply call going outward, out from China into the broader, global economy, from welcoming incoming foreign direct investment, which China has done ever since 1980, to promoting outbound Chinese foreign direct investment as part of a broader strategy whereby Chinese firms are seeking to capture more of the multinational value chain from their international competitors. And a strategy that‘s changing from simply importing raw materials and energy, as China has been doing for some time, to now going outward, seeking to control production at the source either through mergers and acquisitions, direct investment or long–term contracts.

And as this economic network expands as a result of China‘s going global, then as we always say, the flag follows trade. I guess it was originally the trade follows the flag, but now I think we say flag follows trade.

Other aspects of Chinese foreign policy might also begin to change. Already we see a shift in the focus of Chinese diplomacy from a focus on the neighboring states of Asia, where it has been ever since 1980, to a global diplomacy with far greater attention to Africa, the Middle East and Latin America because that is where the investment opportunities and the national resource opportunities are centered.

Talk of a blue water navy, as China becomes more dependent on imported materials and more concerned about the security of the sea lines of communication that would carry those things to China. I suspect eventually discussion as well of a more extended ground force projection capability because energy will increasingly flow to China by over–ground pipelines as well as tankers at sea.

And many worry still about what might yet follow after that. Latent territorial claims – the Russians certainly fear that in Siberia. A desire for an exclusive sphere of influence in Asia, or at least in part of Asia? I don‘t think these kinds of things will happen for awhile at least. I think that the combination of China‘s interdependence and the robust balance of power in Asia will act against it, but nobody can certainly be sure and confident about that over the longer term.

So, what are the implications for the United States?

First, the multidimensionality of China‘s (inaudible audio). It is in that sense, not in the military sphere, that China can be regarded in anyway as a pure competitor of America. When armchair strategists talk about China as a military peer competitor, they are entirely missing the point. The point is that China is rising on three dimensions of power, not just one and in that sense and only in that sense is it a potential peer competitor of the United States.

And that comparison is particularly important because in so many ways the United States, once a multidimensional power in my judgment, is becoming more unidimensional over time: continued military strength, but a weakening of the American economy on many dimensions and certainly an implosion and a hemorrhaging of American soft power.

Second, power is relative. The balance of power is already changing in China‘s favor, both because of the erosion of American power and because of the rise of China. This is especially clear not in the military sphere – again, that‘s not where the focus should be – but in the spheres of relative standing in public opinion and relative standing in the global economy.

Third, China has learned much from the American experience in learning how to cushion the political implications of the rise of its power through various reassurances, confidence–building measures and multilateral diplomacy. That will make it more difficult for the United States to construct an anti China alignment at this point, even if it wanted to do so. However, the incomplete success of China‘s efforts in this regard will make it easier to prepare a more subtle hedge strategy. Many countries are prepared to think about hedging China, preparing for the possibility that something might go wrong but they are not prepared to join in a containment policy now or in the foreseeable future.

So finally the key for American policy in my judgment is not to prevent China from rising; that is a futile and I think very dangerous effort. But rather to try to strengthen the mechanisms that would cushion its impact, some of which mechanisms the Chinese have actually created for themselves or joined. Those include enforcing the international norms and regimes that China has joined or is creating; encouraging China to act as a responsible stakeholder, using its growing power to act in ways that reinforce the interests that it has in common with the United States and other major powers; to preserve the multidimensionality of American power, to recover what we have lost in terms of soft power and to restore the competitiveness of the American economy in an increasingly globalized world, and finally to attempt to maintain a robust balance of power in Asia, where the rise of China will always be counterbalanced by the rise or continued prosperity of other neighboring economies from India and Southeast Asia to Russia and Japan.

I‘ll stop there. Thank you very much.

Nina Hachigian: Thank you, Harry, for that sweeping and nuanced and yet clear presentation. Michael?

Michael Schiffer: Yeah Harry, I guess, mentioned that he, after Chip‘s presentation he was tempted to trade places with me. My temptation after both of those very provocative and comprehensive presentations is simply not to be here at all. But nonetheless I appear to find myself here so I thought what might be most useful, instead of addressing any of the analysis on Russia or China that Chip or Harry have offered – that would be foolish in the extreme for me to try to do so – would be simply to offer up some framing questions for U.S. policymakers and the U.S. public to consider as we look at the question of how to deal with rising and major powers. And many of these questions have obviously already been addressed in one way or another in the comments that Chip and Harry and Nina made, but hopefully I can do some small service in helping to sharpen things at least a little bit.

First, I think there is the question of how changing power relations effect international institutions, norms and regimes. As Harry mentioned when he raised the question of the Beijing consensus, who gets to set the rules of the road and how do we harmonize those rules when interests and values may be at variance with our own?

I think the most immediate question to ask and we received at least a partial answer already is do Russia, China, India and others buy into the existing institutional structure of global governance? And obviously a critical parenthetical question there, as Strobe raised this morning and as was touched on earlier is does the United States presently buy into the current system of global governance?

If the rising powers, the major powers, don‘t, why not? And are there changes that will be necessary to guarantee that these institutions that can provide integration for the globe can continue to function?

And lastly, if these changes in norms, institutional architecture and so forth constrain U.S. power and U.S. maneuvering room, how will we react? Indications are probably not all that well.

A second question that was touched on is how do different measures and dimensions of power convert into political and diplomatic or other leverage? For example, as Chip had touched on, can Russia convert its energy superpower status into a larger international role even as it faces severe challenges across other dimensions of national power such as a demographic crash?

As Harry touched on, if China‘s rising as a multidimensional power and I wholly agree with his analysis, what are the implications of that?

And, as we look at the trajectory of these rising powers and clearly one has to include India in the mix, one should include other major powers like Japan, European Union, as we look at their trajectory, how do we conceptualize this convertibility issue and this convertibility problem for the United States? This is both a short–term and immediate problem, given the constraints that we appear to be facing in the international system as our international standing goes to a low ebb, but it‘s also obviously a long–term problem as we look to a point off in the future when the United States no longer has the unilateral moving power in the international system that it currently has. And I suppose that‘s a very long way of asking, how is it that the United States leverages its strength in an uncertain world?

Fourth, when we talk about the challenges of rising powers and major powers, how much of the discussion is an objective assessment of a challenge in a given area, of the actual power in a certain dimension or across dimensions that another country may possess and how much of the discussion is actually driving, in this country, by questions of regime type?

If Russia had developed into a fuller democracy and had not had some backsliding under Mr. Putin, would we be having the same discussion about Russia?

If China were in any significant sense a democracy, how would that color the discussion?

And clearly, as Harry pointed out, making the assumption that just because China or another country might be a democracy that will translate into greater cooperation is probably a dangerous discussion to make. But nonetheless, there clearly is some aspect of regime type or other culture and political drivers that shape the discussion of major power relations and rising power relations in the United States.

Nine and I were talking last night about all of the Japan bashing in the 1980s and one of the things that we talked about is I recalled reading an article – this is 20 years ago; I don‘t have much recollection of what I did two weeks ago, let along 20 years ago – but reading an article that basically broke down Dutch versus Japanese investment in the United States in the mid–1980s, making the point that in any objective way, the Dutch were actually a much greater threat to the United States than Japan was. Yet clearly there wasn‘t a lot of anti–Dutch sentiment percolating through American politics, and so there were other cultural factors that were at play here.

The last question that I would throw out there, which is a question that Nina alluded to in her introduction, is this: has globalization and have new technologies essentially transformed the question and the relevance of the question about major power strategy for the United States? If a non state actor in the possession of nuclear weapons or if the flow of financial instruments across borders is a national security threat just as certain as the threat that might come from a traditional state rival, then what exactly are we dealing with when we talk about this question of how the United States should be developing and trying to implement and articulate a major power and great power strategy?

So with that by way of just some additional questions to throw out there, I will turn things back to Nina.

Nina Hachigian: Thanks, Michael. Well that‘ll give you some ideas for questions.

I wanted to eliminate this microphone in the middle but it turns out they‘re using it for recording so we‘re going to have to use it, but I suggest why don‘t we have three people at a time sort of line up and ask their questions and then sit down again so we don‘t have to have, you know, 20 people with their legs aching, down the center aisle?

Michael Schiffer: We can hear you.

Bill Jones: Okay. Bill Jones from the Executive Intelligence Review. The thing that surprises me here is that we always get together to talk about a situation we find in Russia, looking at it as a thing in itself. It‘s going to move in a certain direction without taking into consideration the way that we relate to them informing what they become in 20 or 25 years.

I can see that with regard to Russia people talk about how bad things have gotten but if you remember, Dr. Blacker, of course, I know noticed this, immediately after the wall came down, in the first two years there was so much pro American sentiment in Russia that it was absolutely shocking that after so many years of Communism it was shocking. That‘s how this appeared: shock therapy and everything that went with it.

Kind of took that out of circulation. Putin tried to build back the country largely in contradiction to the governing forms of international life and did so successfully in a typically Russian way, and we still really haven‘t figured out a way to relate to that.

With regard to China, I don‘t think there‘s any major conflict we can have with them in the short term aside from the Taiwan issue. In the long term, people may talk about the raw materials and energy problems because you‘re going to have a growing population, both in China and in India, but there are these raw materials in the Russian Far East. They‘re underneath the tundra and there are lots of them, and if we could be supportive, if the United States would support a policy of trying to use those raw materials for the growing India and China, this would improve the relations between those countries and would improve our image in the world as well.

The Baker Commission, of course, yesterday I think indicated quite clearly that we have kind of been on the wrong road in terms of our foreign policy and I think that also to some extent with regard to the global situation, and hopefully the rethinking that‘s going on in the aftermath of the Iraq war will also regard rethinking here of trying to help China.

China‘s a developing country but boy, they‘ve got a lot of poor people and it‘s going to take them a long time and a lot of effort to bring them up to a reasonable standard of living and I think they‘re going to be working with this for a long time, as will India. So in spite of the tremendous growth rates, there are a lot of problems that they‘re going to have to deal with and I think if we can be helpful in doing that, we will have a different situation 20, 25 years down the road with regard to these countries.

Nina Hachigian: Thanks. Can you also state your name and affiliation before you say your question, please?

Mike Haltzel: Sure. I‘m Mike Haltzel with Johns Hopkins. Actually, I wanted to more or less address the first half of what the gentleman just did with regard to Russia.

I take Dr. Blacker‘s points. I think they were very logical and in general, I agree with them, and his point about the thing that the Russian‘s hate the most is when we essentially tell them that we know what‘s better for them than they do. In interpersonal relations, it‘s absolutely true; you don‘t want to come across as a know–it–all and it‘s untoward and it gets people‘s backs up.

But I have to say that, in a sense, objectively there are things that they‘re doing which I think most people would agree are not in their best interests and aside from the fact that they contradict what we believe are international norms. You mentioned Iran‘s nuclear weapon; I would say the whole question of the borderlands, the near abroad.

Putin‘s government seems to think that they‘re better served by encouraging instability and weak or tenuous regimes, and certainly not strong, healthy democratic regimes on their borders. I think objectively that‘s just flat–out wrong. I mean, I think that you get instability flowing from the unstable regimes back into Russia in a variety of ways.

Now, you know, we could say okay, we give up. If you want to persist in Russia in your zero–sum thinking, that‘s fine. We won‘t even use that as an argument but then what comes next? I mean, unless one thinks that we should then go along with it, which I don‘t think for a minute you do, then in fact the only thing we can say is fine. You have your opinion and we‘re just going to oppose you. We‘re not going to let you undermine Georgia. We‘re not going to let you undermine whatever other country you want to use.

I guess that‘s an answer except I would prefer, as the gentleman just said, to think that there might be a time in the future when you might get a more open debate in Russia about not only domestic policies but even their place in the world and you might actually have some of these people that you‘re trying to convince now in positions of influence in the future.

My only point is, I wouldn‘t give up on it. I think that if we think we‘re right and we have standards, I think it‘s in – to do it in a tactful way, not in an overbearing way, but to hold firm. Thank you.

Nina Hachigian: Thanks.

Graham Fuller: Hi, I‘m Graham Fuller, former vice chairman of the National Intelligence Council. Just a quick remark and then two brief questions.

The remark is that surely the question of rising powers versus potentially declining superpowers is much intensified by the present administration‘s explicit determination to exert global hegemony. So I would think that very fact in itself would intensify from our side all our anxieties that might be vastly less if explicit global hegemony was not on the present administration‘s agenda. That‘s an observation.

In terms of Russia for Chip Blacker I wonder, a little bit in distinction to the last questioner, I wonder whether the U.S. rush into, in effect play a game that what is our is still all ours but what is yours is now up for grabs, was perhaps a bit unseemly and has been pushed in further in more unseemly directions, even in terms of sensitivity. I wonder whether Riga, just last week, was the best venue for challenging Russian – let‘s say raising issues of Georgia and Ukrainian and even Belarusian membership in NATO. So to what – I think you know Steve Cohen at Princeton has particularly made that argument among others.

And then Harry, I wonder on the Chinese side, would you comment a little bit about the Shanghai Cooperation Organization and what it is and what it isn‘t. Seemingly I would argue unnecessary anxiety that I see emerging in this country about what that might portend. Thanks.

Nina Hachigian: Thanks. Three great questions. Just to recap: how U.S. policy shapes the evolution of these power‘s policies towards us, Russian behavior is really not in their best interest plus we don‘t like it, but we shouldn‘t maybe give up on trying to convince them of that, and then last sort of, I guess, characterize U.S. tactfulness and also the Shanghai Cooperation Organization.

So Harry, why don‘t you start?

Harry Harding: Okay. Well these are indeed very good questions.

Many years ago when I was thinking about how I would define American policy towards China if I were making it, I came up with a little acronym that was rice. I thought that was appropriate. R I C E. Reassurance, integration, cooperation and enforcement.

I‘ve been talking so far about integration, in other words, endorsing and supporting the idea that China will be joining various norms and regimes and institutions but then that those have to be enforced. But I didn‘t say that much about what the first questioner asked about, which was basically reassurance and cooperation, because in this very fraught situation where a rising power is coming closer and closer to an established power, I think both sides have to engage in reassurance.

The Chinese have done so. We need to do so as well. That we wish China well, or at least we have to make it clear that we have no interest in China‘s failure. We don‘t want China to become weak. We don‘t want it to be a failed state. We are willing to compete with it on equal terms.

Because there are really two sides to the realist‘s dilemma and you just pointed out half of it, that is that when an established power is insistent on maintaining hegemony, don‘t even think about becoming our peer competitor, that means that the rise of any other power is seeing that as a magnified threat. But it also raises concerns in the rising power, and many in China are convinced the United States is going to try to block them. That the United States is not going to allow China to rise. So the process of reassurance as to be mutual.

Secondly, then, we have to find ways of cooperating on issues that could otherwise be contentions, especially emerging issues, and I would identify three: energy, which was already mentioned; the global environment, and development.

Energy could become a major scramble for resources. We have to find ways of cooperating not only on the important issues of energy–saving technologies, alternative sources of energy, but also on the core question of access to energy resources, and to realize that in an interdependent energy market. The real approach is to cooperate to make sure that the market operates smoothly and that all transportation routes are kept open.

On the environment we have a tremendous issue. In face, unfortunately China and the U.S. are both on the same side. They are both resisting the idea, as the major producers of greenhouse gases, that they bear a particular responsibility, but I think that we‘re going to have to cooperate with others in the international community to assess and then address the problems of environmental pollution, especially climate change and global warming.

And on development, as I‘ve said, we now are emerging to a situation where there‘s going to be much criticism of the Chinese model and Washington consensus. Wouldn‘t it be better if we were to say, you know, nobody has perfect solutions but we have a common interest in preventing failing states and in promoting global development, and maybe we could actually learn something if we sat down and compared notes and tried to develop some guidelines or strategies or advice for developing countries.

So I‘d like to see if we couldn‘t take issues that look like they‘re emerging, could be contentious, and find ways of cooperating on them just as we have begun to do so on some of the issues that I mentioned very much present–day issues like especially the North Korean nuclear program.

And on the SCO, I think that it is basically a way of dealing with the problems, the common concerns, and I really do think that the official statement of purpose says it all: extremism, terrorism and fundamentalism in Central Asia. Also some concern about whether the American military presence in that part of the world is going to be permanent and increasing concern about what happens to the energy resources of Central Asia.

Some argue that this could become an anti–American grouping, especially focusing on the Chinese–Russian connection. I think that in an interdependent, multi–polar world, it would take extreme stupidity by any power, China or the United States, to force an alignment against it because I think the preference of every major power is to have access to as many markets and to preserve as much political maneuverability as possible.

Alignment is not the norm today. Fluidity is, and it would take enormous stupidity of the target country to encourage an alignment to form against it in the SCO or elsewhere.

Nina Hachigian: Thanks, Harry. Chip?

Chip Blacker: Before I respond to the three questions, I just want to pick up on something that Harry said at the end about the fluidity of the contemporary international system, which I think is exactly right and it‘s something that 1) we don‘t understand very well because we don‘t have that much experience with it; 2), it‘s very hard to talk about because it‘s profoundly three–dimensional, maybe even four–dimensional in character.

When I‘m asked to talk about it I say you can have some sense for the complexity of what we‘re talking about in systemic terms if you recall what high school physiology books looked like in the 1950s and the 1960s in the U.S., where they had transparent overlays? So, you know, you see the skeletal system and then you‘d see the muscular system and then the nervous system and then the organ system, and then out of that would come the full picture, but it‘s not transparent.

Every conversation I have about the nature of the international system in 2006 begins with the business about enormous complexity, fluidity, dynamism and multi–layer, and it‘s – we shouldn‘t be too hard on ourselves for not being able to get this one right almost instantaneously because we‘ve never dealt with anything of this complexity before if you‘re talking about the nature of the international system, which is a bit of my answer to all three of the questions and comments as posed.

I begin with a set of propositions about what‘s going on in the world. One is, and the most important is, because of the current distribution of power on multiple levels, balancing activity on part of countries other than the United States is inevitable. It‘s going to happen. But because of the complexity of the system, it looks vastly different than it did, you know, after the treaty of Westphalia or war of the Austrian succession, right? I mean, power was defined in relatively simple terms.

What happens now is as an overlay, but a very, very important overlay, is we have learned to talk to one another in vastly different and vastly more complex ways than we did two or three hundred years ago because there are so many more issues at stake, because we‘re so deeply interrelated and integrated.

So when we talk to the Russians about why they shouldn‘t do something or why they should do something, there are two things that are happening. One is, when you do so in an official capacity, you reflect a consensus judgment within your own government as, you know, Graham, about what is supposed to be said, what are the talking points, right? And I can‘t tell you how many times I was obligated to say, in our judgment you have more to fear from a nuclear armed Iran than we do.

Did I believe it? No. I didn‘t believe it. I could imagine the circumstances under which that might be the case but I‘m an academic, right? So I wanted to put it out as a proposition and then we could argue about it, we could talk about it.

But that‘s not what happens. Instead, you get the formal response then from the Russian side that says, you know, your mother wears combat boots, right? And you talk past each other.

All right, what I find really, really interesting, then, is you get beyond it and if you can drop the pretense of being an official representative of your country you can say in the corner look, I‘m not talking here as senior director for Russian affairs at the National Security Council. I‘m talking individually and if you tell, you know, if what I‘m saying now is reported in a literal sense, I will disavow it, okay? Let‘s sit down and talk, all right?

And that‘s how most things get done. That‘s how you make progress on these things.

So one, you don‘t give up. You keep pressing because everything‘s changing and everything‘s changing at the same time. Two, in policy terms, you try to separate the wheat from the chaff, that is, you kind of remind yourself what the target is, what the end goal is here and then you force yourself to engage in whatever series of pirouettes and complicated dance moves are necessary in order to get to those very productive corner conversations.

Three, in dealing with first the Soviet Union and then the Russians and the successor states, I‘ve always thought that the best way to start thinking about what we should or should not do is to put yourself in the position of the other actor and I don‘t care if it‘s Karimov in Uzbekistan or Nasrbyaf or Turkmanbashi, just imagine what the world looks like from their perspective. And it doesn‘t mean that we have to then say well, given your perspective, we‘re perfectly happy to see the point that you‘re making that, you know, you have lock up 25,000 prisoners of conscious in whatever country we‘re talking about because you need to do that. I mean, no. You don‘t have to go that far.

But I think the first piece of wisdom is always to try to figure out how the world looks from the perspective of that capital while at the same time trying to figure out how best to advance your own interests. At the end of the day, it is trying to advance one‘s own interests, not at the expense of others and hopefully there are positive sum outcomes along the way, but not to pretend that somehow you are in possession of the truth when it comes to trying to drive people to do things that they would not otherwise do.

That‘s the problem I have with the way we as Americans in particular tend to frame things and I felt very badly about this until I realized that every other country does basically the same thing.

Nina Hachigian: Michael, do you want to add to that at all?

Michael Schiffer: Well the only thing that I would add, just on the question of reassurance and signaling and the ability of the United States to shape policy choices in other countries is just to recall that the 2002 Bush national security strategy actually had some wonderful language in it about the concert of major powers. I think the letter of transmittal that the president sent actually talked about how we had an opportunity to break a pattern that had existed since the 17th century.

Unfortunately, that document also had some language in there about preemption and hegemony and no peer competitors and primacy and that was the message, none too reassuring, that I think went out from that document.

All of which is to say that I don‘t think we should ever underestimate out ability to influence thinking elsewhere in the world and we need to be very, very careful in how we go about it.

Nina Hachigian: Let‘s go to three more questions.

Unidentified Speaker: Well, actually Michael‘s comment right there was just stole my thunder in a way because I was going to pose the fundamental question of whether it isn‘t at this moment that the most fundamental issue facing the United States in terms of national security arguably is whether the United States is going to take the position that it refuses to allow any other state to become a pure competitor to the United States and will take action to prevent it or whether it will, in fact, take the opposite position, which is that the United States recognizes that a redistribution of power is inevitable, will happen regardless of whether we want it to or not, and that we will not just accept it but that we will actively participate in a process which will make that transition more peaceful and more stable, which is in a way implied by the notion of a great power concert.

But certainly the United States arguably could use diplomacy in a way that would be very creative and that would take advantage of the temporary position of power the United States has today but a very unstable and in many ways unusable power advantage to help to shepherd or to bring about a more stable, more secure world by reassuring China, Russia, Iran, rising powers if you will, that the United States is not indeed – not just challenging but threatening them and thereby bringing about circumstances which would, in fact, make it possible for us to achieve our real security interests and other interests more effectively.

So I guess I‘ll stick with that and maybe ask the panel for comments on that proposition.

Nina Hachigian: Thanks. We‘ll just take all three and then –

Ved Nanda: Ved Nanda. I‘m at the University of Denver; teach International Law.

The context for my question is my trip for about 10, 12 days, I just came back from India yesterday, and that was an international conference that I‘d been asked to address.

Meeting there with government officials, with academicians, with policymakers, two things came clear. One, after President Hu‘s visit to India, the thought there was that China is going to continue to engage in the policy of both containment and engagement of India. Energy, territorial disputes, encouragement, assistance to Pakistan, all those issues were in the open.

At the same time, the talk was that the United States equally engaged with containment and engagement in India; that the United States would use India to balance China and that at the present time the accord, nuclear accord, has so many issues with which India has problems, and I won‘t go into them.

But the question that I want to raise for you is, how does the U.S. policy, looking at the perspective from India‘s own thinking and China–India relations, how does the policy need to be projected in order to further the U.S. interests but at the same time to at least assure India, too, that U.S. policies are in its interests as well?

RajitDas: Rajit Das, Americans for Informed Democracy. My question is, how exactly is India in the equation of a rising power?

Nina Hachigian: Okay, thank you. Three questions, the first one about American primacy and whether it ought to be a goal; second, about China‘s policies towards India and vice versa, and U.S. policy toward India, and last, how is India a rising power?

Do you want to start with this one, Chip?

Chip Blacker: Sure. I was very intrigued by the opening question and comment about managing as opposed to resisting.

I can certainly make the case that, if you take a timeframe that extends out beyond five years or ten years and you are talking about trying to ensure a smooth transition from whatever vestige we have of unipolarity to something that‘s more recognizable although inadequate and insufficient to describe the emerging system, mutipolar in character, and I can agree wholeheartedly with the wisdom of structuring policy around the inevitability of change.

If I take my academic cap off and put on my war fatigues as a policy maker, then I‘m thinking yeah, 10 years, 20 years, 30 years down the line, that‘s all great but long–term planning in the government is, you know, six months, right?

And that‘s the problem. The problem is trying to implement policies today or the day after or a week from now or a month from now that are both good for the long term and also satisfy near–term policy needs. It‘s not impossible. It‘s extremely difficult. You can‘t do it on all issues and you can only do it when the political leadership enjoys a degree of stature and legitimacy that provides the implementers the kind of political cover to do it.

So again, what I‘m struck by is not the inappropriateness of the vision because I think it‘s right if you take this longer term time span. It‘s figuring out how to combine short–term and medium–term exigencies with this kind of longer–term demand.

How an administration voices its long–term goals and plans is absolutely critical here. One of the things that struck me at the time and continues to strike me, although now less with the second edition in terms of the U.S. national security strategy in particular as articulated in 2002, as Michael said, was that it was like reading four or five completely distinct documents. And you could feel very good and very positive about the leadership, again, in 2002 that this country was providing if you read, in particular, the last three chapters. But if you read the executive summary and the second chapter, I think it is, you would think wait a minute, wait a minute, this is going to – this doesn‘t add up. That problem is not so bad in the ‘06 version but it‘s still there.

I‘m going to leave the Sino–Indian question to Harry.

With respect to the third question, how is it that India is a rising power, power is a combination of both substance and perception. I think we‘ve learned a little bit about how power aggregates by the Chinese experience.

My first trip to China was in 1979 and the China of 1979, at least Beijing and Shanghai, bears scant resemblance, literally, to Beijing or Shanghai in 2006. No one anticipated – you can correct me if I‘m wrong on this, Harry – I don‘t think anyone anticipated that the Chinese economy would expand at the effective rate of 10 percent per annum every year since 1979. No one knew that Deng Xiaoping‘s reforms were going to succeed. At least as many people predicted the outright collapse of the system as its prosperity.

That was extremely sobering for people who thought they had a good understanding of what was going on within the developing world, so some of it is a sense we don‘t want to make the same mistakes analytically with India that we made with China and the sense is that the Indians are starting from a higher plateau. So that I think is what gives rise to this perception.

Plus it‘s got a huge population. But I think it‘s more the sense of not wanting to get it wrong a second time.

Harry Harding: On that, I‘d simply add a little bit. India has the same strategically important location, the geographic size, the huge population and the ambition that China does. In that sense, they‘re very similar. They are rising powers because they have the wherewithal and the desire to be rising powers.

Both of them have very uncertain futures and what‘s fascinating is in many, not all, but many ways, they‘re exact mirror images of each other; that India‘s strengths are China‘s weaknesses and vice versa, and so it‘s a fascinating comparison and a fascinating dynamic.

I was fascinated by the perception of the Hu Jintao visit and even more by the threat of parallelism of the way Indians apparently see China and the U.S. They‘re a little bit different; they‘re both trying to engage China. It sounded like the Chinese are trying to contain India and the Americans are trying to use India, and I think that that may be a very accurate perception of what‘s going on.

Unfortunately, I think what happened was that in the late 1990s in the aftermath of the Indian nuclear tests and the sanctions that were imposed at that time, there was an attempt to improve Indian–American relations, not just tactically but in a way to create a new relationship after decades of sort of strained or nonexistent – not nonexistent but, you know, strained and kind of underdeveloped relations by basically selling India as a card to be played against China.

My reaction at the time is that the reason to take India seriously is not China; it‘s India because it is a rising power. But unfortunately there was this sense, and now we‘re seeing the legacy, but basically it is China that is the basis of the U.S.–India relationship. It need not be. It should not be because, as I said earlier, both China – as both the United States and India want if they can get it, positive relations with China. The reason to take India seriously is India.

So I think we have now some legacy to overcome that sense of being used by the Americans in India, plus the very real fact that in a number of issues, particularly with regard to the structure of the international order and particularly now with regard to how to deal with Iran, the United States and India do not see eye to eye.

Finally, with regard to this question of peer competitors, I‘ve always found it fascinating that in so many areas we see competition as a virtue. Our whole philosophy of neoclassical economics is built around competition. Competition is good; monopoly is bad. Our whole theory of democracy is built around competition. Pluralism is good; contested elections are good. Authoritarianism is bad.

But in so many ways and so many circles, our theory of international affairs is built around non–competition. Hegemony is good. Dominance by the United States is good. We are liberals in the economy and in domestic politics but so many of us are conservatives or authoritarians when it comes to the international system.

My sense is that competition is good in all areas of life, but the difference is that in international affairs, competition can become deadly and so the key is first to create structures and institutions that regulate competition in the international environment as we have them domestically and we have them in economics, and then I guess I‘m enough of an American nationalist to say out compete the hell out of everybody else.

And as I said, we have to maintain our own competitiveness and there are a lot of challenges. Because we‘re at the top of the value chain, everybody else finds it easier to replicate what we‘ve done than we find ways of keeping on with new, higher value–added goods and services and technologies and finding the ways of dealing with the growing inequalities that seem to be created in very advanced, post–industrial societies and how to do this in a situation where we have a very, very high and apparently structural deficit in our international accounts.

Thank God our international debt is denominated in our own currency. That‘s all I can say. Otherwise we‘d be in big trouble.

Nina Hachigian: Okay, let‘s go to our next questions.

Unidentified Speaker: Harry, you spoke of the U.S. not too many years ago looking at India in the context of how the U.S. can use India. I think it‘s fair to say today the Indians are looking at how they can use the United States to achieve the regional superpower status that they talk about and if, in a perfect world, the two of them have a lot of interests in common where in fact cooperation could be both beneficial to Washington and Delhi.

But moving from that grand strategic vision of what could be to turning into reality, the words are simple to speak: there‘re massive bureaucracies in both capitals that have a lot of hesitancy and reluctance to allow this to move ahead and as the president and prime minister talk about things, then there‘s this drag and friction that allows, instead of great leaps forward, a tiny little incremental movements, millimeter by millimeter rather than kilometer by kilometer.

So, two points. With that ongoing dynamic between our two countries, what do you gentlemen see as where we might be most likely – projection five or ten years forward and depending on what you think, how do you see the U.S.–China and U.S.–Russia relationships as you started here this afternoon, how do you see that moving and being affected by the U.S.–India relationship, whatever that happens to be?

Nick Berry: Nick Berry, Foreign Policy Forum. See if you agree with this proposition.

It seems like the United States is playing a major role in the rise of China and Russia. We notice the rise of China and Russia because of the great decline in American power. Those of us that go to Davos for the World Economic Forum for this decade have seen enormous hostility towards the United States and to counterweight U.S. militarism.

Secondly, we‘re amazed that Washington pays almost no attention to this and seems rather unconcerned and sticks with its militarism. That may change now with current events.

Is this caused by the fact that this present administration came into power on the national security issue and used that again in 2004 as their, as Rove says, their prime issue and therefore they are locked into using militarism as the measure of power with no peer competitors, missing the nature of power in a globalized world? That is, they play to domestic interests and not to, if you will, the international global system.

Can this explain therefore our concern with the rising powers not recognizing the fact that relatively that is caused by our decline?

Nina Hachigian: Okay, thanks. So two questions, where will be in five or ten years in the U.S.–India relationship and how does that affect our relations with Russia and China and secondly, is the administration blocked into militarism in its effort to play to domestic interests and how does that – is that actually one of the causes of increasing power in the other countries as a relative change.

Harry Harding: Why don‘t I take the first one? I‘ll let these guys who know far more about the politics of American security policy than I do take the second one.

I took the first question to be in the first instance kind of the political economy of India–U.S. relations and let me say, kind of talking about two bureaucracies but it‘s more than that. It‘s the complexities of two democratic systems where there are important differences on at least two sets of issues.

First of all, there is rising economic nationalism in both India and in the United States so that even though India is opening up its economy, being well behind China in that process, we see considerable evidence of resistance to, as in many countries, to the increasing role of multinational corporations in various sectors of the Indian economy and with particular regard to certain sort of neuralgic issues. With regard to the use of land, for example, and the multinationals will push for a liberalization of labor policies in India. This is going to be difficult.

In the meantime here in the U.S. unfortunately India, more than China, is I think going to be the cause of concern over what might be called middle class offshoring. In other words, the export of services to India, professional services, starting with call centers and moving rapidly into various software–related things and other kinds of – it‘ll spread from sector to sector of the U.S. economy. It‘s going to be part of that hugely difficult transition that I talked about as we struggle to move up the value–added chain as other countries are coming up behind us. So there‘ll be economic nationalism on both sides.

There are also strategic differences that I‘ve already alluded to. India has a different view of the world; it‘s in a different place. It has concerns with regard to Iran and Pakistan that we don‘t have, for example. We will want probably a world that is more unipolar; India, like other rising powers, will want a more multipolar world.

Where we end up relative to U.S.–China – I‘ll let Chip talk about U.S.–Russia – I suspect that there will be, these will all be mixed relations, a combination of areas of cooperation and difference.

I think that the difference is that probably for the foreseeable future the United States and India will have a common perception that they are both democratic countries. That will make a big difference in the United States. India will feel closer to the U.S. because it doesn‘t have the same territorial disputes that it has with China. So I think that basically India–U.S. relations are going to be warmer than either U.S.–China or certainly China–India, although I think it‘s all going to be a matter of degree. I don‘t see the U.S. and China evolving into a confrontational relationship and I don‘t see U.S.–India forming an alliance against China or anybody else, but I do see that it will most likely be a qualitative difference in the middle of this broad spectrum.

Chip Blacker: I‘m very intrigued by your closing question about the impact on various bilateral relationships of what happens – by reference to other bilateral relationships and it is an extremely fun question to think about because the world that we‘re dealing with is made up, not of one class of power or two classes of powers, but three classes of powers. You have the rising powers, you have the declining powers and you have the sideways powers. And it‘s the sideways powers that complicate the analytical matrix here.

When I think of who‘s up, who‘s down and who‘s moving sideways, assuming that the Chinese make the political transition over whatever timeframe we‘re talking about, they can hold it together – and personally, I‘m very optimistic because any communist party that welcomes in entrepreneurs and capitalists has its head on straight if it‘s thinking about what they need to do to still be in power 10 or 15 years from now. I think the Chinese would have done this anyway, but I‘m sure that was one of the lessons they learned from the implosion of the Soviet system if they needed any instruction at all, but it‘s exactly the right way to do it.

And I think more or less the same issue confronts the Indians: can they hold together politically given the diversity and also probably widening disparities in income, as some people get rich and others don‘t.

But I think those are two clearly rising powers. I think the Iranians, almost without respect to what happens over the near term, have to be thought of as a rising power regionally. Seventy million people today, how long until it‘s 85, 90 million, 100 million?

What happens to the Nigerians when they move from 100 million to 120 or 150 million? Can you be both a regional superpower and a failing state at the same time? I think the answer‘s probably yes. And Brazil and Mexico, you go all through this stuff.

The big question marks here, for me at least, analytically are what do you do with the sideways powers and what accommodation do you make for them? And the big sideways powers are Japan, Russia and Europe in the sense that there are arrows pointing, you know, multiple ways.

We don‘t have a very good way of thinking about this. We really don‘t, which was my point about our tendency to see the Russians as either ten feet tall or the phrase I used was geopolitical ankle biters where, you know, you just kind of brush them off because they don‘t matter.

One other point on this: Harry made reference to this with respect to China but you can do this in some very, very revealing ways for all countries of the world, that is, take a look at their demographics. I think a huge problem that the Chinese have to contend with is the pig is moving through the python in China in ways that are without precedent and it‘s going to create real stresses and strains. The same thing‘s happening with the Russians so that systemically you have the problem of the old and the rich, and the young and the poor.

So if you want to talk about drivers in terms of international politics that I think will completely overwhelm the kind of neat little minuet which we associate with this or that bilateral relationship, look at those factors because I think they‘re huge.

Michael Schiffer: That‘s one of the few drivers that you can really predict pretty easily.

Chip Blacker: Yeah. Yeah.

Michael Schiffer: It‘s one of the few that‘s easy to predict.

Chip Blacker: Can I say one thing about the second question, that is, militarism, and then Michael might want to say something.

I have a very, very allergic reaction to that term because it has a very specific meaning to me, which is a kind of fascistic corporatist way of thinking about the use of force.

If you say this administration‘s excessive reliance on the military as an instrument of foreign policy or its tendency to resort to the use of force more rapidly than other administrations, then I don‘t have a problem with it. But I do not regard either the country, the polity or the policy of the United States as based on notions of militarism. Thank God for the tradition of civil military relations in the United States. A lot of very good things about the United States, including the way we think about these things. Not always great in executing things, especially beyond our own shores. We get a little carried away. But domestically, I think the architecture‘s about right.

Having said that, we have a problem and the problem is how do we deal with the fact that we have gone from, in terms of being a soft power model, we are now a model to which people take extraordinary exception, first because of our conduct – sorry, first because of our rhetoric, second because of our conduct and third because of our behavior as a purveyor of soft power.

It doesn‘t take that much, given the first two, that is, rhetoric and action, it doesn‘t take that much to take an essentially positive or neutral reading of U.S. soft power and turn that into a profoundly negative set of conclusions because if you‘re doing relatively well with the first two, then U.S. advocacy of democracy abroad can be viewed as basically a positive expression of American values, not terribly threatening.

If you talk about democracy promotion in the context of rhetoric that is focused very loosely around regime change in certain parts of the world and that seems to imply that it‘s done down the barrel of a gun, then you have a problem. That‘s what‘s happened. The soft power equation has changed from being advantageous to our interests to disadvantageous to our interests, which is a very interesting sociological phenomenon that I don‘t think, frankly, we understand very well and as in the case, always in the case of politics and war, we always learn lessons from the last one rather than what is likely to come and I think we‘re going to pay a big price for it.

Nina Hachigian: Thanks, Chip and Michael, we‘ll give you the last word.

Michael Schiffer: Sure. I‘ll just make a couple of comments. Much as it pains me in certain respects to say this, I don‘t think it‘s fair to characterize the Bush administration as having come into power advocating militarism. If you recall the 2000 elections, the president, his memorable campaign statement on foreign policy was that he wanted to be more humble in how the United States interacted with the rest of the world. As far as there was any military aspect to the campaign, it had to do with transformation and the transformation of the military.

9/11, I think – I don‘t offer this as a defense but as an explanation, 9/11 did truly change everything in the sense that it led, for a variety of complicated reasons, to this over–reliance and fixation on the use of force and the use of the military by the administration.

Clearly, there were domestic and political advantages that also drove that and further encouraged the administration in how they approached that set of issues and it paid dividends for them in the elections in 2002 and 2004.

I think now we‘ve seen with the recent midterms that that domestic consensus is breaking down and I think that will, in turn, lead to some changes, some very real changes in policy.

The question, as Chip was just discussing, is how much damage has been done in the meantime. You can‘t walk these things back. Once you‘ve scared the hell out of everybody, it‘s hard to convince them that you‘re really the nice guy that they should want to go out with and grab a beer with at the end of the day.

It‘s very difficult to tell how that all unfolds over the next couple of years. I would like to think being at least somewhat optimistically inclined that with deft diplomacy it is possible to undo at least some of the damage.

The other comment that I wanted to make was on this idea of the relative decline of the United States. I think that is somewhat oversold. There is, as a colleague of mine likes to comment, this baseline versus trend line issue. Some of these trend lines that we‘ve been looking at when we talk about India and China and others, and the rise of these other powers, tend to look fairly scary as their power is accumulating in a rather steep way.

On the other hand, when you look at the baseline, the United States still very much dominates the globe, for better or for worse, and others recognize that and realize that, and that is the essential reality that we will have, not forever, which is why I personally would not advocate a policy of primacy because I don‘t think it‘s sustainable over the long term but certainly for the next period of years.

So the question is how well and how wisely we‘re able to shepherd this period where we still have considerable power and influence to try to shape a world that is more to our liking and more consistent with our values and our interests.

That‘s it in terms of my comments. I don‘t know if – Nina, if you have anything that you wanted to –

Nina Hachigian: No, I just wanted to say I think that‘s a great way to end. I‘ve been thinking a lot about these issues lately and I really can‘t imagine a better distillation of them than we‘ve had in the last couple of hours, and I want to thank our panelists. They‘re really just terrific. So, thank you very much.

Harry Harding: Thank you.

Chip Blacker: Thank you.

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