America in Asia: On the outside looking in, by Evan Feigenbaum

Below is a complete transcript of the keynote address given by Evan Feigenbaum at the recent East Asia Strategy Forum.

Kaiser Kuo: Welcome to the Sinica Podcast, a weekly discussion of current affairs in China, produced in partnership with The China Project. Subscribe to Access from The China Project to get access. Access to, not only our great daily newsletter, but all the original writing on our website at thechinaproject.com. We’ve got reported stories, essays and editorials, great explainers and trackers, regular columns, and, of course, a growing library of podcasts. We cover everything from China’s fraught foreign relations to its ingenious entrepreneurs, from the ongoing repression of Uyghurs and other Muslim peoples in China’s Xinjiang region, to Beijing’s ambitious plans to shift the Chinese economy onto a post-carbon footing. It’s a feast of business, political, and cultural news about a nation that is reshaping the world. We cover China with neither fear nor favor.

I’m Kaiser Kuo, coming to you from Chapel Hill, North Carolina.

This week, in lieu of our normal program, we’ve got an outstanding keynote address that Evan Feigenbaum gave recently. Evan is vice president for studies at the Carnegie Endowment for International Peace. He is a State Department veteran with deep experience in East, Central, and South Asia, and he worked for many years at the Paulson Institute in Chicago. He has, of course, been on Sinica on numerous occasions over the years. Most recently, after the February 24 invasion of Ukraine by Russia. He delivered this talk at the East Asia Strategy Forum, which was held in person in Ottawa, Canada on November 1-2. About 150 people attended, including policy-makers, business people, academics, and students.

It’s an annual event and was put on by the Asia Pacific Foundation of Canada, APF Canada, and by the Institute for Peace and Diplomacy. The Asia Pacific Foundation of Canada is a not-for-profit organization focused on Canada’s relations with Asia. Its mission is to be Canada’s catalyst for engagement with Asia and Asia’s bridge to Canada. The Institute for Peace and Diplomacy, IPD, is a non-profit and nonpartisan international affairs think tank operating in the United States and Canada, dedicated to promoting dialogue, diplomacy, prudent realism, and military restraint.

The moderator was Jeff Nankivell, CEO of APF Canada. Jeff was the consul general to Hong Kong before taking his post at APF Canada. I thought this would be a great talk to listen to this week, given that today Monday morning, November 14, U.S. President Joe Biden is in Bali, Indonesia for the G20 meeting, and he met with Chinese President Xí Jìnpíng 习近平 for over three hours. So, I pinged Evan on Monday morning to see whether he was available to comment about the Bali meeting, something that we could append to this speech of his, but unfortunately, he was on an airplane and is not able to do this. So, let me just offer a couple of observations about the meeting.

I’ve read the readouts from both the State Department and the foreign ministry. And while the U.S. version was considerably more terse, it was nonetheless very encouraging. The much longer Chinese version, unsurprisingly, centers on the foundational importance of Taiwan and attributes to Biden, not inaccurately, language about how the U.S. government pursues still a One-China policy, does not seek to use the Taiwan issue as a tool to contain China — this is the wording in the actual readout — and wants to see peace and stability in the Taiwan Strait. The Chinese version doesn’t indulge in too, too much finger pointing. And the U.S. version includes, by now, what is a pretty standard set of issues that Biden would be expected to raise on Xinjiang, on Hong Kong, and things down to exit bans on U.S. nationals.

I wouldn’t dismiss either the Chinese or the U.S. litanies as mere boilerplate, but the focus was decidedly more on avoidance of calamity and areas even of possible cooperation. Both leaders emphasized the need to cooperate on what the U.S., in its readout, calls “transnational challenges,” but actually that Biden described as “global issues.” And you guys can see my interview last week with Anne-Marie Slaughter who talked about the significance of those phrases, transnational challenges versus global issues. And both leaders were really quite intent on putting a floor under the downward slide in relations. So, that’s definitely encouraging.

Perhaps the most important announcement was that, and I’m quoting from the U.S. readout here, “The two leaders agreed to empower key senior officials to maintain communications and deepen constructive efforts on these and other issues. They welcomed ongoing efforts to address specific issues in U.S.-China bilateral relations, and encouraged further progress in these existing mechanisms, including through joint working groups.” So, while this isn’t revival exactly of the SDD, at least there will be more diplomatic contact at different levels. And it was also announced that Tony Blinken will be going to China in the not-too-distant future. So, that’s great.

Xi Jinping also offered some assurances attended to, pretty clearly, to assuage American fears about China’s ambitions in the world. This will not, of course, convince anyone who is already locked into assumptions about China seeking to replace the U.S. as the global hegemon. But it is significant that he said this. He said, “China has never sought to change the existing international order, does not interfere in the internal affairs of the United States, and has no intention to challenge or replace the United States.” There was another interesting sentence in the U.S. readout that was, I think, significantly omitted in the Chinese version. It said, “President Biden and President Xi reiterated their agreement that a nuclear war should never be fought and can never be won, and underscored their opposition to the use or threat of use of nuclear weapons in Ukraine.”

This is really reiterating something that Xi Jinping had already said before and that was repeated by Wáng Yì 王毅 recently. I think it’s interesting to note that the U.S. readout kind of breaks with what they’ve done in recent readouts from high-level meetings. Many of the statements are actually explicitly attributed to both leaders rather than just Biden, or Blinken, or Sullivan as had previously been the case in most State Department readouts. This is significant. It suggests maybe some agreement on language that would be put out after the meeting. It’s a pity that Evan wasn’t able to comment, but still, this excellent talk of his, as I’m sure you will see, provides a really valuable perspective on the challenges and shortcomings of U.S. policy in the region.

Thank you so much to Jeff Reeves and all the good folks at APF Canada and the IPD for giving us permission to publish this talk on the Sinica Podcast. Enjoy.

Jeff Nankivell: Welcome back, everybody. It’s my great pleasure to moderate this next session which I hope will be mildly immoderate. But our guest is… I think we’re really privileged and I’m very grateful to have with us, Evan Feigenbaum, who is the vice president for studies at the Carnegie Endowment for International Peace. And he’s a former U.S. Deputy Assistant Secretary of State for South Asia. Evan currently oversees research for the Endowment in Washington, Beijing, and New Delhi on East Asia and South Asia. He started out with a PhD in Chinese politics from Stanford University, and his career has taken him through government service, think tanks, the private sector, and three really substantial involvement in three major regions of Asia.

You can get the full story if you look at the speaker’s bio, obviously some issues with holding down a job, but it’s because he’s been excelling at everything he’s done. I’ll just mention a few highlights that I think are very pertinent for the talk today. So, from 2001 to 2009, Evan served at the U.S. State Department as Deputy Assistant Secretary of State for South Asia, Deputy Assistant Secretary of State for Central Asia, a member of the Policy Planning Staff with principal responsibility for East Asia and the Pacific, and as an advisor on China to Deputy Secretary of State, Bob Zoellick, with whom he worked closely in the development of the U.S.-China Senior Dialogue.

He’s also worked on, among other things, U.S.-India Civil Nuclear Cooperation, not a light lift, and non-proliferation issues related there too. He has worked on Korean Peninsula issues, Central Asia agreements with Japan and Australia. If you listen to some of the leading American international podcasts on Asia, you may have heard Evan. I feel I know him from some that I have listened to as he’s a highly sought-after guest, and I think we’re very lucky to have him. I’m grateful, Evan, to you for joining us, and I look forward to your insights. Please join me in welcoming Evan Feigenbaum.

Evan Feigenbaum: Great. Well, thank you. First, I want to thank the Institute and I want to thank the Foundation. I want to thank Jeff and Jeff. It was easy to have two Jeffs. It’s very good to be back in Ottawa. I haven’t been here since before the pandemic. It’s been for me, as I’m sure it’s been for you, a very strange few years. About four months into the pandemic, my then boss, Bill Burns, called me and he said, “How’re you doing? You’re hold up okay?” And I said, “There are a lot of things I could have done with my life, and I picked international affairs, and I haven’t left my kitchen in about four or five months.” And so, it’s good to be back on the road and to see Canadian colleagues and friends. Thanks for having me.

I’ve been asked to talk to you about the United States and the Indo-Pacific. If you have spent more than two minutes and 27 seconds in Washington, D.C., where I hail from, anytime in the last few years, you will know that that story, generally speaking, begins with security balancing of China. The middle of the story is security balancing of China. And then the end of the story is security balancing of China. If you all want to talk about security balancing of China, I am very happy to do that in the conversational part of this. But if, by contrast, you’ve spent more than two minutes and 27 seconds out in the region rather than just in Washington, D.C., you will, of course, know that this part of the world is not just complex, which is a bit of a cliché, but it is multifaceted, it is multidimensional, and in a lot of areas that matter to governments and firms and market participants and people, it is increasingly multipolar.

And so, that’s what I thought I would use the setup to talk about how the United States in the Indo-Pacific is or is not navigating what I would call three collisions that I think reflect the region that actually exists rather than the ones of American wishes, dreams, and fantasies. The first of those is the collision between economics and security. The second is the collision between coalition building and some of the realities of fragmentation, not least among democracies in this part of the world on issues and functions that matter, as I said, greatly. And then third, the collision between America’s approach to strategic competition with China and, with a few exceptions, what I would characterize as pretty much everyone else’s approach to the same. You asked me to talk for about 15, 20 minutes. I’ll take about five minutes on each of those three, and I’ll try and provoke you a little bit.

And then if you want, we can just ignore it all and go back to security balancing of China and talk about Taiwan. Okay? All right. On the first, to my mind, the central strategic dynamic in this part of the world, other than the obvious one, which is the increasingly confrontational relationship between the U.S. and China, is what I would call the collision between economics and security. Or to put that another way, between economic integration and security fragmentation. 10 years ago, I wrote an article in Foreign Policy magazine with a colleague of mine, a guy named Bob Manning, called “A Tale of Two Asias.” And essentially what we did was we told a kind of Jekyll and Hyde story about this part of the world, and how it had evolved over the previous couple of decades. On the one hand, you had… we called it economic Asia.

This is a region with, however you count who’s in or out, $25, $30 trillion regional economy, countries that are growing together, trading together, investing together, building together in many areas. They’re innovating together. And they’re building an Indo-Pacific with East Asia as the anchor that is really, in many ways, the most economically successful part of the world over the last several decades. But then, and now I can tell you the story of the same region in a completely different way, security Asia. The same countries that are trading, building, investing, growing, and innovating together are, in many cases, beset by powerful nationalisms. They have territorial disputes, they’re building blue water navies, they’re arming for conflict. And pathologies that a lot of people thought were frozen in time have essentially roared back front and center with a vengeance. And so, in that dynamic and the push and pull between those, there’s the question of how major countries that have both economic and security interests navigate that duality.

Now, from the 1990s until, I’d say 2010-ish, I would’ve told you that economic Asia was decidedly winning this contest. The reason for that was really twofold; one is the Asian financial crisis. When a lot of governments and frankly a lot of people looked at each other and said, “What the hell is security if your economy can just be blown up in an afternoon?” Maybe security and conceptions of security need to be broader than just military security. But then second, American policy had something to do with this. And in fact, bad American policy had something to do with this, and particularly to the turn by many Asian countries to one another to navigate some of these challenges. You remember, the United States bailed out Mexico in 1994, then refused to bail out Thailand three years later and paid a price. I would argue among many Southeast Asians for that.

That’s been the dynamic. But from 2010 on, a lot of security issues really roared back front and center. You heard a little bit about it from Ariana. I understand it was front and center in a lot of your discussion yesterday. We hear about it, as I said, in Washington, D.C., and in Beijing, China on a daily basis. And so, this security fragmentation threatens to overwhelm a lot of the economic integration that had been so important to people, firms, markets, governments, and the future of that part of the world. Now, that’s a challenge for the United States, despite all the talk about security balancing, because the region has evolved a lot in the face of that push and pull. If I think about American leadership in this part of the world, particularly in the period after the Cold War, the United States was a leader because it was the principal provider in the first instance of security-related public goods through its alliances, its forward deployed military presence, carrier battle groups.

It was the security provider either directly for its security allies or indirectly for those countries who basically were taken a free ride off the security of public goods that the U.S. presence provides, except for who? China, which, in a lot of ways, objects to elements of that presence. When I project out over the next five or 10 years, there’s really no challenge to that American role. Because until China and Japan have a moment that is analogous to the one that France and Germany have had in Europe, there’s no basis for collective security in the Pacific. And if there’s no basis for collective security in the Pacific, then the United States was, is, and as far as my eyes can see, going to continue to be an important, and in many cases, principle provider of security for nearly everybody, but who? China. And so, the security questions involve investing in alliances and partnerships, modernizing platforms, ensuring access.

These are operational issues. They’re not fundamental existential strategic issues because there’s no basis for collective security. But that security role, as Kevin, Alice, and others know, that was not the whole story of the American role in the region. The United States was also a leader because it was the principal source of demand for a lot of Asia’s export-led economies to power their way to prosperity, and it was a leader on standard setting and across and behind the border liberalization as that became a major issue on the agenda. So, there’s no basis for collective security, and the United States will continue to be a major security provider. But if I look down the road, I see the U.S. demand profile in many areas shrinking, not in absolute terms, but in relative terms, U.S. trade with every country in Asia has gone up in absolute terms. It’s declining almost everywhere in relative terms.

And if your role as a demand driver is shrinking, then you need to fall back for economic leadership on what? On that other pillar to be a standard-setting nation. The last panel talked a little bit about some of the trade agreements and packs that are setting standards in this part of the world. So, there are three, for example, that people tend to focus on: the regional comprehensive economic partnership; the comprehensive and progressive transpacific partnership; the digital economy partnership agreement. Three agreements that will help to set standards for the next generation in this region. Guess who’s not in any of those three? The United States is on the outside looking in. And guess who else is not in any of those three? India. So, the United States premises its strategy for this part of the world on, as I said in the setup, the Indo-Pacific. But in this area, the largest economy in the Indo, and the largest economy across the Pacific are both missing in action.

And if you ain’t got no Indo and you ain’t got no Pacific, you’re back to the centrality of Asia. And that is not a region or a set of challenges that American strategy or policy has figured out how to navigate. Now, the good news is that there are a lot of issues and functions that are beyond the scope of those agreements or other existing patterns of agreement between powers and players in this part of the world. Digital trade’s a good example. There’s a lot of bad cross-border data that is in play.

But the bad news, and this comes to my second point, is that a lot of the countries that the United States wants to lean most heavily on to counterbalance Chinese power actually are not on the same page as American policy in a lot of those areas. Data governance is a good example. Okay? In 2019, Prime Minister Abe of Japan was in the chair of the G20, and he had something called the Osaka Track, the Osaka Initiative on Data Governance, which he called free flow of data with trust. And guess who refused to sign up to it? India in the first instance, Indonesia in the second instance. Two successful consolidated Asian democracies, one of which is a member of the Quad. The United States is banking heavily on India to counterbalance the rise of Chinese power. Indonesia, a country the United States would like to bank on heavily to counterbalance the rise of Chinese power. So, on a lot of these issues, not just data governance, but issues in functions that touch the interstices between economics and security, economics and technology, open data, cross-border data, online authentication, and data access control. There is no one set of rules, standards, or prevailing norms.

And in many major economies, the ones that prevail are not necessarily the ones that are to American liking. India’s the best example of this. I mean, look at the debates in India, for example, on data localization, where both the law enforcement authority and, frankly, the privacy regulator have an approach to localization that requires most data to be stored locally. And that’s a function of the Indian system, privacy regulators, law enforcement, they don’t want Indian citizens’ data stored in servers offshore.

They want to be able to access that. The point is the region is developing because of that; different models, and rules, and standards, and is heading, in many areas, for something that I would characterize more as fragmentation than as integration. Why do I say the United States needs to struggle with that collision? Because it’s beyond the scope of the way a lot of American strategists talk about this part of the world, where the only possibilities are Chinese unipolarity, American unipolarity, or some sort of Cold War-like bipolarity, where the United States and China will be the poles, and everybody will line up on one side or the other.

If you want to see that kind of thinking in action, let’s just look at an interview that President Obama gave in, I think, 2016 with Gerry Seib of the Wall Street Journal. President Obama was trying to make the case for the TPP. Remember when the U.S. was interested in the TPP? It’s back in the Jurassic era. He argued it this way, partly for political effect domestically, but I think it’s instructive. He was asked, “Why should the United States join the TPP?” And the president said, “Well, because if we don’t write the rules, China’s going to write the rules out in that part of the world.” But if President Obama had been right about that, then when President Trump withdrew the United States from TPP, what should have happened? Logically, China should have come in and become the rule rider.

But as we all know, that’s not actually what happened. What happened, the other 11 got together, solidified the agreement, albeit influenced by the United States, and the text the United States wanted, but with neither the United States nor China in a room. So, clearly there’s something going on in a region that belies these very straightforward notions of bipolarity or unipolarity. I think, in a lot of ways, the region is heading for what I would call fragmentation on things that are meaningful for the interest of the United States. And that’s the second collision that the United States has not really figured out how to navigate through a prism that’s focused almost exclusively on balancing Chinese power.

So, that brings me to the third point, which is American policy toward China. I don’t know how much you’ve noticed the change in Washington over the last several years. But I’ve worked on U.S.-China relations for 25 years, and I will tell you there has been a sea change in the last seven or eight years in the thinking about China in that capital city, and frankly in the American body politic, more broadly, and it’s really got a bipartisan basis. The way it’s sometimes characterized is that the U.S. is very focused on strategic competition with China. That’s not quite it. When Richard Nixon went to China in February, 1972, which is the modern inception of the relationship, the United States and China were fighting a proxy war in Vietnam, and China was just crawling out of a cultural revolution. So, from the very inception, there were clashing security concepts, and there were obvious differences of political system and ideology baked into this relationship.

But after the U.S. and China developed an economic relationship, and particularly after China came into World Trade Organization in 2001, these large-scale flows of five things; goods, capital, people, technology, and increasingly of data, happened, I would argue, largely on a parallel track. People in the markets, people in corporate C-suites, they’re not morons. They weren’t unaware of these security issues around Taiwan, the South China Sea. But the point was they didn’t impinge on most business models for China, and they rarely impinged on a trade if you were trading stuff in the markets.

So, what’s changed in the last several years is not that strategic competition is somehow brand new, and it’s a revelation, it’s that economics and security have largely collapsed together. And what’s more, and this goes to a point that Paul Evans made in a question to the last panel, not only have economics and security collapsed together, but those economic flows that I talked about, capital people, technology, data, increasingly are being refracted on both sides, but particularly on the American side through the prism of national security. And that’s what a lot of us like to talk about when we talk about securitization.

So, if everything is security, then those things will not be separable. What’s happened, particularly in the last two administrations, one Republican, one Democrat, is that the American strategic class, of which I’m a card-carrying member, the American political class on a bipartisan basis, and if I may say so, the American regulatory class has discovered that there were a lot of regulatory and administrative instruments that were sitting out there that could be leveraged and deployed in interesting, expansive, and sometimes extremely creative ways. Take a sector like artificial intelligence, I would have trouble naming for you a Chinese AI player that hasn’t landed on the Commerce Department entity list. There’s other instruments, use of the Foreign Direct Product Rule. You’ve read about these semiconductor controls that have just come out, other export controls. New and expansive notions of what constitutes national security and CFIUS.

I worked eight years for Hank Paulson. He’d been the chairman of Goldman Sachs. He had a pretty narrow definition of what constituted national security. It’s very expansive today. There’s a so-called Military Company List administered by the Department of Defense. Doesn’t have enforcement teeth, but if you land on that list, you are toxic as a Chinese company. Nobody’s going to do business with those companies. So, there’s this use of administrative and regulatory instruments in the context of securitization that I think if you pull the thread and you project out four or five years is going to define a lot of elements of American financial policy, investment policy, commercial policy.

And people in the markets are well aware of what that means for their business and the ways in which it restricts things that were easier to do five, six, seven, eight years ago. Now, why is that a collision? It’s a collision because if that’s the trajectory of American policy, it begs the question of whether it’s the trajectory of everybody else’s policy. I will tell you, the United States is increasingly extra-territorializing the application of these instruments precisely because it is not the trajectory of everybody else’s policy. If it was, ideally, what the United States would want to see is other countries deploying export controls and administrative and regulatory instruments in an identical way vis-à-vis China as a trading partner, as a capital partner, in or out, and particularly in the technology and data space.

Because that’s not happening, the United States is attempting to elicit voluntary compliance. And if it cannot, I confidently predict to you the United States is going to bring the hammer down. Going to bring the hammer down and try to coerce compliance on a lot of these controls. And it reflects this American zeitgeist on competition with China, which, by the way, is mirrored, in some respects, on a Chinese side. And the Chinese have built their own architecture to use administrative and regulatory instruments and are trying to offshore it in the same way. But it will catch other countries not called the United States and China betwixt and between. And so, that really circles me back to where I start. That’s a collision for the United States, because if American policies and strategies for strategic competition with China are not mirrored elsewhere, we’re heading for a somewhat fractious period between the United States and the very partners that it needs to navigate competition with China.

So, you often hear this talking point from Washington, the United States isn’t forcing countries to choose. We don’t want anybody to have to choose. Okay. Try putting a Huawei kit in your 5G backbone and see how the United States feels about you not making a choice. Try not complying with U.S. export controls and see whether the United States wants you to make a choice. Try making Huawei your cybersecurity partner of choice as Indonesia has. I just published a paper on this at the Carnegie Endowment. All those political tensions between China and Indonesia, guess who’s doing cybersecurity backbone solutions in Indonesia? Huawei. How does the United States feel about that? Would you prefer that you don’t make a choice?

Those contradictions are going to get sharper and sharper. And so, my very direct answer to Paul’s very direct question is that’s the trend line and trajectory. Now, the conventional Washington story is everybody needs to adjust to that because the U.S. is weighty, and big, and has power, and has scale. But what I’m trying to tell you is that quite apart from the debate about security balancing in the region that exists rather than the one of American wishes, dreams, and think tank fantasies, and I say that as the vice president of a major Washington think tank, the United States is going to figure out how to have to navigate that as well.

That’s really somewhat beyond the scope of the strategic conversation in the United States. And it’s where, if I may be blunt about it, when the United States has no better partners, Canada’s one of them, the best partners are the ones that need to speak with intellectual honesty, but also find ways to help the United States navigate that set of contradictions too. If everything was just security balancing of China, the world would be so much simpler and so much easier. But the world, as I said, it’s not simple, and it’s complex and it’s multifaceted. That’s what I wanted to say to you by way of opening because it’s not something that I think the United States has fully come to appreciate. And so, it’s probably not something you hear often from Americans. Why don’t I stop there, and if you want to just ditch it all and talk about the South China Sea, let’s talk about rocks.

Jeff: Wow. That was really a tour de force. Thank you very much. I probably don’t need to give much time to this crowd for you to think of your questions. But I will do the customary thing and prime the pump with one or two. And I guess I really just want to get back on the bus where we just stopped in terms of, for those partners, those other players like Canada, and maybe starting with the closest allies, apart from delivering honest intellectual messages about the facts on the ground, do you have some ideas, some suggestions of what kinds of things Canada and other countries, and maybe working in informal coalitions, could put together that we… kind of a positive agenda? Not to say like, “Don’t do this, don’t do that.” But to say, “Well, here’s a way that we could address the core interest that that is driving American thinking on this. That we, this group of, whichever countries, your good partners would like to put forward,” and can we explore that path? Are there some practical things?

Evan: Sure. I mean, I’m selfish about American interests, but I’m also very old-fashioned about them. I tend to think that function should drive form rather than the other way around. What I think increasingly is happening is that the United States is organizing form-based coalitions and then groping for purpose within them rather than beginning with function and then assembling the right group of players either on a formal basis or in and out basis. The Quad is the best example of this. I mean, Darcy spoke about this morning. She works with me at Carnegie. She follows the Quad very closely. The quad, if you look at how the Quad began, the Quad began, you may remember this, after the Indian Ocean tsunami back in 2004 when the United States, India, Japan, and Australia, and those four navies got together and provided rapid and effective relief all around the Indian Ocean Littoral for nine days at the end of 2004 and into 2005.

There was no secretariat, there were no communiques, there were no big ministerials in storied cities of diplomacy. And the definition of success was what? The group put itself out of business because the mission had been achieved. Now, in an era where the U.S. and China are locked in a competition and, in many ways, into adversarial antagonism, some form is going to drive function because what the United States is doing is trying, like a John Wayne movie, to organize a posse and round them up, and then organize the like-mindeds, who, as I just told you, are not always so like-minded on functions that matter to American interests. But that won’t work ultimately for other countries in the region if it doesn’t deliver meaningful results to people and markets and companies.

And so, where something like the Quad has to evolve, for example, is to become what I would call the firm core of an elastic regional architecture, where on issues that functionally are meaningful, the four organize diverse posses on an ad hoc basis, assembling the right group of players on the issues and functions that matter, which may sometimes have to include China, by the way. That’s a role I think others can play if the United States chooses not to, inclusive of the United States, because the United States doesn’t have a monopoly on organizing coalitions. And the United States doesn’t have a monopoly on deciding which functions are and are not important. One very practical thing is to look at, and you begin… As I said, you should be as selfish about Canadian interests as I am about American interests.

So, if you begin with the things that are meaningful for Canadian interest and you take a function-based approach, then you can organize some of those poses. One place to begin, because we’re allies, is with a conversation with Washington about that. But I think on a lot of functions, as I was trying to get at around data, is the U.S. likes to talk about rules, but the rules don’t… There’s no one set of rules that really prevails. And in a lot of areas, but as I talked about fragmentation, there will never be one set of rules that prevails, but there can be diverse sets of rules that can prevail. I think, to the extent the United States can and should be a standard-setting nation, others should want to be a standard-setting nation too. And so, it’s not just about talking straight with the United States and listening straight to what the United States has to say, it’s also about problem solving in a function-specific way. And I see no reason why the United States has a monopoly on wisdom on that.

Jeff: That’s incredibly helpful. I would-

Evan: I hope your Indo-Pacific strategy starts with functions and then… Because if you begin with kind of the strategic zeitgeist at 150,000 feet, you won’t get to that kind of solution base.

Jeff: Yeah. Well, that’s incredibly helpful, and I’ve got a million follow-ups, but I want to get to these folks, and we’ll come over to Carlo.

Speaker 4: Thanks Jeff and thanks for that presentation. That was really good and a corrective to some of the previous panel. But here’s a question for you. I share the concern of many Canadians about the securitization of economics and trade, but the concern comes, not just from what we anticipate, but from the past, what we’ve gone through before. We’ve dealt with the Americans on securitization of trade embargoes, Cuba, other embargoes, and we’ve seen what starts, often in the U.S., as a clear-sighted, hard, almost technical focus on security issues get morphed and changed by domestic political considerations in the U.S. and domestic economic interest in the U.S. With the Cuba embargo, the history of the embargo has moved from an area of security to one arguably of 110% domestic U.S. politics. As someone who spent lots of time on the issue and ran afoul of OFAC, I can speak to that from personal experience.

But with the NAFTA renegotiation, we also are the case where the U.S. put security concerns for Canada not to consider engaging with trade with China. And then, before the ink was dry, turned around and signed its own agreement with China that did damage to Canadian agricultural exporters. So, we see time and time again, I would argue, one reading of history and unkind reading of history from your allies is that we see these hard technical considerations of security get captured by domestic political and domestic economic interest. And to Paul’s point, this may be the real threat that we face economically. The first wave, the impact of the sanctions. The second wave, the use of the sanctions by domestic economic forces. It’s kind of a question as to where do you see this going? Do you see this happening? How much time do we have? Are there ways we can think about responding to this?

Evan: I appreciate what you said. I don’t think Cuba’s the best analogy for China. First, because the scale is different. But second, just because you framed it in terms of domestic politics, but whether it’s framed in terms of domestic politics or National Security Strategy, the scope of the competitive challenge that Americans perceive from China is qualitatively and vastly different from Cuba, which Americans never perceived as a strategic competitor. Cuba is not a nuclear weapon’s power, with which, if you believed Ariana’s presentation this morning, the United States may fight a force-on-force conflict at the conventional level, which somehow will miraculously not escalate to the nuclear level. Which is something that was never tested during the Cold War, by the way. All those years, the U.S. and Soviet Union never fired a shot in anger. It was all proxy stuff, but somehow the U.S. and China are going to fight a conventional conflict, and it won’t escalate?

The scope and nature of the way Americans think about China and Chinese think about the United States is different. And I’m not saying it’s not relevant, but it’s just different in terms of national security, in terms of strategy, in terms of domestic politics. What I would say is there are four or five threads that I think are worth watching if you want to see where this is going to go. One is that elasticity of what does and doesn’t constitute national security in the American context and the way in which that becomes relevant to people that are trying to do business. You said something interesting in the last part. So, basically markets find a way. I don’t disagree. Markets often find a way. In fact, I think a lot of what’s happening, actually, a lot of people are going to find ways to adjust their business models in China because there’s still a value proposition in China notwithstanding any of that.

But the notion of what constitutes national security in the American context is more elastic than I’ve ever seen it. And so, tech is really at the center of that because of a change in the nature of the technology itself. From the 1940s to 1960s, a lot of weapons innovation drove commercial innovation. After the 1960s, with semiconductors and the commercial microelectronics revolution, a lot of commercial technology drove weapons innovation. You look down the road, next 10 or 15 years, this probably came up on the last panel, I didn’t hear all of it, a lot of the critical and emerging technologies, AI enabled applications, new synthetic and composite materials, life sciences and biotech innovations, nanotechnology, quantum computing, big data algorithms, that stuff is intrinsically dual-use. And so, a lot of the things that have all kinds of miraculous commercial applications can also guide a missile much more accurately.

And so, it feeds the securitization of things that were once seen as commercial goods or public goods. And so, you may be right that that gets attenuated, but that’s not the trajectory the United States is on. It’s on toward an ever more expansive and elastic notion of what constitutes national security. Second, the United States increasingly looks at competitiveness itself as national security. And if you look at the president’s recent executive order on CFIUS stuff, I see you laughing, I mean, the language actually is becoming more and more explicit, and more and more stark. American competitiveness is national security. And if American competitiveness is national security, that’s not only more elastic, it’s going to bleed into what regulators do.

Third, there are some really interesting legislative innovations that my colleagues who’ve come from Washington will have seen in the last few years. Just take the Uyghur Forced Labor Act. In the Uyghur Forced Labor Act, companies have to prove the negative. You actually have to prove that you don’t have force labor in your supply chain. And the presumption is that you do. And because the presumption is you do, it shifts the burden from regulators and customs and border protection onto companies. By the way, in an area where the Chinese have absolutely no interest whatsoever in helping you or to help facilitate inspections in ways that are in invariably going to bleed into business models. The legislation was written deliberately that way.

And so, it’s a test case of whether legislation in future will be written more expansively in that way too. And that will affect corporate calculations. All right. Then there is, as I said, extra territorialization, the way the U.S. is applying some of these things extraterritorially. And then I wrote something else, and I can’t read my own handwriting. So, there’s a fifth one that I will think of later and I’ll circle back. Oh, I know what it was, domestic politics. Sorry, domestic. I wrote domestic politics on China. Well, I’ll let my colleagues reflect on domestic, but domestic… Nobody likes China. It’s not a top 10 issue for most people. But I mean, I’ll just tell you, we’re heading for midterm elections next week. There are at least two pieces of legislation or other things that Ted Cruz and Elizabeth Warren are working on together. I’ve seen Marco Rubio work with Democrats. Richard Burr is working with Mark Warner.

Alexandria Ocasio-Cortez signed a letter with Tom Cotton of all people. So, it defies political gravity in the United States. Now, will that hold indefinitely? I don’t know. But I can tell you, as we get into what I think is going to be a bananas next two years, and then an even more bananas presidential cycle in 2024, I would not be banking on domestic politics providing either ballast or a counterbalance to lead to the kind of reversal that you’re projecting. I think that’s just where we are. And it would take a lot to change that momentum.

Speaker 4: That was a lot of desperation and fear.

Evan: Okay. Sorry.

Jeff: Okay, so we’re getting into end of day’s territory here. Cats and dogs sleeping together in the streets.

Evan: Markets adjust.

Jeff: The warning signs are there. Actually, the time has flown by here. What we’re going to do, we’ve got just a few minutes more for this session. And Bijan, I think we have a hard stop for the next panel, right? Which is at 2:30? Yeah. Okay. We’ve got, like a maximum, 10 minutes. But why don’t we take… We’ll take the two questions together. Get your pad. I’ve got Zach first, and then Paul.

Zach Paikin: Hi there. Zach Paikin, I’m a non-resident research fellow at the Institute for Peace and Diplomacy here, and also a researcher with the Center for European Policy Studies in Brussels. Thanks so much for being with us today. I wanted to just pick up on a discussion that we were having a little bit yesterday and a question I posed yesterday, and to gain your insights as someone who observes political trends in D.C. And it has to do with the concept of the term ‘rules-based international order’ and whether or not there’s increasing… Is there any evidence at this point that there are people in Washington who view that there’s some sort of a cognitive dissonance between that term, on the one hand, and pursuing the restrictions that we’re seeing in the strategic competition approach towards China, on the other hand?

Is it possible that those things don’t necessarily go together? Because strategic competition and the restrictions we’re seeing eat away at the openness and potentially at the, at least agreed upon rules-based element of a regional or even global order. And in terms of the staying power of that term itself, because starting in 2015, 2016 or so, everyone was talking about the liberal international order. And as we were hearing from Jeff Reeves yesterday, the term rules-based international order is not as appealing in the region itself as international law, which is, of course, much easier to situate, much easier to define.

So, I’m wondering if you think that this term, rules-based international order, in Washington lingo, may itself go by the wayside in the years ahead as the U.S. engagement in the region continues. One final question for you, which is unrelated to that one, which was brought up during the panel that I moderated yesterday morning, which has to do with what you call the Beijing straddle, and I wonder how long you think that that’s durable?

And if there are any particular Russian actions or any sort of length of that conflict in Ukraine going on before China will have to choose definitively between the principles that it upholds nominally, its strategic partnership with Russia — this is a question that you asked Jeff indeed — and it’s broader desire, of course, to maintain some form of economic and technological links with the West all at the same time?

Jeff: Okay. So, we’ll take the two questions together because we have to wrap up, actually, I see we’re actually into the next session time. So, Dr. Evans.

Paul Evans: All right. Thank you. Paul Evans from Vancouver. Evan, what a wonderful speech. And welcome back to Canada after COVID. Because I’d like to make an observation that the zeitgeist that you described in the United States, this unusual coalition of views on the strategic competition with China, etc., that you and others have spoken about as the American consensus. You come back to Canada now where we have a bit of that zeitgeist here too. And it has been built around feelings around China based on negative experiences with our 3Ms Affair. It’s been built on a set of views about China as an existential threat to Canadian values. It has support in two or three or four of our political parties. It is not isolated to our conservatives. That, while it is not, I think, the dominant opinion, it is a dominant opinion as part of our world.

And so, that that desire that we’ve heard, and you maybe even in Washington heard of Ms. Freeland’s speech on the world of autocracies versus democracies, the collapse of the international system as we knew it, and the need for things like friend shoring as one of the possible responses. I give this as a bit of an answer because if you had spoken with us three years ago, the texture in this room would’ve been considerably different. But now, in the year 2022, there’s a lot of Canadians that would like to line up with that zeitgeist. And here’s my question for you. You, just a moment ago, with reference to the elections coming up in a week or so, and the next couple of years, which were described as bananas that in light of that, do we see any light at the end of the tunnel?

My Harvard friends and others are trying to nibble away at that zeitgeist. You and your foundation are trying to nibble away at it, maybe chew against it, and the people who are in this room are trying to do it. It’s very hard to see how this is going to diminish inside the United States. And it’s also important to recognize it is not unimportant here in Canada before we get into the elastic kinds of coalitions and other things you’ve recommended.

Evan: Okay. China and the consensus, rules-based order, and then China-Russia. I’m actually going to go in reverse order. Let me start with Paul. I didn’t really talk about China, Quad China. I talked about the regional setup and what that laid down means for American strategy and policy that is basically one-dimensional and focused heavily on China. And it’s important, in any case, because no matter how threatening China may be, no matter how much it’s coercing its neighbors, I mean, nobody’s naive about China in that part of the world. I’m not naive about China. It’s funny that you think I’m nibbling away at the… I tend to think of myself actually as pretty hawkish on China. It’s just that the United States or Canada or anybody else get no margin in telling countries that they’re only interesting to us as proxies in our strategic competition with China rather than as subjects in their own stories.

If you treat them as objects of competition, a playing field rather than subjects, that’s a problem. That problem would remain whether China was even more coercive and malign or more benign. That’s the point I was making. On China, I’m not uncomfortable with some elements of the consensus since you asked that question very directly. China’s changed a lot in the last decade. I mean, you cannot tell me that if Zhū Róngjī 朱镕基 were running the Chinese economy today that many of the decisions about macroeconomic policy in China would be the same as what we’re seeing. That’s the economy. In terms of politics, I think what we saw a few weeks ago suggest that certain institutionalized norms, notions of collective leadership, notions of balance have gone out the window. And whether you think that’s a good thing or a bad thing, depending on whether you’re Chinese and you’re part of that consignment, I’m not a Chinese communist, so I don’t think it’s a good thing.

But the point is that’s a different China than the one we got used to dealing with, and we need a new paradigm for thinking about it. This is also true of external-internal linkages. You remember, Zhu Rongji used WTO accession as a lever to lay off 30 or 40 million people out of state-owned enterprises and to discipline the Chinese economy in ways that I think are really not on our radar screen for this leadership. So, the China we’re dealing with is not the China we were dealing with 10 or 15 years ago. And when I was in government, it was just different China in a lot of ways. So, people can endorse the so-called consensus or they can dismiss the consensus. My point is we just need to be realistic about what it is we’re dealing with, but also the instruments that we have for dealing with it.

And the general American approach is, if you can’t influence China directly, because you’re dealing with a different setup domestically, then you need to shape the environment around it. But then you better have a pretty clear eye idea about what kind of environment you’re dealing with. And the environment we’re dealing with is not, as I was arguing in the setup, always what the United States thinks.

Is there a conflict between ‘rules-based international order’ and implementing targeted restrictions towards China?

Okay. Rules. Rules. Oh, you moved, sorry, I was looking over there. Okay. Rules. So, you see contradictions between American rhetoric and reality. If you’re looking for a complete coherence, don’t sign up for government work, right? You’re never going to find… I mean, political rhetoric is political rhetoric. I wrote speeches for a couple secretaries of state. I wrote for one deputy secretary of state. It’s just the way it is. It’s aspirational and it’s designed to express a view of the kind of region the United States thinks would be optimal, which is a rules-based region where might doesn’t always make right.

Again, don’t look for the… If you’re looking for no contradictions, don’t push back. I know there are contradictions. China doesn’t have a problem with a rules-based order. China likes rules. They just don’t like American rules. Okay? The problem with that phrasing, rules-based order, is that it sets up a binary between a rules-based order that America adopts and a law of the jungle that… And aligns the fact that… Actually, China’s advocating all sorts of rules domestically. I mean, American companies operated under Chinese rules domestically in China for a longer… We just don’t like the rules. And if you then project that externally, China doesn’t like a lot of the rules. The issue is not rules-based order, it’s what kind of rules, who adjudicates the rules, and who signs up to them, and why?

And I think that really gets at what I think, since I’m not engaged in political rhetoric anymore, is the real issue, which is it’s not rules, it’s the gap between forms and norms. China’s signed up to most of the forms of the prevailing international order, which was designed by the transatlantic powers after the war. They’re in the P5, they’re in the WTO, they’re in every protocol, and everything from ozone to pollution, to chemical weapons. They agree to WTO rulings. They often abide by them. They sometimes don’t abide by them. But the point is, they’re the number three shareholder in the Asian Development Bank, the very institution they’re supposed to be subverting with this new Asian Infrastructure and Investment. So, they buy into the forms. But the problem is we have a dispute about norms within those forms. That takes us back to the rules. The norms, standards, and rules that the United States and its democratic partners would like to prevail within those structures are not necessarily the ones that are to China’s liking.

If the consensus, to Paul’s question, is that we need to sometimes have a punch-up with China over which rules are going to prevail, well, okay. Okay. Because norms matter. And as democracies, we have a commitment to a very different set of norms. But I don’t think it’s a debate about whether there should be rules. It’s whose rules and whose norms?

That’s going to be a very contested space over the next five, 10 years, which brings me to Russia, China, and then I promise I’ll shut up. Russia, like China, at the strategic level, is deeply dissatisfied with the prevailing setup. I often hear that Russia and China, they’re deeply ambivalent about one another. They don’t like each other. Yeah, okay. All that is true. But Russia and China are vastly more ambivalent about American foreign policy and about the set, the prevailing setup in the international order than they are about one another.

And so, on February 24, when Mr. Putin invaded Ukraine, China found itself in a rather uncomfortable position, which begins to tease what I… You’ve read my writing, so that’s where you got Beijing straddle. Right. At the strategic level, China’s basically all in for Russia. I mean, they are all in. I can tell you that because I was deputy assistant secretary of State in 2008 when we had a dry run of this. And Russia invaded Georgia and tried to detach Abkhazia and South Ossetia. And Mr. Medvedev, who was then the president, went down to a Shanghai cooperation organization meeting in Dushanbe, Tajikistan, and tried to round up the posse, and the Chinese flipped them the bird. They flipped their middle finger, and lots of central Asian countries hid behind the Chinese. Fast forward to today, that is not… I don’t see China rallying the opposition.

Okay. China, at the strategic level, all of this talk about NATO is the culprit, NATO expansion is the reason. The United States is the culprit. It’s all your fault. Never mentioned the word Russia. There’s both sides-ism. They’re all in. But that’s at the strategic level. That’s because at the strategic level, they’re all both deeply dissatisfied revisionist powers albeit strategic revisionist that want to counterbalance American power. But why the straddle? Because at the tactical and operational level, there’s nothing in it for China from this. China’s a multidimensional power. They got more than one interest. Counterbalancing American power at the strategic level is not China’s only interest. And if you take something like global market access, there is not one thing Chinese firms are doing in Russia that is more important to them than access to the global market. And so, the reason for the straddle is China’s got an inherent contradiction since February.

The more they lean in on Russia, the more they paint a target on their back for the sanctions, okay? And the more they comply with the sanctions, the more Mr. P is dissatisfied. And so, they have had to tack uncomfortably back and forth, sometimes on an hourly basis, to try to straddle their multidimensional interest. But where they’ve landed essentially is at the strategic level they’re in for Russia at the operational level, they’re squirming and they’re doing very little for Russia. And then broadly speaking, they’re compliant with the sanctions. And that’s working fine for them. And I predict they will pull that thread as long as they possibly can until it gets harder. And you know what? It hadn’t been that hard. And what the United States wants to see is sanctions compliance. And the China doesn’t open the taps. You’re a Russia expert? For the last three weeks, we’ve been talking about Iranian drones.

The fact that we’re talking about Iranian drones tells you what China’s not doing for Russia. Tells me everything I need to know. Because if they had opened up the spigot, we wouldn’t be talking about Iranian drones. I think, to circle back, that’s the global… It’s a contested global order. And some elements of this D.C. consensus reflect the kind of China that we’re dealing with, which is a self-interested and highly strategic revisionist, but a revisionist nonetheless. And yes, rules matter, and our proposition about the rules is not frankly the one emanating from Beijing right now. So, we have every incentive to push back as democracies.

Speaker 7: With use of the-

Evan: Russia changed China’s?

Speaker 7: Yeah.

Evan: Your guess is as good as mine.

Jeff: We’ll look to the Russia experts on that one. In fact, we did have, yesterday in our opening panel session, we saw someone from Beijing talking back and forth within two minutes on, it’s a friendship without limits, but it’s not a strategic partnership. So, these things are in evidence. We’ve gone over our time. We could have gone… No, no, but we’ve… I feel like we are indulging ourselves with you, Evan, and let me just say very, very briefly, that was tremendous. We really want to have you back in Canada. Come to Vancouver, come to other places in Canada. And we want to keep this conversation going, but for today, just thank you so much. That was good. That was excellent. Yeah.