Tensions between the U.S. and China have been growing.

Taiwan, which will soon hold a presidential election, is one of the main points of contention.

China has repeatedly conducted military exercises near Taiwan.

Meanwhile, the US is strengthening its military support for Taiwan.

There have also been conflicts in the South China Sea.

China claims jurisdiction over the entire area, which the US challenges.

At a recent summit, the leaders of the two countries agreed on measures to turn down the heat,

including the resumption of talks by defense ministers.

But the fundamental structure of confrontation still remains.

The United States will continue to compete vigorously with the PRC, but will manage that competition responsibly.

Whether China and the US are ultimately rivals or partners
is a fundamental and overarching question.

Where is this relationship headed?

And what can Japan and other countries in the Indo-Pacific do to ensure stability in the region?

Welcome to Global Agenda.

We're bringing you this episode from the heart of American diplomacy, Washington DC.

US leaders have taken pride in their country's unparalleled political, economic and military strength.

But China's growing influence around the globe has introduced new challenges.

Tension between the two countries is something the rest of the world cannot ignore.

Our guests today will help us to understand whether 2024 might bring more stability or more reason for tension.

Joining me is Rick Waters, first of all,

who was with the US State Department for 27 years most recently serving as their top China policy official.

Thank you for joining us. And Rick, you have seen these tensions up close.

If you were to describe in a word or two, what the current state of US-China relations are, what would they be?

We're in a calm before whatever the next storm is.

Thank you. Well, the calm before the storm.

Elbridge Colby, served at the US Department of Defense as Deputy Assistant Secretary of Defense for strategy and force development.

Bridge, how would you sketch out the current situation in a word or two?

Well, thanks, and great to be with you. And I agree with Rick I would say fundamentally rivalrous.

Rivalrous.

Suisheng Zhao is a professor of Chinese politics and Foreign Policy at the University of Denver

and you continue to give lectures back in China.

Please share with us in a word or two how you see the current situation.

A continuation of a pronounced crisis.

Which is not a cold war but it's very different from the earlier cycle patterns of up and down.

- So, we'll see a continued crisis.
- Okay.

Tatsumi Yuki. Yuki is a director of the Japan Program at the Stimson Center.

Yuki, in your view, how would you describe in a word or two?

Oh, very much agree with Rick and Bridge; calm before the storm. I think he nailed it.

Well, we'll have more on your perspectives.

President Xi has called Taiwan the most important and the most sensitive issue behind the strained ties.

Observers around the world are wondering how the results of Taiwan's upcoming presidential election

might sway the direction of diplomacy in the coming year.

On January 13th, a presidential election will be held in Taiwan.

Its relationship with China is a key issue.

Lai Ching-te is a candidate of the ruling Democratic Progressive Party.

He has taken a harsh position against China's reunification ambitions.

On the other hand, candidates Hou Yu-ih of the opposition Kuomintang or Nationalist Party,

and Ko Wen-je of the Taiwan People's Party, emphasize the importance of dialogue with China.

China is closely watching the election.

To increase the pressure, it has repeatedly conducted military exercises around Taiwan.

China maintains that Taiwan is an inseparable part of China.

Realizing the complete reunification of the country
cannot be stopped by any force.

The US acknowledges China's position and maintains what it calls "strategic ambiguity,"

not clarifying whether it would use military force to come to Taiwan's defense.

But a recent remark by President Biden called that position into question.

Are you willing to get involved militarily to defend Taiwan if it comes to that?

- Yes.
- You are?

That's a commitment we made.

At the same time, the US also supports Taiwan's capacity to defend itself.

The US has approved an arms sale worth $300 million dollars.

I'd like to start this conversation with Suisheng.

How concerned is China about this election?

What actions might China take to get involved with the results of this election?

China is very concerned with great anxiety.

China had a long game on Taiwan with strategic patience,

but Xi Jinping's patience is running out and he wants to resolve this issue

without passing the issue from generation to generation.

And so there are several possibilities here.

One is he will use this as a pretext if the pro-Independence Party wins,

moving further away, he might just use this opportunity to use force.

But I don't think China is ready.

So, there's another possibility that he does not want to see that happen.

And as he did in the past, China always poses threats, then takes nothing in actions.

So that might be another possibility there.

Rick, do you see the possibility of any involvement by China in the results of these elections?

I see a lot of involvement by China in these elections.

I think they've had a "carrot and stick" approach towards those they favor and those they don't favor.

I think they're using a lot of tools whether it's disinformation

or signals that economic inducements might follow a certain route,

or military pressure might follow a different route.

But I think the good news is, it's not really working.

I think Taiwan is a functioning healthy democracy and Taiwan electorate is sophisticated,

and they're not falling into the trap.

So, I think we can be confident that the results of the election in Taiwan

will be more reflective of how voters feel and less a reflection of the impact of this "carrot and stick" approach.

Interesting. Bridge. Do you agree with that?

Well, actually, I agree with everything that's been said. And I...

but unfortunately, I don't think it's necessarily such good news,

because it is good news on its face that the Taiwanese people are willing to see through Chinese propaganda.

I mean, the DPP is currently in the lead, which is historically a pro-Independence Party, or at least to some degree.

And Beijing appears to believe that Lai is more pro-independence than President Tsai, the current president.

So, if propaganda and economic inducements are not going to work,

but if Xi Jinping does not want to leave the resolution of the Taiwan issue to future generations,

and the man is in his early 70s, what options does that leave him?

It leaves him military force as an option.

The Chinese are in a historic, unprecedented military buildup,

designed not only to take over Taiwan, but also to ultimately project power beyond Taiwan.

Because for instance, aircraft carriers that they're deploying around Taiwan are not relevant for Taiwan context.

They assume that China has taken over Taiwan in the relatively foreseeable future.

So that is the anticipation that I should think Xi Jinping and his system are planning on.

And every... a lot of what we're seeing, meetings with President Biden,

the particular outcome of the election is probably more noise and use for pretext.

My sense is Beijing has a much longer-term plan,

and is building a military capacity to be able to resolve this issue for good, from their point of view.

Yuki, do you think the results of these elections is as decided as perhaps what we've been saying up until now?

It will remain pretty unpredictable until like the day of the voting.

However, if you look at other public opinions, I think we are seeing a more and more kind of a unison amongst Taiwanese people,

about they really don't want to be part of PRC, regardless whether you are DPP supporter or KMT supporter.

So, I think that's one thing that Xi Jinping might be miscalculating on.

That somehow, he has this notion that well,

if we can help KMT and the government, we'll have a government that's easier to deal with.

Because I think we need to notice that even the opposition,

even if they don't come out strongly on a pro-independence, they talk about dialogue.

But dialogue to what end?

You know, it's not a dialogue for them to be reunified by PRC.

So, I think that that is one trend that is very telling, regardless of which party wins on top at the election.

Well, Rick, tell us, you were, you know, with the State Department until quite recently, a few months ago.

Why is Taiwan so important for the US?

Well, it's important for many reasons. I mean, one reason is it is a democracy.

It's an important economy. It's one of our 10 largest trading partners.

But I think, you know, as Bridge and others have pointed out, I mean,

there's an importance that goes well beyond the unofficial relationship in the Indo-Pacific region.

And so, I think the administration has been careful, as has its predecessors not to portray Taiwan as part of a strategic game.

But I think increasingly the challenge is that China itself is doing so.

And that does, in some ways dictate the future course of action.

And I think what is different today, as opposed to say 20 or 30 years ago, is exactly what Professor Zhao mentioned.

There is a different leadership in China, there is less patience.

And there is a massive buildup of the PLA both in its conventional and its non-conventional capabilities

that lead to fundamental questions about China's intentions.

So, I think in many ways, Washington is reacting to the perceptions of what is happening in Beijing.

And that is leading to a need to increase both the hard and the soft diplomatic elements of deterrence.

Suisheng, would you agree with that?

Depends on what position you are standing.

In American position, you would say China is acting militarily; threatening.

So America responded to the Chinese military threat.

From a Chinese perspective, they will see the opposite.

They see Americans now have involved much more than it used to be.

And the US has, for example, abandoned so-called strategic ambiguity.

And Joe Biden mentioned four times that the US will come to the military assistance to Taiwan.

And also, the US has increased the military arms sales to Taiwan.

Not only sales arms, but also transfer military equipment, using the foreign military assistance finance program,

which treats Taiwan as a solvent state.

For China, US has crossed or pushing the red lines, so China has responded to those US push.

Bridge would you say that this build up, if I may say so, is necessary for the US? How necessary?

The fundamental factor that has changed, the One China Policy might have made sense in the 1970s, and we could debate about it.

50 years ago, China was a desperately impoverished country.

Now, China is more advanced than the United States in areas like hypersonics, and potentially elements of artificial intelligence.

1.4 billion people, the world's largest industrial economy. This is a totally different situation.

Now China can do something about Taiwan.

What are more important than what are our interests, is what are China's interests in Taiwan?

And my view is that China has both irredentist or nationalist reasons for taking over Taiwan, which I believe are genuinely felt.

I do not question the genuineness. I'm not saying they're just, but they are genuine.

Our interest in Taiwan is if China seizes Taiwan, it will undermine what I think of as our anti-hegemonic balancing Coalition.

We do not want to force China to become a flourishing democracy.

I wish the Chinese people well, but that's not our goal.

We do not want to dismember China, we want a balance of power with China.

Well, Yuki I must say though, you know, President Xi did remind Kishida,

Prime Minister Kishida during their meeting in November, on the sidelines of the APEC meeting,

that Japan is handling of Taiwan has a bearing on Japan's relationship with China.

How do you see Prime Minister Kishida's diplomacy with China itself?

So, I think our Prime Minister Kishida is in a kind of a tight corner.

Like US, Japan does have a One China policy as well.

But at the same time, like the US, it really has a fundamental stake in peace across the Taiwan Straits,

and whatever the reunification solution comes in, that has been done peacefully.

And based on the mutual agreement, not one side, forcing the other of their own will.

But at the same time, though, there is a reason why I think it was Prime Minister Kishida's speech at the Shangri La last year in Singapore.

He kept talking about Ukraine in Europe. Ukraine today can be East Asia tomorrow.

And what does he talk about?

He clearly sees the parallel of what Russia has tried to do,

and still trying to do to Ukraine is what Chinese ambition might mean for Taiwan, a very similar situation.

So, I think he is at the point where he considers the peace and stability of Taiwan Strait much more like,

not just a regional security issue, but because of the geographical proximity,

he is really trying to articulate this issue more in the sense of Japan's own defense issue.

How likely is it that China would invade Taiwan?

Well, I think the Chinese have made very clear they've never ruled out the use of force.

What are the conditions under which they would use force?

My sense is they would rule out the available alternatives. That's a rational approach.

But I don't think those available alternatives are limited to the non-military.

I think what we've seen over the past 15 months is an increasing resort to limited gray zone coercive efforts

that use the PLA that use paramilitary tools, that use disinformation, even cyber warfare.

So, I think we don't want to see this as a binary question.

I think we're actually moving in some ways along an escalatory ladder, that could be very dangerous in its own way.

Sorry, Suisheng. Yeah. Go ahead.

In fact, if China would use force, it totally depends on one person now.

I think that Xi Jinping was, in his mind, is thinking, what is the cost? What is the benefit he will get?

And the feedback loop for him now is not very healthy.

And what will he get? What he wants to get. That's the problem at this time.

So, from a rational perspective, I don't think China is ready to use force.

But because of his power, because people are fearing of his power, people will not tell him the truth.

So, if he makes his mind, I think he would use force, decisively, which could be a disaster for China, and for US and for the world.

China has three conditions for using force in the so-called anti-secession law.

One is Taiwan would declare independence.

Second is some international or domestic events that occurred leading to the secede of Taiwan.

Third is which I think is a very unreasonable that is that the prospects of peaceful unification is lost.

Which is a very, very ambivalent.

So, I think the US should try to do everything to make China clarify what do you mean by the prospects lost.

And China should be patient and the US also try to assure that if you don't use military force, we will not get involved.

And would do whatever to work with China.

So that's what I think we should move toward, the peaceful resolution eventually.

- Well, Bridge?
- Well, I have a different perspective, although I come to much of what you agree.

I mean, let's look at this. I think what Yuki said was a really important point,

which is essentially there's zero serious political constituency on the island of Taiwan, for peaceful unification.

And the Americans are not going to force Taiwan, we don't have the ability to force Taiwan into PRC's lap.

So, let's take the mindset that you're bringing Professor, to Xi Jinping. Nobody's inside his mind.

So, let's use a kind of roughly rational actor at the level of like Darwin, he wants to survive he wants to be successful.

Okay. He knows peaceful unification isn't going to happen.

So, what's his alternative? Military force.

You have to be prepared for war.

That's how we got through the Cold War without the Soviets using aggression against Western Europe, in my view.

We were strong, then you can have detente.

You can't have detente I think,

certainly not with a guy like Xi Jinping who's going to take advantage of you from a position of weakness.

Well, we're gonna take this debate broader.

We started with Taiwan, but concerns over Chinese military activity does go beyond the Taiwan Strait.

Strategic competition between the US and China is growing throughout the Indo-Pacific.

In October, a Chinese militia ship collided with a Philippine patrol boat in the Spratly Islands in the South China Sea.

There have been multiple incidents, such as the firing of water cannons by Chinese vessels.

China claims jurisdiction over almost the entire South China Sea.

Its actions have drawn ire from the Philippines, Vietnam, and other countries and regions that claim territorial rights.

In response, the U.S. has conducted multiple naval operations.

The US says it will challenge China's excessive claims to regional waters.

China was quick to respond.

We firmly oppose any act that provokes confrontation
in the South China Sea and aggravates regional tensions.

China's military presence is growing from the South China Sea to the Pacific.

A Chinese aircraft carrier was spotted for the first time conducting military exercises in the area.

In response to these developments, the US is strengthening cooperation with its allies and friends.

The Quad alliance includes the US, Japan, Australia, and India.

AUKUS is a security framework made up of the US, the UK and Australia.

And then there is the trilateral relationship involving the US, Japan and South Korea.

Rick, what is behind China's increasingly conspicuous presence in the South China Sea?

How seriously do countries in the Indo-Pacific Region need to consider China's growing assertiveness in this area?

It's part of China's efforts as its power grows to actually attain elements of their sovereign narrative.

But what I think is the most interesting thing over the past couple of years is that that expansion of Chinese assertiveness,

particularly in the South China Sea, has produced two responsive dynamics.

One is that many countries in the region are looking to each other to increase their security.

And two, they're looking to repurpose their relations with the US around this new dynamic.

And I think we've seen that in the trilateral process between Japan and South Korea.

We've seen it in the base access facilitation that the Philippines has offered the US,

we've seen it in the AUKUS alliance, and we've seen it with the QUAD.

Yuki, what do you think of this new cooperation, if I may say, between Japan and South Korea for example.

Do you see this as a strong development towards its, how should I say, stance towards China?

It's not all about China.

But definitely a large part of it is driven by China, particularly I would say,

on the part of the Republic of Korea, which is very particular about this current administration.

President Yoon made a conscious decision that it is more of a priority for him to double down on the alliance with the United States,

put the relations with Japan back on track.

And by so doing, I think, in his calculation, that will better equipped Seoul to counter whatever the intimidation or coercion, non-military,

I would say, but still coercive behavior coming out of Beijing.

And I think he did achieve his purpose.

I think Beijing was super irritated with the notion that three leaders of Japan, US and Republic of Korea met at Camp David,

and come out with a very strongly with a shared vision, that the all these three countries are on the same page, essentially,

supporting the free and open Indo-Pacific concept,

which is very contradictory with what China has been doing with the US in the South China Sea.

Because basically, South China, basically what had been going on in the last 15-18 months,

or so or probably even before is that Beijing is saying, this is our territorial water, you have nothing to do with it.

And you smaller countries in Southeast Asia, you're just going to have to shut up and put up with it.

And then I think that I would say, though, that is really kind of very counterproductive for China.

So, Rick was talking about, you know, how all the countries in the region are looking at each other, and find for ways to cooperate.

Suisheng, can we agree with that, in terms of the QUAD, the AUKUS.

All these movements happening around China? Is this really not an irritation forum?

Is this a warning? I mean, how is China reacting really?

From a Western perspective those are very successful alliances to deter China, and it has been successful.

Indeed, I think those are exactly the opposite that Xi Jinping would anticipate.

As Rick mentioned, those countries are now working together and also working with the United States.

Those were the nightmare for China. But from Chinese perspective, they said yes, so what.

Because remember, Yang Jiechi talked to ASEAN countries.

We are a big country and you are small countries.

So that's the mentality of China has. So, what!

These countries you work together. So, what!

You cannot change your geographical location. The US is far away.

So, we are here, and you have to work with us.

And also, they see the some kind of vulnerabilities of those alliances systems.

For example, US, Japan, South Korea now working together,

but now they also try to drive a wedge between US, South Korea and Japan.

They just had the Foreign Minister meeting just months ago.

Then they are now planning for the summit of China, South Korea, Japan.

So that's the counter action against the US alliance. It is also Australia talking about this QUAD.

Australia had a lot of problems with China. Now they are working together. I was in Sydney just last week.

I was really impressed by so many Chinese students, so many Chinese business people in Australia.

If Chinese students were not there, all those Austrian universities would be closed.

So, it's kind of two sides.

We cannot simply say that the alliances would deter China; could deter.

But China will still do what they want to do in the Indo-Pacific or wherever they want to do.

Let me add, just to kind of frame it. Like what is the QUAD actually do?

AUKUS, for instance, involves us giving up submarines.

I'm not sure we're going to follow through on AUKUS.

By the way, we were already allies with the United Kingdom and Australia.

And the trilateral with Japan and South Korea. Very nice, nice photo opportunities.

What has it done to the military balance in the region? Zero. It hasn't changed it.

If anything, it has probably convinced China that there is more of a containment policy.

Here's the way to measure whether Xi Jinping thinks he's successful or not.

Has he fundamentally changed what he's doing? Well, no. They're water-cannoning the Philippines.

And they're building up their military, and they're continuing to do the things,

the military exercises and provocations around Japan and Taiwan.

Bridge, are you saying though, that these possibilities for warfare versus the other options,

if I may say, you know, economic options or diplomacy, all these other things that could play into this relationship?

- Are they...
- They don't really matter much. They don't...

Look, look the sanctions don't work. I mean, the sanctions on Russia are almost a joke.

They are clearly not changing Russia's behavior, and they're not even stopping its military buildup that much.

Do we think economic sanctions are going to work against China?

I mean, come on. It's like a superpower economy. It's the world's largest industrial base.

Where are we going to get our stuff from?

And by the way, you think the Europeans are going to bail you out?

Where are the German is going to sell VW and Mercedes to?

Diplomacy, as Kissinger himself said, diplomacy without force is like a dance without music.

Diplomacy is critical from a position of military strength.

That's, of course what Ronald Reagan and George Shultz said.

Right? You need to be in a position of strength.

Rick, would you say, though, we've seen more people, Blinken, of course, we've seen Yellen.

All these people from the Biden administration taking more time to go to Beijing to talk.

Would you say that what Bridge is saying is fundamentally true?

Well, I think we have to be honest about the limits of diplomacy.

And there I would agree with Bridge.

I think that where I might see things somewhat differently is that the direction of travel in many of these areas,

even with the emerging repurposing of US relationships.

Yes, it's not that significant in many of these cases yet.

But I think we have to allow for the possibility that the direction of travel is very much in a serious way.

And that may be perceived in Beijing in that regard.

I was on one of the early trips in March, after the balloon incident.

And some of my colleagues from Treasury and Commerce went out after that.

And I think we found that the Chinese wanted us to come out.

They were not yet ready to engage at the senior most levels.

And what I think changed, to be honest, is perceptions in China,

that there was not going to be a rebound after the COVID Zero policies were dropped, but rather,

it was a very soft and fragmented internal economic situation.

That plus I think regional pressure to some degree has led them to seek a little bit of breathing space this year.

The US and China has interacted in the 50 years, half a century.

They know each other so well now. They know each other's redlines so well.

Lead on the talk is not try to understand each other.

It's just to tell the other side, what we think you have to respect our redlines.

In Chinese term, this is called national interest.

What's called national interests, bottom line is the nature of survival, non-negotiable.

What the US tries to blame is China's side to change the status quo by military threat.

So, from Chinese perspective, US is not in the right.

It is not an objective or balanced country here.

- Why we should trust you?
- That's right. We don't trust each other trust.

My Chinese friends like to say, "Oh, we don't have enough trust."

The trust is that we're not gonna get trust. Let's have a balance of power. Then make a deal.

Well, China's eagerness to expand its influence has not been limited to the Indo-Pacific.

Beijing is growing bolder in challenging the US-led global order elsewhere as well.

But is the country really becoming a global power?

In November, the first face-to-face US-China summit in a year took place.

The two leaders expressed their views on their relationship.

You and I understand each other clearly, leader to leader, with no misconceptions or miscommunications.

President Xi stated that China stands alongside the US as an equal.

Planet Earth is big enough for the two countries to succeed.
And one country's success is an opportunity for the other.

The conflicts in Ukraine and Gaza are raising questions about the Biden administration's leadership.

The US is struggling to win the support of countries in the Global South.

Through its "Belt and Road Initiative," China has built strong ties with the Global South.

At the October meeting, Xi emphasized the accomplishments and the future of the initiative.

For the Belt and Road Initiative, we are looking to
advancing together and developing win-win cooperation.

Suisheng, what does Xi mean when he says the earth is big enough for two superpowers?

In fact, he talks about the Pacific was big enough for US and China to peacefully coexist before.

- Before?
- Yes.

And that mean, China ambition at that time was primarily focused on the Pacific.

Now China's ambition has been expanded from these,

and US-China competition has gone far beyond the Pacific into the global arena.

And China has seen itself as the video showed, as a US peer in the global stage.

And China would compete and respond to US so-called contaminants of whatever, vigorously and to do everything it could.

So that's what I see what he's talking about, the earth is big enough.

Does anyone joining me today, see this meeting between Xi and Biden in San Francisco as any thaw in the current relationship?

I don't think so. I think, if anything,

even if you just see the opening and exchange between the two leaders,

they are not meeting eye to eye on anything.

I think that was more of the occasion of each side has to state what it has to say.

What needs to be said to each other at that point.

Yes, it was good that the two met.

It was much better than they met that they didn't meet.

But I don't think either side had any illusion.

Well, I think if you back it up to the big picture,

the Biden-Xi meeting in San Francisco did not change anything fundamental about the strategic picture.

That is no longer what these summits are about.

Look, I served proudly under both the Trump and the Biden administration's working on China policy.

And there is a convergence now, as we saw just yesterday with this select committee report,

that goes through in 150 recommendations, bipartisan consensus about much of our approach to China.

So, there are differences. To be clear.

There are debates, but I think that the bigger picture here is that really in US electoral politics,

the consensus around strategic competition with China is there.

Suisheng, what about for Xi?

How strong is Xi's desire to show his people back home, that China is not isolated.

China is isolated. First of all, I want to make sure of that -

but and also Xi Jinping, I think he knows that.

And they have offended that almost all their neighbors and the Philippines is a very recent example.

Xi tried to build with Biden's predecessor. Now, everything is reversed. He knows that.

But back home, the propaganda machine has been very successful to portray China as a global leader,

especially in the Global South, we talk about the Global South.

There are so many countries still grateful for China's One Belt One Road.

Although from American perspective, its kind of rating is not successful.

But China has presented, for example, I was in Beijing in October when the third Belt Road Global Summit took place.

I was on TV. It's was only 25 leaders were there,

but they presented in a way for the Chinese people, wow, the whole world came to Beijing.

- Has the Belt and Road Initiative really been waning? Or is it still powerful?
- That's my sense, too, is its waning.

In fact, then I was in Sydney, I gave a keynote presentation to the Australian Association of China studies.

One person from the audience asked me a question about Belt and Road.

I use this argument is that it's waning that it cannot finish the project, everything.

Then after my presentation, an old gentleman from Thailand came and said to me,

you have been in US too long, and you have been brainwashed by American propaganda.

We, in third world countries, we are forever grateful for the One Belt One Road

because all those projects they brought to us; we would not otherwise get it.

So that's what I think. There are two sides of this issue.

On one hand, the One Belt One Road targets on the infrastructure, provide funding to those poor countries - Global South,

are a very smart move, because there's a deficit of infrastructure, deficit funding for those countries.

They need it. And China presented them to those countries. They worked on that.

But on the other hand, China is not in a position now to provide all those.

What I would argue is that China has overreached, overplayed its hand, overextended on those promises.

And if they cannot deliver, that's the problem.

Yuki, how does Japan see China's engagement with the Global South?

So, I think the one big challenge for Japan is they see those issues,

whether that may be the relationship with the Global South, focused attention on the capacity building for Southeast Asia,

or other countries in Indo-Pacific, cooperation through QUAD.

They really have not been able to come up with an articulation of those policies and rationales policy other than, simply put;

China is doing it so; we have to do it too.

It shouldn't be all about China really,

because it is in Japanese interest to have those friends and partnerships in Global South.

For example, their assistance to Africa, or infrastructure development assistance.

They often talked about quality versus quantity.

They're clearly thinking about Chinese quantity.

But no, Japan has an alternative approach, which is quality.

We show up, we finish the project, we train the local workers,

we bring actually business to the local economy and make that our project sustainable by locals.

But it takes longer time for the population who benefits from those quality infrastructure investment to feel that.

Everybody's going to be calculating based on their interests.

This is not, I think- the really important part is not to see this through the framework of some vague conception of the rules,

and the international order, but very practically about balance of power and how different countries

are going to try to take account of that.

And when we talk about the rules-based international order,

and I've heard this when I made these criticisms like on Twitter, I get a lot of responses,

including from some of our allies like India, Southeast Asia, where they say the Americans just applied selectively.

Why don't you follow the U.N., you're arrogant and hubristic. All of which has some truth to it.

Exactly, because when you say rules-based order, what are the rules?

What is that? What are the rules? So, are we constantly shifting?

From the Chinese perspective, those rules are made by America.

America makes rules, China follows. That's the American intention.

And also, those rules basically just serve American interests.

And America never follows those rules Americans made.

Americans are so good making so many rules. Those rules are only for other countries.

For example with China, they will say in South China Sea, you have freedom of navigation.

That's following the UNCLOS. But U.S. has not ratified UNCLOS.

You want China to follow a law you don't want to even join.

Why we should follow those kinds of rules?

So, Bridge, you think that like, for example, the war in Ukraine, conflict in the Middle East,

these things are really diverting attention from other places that the US really should be focusing.

We're going to give the Taiwanese 350 million. How many of how we were looking to give to Taiwan, excuse me, to Ukraine?

We've already authorized over 100 billion, and they want 60 billion more dollars.

That would have been very helpful for strengthening our Pacific position.

And if you look at the best military analysis from our people like the Rand Corporation,

they say we're on a trajectory to lose a war over Taiwan.

Our political capital, the president and a lot of leading in fairness, Republicans in the Congress have been focused on Ukraine.

They make the argument that, oh, we're investing in Ukraine and it's going to help us in the Pacific.

That's just obviously not true.

And so, this is the thing about; it's really important for Asians to understand.

We need to focus on Asia now, because, nobody knows,

maybe the war would come next year, maybe the war would never come.

But even if the war comes like in 2027 and 2028, we needed to start three years ago to solve the problem.

So, in Japan speaking, there's a lot of applause for Japan for getting the 2% by 2027.

Tony Blinken is nobody's idea of a hawk. Tony Blinken has said publicly that China is,

that Xi Jinping wants the PLA to be ready by 2027, and that Xi Jinping has moved the timeline to the left.

By the way, the American people are tired of wars.

There have been a lot of foolish wars that we've waged.

I think I believe in the Ukrainian cause. I support what they're doing.

But the American people are saying, look, interest rates are at all-time high.

Our government is in massive amounts of debt.

We have a problem on the border, yadda, yadda.

Why are we getting into another war? And that's going to affect Asia too. This is the problem.

Asian, Japanese friends, Taiwanese friends need to understand that people are going to say:

No! Oh, we stood up by Ukraine. Now we're ready to stand by you.

No. No. They're going to say we already dumped a bunch of money into all

of these other things and people got wounded or killed.

Now you're asking me to do another war?

We needed to husband the American people's support and focus on the biggest challenge, which is clearly China.

And we did not do that. And now we're deeper in the hole that we have dug ourselves.

From China's perspective, what incentive would China have to avoid conflict for itself?

Well, I think one of the big incentives is one that we've alluded to on this panel.

But I think for all of us, we would all agree that, you know, China is a proud nation.

They've gone through a remarkable period of reform and opening

that has brought a lot of economic prosperity to their citizens.

They have had a technological base that I would agree,

is becoming world class in many sectors, even beyond the US's own.

So, I think part of the question here is will China's development goals and its rejuvenation goals become an opposition?

And I think we're starting to see that tension already in many of these areas,

and ultimately that's the choice that they may face.

- I do wanna add to that point.
- OK, yes.

When talk about deterrence, to build military strength, to stop China from trying to replace the United States.

I think that's a very important aspect.

Here for me, the question is, I was asked by a Chinese friend that you talk competition in American, you talk of competition.

What is the end outcome of that competition?

Is one side defeating the other side?

Okay, all destroy. Both are destroyed.

So, I don't know if those are the objectives of the US.

I don't think that's also what China wants to see.

So here for me the important outcome is that for US tries to recognize China's power, as Bridge talked so much today.

China is a peer-power, although China's power is still not that of the US level,

but US should treat China as a peer power and also respect to China as a peer power.

And also in the meantime, China should realize that China is not in a position to replace the US.

And China can never replace the US.

So here, to find a way to avoid a war, or peacefully coexistence, is that each leaves room for the other.

What we should go for is a stable, sufficient, and adaptive balance of power in which China is able,

I think, to achieve a reasonable conception of the great rejuvenation of Chinese nation.

The development of Chinese nation, the Chinese people have stood up dignity, pride, respect,

as one of the two, or as India grows, maybe three superpowers of the world, but cannot boss everybody around.

And when I deal with Chinese people, for instance, on Twitter or something.

You know, people say, well, that's not fair, and you did this.

China needs to understand. And I think they do.

But I think it's important to emphasize is that this is not just about, this is not about fairness.

China is too big. China is like Jupiter now. China is still a developing nation-

No, no, no, no, no, no, no, no, no, no. China is a superpower now.

And superpower is good, because you get the boss people around.

But it also means that people are more afraid of you.

And if we can come... and from my point of view, if we have a strong, we need that deterrent,

and then diplomacy will have more scope where we can have the Henry Kissinger style of conversation.

But first, you need to really have that.

So, China understands, the way I think about it. You're a professor.

China won't get the A-plus outcome of Xi Jinping's dream, maybe.

But maybe it'll get an A-minus or a B plus outcome.

And that, I think, that would be consistent. And that would be, as China likes to say, a win-win outcome.

- But here's my question here is that does that mean that US and China will have its own sphere of influence?
- I think there will be a kind of sphere and block elements.

Yeah, because that's inevitable. But countries will be adaptive.

It's not going to be like the Cold War probably. Countries will kind of pass and deal with both.

If that's the case, how about Taiwan or Japan?

That's for future generations, hopefully, as Deng Xiaoping said.

I want to ask everyone the same question to wrap up our conversation.

I'll start with Yuki.

Where do you see US-China relations in 2024?

2024? It will be stable, but then there is always a great level of nervousness surrounding it.

And what I'm afraid of is both sides,

or the rest of the world will overreact to every single move that each country makes.

That kind of gets basically, you know, there're so focused on what each countries do,

and they get, that gets lost in the mix, if you will.

So, I would say stable but uneasy stability.

- Suisheng? What do you think?
- I still use my opening statement, the continuation of prolonged crisis.

I don't think there is any solution to Taiwan issue.

This Taiwan issue can only be intensified next year and beyond.

The US would never want China to surpass America.

Joe Biden made that very clear. I would not like China to pass US on my watch.

I don't think any US president would go that path.

And China would not believe; and China was always suspicious that America would do everything to stop China.

China would do everything to put America at bay.

So, this kind of big power competition will continue.

Okay, Bridge. How do you see 2024?

I think fundamentally rivalrous with the growing potential for war. I don't think anybody knows.

I wouldn't bet a tremendous amount of money on it.

But I think as we go over the course of this decade,

it's going to become more and more acute - the potential for conflict.

And Rick?

Yeah, I tend to see it the same way.

It's a strategic competition that for periods can be managed,

but eventually there are times when it will be disrupted,

and it will become unmanaged and it can happen in any of those domains.

Thank you all very much for this very engaging conversation.

And while both Biden and Xi have said they want to manage, they want to manage their competition responsibly,

their current relationship seems to be more about preventing a major conflict

than about making major policy changes.

Still, as we head into 2024, it is important for the rest of the world that both sides

have an incentive to show they can keep their tensions under control.

Thank you all for joining us in this edition of Global Agenda.