>> good afternoon everybody. welcome to the aspen institute i'm the director of the strategy group bricco you will be on c-span. be on your best behavior and we are here to launch a very important book on the china relationship of the struggle for power but first i want to recognize our very distinguished guest, the cochair of our organization condoleezza rice is here with us. [applause] and you will be hearing from secretary rice in about half an hour. she would be one of the conversationalists. the other cochair could not be here with us but he is very much a part of this effort. i want to pay tribute to our former secretary of defense in a very good friend bill and janet cohen. welcome. [applause] and also paid tribute to the people that embody bipartisanship involved in every effort to go across bipartisan lines former national security advisor steve hadley is here as well. [applause] rama manuel you will see him on stage during the interviews. the subject is china. all of us agree that our relationship with china is the greatest challenge we can face as a country in the next several decades and it's an important moment in that relationship from march 1979 jimmy carter and ping from the democratic administration, we all felt that we were seeking cooperation with china that was a basic strategy and the chinese felt the same way. in recent years there is no question that both countries have went from a strategy of competition. that gets to the heart of the vital national interest oversea overseas. we are competing for military predominance in the indo pacific with the allies japan and south korea and australia for 75 years ago but the chinese make a concerted effort to cut into that military power. we are competing to see who will dominate the next generation of military technology in two years the aspen strategy groups was thinking about that subject. ai would be militarized quantum computing will be militarized. biotechnology will be militarized. which will get the first in the new generation of military technology over the next several decades. but certainly competing as the number one and two economic powers and that was just last week. and from the perspective of the united states to support that president trump is at the heart of chinese difficulties will the chinese agree to live on a level playing field with japan, europe and the european union. and strategic predominance and military technology. we will talk to secretary rice about this but the battle of ideas and peeing is brimming with ideas the authoritarian model how that country is organized and he things that should be exported and other country should adopt it and vladimir putin things the same way. and air do want think the same way. americans disagree europeans disagree. japanese disagree. it's not the ultimate battle of armies but ideals and how we think society should be organized. with republicans independence and democrats together we produce this volume that i hope all of you have a copy of that if not there are copies available in the back we produce on a nonpartisan basis we are americans and believe in our country first we do not believe in partisanship should interfere with our analysis of challenges like this. the cautionary note is are we overestimating china's strengths and underestimating china's weaknesses? are we underestimating the ability of the united states and its allies in europe and asia to cope peacefully and successfully we have someone here with condi rice bending a better part of her academic career thinking of an empire that crashed in the soviet union and there were times we were working together secretary :-colon when you overestimated the strength of the soviet union. do we have self-confidence to think the united states and its allies are having a way forward for success in the 21st century. i commend this volume to you republicans and democrats and independents. my colleague rahm emanuel interview mike who is an advisor as a china specialist and is really smart the second interview condoleezza rice will be asked about these issues the third interview kathleen hicks who i think is on the smartest young strategist we have in the united states on the positioning of the american military and the ability to respond to secretary :-colon and next me will interview a guy who is a force of nature ambassador kurt campbell from president obama was the assistant secretary of state for east asia and architect the united states must make to the endo pacific on these issues we have for conversations and we hope it will be useful to you and now without further ado. [applause] >> thank you for being here today. when we were in aspen last august, i thought we had one of the best discussions we had ever had of depth, substance, diversity of opinion to be respectful of others opinion and you can see what it's like in different formats today where everybody talks. we want to highlight a couple of our authors and give them the opportunity what they are trying to say. needing no introduction but i will do it anyway. [laughter] a fellow at the hudson institute former senior government official from the reagan administration and elsewhere currently i would say you are the number one advisors to the administration on china so you took six trips to prepare for the trade deal. so i really want to start on the narrow and i'm asking you to speak for the administration for what they think. what is the trump administration's objective? is at a level playing field to muddle through? is it pushing back like on the soviet union to get a different system? what are we striving for? >> first comment about the trump administration are those within it from the point of view from previous administrations with their debates on the front page of the wall street journal like you would read from the oval office someone said this or someone said that. so this administration it is very difficult for outsiders to understand who speaks for the administration. in my view it is the president alone and one thing we learn from the impeachment discussion is the permanent bureaucracy up to and including the cabinet secretaries are not necessarily involved in what the president is concerned with. so my observation, i was not a trump campaign supporter. my candidate lost but i was invited to the transition team. and what i heard from the beginning is the president-elect was deeply and personally interested in china. this surprised me. i thought during the campaign when he would frequently say phrases like china is raping the country it is campaign rhetoric. it worked in some counties and that's the end of it. but in fact as i say in my chapter in the book we are here to discuss the president began to act as the desk officer himself then we should all be thrilled the president himself is taking china very seriously. but the hazard to that is that everybody around him wants to influence his view and find out what it is. and what i have come to understand about president trumps post to china he thinks of himself as a dealmaker a businessman, a billionaire and wants to make a deal in some sense another company that is run by another ceo. so his focus from the beginning during the transition was on pain and the early developments in my view unfortunately had taken a phone call from the taiwan president of the chinese say so-called president. and the chinese began to punish the trump administration for the phone call without actually having a summit anywhere until the president clarifies his views. but the way he did that set the tone for the next three years. he said at the request of president xi i will abide by our one china policy to remove the obstacle for the mar-a-lago summit. i'm not sure where you want to go. >> so it's possible but is it possible watching is a total outside observer, i sometimes hear from the administration we are looking for china to fail. and sometimes i hear no it's fair playing field so the companies can compete and we can have her own sphere of influence and have a way to get along. >> i have been advocating the president should have a speech on china himself and answer these kind of questions you are raising. but the vice president has given two speeches in great detail. but they too have created questions about what is he saying that we don't want to decouple but soon after people associated with the administration with steve bannon in particular which i'm not a member of says decoupling is exactly our goal. decoupling is exactly our goal. others to suggest there is considerable ambiguity. and for some reason i don't understand in the present invites me into the oval office one - - the oval office to witness these debates. and there they are. >> do you participate? >> he uses me as a foil. it doesn't take long before you realize who likes me to be there and who doesn't. so that debate continues. so when i joined the transition team i replaced my order with amazon.com to order all 14 books the president has authored and some of those have china sections. when the new president comes in working for him or her i recommend reading all those books before you go to the first meeting. >> they are quite deaf i have read some of those sections. but he has a point about the china bad china. he lays out a good china that he would like to see as he demonizes a bad china. that the whole course of us china relations to a large degree is up to china. they have steve bannon they have steve nguyen and that is part of what i'm supposed to be following because i've known these scholars and former officials for 30 years. >> you wrote the book 100 year marathon and it is an excellent book and when you go to china now i see when i travel to chin china, i see the hardliners winning. it is harder and harder for the reformers you want domestic reform much less anyone who wants political reform for the year of their president so the hardliners on both sides are winning driving up. is that what you see? >> yes. also what henry kissinger warned about the very last of his chapter of china his nightmare that he forecast the unfathomable war on the scale of world war i between the us and china if the hawks on both sides got into power. he has the title 100 year marathon from a chinese hawk. doctor kissinger spent time with that hardliner. we had him on his first visit to america we had a cocktail party for him. he came over to the pentagon. but doctor kissinger said it won't happen it is a fringe element reflecting stream of thinking but it will never happen. but it did. so i think the hardliners in the china field and the cia have known a great deal all along but that estimate is they are not very powerful. and then to the foreign ministry in beijing. >> and then what you roll out. but you raised kissinger and he famously said beer in the foothills of the cold war. that doesn't mean we need to go all the way. where do you see the administration going? pushing told the cold war or pull back? >> 1 million voices are inside the administration. i don't think the president wants a cold war with china at all but i think he is quite aware of military improvements. but you will notice there are little micro indicators like the south china sea with our frequent navigation patrols to observe innocent passage rules where they don't do on their weapons or radar and don't go in circles or at night. as part of the sea treaty how you can make innocent passage without challenging the territorial claims. as i understand it from the navy spokesman, we have not aggressively challenge the chinese with these maneuvers. we have come close. there is a wonderful harvard study about this in our group people i've's reference the study on exactly how we approach the issue of freedom of navigation missions but that could change. of the whole trade deal go sour and it is very voluntary on both sides, i can envision a cold war breaking out inadvertently and to look back on the details and just have a cold war it's a series of blunders. but you did formally launch it and you think we are not quite there yet. >> i think it could be avoided but it takes two sides and intricacies of the trading agreement could lay the foundation for a cold war. >> i do want to get to the trade agreement since you were instrumental to help get it through. that was a real accomplishment. talk about freedom of navigation and the south china sea and in the us to be so fixated and i want to get your views on the other part of the relationship what is happening diplomatically you are spending a lot of time in your paper talking about our allies in asia and what each of them are doing especially on the military side. i thought it was excellent and made really good points of what we are already doing and what we should be doing more with our allies. when we see the defense policy we see some of that but inconsistently asking them more than triple the payment and south korea more than triple the contribution. how do you view that? is that a coequal strategy or multiple people not working together? like this is an area where president has strong views from 12 years earlier. so the notion we are being ripped off by our allies is a core donald trump view if you want to ingratiate yourself. >> you are there all the time i am never there. >> if we both go to see them and i say sir we need to work with allies and share values and you say sir we need to ask the south korean to go 500 percent more who will the president listen to? >> you. i'm afraid that calculation goes on with other cabinet secretaries trying to get the president to go along and not get ousted. we've had a lot of firings. one hundred people close advisers to the president have been hired in the first three years including cabinet secretaries and there is a pattern to the firings. if you say or do things that are yesterday that the base does not agree with the president doesn't agree with that is a good way to get fired. tell the press about your valiant effort to work with our allies that's a good way to get fired. >> that's a very good point to make the crucial point of the china strategy is to bring allies along to listen and get their ideas and it's absolutely crucial so in my chapter for the book i tried to describe what the administration is doing with each country in asia but they think i'm a deep state infiltrator to think this way of the importance of allies that partners and friends especially india as the key to the overall approach to china. >> you don't strike me as very deep state. >> that the book discusses equally india and america if you praise me i need to praise you as well does everybody have a copy of her book? >> it's called brave new world of this as i get the moderator to be really nice to you. only softball questions. who doesn't have a copy of brave new world? put your hand up. >> perfect. now i will follow with a softball. tell us about the trade deal and what is the most effective part parts. >> the president had a signing ceremony in the white house last week and had a lot of ceos from very large corporations and singled out each one with a joke including hank greenberg by the way who is highly knowledgeable doctor kissinger was there. >> you were there and praised. >> i will get in trouble with my fellow china experts again referring to our fellow partnership with the president of the united states. but the point of the signing ceremony was the chinese were there. they laughed. they applauded. you could see there is not any acrimony or bitterness. we had a really tough two years which nobody can understand and the chinese translation is also quite ambiguous. it is a celebration that is so far so good there is a recovery that the president reacted very quickly to. and the number of chinese that had come in some delegations with 30 officials they were all up on the fifth floor in the treaty room, they are the people who run china and the economy and trade policy. at one time there is a title a special envoy of president xi that we were told not to use the title anymore because and we had to ponder what that meant so i see this as good news the details are not important as the cooperative attitude after a emotional experience on both sides over the last two years. >> so reading the agreement in english i thought it was extremely novel with the dispute resolution i know you call it something else on the chinese side but that one side has a tariff if you need to and let's hope it works. and on the intellectual-property side especially on the biologics and pharma. wasn't worth the cost the amount the economy suffered because of the tariffs? what came out of the phase i deal with it? >> i think so but i try to put myself in the mind of another preacher president who will inherit this problem and if they would be willing to use tariffs as president trump did against the wishes of some in his administration and to threaten others there was a campaign in the press using a memo that said of the chinese don't come around we will put capital constraints on them from the waiver of 2013 with the chinese accounting anomalies not according to the sec. that will go away talking about making $3 trillion of capital over the next few years. the us government has a way to slow that down for a large amount of capital so those threats may have worked. they were not made by the president directly. but if you look at the opening chapter in here he talks about the different voices china policy the chinese follow that very closely they have a lot of american players. so they had to make an assessment last september and october that we could be badly hurt by these additional measures of escalation. that may have affected their decision but he did it with goodwill and chinese philosophical fatalism this is the long game going on for hundreds of years so china has to make a concession and brilliantly marketed it by saying at the white house signing ceremony position there's a letter from president xi and then all three said this agreement is important for global peace and global economic growth. . . . . >> depends on how we do with our trade talks with europe. final question for you. everyone's talking about a phase two. the strategic and economic dialogue has been renamed but, apparently, it's going to happen again. any chances that you will see anything close to a phase two before november? >> well, as the president likes to say, we'll have to wait and see. [laughter] >> how long will we have to wait? >> there are some issues that the president could solve when he goes to beijing to see his friend xi jinping. i think it's escalated, by the way, beyond friend. now they love each other, according to the president's comments at davos. >> for a while. [laughter] >> so we're in the dark because the subsidies to some degree are secret in china. there's not a big list they publish saying, no, here's -- they've got roughly 80 state-owned enterprises, corporations on the or fortune 500 list now. by the way, they beat the american companies. there's now 129 chinese companies, 80 of which are state-owned. so subsidies are secret. we will need their cooperation and their identifying what subsidies ought to be eliminated, which they promised at the wto negotiating round. to eliminate. that's one with issue. the second issue is we'll begin the ene forcement phase, the bilateral dispute recognition phase, more properly, as phase two is going on. so we're going to have the summit, the issue i of secrecy -- issue of secrecy of subsidies, the enforcement that could turn into a very nasty quarrel. and then the other policies in diplomacy, military sphere, there's quite a long list, actually. our cooperation with china, many other issues. all that will be at stake in how we solve phase two. i'm cautiously optimistic about it, and i think the president is too, actually. >>