American Enterprise Institute

December 12, 2005

[Edited transcript from audio tapes]

9:45 a.m.	Registration
10:00	Presenters:	JOSHUA KURLANTZICK, The New Republic ELIZABETH ECONOMY, Council on Foreign Relations
		ROBERT SUTTER, Georgetown University
	Moderators:	DAN BLUMENTHAL, AEI
		PHIL SAUNDERS, INSS
11:30	Adjournment

Proceedings:

 Dan Blumenthal:  Ok, I think we’re going to get started here, even though people are still trickling in.  We’re very pleased today to have this panel on this issue that has been hotly debated here in Washington and in Asia as well – which is the idea of soft power, and whether or not there is a kind of competition for soft power, if China is wielding soft power very well in Asia, if United States is losing its influence, and a whole host of questions that had been raised and debated here. 
We have a tremendous group of speakers here.  We have Josh Kurlantzick from the Carnegie Endowment’s China program who is writing a book on this issue and has done quite a bit of extensive field work on the issue.  And we’re happy that this panel and conference is forcing him to get closer to his deadline in the book.  He just thanked us for that.  We have Liz Economy who has written a very, very well received book that has won prizes and much acclaim called, The River Runs Black:  The Environmental Challenges to China’s Future, and who is a very well-regarded scholar on China’s international relations.  We have Bob Sutter from Georgetown University who has also recently written a very well-received book on the changing power dynamics in Asia that have been associated with China’s rise in power.  And we have Phil Saunders from the National Defense University who is co-moderating and co-hosting this mini-series, and also in his own right, a very well-regarded and prolific writer on these issues of East Asian security.
 Before Josh begins and then both Liz and Bob Sutter comment on his presentation, I’d like to kind of frame this a little bit.  The term “soft power,” – which of course was first introduced by Joe and me a few years back, and he wrote with some precision about exactly what that means – not to oversimplify, but part of it is, of course, the appeal of one’s culture and the model that one’s country provides to others that yields a certain kind of power that other kinds of power can’t also yield. 
And the other way I would like to frame this before we get Josh started, something for the panelists to think about is a recent column that Fareed Zakaria wrote entitled, “The US can out-charm China,” taking on the notion that the United States is just out of the game in terms of the charm offensive in China.  And one quote he had is, essentially, from an observer in Singapore who said that people misunderstand soft power. 
Soft power means the appeal of one’s culture, ideas, and principles.  China has no soft power.  No one in the Asia wants the Chinese Dream or pines to live in a Chinese world.  Even the Chinese don’t really know what that would mean.  So, I’ll leave it to the panelists to take issue with that statement and either to agree or disagree, and so on and so forth.  Quite a controversial and contrary statement, I think, these days.  Anyway, with that let’s let Josh go ahead.
Joshua Kurlantzick:  Thank you very much and thanks for having me.  And I would also like to extend my thanks to NDU for these series which I’ve attended, many others in the past.  I’m not a China specialist.  I’m a Southeast Asia person.  And the idea of my book is to look at China’s image and role in the region through the prism, mostly of the ASEANs, in order to get a sense from their point of view on how China’s role on the region is changing.  And as Dan mentioned, I’ve tried to do as much on-the-ground field work as possible looking in through the ASEAN’s perspective. 
What I’d like to do today is examine and discuss several components of that research.  First, I’m just going to give a brief definition of how I am looking at soft power in the book within a Southeast Asian context. 
Secondly, I’m going to talk a little bit about whether you can say there is any kind of defined Chinese strategy to gain influence in the region, as much as it can be said that any state has a coherent strategy. 
And third, I’m going to look a little bit about the specific policy tools that might be used to leverage soft power, to leverage influence in the region.  I think this system is not well understood in Washington, and I’m going to try to offer as much detail as possible. 
And then, fourth, talk a little bit about if indeed China is gaining influence in the region, to what extent might that be used to fulfill certain goals, and what are the implications for the ASEAN nations themselves and for us here in the US?  As Dan alluded to in a nice definition, soft power refers to the appeal of the values and culture and institutions of a country.  And then, at the same time, classically realist definitions of hard power relate to both economic and military security’s fears. 
In the case of China, particularly in Southeast Asia though, I do think that to some extent, the success in the last 20 years of the socioeconomic development model is part of its appeal, part of its influence.  And I do, in my research, include the economic capabilities in the equation, as I think that is part of the appeal and draw of China in the region.  I know I must include the military security dimension.  As I’m looking at it in my book, in Southeast Asia, soft power is non-military power. 
China’s soft power stems from its ability to influence from the attractiveness, both to some leaders in the region and some of the public, of its economic development model, the attractiveness of some elements of the way it portrays itself as an actor in the region.  The attraction is some of its culture, particularly among overseas Chinese, the attractiveness of public and official diplomacy, and the kind of broader gravitational pull of the business community and of corporate branding which is just starting to be seen among some of the larger Chinese companies in the region.  All these factors allow China broadly and by definition to persuade rather than coerce or threaten.  And, I think, also help Beijing the way American leaders or business people in the past see that the ASEANs, if not necessarily looking to China as a leader on many issues, are at least looking to China as an alternative in terms of culture, business, even diplomacy to the United States from the past. 
I recognize – as I’ve done some of my research and proposed it to other people, that it is hard to differentiate in some ways.  It’s hard to differentiate whether some of ASEAN’s engagement strategies toward Beijing stem from a growing respect for its hard power, for its security, for its military buildup in the region.  But I’ll try to differentiate as much as possible.  As we all know, there has clearly been at least something of a sea change in the past eight to ten years in how the Southeast Asians view China.  It has been a change into viewing China at least as more of a constructive and benign actor in the region; in some ways an actor to be emulated; and a place who, looking through the Southeast Asian media and through interviews with elites, a place whose business, and society, and culture are attractive, and in some ways, even exciting. 
Does this suggest that China has a soft power strategy?  I think that has very difficult to say because soft power stems as much from non-governmental actors as well as governments.  But I do think you can draw out some elements of a strategy, and I’m going to start expressing them.  I think there is growing emphasis on relations with neighboring countries in the region if you look at the 16th Party Congress, if you talk to Chinese scholars that some high official think-tanks like CASS or the party school where resources have been shifted from just traditional areas, like studying relations where the US and Japan, to focusing on neighboring countries. 
And I think there are, if you look at several strategies, and then let me get into policy tools that Professor Sutter also alludes to in his paper, that allow individual tools of soft influence on the ground more leverage.  They provide a framework for them.  So that could be business people in Yunan province who are investing in Thailand or Chinese migrants in Northern Burma, or Chinese language schools. 
All these benefit in some ways from broader strategies.  First, as we know, Beijing has enunciated and, I think, very well and effectively publicized the doctrine of non-interference, sovereignty, and cooperation in the region.  What is interesting, I think, in the context in the region is that this comes at a time when, at least since the mid-90s, American foreign policy elites, including many people who work here, have shifted away from the idea of sovereignty as an end-all, be-all in relations and have begun to more greatly question the idea between sovereignty and, say, pushing for democratization.  Beijing backstops its rhetoric with some real initiatives, again that I think don’t get focus on them much here.  And that means not only signing the ASEAN’s Treaty of Amity and Cooperation, but signing cooperative agreements with countries in the region, even a strategic partnership with a country like Indonesia. 
What is also interesting is that Beijing has taken some rhetorical hits to its own hard power – I think in order to project an image as being more benign in the region.  So this means not only publishing defense white papers in an attempt to be more transparent, but backing off on some of the rhetoric about control of the South China Sea, even considering jointly exploring areas of the South China Sea with the Vietnamese in the Philippines.  I think that would have been hard to imagine 15 years ago. 
Second, I think you can see Southeast Asia and other areas of the world, like Central Asia, are focused on areas where American influence has hit rocks, where the bilateral relationship is threatened, or in some places like Uzbekistan, perhaps endangered.  I think you see this in the Philippines where Beijing has stepped up its wooing, both of the royal government and of the public in the past two years as the American relationship has hit some rocks, and for a long time there was no ambassador in place. 
I think you see most obviously in a place like Uzbekistan, which is outside of this regional focus but where, as the American relationship deteriorated, the Chinese have aggressively stepped up their wooing of the government.  You see it in a place like Cambodia.  I think you see it, to some extent, in how successful Beijing has been in advertising its development model in places like Burma or Laos, where at least clearly would be worried about – if they’ve given much thought to it – about a relationship with the United States would be sympathetic to China’s rhetoric of non-interference and sovereignty. 
Third, and certainly related, I think if you look at statements at official gatherings or informal summits, you see an emphasis on portraying gaps between American values and norms in the region.  Particularly portraying United States as a non-Asian actor in the region, again, not respectful of sovereignty and highlighted at least going back five to ten years by the web of sort of sanctions, restrictions, and informal restrictions United States has on the ASEAN countries. Obviously we have significant sanctions on Burma, to military restrictions in Indonesia to restrictions in the past on Laos to restrictions on Vietnam. 
Okay.  Now, what is more interesting to me and what I think is more interesting from research on the ground is looking at ways in which the tools of influence that might have once been available only to the United States or less available to China are increasingly available.  I think as China’s international engagement has become more sophisticated, Beijing has better recognized this.  And from talking to both embassy officials and officials at places like the party school, I see this recognition, the levers outside of traditional blandishments and rhetoric and the security arena, the levers that China can use to grow its ability to persuade in Southeast Asia.  Some of these policy tools can be somewhat opaque, but I’ve tried to get as much detail as possible. 
First, Chinese development assistance has undergone a serious transformation in the past decade.  China is not going to be able to match US aid efforts around the world.  And what is interesting from talking to some ASEAN officials who deal with aid is, I think there is still clearly a recognition that American assistance, when given, is more trustworthy.  The United States, when making either official visits or through various programs, makes an agreement, it follows through. Whereas, you do have this problem where often you see at summits or at meetings attended by top leaders like Wen Jiabao, cited an investment or promises given of ODA or other types of what I call ODA soft loans that are given explicitly and never to be forgiven. 
Now when you go back or when I’ve come back and met Filipino or Lao or Cambodian officials and said, “What happened to that?”  Sometimes that actually didn’t materialize.  However, despite that, I think it is not well appreciated here how large Chinese ODA and ASEAN really has become.  I’ve tried to do researching in some of the small countries in the region because it is often easier to get information because this fear of policy leaves us relatively small.  So in two countries, for example in Laos and Cambodia, Chinese ODA puts in on a par with Japan, making it either the largest or the second largest donor (from my research) in the country, although official figures obviously and definitely do not reflect this. 
There are other organizations.  I learned that Britain’s Aid organization and some of the Japanese organizations, I believe, have tried to do a broader quantification of Chinese ODA in the region, and at least they found broadly that there are mid-sizable gains in the last three years alone.  And I believe in many of the countries in the region, particularly in Mainland Southeast Asia, is now equivalent to or greater than American aid and assistance.  China, of course, in countries like Cambodia, operates outside donor groups that pool funds and decides on how resources will be allocated, which also gives it something of an advantage because it can more easily decide how it likes to use its resources. 
The other interesting element of this, at least to me, is that ODA has been transformed and become much more sophisticated.  The old image was the Chinese ODA, which went primarily or only for infrastructure and kind of white elephant projects; the Ministry of Foreign Affairs building in Mozambique, a massive building for ministers in various countries, the new counsel ministers in Cambodia.  But I think that it has become much more sophisticated than that, and I think you see that in a way, that the Chinese themselves have approached people in the US government who were responsible for delivering aid and asked them quite seriously how we deliver our aid. 
They’ve done studies of the Millennium Challenge Corporation.  They’ve approached American diplomats in the field and tried to figure out how we deliver our aid so that it is more effective and it doesn’t go down the drain.  I think, partly, this has come because you see Chinese business people themselves have started to complain to Chinese diplomats and officials on the ground that money spent is not necessarily in any way benefiting them. 
So how is that reflected?  One interesting trend, I think, is you increasingly see in freer governments in Southeast Asia a kind of lobbying, as we might understand it here in Washington.  So that means, for example, I’ve done research in Thailand with senators and MPs who talked about the increasing amount of assistance, sort of what we’d understand as lobbying here in this D.C., trips to conferences and meetings in China often held at resorts, particularly for senators who have pushed forward to sign a Thai relationship very constructively.  Often, these are people who, 20 or 30 years ago might have come on educational visits in the United States.  Unfortunately, in some ways, our public diplomacy target towards them and has decreased. 
Again, I think there is not a terrific understanding of how informal lobbying has gone on in Southeast Asia probably because, again, it’s opaque.  Also, I would say that the quality of diplomats here has increased enormously.  We know that broadly, China has spent a lot of resources upgrading the quality of its diplomats in terms of language skills, and ability to operate somewhat unilaterally.  But what is interesting in the Southeast Asian context is, as compared to the US, the Chinese tend to focus on one region of the world early and stay in that region, so they rotate through many times and develop, I found, quite good language fluency. 
A good way to test this, for example, is rather than just meeting with top officials, try to meet with midlevel consular officials at places like Bangkok and other places in the region – a type of people who’d be in their first or second tour – and found that, although they tended to stay closer within the Chinese community in that country, their language skills often were better, or at least equivalent, to much higher level diplomats from Western and Japanese embassies.  What is also interesting is at the highest levels, ambassadors to places like Cambodia, often because of their experience before coming, with extensive connections to the diplomatic and business community from the outset, as if they were specifically chosen for this post rather than, as we often do in the United States, rotating people through in the Foreign Service who’ve shown their quite exceptional skill in other parts of the world.  It is, of course, debatable whether they are not transferable skills you get from other posts. 
But in any extent, this has tended to make the Chinese ambassadors, particularly in places like Cambodia and Burma, recognized as the most powerful or among the most powerful and the most sophisticated and savvy diplomatic actors in the field.  The Chinese backstopped this increasingly with, I think, more skillful formal diplomacy, and what I – let’s say that they do quite well, as they use their whole bench of formal diplomacy in a way the United States increasingly does not. 
So, for example, there has been a lot of criticism that Secretary of State Rice didn’t come to a meeting in Southeast Asia that is important to many ASEAN countries.  But beyond Secretary of State Rice, what the Chinese do well is they bring other sub-cabinet ministers and frequently show their flag in a way that we don’t.  The formal diplomacy also comes with an effort to set up, both from Beijing’s sponsored organizations and others, a network of informal summits and meetings in the region that again, I think, don’t get a lot of press coverage here, perhaps because they’re not very interesting on the face.  But again, they also allow China to emphasize its role as a constructive and benign actor in the region on business and cultural and language issues. 
The best known is obviously a forum which draws Asian elites.  But others are similarly interesting.  There have been summits in Beijing on the Asian media and environment which were very well attended by a number of friends of mine who are Southeast Asian journalists.  There is the ASEAN-China Eminent Person’s Group which, again, doesn’t get much coverage here, but is an important factor.  There are events that a new ASEAN Center of Contemporary Chinese Studies in Hanoi which draws almost only Sino and Vietnamese scholars. 
Again, these informal summits tend to be heavily, if not exclusively, attended by Southeast and Northeast Asians.  The informal summits are also a part of a broader effort at public diplomacy which has been, I think somewhat, but not terrifically effective, but has coincided, I think with something of a decrease in American Public Diplomacy efforts in the region which I’ll mention later.  So from the Chinese side, this is meant an increase of broadcasting of CCTV9 to the region.  My research with Chinese language editors from places like Malaysia and Cambodia where the Chinese language media is very wildly read, very good, and often is much better at breaking news than, I’m afraid, than the English language media. 
I’m not going into great detail on this, but this is also coincided with just a broader effort by the Chinese government to recognize the potential and power of overseas Chinese organizations in Southeast Asia, which obviously, were seriously marginalized during the Cultural Revolution and after that, but have begun to grow in scope of number significantly, in which Beijing has clearly reached out to and try to emphasize that they’re important actors in building the ASEAN and China relationship. 
One final element of public diplomacy has been cultural promotion.  If you go around Southeast Asia, there are an incredible number of language institutes – and many of these are private – just set up by people who are entrepreneurial and realized that, just as in the past, when they would teach English or Japanese, it’s a good idea to teach Chinese and they can make money.  But Beijing has invested in promoting and even in paying for the first year of what they’re calling Confucius Institutes, not only in Southeast Asia, but here in the US, in New Zealand, and Australia, Latin America, Northeast Asia, Africa.  And these are parts of universities that will focus on language and cultural studies.  Sometimes, they also come with sort of larger cultural centers. 
What is interesting to me is that in poorer countries in the region, particularly in mainland Southeast Asia, there has been a significant growth in scholarships provided by either Beijing or by specific universities like Fudan, to graduates of these institutes to go on to higher studies, whether that is university or graduate studies in China.  And this, I think, is a significant change from in the past and is incredibly attractive to people in places like Laos or Cambodia where there are just not very many other options, except for the ultra-elite of students. 
So partly because of this in 2004, China had by far its largest ever number of overseas students, visa, and enrollment numbers at major universities on the Chinese East Coast show a significant number of students from ASEAN which, whereas 15 years ago, there was almost none.  And some of these people are people who will be elite and opinion leaders in the future.  The type of people who might, at one point, have gone to Georgetown or Australian National University.  At the same time, now, I’ll mention this a little bit later, American visa policies, partly for good reasons, have become increasingly restricted in some countries in Southeast Asia. 
Fourth, we know that Beijing used to tightly control migration within China, and that has changed significantly.  Again, what is more interesting in this context, I think, not only have restrictions been lifted on out migration, but particularly in border provinces like Yunan, backed by some incentives from the central government, there have been incentives to actually out migrate to places like Northern Burma, Northern Thailand, and Northern Laos.  Because of this out migration, you now have something of a belt of influence stretching from Northern Burma to Northern Vietnam where, for example, Chinese public security bill numbers show that there were 1.5 million border crossings in this region last year, which has quadrupled from only five years before. 
The out migration is rapidly changing the demographic makeup on the ground, basically.  Across this belt, Chinese now dominate, and recently emigrated mainland Chinese now dominate not only business, but increasingly in towns in Northern Laos and in places from Mandalay up in Northern Burma society; and increasingly, even in places like Northern Thailand and Northern Laos, the Chinese now dominate politics which as we know is taboo for, I think, Chinese for many years. 
They’ve also created a kind of RMB zone.  The RMBs are not supposed to be convertible, but in this belt from Northern Burma to Northern Vietnam, you have a kind of RMB zone where RMB is used openly as a de facto first or second currency.  Meanwhile, restrictions on tourism which reflect mostly elites or at least middle and upper class, not necessarily the type of people crossing to Burma or Thailand, but the lifting of restrictions on tourism, as well as courting by lot of the ASEANs, has meant that the outbound market is going to grow enormously. 
CLSA - Asia Pacific has done some good research on this.  They suggest that by 2020, the outbound market would be 100 million Chinese travelers annually.  Already, if you talk to tourism officials in places like Thailand, Singapore, or Vietnam, they recognize that China is going to become their key tourist in the market or already is.  What is more interesting in the context of perceptions and influences, the growth of Chinese tourists also leads to a change from my research with a number of ASEANs in the travel industry in the image of China, because what you had five or ten years ago was mostly torn with tourism, and to be honest, I don’t think that added to China’s image in the region.  I think it distracted significantly. 
But now what you have in elite hotels in places like Bangkok and Singapore is people in the travel industry and just average workers seeing wealthy and urbane and sophisticated people from places like Beijing and Shanghai in the south coming as individual FITs, impressing them with their urbaneness, their ability, in some ways suggesting to the ASEANs, particularly in places like Thailand, how China’s outstripping ASEAN’s economic growth. 
Finally, I want to just mention FTAs in the region.  If you talk to people from UFGR I found or Australians or people who negotiate trade deals with the European Union, they’ll say that because trade deals are so labor intensive.  So resources intensive in terms of going through every little detail, you can’t negotiate more than one, or at most, two serious trade deals a year and have some substance on the bonus of the trade deal.  So we look at China, and China not only has CAFTA in their implementing, but has actually pushed provisions forward with early harvest.  They’re talking with New Zealand; they’re on the boards with Chile; Singapore wants to push forward; the Thais you want to push forward more.  They’re negotiating in other areas, and the response I will get, particularly from trade negotiators, because other major powers say that this is all just puff. 
But I don’t necessarily agree.  I do think that, obviously, a lot of these – not CAFTA but some of the other ones – are just frameworks that have no significant substance and substance might come in the future or not.  But in the region where the Japanese have been extremely resistant to negotiating anything on trade, (and we’re after US-Singapore, we’ve moved on US-Thai, but it’s still moving, and US- Malaysia is somewhere down the road), you frequently get from a number of ASEAN elites that the Chinese get some respect and they do get credence for just stepping up and signing, particularly CAFTA, but also these other things. 
And in an area where image is often sometimes as important as reality, this I think adds to the perception of the Chinese as a benign actor in the region.  They do get credit.  Frankly, I was surprised, because even among sophisticated people who know that these are often just frameworks, all these come, I think to some extent, with coinciding with something of a decline of American soft power, softer influence in the region, going back to the financial crisis.  Which is when I was based in Bangkok, and a lack of response offered an initial opportunity for any other external actor, including China, an opportunity, I think, to push back in American influence. 
The shift among American foreign policy leaders that I mentioned to sort of reconsider the idea of sovereignty trumping, say, democratization, I think provided something of a scare with leaders in some other countries in mainland Southeast Asia – the reallocation of American Public Diplomacy Resources.  So what I mean is in the 90s, they’re cutting down the resources available for public diplomacy and then since 9/11, as ramping up at a focus, primarily in the Middle East and the Muslim world, that has meant that a huge number of public diplomacy resources from language centers to libraries and others in Southeast Asia were closed.  Increasingly sophisticated and complex economic models in the region – where it revolves much less about around only American and Japanese FTI or consumption – diminishes our soft power.  Tighter visa policies which are a significant issue in the peninsula of Southeast Asia, particularly in Indonesia, where polling data has shown it’s often among the top five complaints among young Indonesians about the United States.  And the declining appeal of American corporate branding and particularly US corporate governance, which I think detracts from our ability to contrast ourselves with Chinese corporate governance in the region, diminishes our soft power. 
The broad strategies and frameworks in policy tools that I’m talking about help bolster soft power only so much, as I mentioned, in private body structure for individual actors on the ground to be more successful.  So in the past, the greater image in the American corporate governments, American public diplomacy, allowed individual American actors, from business people to pop stars to be more successful in Southeast Asia and more respected. 
So, too, now they work that way for the Chinese, I think, and conversely, they tamp down any negative sentiment or they tamp down, to some extent, negative sentiment about some of the things that the Chinese are doing in the region that actually already are, I think, negatively impacting Southeast Asians.  For example, the China-ASEAN free trade agreement is going to have significant negative implications for a number of sectors, and in even wealthier countries in the region like Thailand.  And yet as compared to ’97 and ’98, when in Thailand it was quite easy to find people who would go protest a Carrefour or an American store, you see very little public and even private resentment against implications of CAFTA for powerful sectors like agriculture. 
Ultimately then, what we’re trying as goals in the region would be, what would greater influence allow.  Other scholars like Professor Sutter and Ott and others have talked about goals like stability on the parameter, for greater economic development and trade.  This also could, if their stability obviously gives the CCP more room to deal with its own and significant internal socioeconomic problems, also, as I mentioned, to foster the idea that China is a constructive and benign presence in the region. 
But I do think there are more, if not necessarily to establish a sphere of influence in Southeast Asia – I think Ott calls it a kind of Chinese memoir doctrine in the region, at least to neuter Japan’s rule and to give the ASEANs an opportunity when any issue comes up to view China as an ultimate player to be called.  You saw this in 2003, for example, when the Thais and the Cambodians looked to China to help resolve their dispute, which shows an interesting change from the past.  The idea, as one Chinese official said to me, was not to replace United States, but to give the idea that when something happens in ASEAN, to the Southeast Asians, when an issue comes forward, do they reflexively pick up the phone and call the United States. 
Finally, I do think, to push back on some other trends in the region, Southeast Asia and, particularly, mainland Southeast Asia is a place where the balance between authoritarian rule and democratization is still extremely precarious even in places that I think only a few years ago we thought were consolidated democracies as like Thailand.  That balance I think is still very much in question.  Would this be successful?  Is this soft influence destined to grow? 
I’ve tried to look at some matrices, and as I’ve touched them, I think there are already some signs of success in Southeast Asia.  I think people with scholars and just average Southeast Asian leaders would’ve been surprised 15 years ago of the way that China, I do think, is perceived in the region as a constructive actor and often as a model.  The view of ethnic Chinese and Southeast Asia has been transformed 180 degrees in the past 15 to 20 years, and I think this is partly and largely due to China’s growing appeal in the region. 
You can see this most clearly in Thailand where the prime minister himself openly counts his Chinese heritage, visits his ancestral village in Thailand and brings the entire Thai media with him.  But you see this in many other Southeast Asian countries, where being Chinese now is an advantage in the business, which had always been in many places, but the high society which is often exclusively reserved for non-Chinese, high culture, and increasingly political elites.  It was only 20 years ago that the teaching of Chinese as a language in Thailand was banned.  And now, you have prime minister himself openly tells his Chinese heritage on a campaign trail to appeal the people. 
Polling data in Thailand and Cambodia and even, interestingly, in Australia by the Lowe Institute suggest that both publics and opinion leaders increasingly view China more positively than they do the United States.  Or when questioned as to who their closest friend or ally in the region is, by huge margins in Thailand and also significant margins in other places like Cambodia, say China.  China’s economic growth as compared five or definitely 10 years ago in Southeast Asia is talked of less and not perceived as much as a threat. 
What is interesting I think, if you look, and I’ve done some analysis of the elite media in some of the freer papers in Southeast Asian nations that have very good papers like Thailand, with The Nation or Indonesia with The Jakarta Post, if you do a comparison to 10 years ago, in general, the amount of criticism of Chinese politics or society or values or norms, even in these free papers which have no compunctions criticizing US or their own governments, has declined significantly.  Chinese business people and cultural elites are increasingly given the type of welcome and access in Southeast Asia.  These were once reserved for American business people or, to some extent, for Japanese business people and American cultural elites. 
Chinese language universities, and language studies, and TV, and books have grown in popularity significantly.  Just a couple of examples: in Vietnam, Chinese books are now the most popular in translation.  In Cambodia, the number of senior officials, I learned, who studied in China ¬for graduate studies grew from 0 in ‘97 to 500 annually today.  You find similar figures in places like Laos.  I’m sure in Burma, there is a significant number, although doing research in Burma is more than impossible. 
You see significant changes as well in Thailand.  The Chinese have increasingly been able to leverage their appeal, I think, to persuade:  whether that is on persuading the Thais to keep Taiwanese officials out of important conferences on health issues and other matters in Bangkok; whether that is on tamping down potential anger over the China-ASEAN free trade agreement in Laos and Cambodia; whether that is on tamping down potential anger in places like Laos and Cambodia about China’s environmental stewardship of the upper part of the Mekong River, which is going to have a significant impact for those countries in which there are clearly groups of people who are very worried about what is going to be.  And yet the Chinese have been able, I think, to use their appeal both with leaders as well as dollar or RMB diplomacy to keep that off the table at important meetings in the region. 
Finally, I think most importantly, appeal allows leaders in freer countries in the region that have to respond to their electorates, in places like the Philippines or even Australia, to sell the electorate on the idea of closer ties with China.  So this means not only closer economic ties, but rethinking security partnerships or even, perhaps, the Chinese have pushed the Australians to rethink their security relationship with ASEAN and United States. 
All this is not to say that the Southeast Asians don’t recognize that the US still has the capacity to deliver public goods China can’t match to respond to emergencies like the tsunami, that there is no way China could have responded to; that as I mentioned, American assistance on aid I think is often viewed as more trustworthy, or the Western and Japanese culture and schools and values are not still popular, particularly among educated elites in freer countries in the region.  Also, I think that is not to say that they can’t be pushed back.  There is some interesting research that was done, and I think published by CFR, but I’m not sure, about the China research group, which is a research organization here in town, about the effective United States publicizing specific individual initiatives. 
In this case, they looked at two in the Muslim world:  tsunami relief and, I believe, women’s rights immersion in Morocco, and how that had a significant impact on views in the United States.  In a way, I think that sort of promotion of broader aims and goals.  That type of recalibration of public diplomacy could be useful. 
We’re thinking our visa policies could be useful.  Having one officer in each embassy in Southeast Asia whose job is, specifically, to focus on what the Chinese do on the ground could be useful.  I’ve talked about this with a number of people.  During the Cold War, we had embassy officials whose job was in various important places in the world to look at what the Soviets did on the ground.  We now have a core of FSOs who have been at least on one or two tours in China, who speak Chinese well, and who rotate to Southeast Asia and are interested in that Chinese influence, both negative and positive, in the region. 
The State Department has efforts to compile info on Chinese activities in the region, but it’s not necessarily more than occasional or ad hoc from what I know.  And we don’t have one defined person at embassies whose job or first job is to use this type of analysis.  We could be giving specific meetings and same priority as European meetings, copying the Chinese in using their whole bench, so that people from commerce and agriculture and energy, not just Secretary of State Rice or Deputy Secretary of State Zoellick were coming in the region more, showing their face more. 
We could be refocusing in the national security strategy and elsewhere on importance of economic policies and trade, so that they’ll recognize that those are as important to us as the obviously important counterterrorism efforts.  And we could be rethinking our web of sanctions and restrictions in the region and making hard decisions about them, both decisions to lift them, decisions not to lift them, but rethinking about the utility of them in some places, which we already have done to some extent in Indonesia. 
Finally, I think, and I’m just going to get into this briefly, I think that it’s possible that even if we do nothing, the Chinese will in engender blowback against themselves anyway.  I do think that there is a possibility that the Chinese simply will overplay their hand, making the kind of promises on aid or FTAs or assistance to language schools or anything else that they can’t deliver because they don’t yet have the resources and the capacity to do so.  You already started to see this.  For example, in Cambodia in the Chinese language press in the last two years, there are increasing numbers of articles where a reporter goes out to some relatively small area and people complain about there was money that was supposed to be provided for this school and what happened. 
You see it even at a place like Laos, where aid promised sometimes doesn’t show up.  You see it in places like Northern Thailand and particularly in the Philippines where, and in Northern Laos to some extent, assistance and investment once welcomed is increasingly perceived as only helping Chinese migrants who were brought in by Chinese companies as migrant labor to work on projects. 
There is also, I think, the possibility that the Chinese had brought their influence so much that it’ll spark more concerns and greater hedging in Southeast Asia.  I don’t think, the Chinese can use multilateral organizations in Southeast Asia to push back on American influence the way, for example, I think they’ve used Shanghai Corporation to quite actually push back on the US in central Asia.  The American rule in Southeast Asia is too long.  The history is too long even if there are bumps, I think, for the Chinese to use multilateral organizations in that way.  I think even from talking to ASEAN diplomats, you see that although the East Asia somewhat has been talked a lot about, I think, perhaps to some extent, wrongly with a bit of fear here which I disagree with. 
Even China’s attempts to try to use DAS or even gain any control of the agenda there, I think, have really been marginalized quick from quite early on, particularly by George Yu and the Singaporeans, but by the other ASEANs as well.  The ASEANs were weary, and they asserted control over DAS or how to enter EAS over who would control the agenda and this is made as much, or almost completely an ASEAN or Southeast Asian show and not a China show.  I think I’ll stop there so that we can have some comment.
Dan Blumenthal:  Thank you very much Josh for a very comprehensive and a very fascinating detailed presentation.  I’m sure you’ve raised a lot of questions.  I know I have a lot of questions for you.  I’m sure a lot of people do, too.  Why don’t we turn now to, I guess, why don’t we start with Liz, and then have Bob wrap-up for some commentary.
 Elizabeth Economy:  Okay.  Thanks Dan and indeed I think your presentation, Josh, was so comprehensive and you’ve left me with very little, in fact, to say, but I also have some questions I’ll raise at the end.  I think what is most interesting to me from your remarks is the extent to which what you described as China’s sort of foreign policy soft power outreach in Southeast Asia is, really, I think just emblematic of what is going on in terms of Chinese foreign policy globally. 
I think if we look at what China’s doing in Latin America or Africa, we see many of the same patterns, which I think suggest that this is a sort of broader strategy and not just simply focused on - you were talking about what is it that China’s trying to gain here, and perhaps, simply securing its perimeter – this, I think is one element of it, but I do think there is a broader strategy in place as China increasingly goes further and further in field. 
What I think I’ll do is just talk a little bit very briefly on one other sort of tool in China’s soft power toolbox that I think they have, and then go into a little bit of detail about some of the obstacles which you raised at the end, obstacles that I think China will face as it extends its reach further out, and then just raise a couple of questions for discussion.  I think the one part of sort of China’s diplomacy that is quite effective, in which maybe you didn’t spend as much time, in addition to its repetition of this sort of sovereignty and non-interference mantra which has been central part of Chinese foreign policy for 50 years or so, is really this emphasis on “win-win” diplomacy. 
When China goes abroad, it really brings a very positive message.  China is always on a listening tour, and a much more effective one, I think, than we’d managed to do so far.  But I guess when I look at it, I think about it listens to the needs of others.  So whether its debt-forgiveness in Africa or a 10-year grace period for Cuba to repay its loans or trying to secure a Security Council seat for Brazil, it’s always on the lookout for what it is that the other country wants. 
I think, too, when countries raise specific concerns, and you mentioned the case of Vietnam in the South China Sea, I think that was a really good example.  China and the Philippines are already started mucking about, and Vietnam was trying to do its own thing and got sort of upset and what did China say, they said, “Let’s sit down and figure out a way that we can do this jointly”.  And now, you’re quite right, they have this kind of move toward joint exploration and cooperation in the South China Sea. 
I think, similarly, when you look at what happened with Mexico – and Mexico is very concerned about the impact of China and its economy, whether its textiles, handicrafts whatever – and Premier Wen Jiabao said to President Fox, “Let’s form a joint committee to sit down and figure out how we can have this ‘win-win’ solution so both sides come out ahead”.  So at the very least in the rhetorical front, I think China approaches sort of the world with large, with a very positive kind of message. 
I think China also, and I think here, too, you alluded to this in the case on Southeast Asia, I think that it places more importance on regional organizations than the United States tends to do.  And so, it constantly has this mantra that regional organizations should be the ones to resolve or come up with regional solutions to regional problems.  And that is the way, not only in the case of Asia probably, but also in Latin American other parts of the world, of maybe of starting to move the United States a little bit out of the picture.  If you’re constantly hinting at the ability of regional institutions to solve regional powers, why do you need the United States so deeply engaged throughout the world?
  You went through, I think, many, many of the other important aspects of Chinese soft power diplomacy and I’m not going to go through the rest of them over again.  In terms of the obstacles that, I think, China is going to face, I think they’re many, actually, and I think they begin with what you were finishing with, which was sort of a trade issue.  That as China’s economy continues to grow and it moves up the food chain in terms of the goods that it produces and the services that it provides, it will increasingly affect different economies throughout the world in different ways and different sectors will rise up and protest. 
And I think the kind of impact that has – again it could be motorcycles in Thailand or textiles in Mexico or the construction industry in South Africa – and I think the extent to which this becomes an issue really depends on the strength of the sector within that particular country.  But I do think that that will be a challenge. 
Second, I think, is the issue of China exporting its worst practices, and I actually think this is very important if we look, in fact, at what has transpired in China just over the past few weeks with the Harbin disaster, and with the environmental disaster, and with three or four mining accidents, significant accidents, China has among the worst labor environmental safety standards of any power, certainly of any global economic power.   And over 50 percent of China’s investment abroad now – these are Chinese companies, Chinese government going abroad – investments is in extractive resources:  mining, oil, this kind of thing. 
So you can see issues already with Shogun mine in Peru; you have issues that have arisen with Chinese construction of the dam in Sudan; and even in Myanmar, at some point in time, people are going to be upset with what they’ve been doing to the forest there.  So I think that their community, certainly within a range of developing countries, where perhaps governments have sold out to the Chinese cheaply, right?  Or haven’t protected the interest.  I think that there might be some, as you term it, blowback based on this kind of practice. 
In the same vein, I think, are Chinese governance issues.  I was in a conference in South Africa about a month a half ago, and a person who was there from Namibia was talking about how you can trace the assistance that countries provide – the United States, for example, provides to Namibia through the national budget of Namibia.  For every country that provides aid to Namibia, you can trace the assistance – except for China.  They don’t know how much money China is giving, or where it’s going, and this is a source of some concern.  I would expect that throughout much of the developing world, the sort of trade aid and kind of assistance deals that China’s brokering again may raise some concerns because of the lack of transparency. 
I think you mentioned the issue of over-reaching, sort of promising more than you can deliver; I think that is already, as you suggest, an evidence and important.  And too, you mentioned the issue of the Chinese importing their own workers.  Here too in Africa, this is a huge, huge issue.  The person from Sudan kept talking about how, back in the 1960s, the Chinese were all about providing technical assistance and training and education to the Sudanese; but now they’re just bringing their own people.  And not only are they bringing now their own construction workers and engineers, but the people – the Chinese – are coming, and they’re simply renting homes; they’re providing the tourist outlets.  They’re setting up their own restaurants so that the Sudanese feel very little of the Chinese money that’s coming is actually benefiting the Sudanese people.  Now, this is one perspective, but I think that it bears sort of thinking about. 
And finally, I would suggest on this front that the issue of sort of peace in foreign affairs, and this sort of, again this Chinese mantra of not mixing business with politics, and China’s peaceful development and…all these things—I think again, if we look at what China is doing in the Sudan or Zimbabwe or in Myanmar, that the sort of reality does not bear out the rhetoric that we’re hearing.  I also think that like the United States and like many former European powers, that China may well, down the line, come to pay a very steep price for providing assistance to what we might think of as rather ugly regimes.  So those, I think, are some of the challenges that China, I think, faces as it sort of extends its diplomacy outward. 
Now, just a couple of questions that I wanted to raise based on your presentation.  I think one of the things that comes through your examples and stories, but that you don’t perhaps maybe provide enough of an analytic framework for is, what are the differences, both among countries within Asia, right, and sort of the Chinese and the view of China?  You mentioned Thailand and Laos and Cambodia, but I don’t really have a sense –is it so different from Singapore and other countries and by communities within them?  Are there elite and popular perceptual differences? 
I think it’s important, just to make a point about for Reed’s piece; I think the person was Simon Te.  He is a good friend of mine.  He made the comment, right?  So he’s as close to a democracy activist and environmentalist as you’re going to get in Singapore.  So he is a little bit of an outlier in that framework, but I think it does raise an interesting point because you are going to have different people with different perceptions.  And I think it’s important, especially in a region that you know better than I – it’s so diverse, really – to get a sense for some of the nuances of how the region sort of splits. 
Also, do you see any evidence that sort of China’s rise has stirred a new Indian or Japanese sense of beginning to extend its own sort of soft power diplomacy?  And Japan has been so heavily engaged in overseas development assistance throughout the region, yet it has never really seemed to promote itself in that respect.  You see Japan now out there talking more about what it’s doing or trying to switch its approach, or India sort of the new star on the horizon. 
Just two more quick questions:  you started to talk about this I guess.  You don’t mention Iraq and 9/11, which are often used as two benchmarks for where the United States stood at one point and where it stands at the second point.  And I’m wondering if you don’t see those events as playing out here at all?  I mean, that you talked about democracy promotion, and I guess I’m wondering whether democracy promotion in the way that it was pushed in the 1990s (as sort of a negative, right) in the 1990s by United States and the way that it is perceived today, whether that is different.  Were you getting different sentiments because of the nature of the promotion and whether this is done very ephemeral, a new administration, a new approach, and a new set of, sort of Asian perceptions? 
Finally, I guess, and this is maybe an unfair question so I’ll excuse it if you don’t bother to answer it,  but it is:  one of the things that makes this soft power discussion so interesting, but so difficult at the same time and you talked about matrices, but what about metrics, right?  How do you measure this stuff really?  Right?  There is polling.  Yes, well you know what? US polls for like how the US is viewed in India and the Philippines are through the roof. 
I’m shocked.  But what is it all?  How do you basically really sit down and say, “What is going on?”  Can we say, for example, that Chinese are trying to get extra wire “Z” accomplished today?  They couldn’t have gotten it accomplished 5 years ago, so we see that there has been a shift, right, in their relative influence.  Or that today if President Bush were to walk into APEC, as he did in 2001 in Shanghai, and say the United States has just been attacked and we need to transform the nature of APEC.  I need every country here to rally behind us, that in fact that would not happen today, whereas in 2001 that did happen.  So I guess I’m wondering how you can help us sort of get a fix on the actual sort of transformation and real influence, if there is such a thing. 
I’ll stop there.
 Dan Blumenthal:  Thanks very much, Liz.  Excellent questions.  Why don’t we do this:  just let Bob finish his, do his presentation and let Joshua have a bracket in answering those questions that he wants to answer.
 Robert Sutter:  Thanks so much.  I know we’re short on time, and so I figured this would be the case, and so what I did is drafted a handout which I hope that you’ve all had a chance to get.  It is on the front desk.  It sort of lays out a perspective on dealing with this issue of China’s rise in Asia.  I think Joshua’s presentation is an excellent presentation.  I really encourage him to pursue this book because it will take us to a new level of specificity in an area that still remains very vague. 
We’re dealing, and I recall in his presentation, he talked about image.  He talked about things like that.  This is pretty fussy stuff for the most part, but his specificity is better than what we’ve been seeing, and I really hope he will do this.  I would encourage him, however, if he can possibly to not join this long list of presentations that we’ve been seeing in this city over the last year or so and, really in general, that inventory China’s advances and inventory US weaknesses.  This is what we’ve been seeing for a year or two years, basically this, in the scholarly literature as well as in the commentaries.  And this is all true. 
The Chinese strengths are as he said – no question about it, and I have no disagreement with any of the specific points that he made.  And I have no disagreement with the weaknesses of the United States which were added to the list; I think which is good and true.  All this is true, too. 
And so the question is, how much does this matter?  And when we look at that, then we have to look at the Chinese weaknesses, and we have to look at the US strengths, and if we don’t do that, we’re not going to be able to figure out accurately how much this matters.  Obviously, it’s changing.  Obviously, things are going on.  How significant is it?  How much does it matter?  And so that’s the basic point and the handout that you have is designed to underline that point to you, and I’m going to just tick off a couple of things there. 
But I think Josh was getting to this at the end of this presentation.  I think Liz amplified this very nicely as far as Chinese weaknesses are concerned.  These things are happening now.  There aren’t things that are, that we have to wait for.  The Chinese can do certain things; they can’t do other things. 
If you’re looking at influence, ladies and gentlemen, you have to figure out what is influence.  You have to define that.  What is it?  And I think influence – I guess I’m an old US government practitioner – but influence is getting somebody to do something they don’t want to do, or getting somebody to stop doing something they usually do “do”.  And the Chinese don’t do this, except in the case of Taiwan, and then they’re quite prepared to use hard power.  When they want to tell somebody not to have interaction with Taiwan, you’ll see hard power right up in your face. 
And so, they just don’t do this.  It’s part of their approach and I understand why they do it.  It’s the “win-win” approach; it’s a nice, it works pretty well and it builds good public relations, but it doesn’t really do influence.  You’re working on common ground.  You’re working on “win-win” where both sides have common interest.  And so, that is fine and it builds a good relationship, but it doesn’t do anything that it doesn’t show that kind of concrete influence that I think you can show in other ways. 
Just a couple of points here.  Looking at China’s strengths in the region, if you add it all up and here I think, I really, anything you can do to give us concrete figures on Chinese investment.  Chinese investment, according to the OECD, Chinese investment – overseas money leaving China overseas to the world – was under 4 billion dollars in 2004.  That is the whole world.  And so this is, and now the Chinese figures also underline this point.  Chinese foreign assistance, how much money are we really talking about here?  And I think this is much less.  And so we’re really talking about – from Japanese, US perspective – pretty small potatoes. 
So, let’s look at the Chinese strengths on trade are very important, but we have inter-regional trade.  Double counting goes on all the time with this inter-regional trade. Over half of Chinese foreign trade is processing trade, double counted, and so these countries are intertwined into this thing.  Are there negative features for this type of processing trade for people in Southeast Asia?  If you’re a laborer in Southeast Asia, I think it does have tremendous implications for you, negative ones, right now, and the Cambodians complain about this and I’ll just complain about this, too.
And so the point I’m getting at here is that China’s base, the strengths of China, and of course, Southeast Asia’s the one area of Asia where they’ve made the most gains.  All around the periphery, this is the best area for that.  Korea is probably about the same.  The rest is very different, but these two areas are very, very powerful for China.  And so what I think you’ll get away from when you listen to Joshua’s presentation, if he doesn’t do this balance approach, you get a sense of a China-centered order emerging in Asia, sort of this China’s centric types of approach and scholars have talked about this. 
David Kong talks about this.  David Shambaugh talks about this.  This is widely talked about, and I think this is just not going to happen.  I think that it’s quite clear that what when policy decisions are made in Asia, you’re dealing with governments, and the governments are very independent minded as Josh alluded to.  They don’t come under China’s way, and so they’ll hedge, and the hedging’s under way.  It’s been underway for a long time, particularly, on those countries.  I admit, Burma, Laos and Cambodia don’t have a lot of hedging options, I admit.  But when you’re dealing with countries that matter for the United States, I think they have hedging options and they use them all the time. 
And so the off-shot here, and then on the US side and we just urge you to please take a good look at the US strengths even if we have an ineffective or maladroit government in the United States – and as a sidebar here, I’ve never voted for a Republican in my life.   But even if we have a maladroit President, the US as a country, as a government, has tremendous strengths in Asia, as a stabilizer, as a security guarantor and as a country that’s far away has no territorial ambitions for these governments, and is willing to do the hard things, willing to spend the money, willing to put troops on the line that they might even get shot in some places, willing to do that kind of thing in tough positions and they’re willing to confront their enemies. 
Just one thing, and so, therefore, in the future, I would urge that if you could and if you agree, that the US problems in Southeast Asia clearly don’t relate to China.  China really isn’t having any direct effect on what the US problems in Southeast Asia or the things that Liz was talking about, in particular.  And the US and the things that Josh was talking in the sense that the US not paying enough attention has nothing to do with China.  And so I think and I think it’s very important that we not get the US government, not get into position of looking like that it’s competing with China. 
This is a big mistake, because then we’d be seen as getting this government to choose between China and the United States.  If you look at the record, China tried this.  China pushed this pushed this really pretty hard from 1996 until 2001.  They pushed very hard for the governments in Southeast Asia to differentiate themselves, to join with China’s new security concept and to differentiate themselves from the alliance Cold War thinking of the United States.  Very overt, Hu Jintao did this in various capitals in Southeast Asia, and they found that didn’t work. 
The governments in Southeast Asia want no part of that.  So I don’t think the Americans should fall into that trap.  We have to be very careful that these appointments of SS, FSOs and you mentioned the Cold War example, Josh – that’s what I’m really referring to.  I’m sensing that you probably wouldn’t favor this direct competition with China.  I think it has to be handled in a very different way.  The US has interests in Southeast Asia; they should work on those interests and work constructively in those interests, and clean up their act on Iraq and other areas, but basically not compete with China because we don’t have to.  It’s not warranted, as well as it being counterproductive.  I’ll stop there. 
Thank you.
 Dan Blumenthal:  Thank you very much Bob.  Let’s let Josh take a whack back.  You don’t have to confess your electoral preferences, but I want to own a confession.  
 Elizabeth Economy:  Yes.
Dan Blumenthal:  I voted for Reagan.
Elizabeth Economy:  You have these think tanks to move, that’s all.  
Dan Blumenthal:  But, I wanted to sort of ask a flip side of one Liz’s very good questions about whether this is ephemeral and this could be shifted, that this all can be shifted in a few years, and so on and so forth.  Is it actually more structural, in the sense that the United States has security obligations that Bob alluded to and was, of course, attacked and China has not been, and therefore, it’s going to act in ways that are to China’s advantage of not acting.  In other words, if they are going to be so concerned about security concerns, so concerned about its responsibilities throughout the world that this is structural, that China can take advantage of them.  There’s not much we can do, and so that’s what I want to bat your way.  When we have you answer some questions then open up for a few minutes of questions.
 Josh Kurlantzick:  Okay, thanks.  Well, I definitely think in relation to that – whether we like it or not, and whether you supported in Southeast Asia the United States’ commitment to security, and particularly, the focus in current terrorism post-9/11 has created an architecture where it forces our resources to be allocated for that and offers China the option at meetings and summits to talk about other things and present themselves as interested in “win-win” and other things. 
You saw this when Bush went to the region, particularly in Indonesia.  I thought he had a pretty disastrous visit.  Not that the Indonesians don’t have significant security and terrorism problems, but he wasn’t, it was probably getting much in response, and the Chinese sort of talked primarily at meetings after that about trade.  In terms of whether or not we should be encouraging competition, I don’t think we should be encouraging competition. 
My point is only that, if there is another major potential power in a region, I think that we should have one FSO in embassies, at least trying to keep a better sense of what’s going on.  Part of the complaints I’ve heard frequently is that we don’t know the extent of Chinese investments, the real extent Chinese aid, etc.  Well, I think that if that’s a complaint, we should at least be trying to do better assessment.  That doesn’t necessarily mean it has to lead to competition.  I just think we should have a better sense of exactly what’s going and then make a decision. 
Similarly, like with sanctions, I don’t think we should be lifting sanctions.  I just think we should reconsider the utility of sanctions in some of these places, and then we could just try to keep them if we want it.  In terms of whether 9/11 and Iraq eroded the image in the region, I really, personally – and this might reflect my bias from going back to the living in the region at the time – I think the financial crisis eroded our image. 
I don’t think, to be honest, people in non-Muslim countries in Southeast Asia, particularly in mainland Southeast Asia, really care about terrorism or even Iraq.  I mean, I just came back from a multilateral conference in Na Chang, in Vietnam, and none of the Vietnamese officials care about terrorism.  I mean, in my own opinion, it’s just not an issue for them.  Obviously, in Indonesia, and Malaysia, and Singapore it’s a different story.  I think it goes back to the financial crisis, and I think it’s reflected by how you still see Thai and even Indonesian officials and scholars talking about conspiratorial things about the financial crisis almost a decade later, and I think that reflects that it started then. 
I do think that post 9/11, post Iraq, really had some…the policy of the United States government clearly had resonance in Indonesia most clearly.  But I think, much less so in Malaysia, and in Singapore, less so, and even less so in mainland Southeast Asia.  Down the line, whether China might pay a steep price for assisting ugly regimes, I think you’ve seen this, to some extent; it’s just not able to bubble up that much.
 I think there are a lot of people like Bertha Litner who’s a really good writer – used to work for Far Eastern Economic Review – and others have written about how there’s a significant undercurrent of sentiment, for example, on a place like Burma against Chinese migrants.  And I think it’s partly because they’re viewed as taking the resources, partly because a lot of the migrants are kind of new and relatively flashy in the way that they show off their wealth in places like Mandalay.  And there is now increasing kidnapping of Chinese businesspeople in northern Burma, something that, although it’s pretty common in places like the Philippines, was not that common there before. 
I guess beyond that, you’re not going to see that much resentment in some of these places yet because of the nature of the government.  I’ll just try to answer one more, whether India and Japan are pushing back?  I definitely think India has been very sophisticated and successful in pushing back.  You might not like it, but they’ve have changed their policy towards some of their authoritarian governments in the region, most notably towards Burma. 
Ten years ago Indian leaders like George Fernandez, who was the old Defense Minister, used to personally have Indian house dissidents or democracy activists from Burma in his compound.  Now the Indian government welcomes the Burmese leaders for official visits and has completely changed their policy.  I also think the Indians have done a better job of public diplomacy, particularly in places where there’s an Indian community like Singapore. 
The Japanese, I think, in my impression, I’m afraid cannot and will not be able to and have failed their opportunity.  Their opportunity was 1997.  There was a huge crisis in their backyard and they had the money and they had the resources to help out and they did; and yet, I’m hard pressed to find a single elite in Thailand or Indonesia or somewhere else in the region who was willing to praise the Japanese for what they have done.  No one will praise them.  They never say anything positive.  And now, with a government which is increasingly alienating the region, and is likely perhaps to be led by someone who’s more conservative and enclosing himself, I don’t see how the Japanese are going to make up their debts.  And meanwhile, the same time they have slashed their own public diplomacy efforts. 
I’ll stop there.
 Dan Blumenthal:  Thanks.  Let’s open it up to questions.  We have time for a few.  Let’s take, let’s bundle them and take a few at a time.  So we had the first hand go up right here.  Let’s take three at a time, so go ahead right here.  Please state your name and as…
 Mike McDevitt:  Mike McDevitt from CNA.  The issue that Josh talked a lot about, he described the phenomena. I thought that Bob came close to answering this “so what?” question.  So I think, Josh I’m interested in your “so what?”  Is there a zero sum game going on in Southeast Asia for soft power between United States and China?  Is this a sinister thing that we should worry about?  Are the Chinese up to no good?  Or, in fact, are the Chinese acting like Bob Zoellick has said, it’s been 30 years of US policy to become more integrated with the region, become more of a state that has a stake in the region and what have you?  So, what are we to make of this? 
And I guess following up—one final observation is, both Southeast Asian scholars in this town, as well as Southeast Asian elites and what-have-you have always regretted the fact that for the last 105 years, the US interest in Southeast Asia has only peaked three times:  in 1940, during Vietnam, and currently during the war on terror.  Otherwise it is always been an important, but not a vital interest, and so, well, now perhaps vital because of the war on terror.  Are we losing that game? 
 Dan Blumenthal:  Three questions.  Let’s just go there.  Let’s just go right to Josh and then we’ll…
 Josh Kurlantzick:  I think on whether a zero-sum game, I think it sounds zero-sum game in many ways.  I mean one of the interesting things I think you see is the Chinese have been very proactive and backed up their rhetoric with really good cooperation on non-traditional security issues in some respects.  Not and always, none on disease issues, but they’ve cooperated with countries in the region and the US well, and fighting narcotics, and it becomes serious about human trafficking in some ways.  And I think that they are, in some ways, taking on their role as a major actor in the region on some of these issues and showing that when United States will work with them and they’ll work with United States, that they can play a major role. 
But I wanted to add just one other interest; it’s not a core interest perhaps we have in the region, but it also alludes to what Liz referred to.  In some ways, I do think elites in mainland Southeast Asia, there is some zero-sum, in that this is a region in the world where there is a balance between democracies, and we’ve seen a complete transformation in some of the parts of the region in just the last 10 years.  And I think that in that case, as long as the government stays as it is in Beijing, we’ll have something of zero-sum game in terms of the way we would like see this region progress in the way they would like to, and I think that matters for average people.
 Finally, in terms of whether Chinese become more integrated regionally, I do think what they talk about in terms of regional cooperation is backed up by serious efforts.  I don’t think there’s any question about that.  And as long as we don’t have the core security interest that you talk about, except for 3 times, the Chinese are always going to be more regionally integrated, and in the long term, we have to accept that it’s their neighborhood. 
 Dan Blumenthal:  Right over there, and then next to him.
 Male Voice:  Is it on? Josh, very good.  Appreciate it.  Great examples, but you didn’t say a word about Islam and almost half of the people in Southeast Asia are Muslims.  What’s the difference in Chinese soft power between maritime Southeast Asia, Indonesia and something like Thailand where, I think, we all agree that China has a great deal of soft power. 
The second thing I wanted to do is to come back to the whole question of do we really have a zero-sum game going on between the United States and China and Southeast Asia, because at least my research shows that many Southeast Asians think there is a much more serious competition going on between China and Japan.  And in fact, China is trying to push or is having some success in replacing Japan as the major Asian power in Southeast Asia and has been very careful to not challenge the United States.
 Dan Blumenthal:  Just hand it over there.  Go ahead, please.
 Bill Barkell:  Bill Barkell.  Joshua, at the beginning of your presentation you mentioned Chinese economic policy as one of, what I gathered, you meant to be one of the attractions, soft power attractions.  How did you mean that specifically?  Is it basically as a market for Southeast Asian goods?  And also, did they have any fear that China will compete with them in textiles and other areas and present a problem rather than attraction?
 Dan Blumenthal:  Why don’t you answer and then we’ll go…
 Joshua Kurlantzick:  Well, I think there’s, it has a market, and also just in some ways, two leaders in the region, particularly in places like Vietnam as a possible example of a place where they maintained some significant state control while also developing their economy.  I think that in terms of concern about China as fear and fear about competition with China, it’s always there and you see in particular sectors like agriculture and textiles, so that textiles the Cambodians think they have a way to compete. 
But I do think that, particularly because the leadership in the region in the freer countries like Thailand and Singapore and Indonesia have emphasized the other sectors that they can win from, you don’t get as much, and this I think is backed up.  Brom might know this better in Indonesia.  You don’t get that much in terms of elite businesspeople such concern in areas like services, tourism, etc.  The governments have really effectively promoted the idea of a China as a market for these, so I do think there are fears there, but the people who fear it increasingly don’t have as much voice as the people who would not fear it. 
In terms of China-Japan, I mean, I agree if you bought it, but I think Japan’s already been pushed out a significant extent already.  I mean, I just think that all indicators suggest that. 
And in terms of the role of Islam, I would say that I don’t think China particularly has a strategy for dealing with Muslim countries, but I do think that their growth and influence in the region, because it’s coincided with increasingly unpopular than the United States, and Indonesia which is, obviously, it’s the large Muslim actor, has made them look good just by not doing anything. 
So it’s not like that I believe…I don’t know about as much about Indonesia as you would.  At least I’ve found this in Singapore, in Southern Thailand significantly, where there’s a kind of ongoing insurgency.  I don’t think they know anything about China’s policies or the state of Muslims in Xian Jiang or Hu Muslims, but I’ve found that in Southern Thailand, people just increasingly alienated with the US and China because of sort of fussy benign outside actor and they don’t know anything about Chinese Muslims’ wins to some extent by comparison, but beyond that I don’t know.
 Rich Cronin:  Thanks.  I’m Rich Cronin with Stimson Center, and Josh and I actually worked at that same conference and identify with a lot of the points said, in turn, Josh has.  I think Elizabeth stated my particular concerns a little more closely, but Bob has asked the question. 
Good question, what is influence, and that I would go further than that.  The question is to what end do we…is this influence to be used whoever has it?  What I would suggest is just go back to first principles.  Why do we care about Southeast Asia?  Why have we always cared about Southeast Asia, primarily its issues of securities and stability, especially stability? 
And I think our interest is in a dynamic thriving Southeast Asia, particularly in the economic side, politically as well, and that there are some things we could do to help that.  I don’t want to take time to go on that now, but to me, the main worry is that this growing trade between China and Southeast Asia – although it might look good in the top line and bottom line in terms of trade and balances etc, it’s very severely affecting the key manufacturing and the key high value added industries of the Southeast Asian countries because you have more developed. 
And I think that it presents a risk of instability.  And these are all governments whose legitimacy and large stand is dependent on delivering good economic progress and with spreading it widely.  So I would say we should think more about what we can to enhance stability by finding ways to help the Southeast Asian countries, especially move up the technology ladders so that they can hold their own against Chinese. 
Thank you.
 Joshua Kurlantzick:  The only thing I’d say about that, Richard, as you well know, I think one thing we could do more in the US is, one thing the Chinese do well, as I mentioned and others mentioned, is reach out to overseas Chinese and Southeast Asia.  That we can have a more focused effort to reach out the Southeast Asian-American businesspeople in the United States who increasingly wanted to get involved and have been involved, for example, as you’ve seen with Vietnamese-Americans; but there’s been not much organized effort to reach out to Thai-Americans or Lao-Americans or Indonesian-Americans.  And I think in this plate where we could learn a little about from the Chinese.
 Dan Blumenthal:  Well, I want to thank, first of all, Josh very much for being such a good sport in answering all the questions on his fantastic presentation, and also to Liz and Bob for very insightful commentary and great questions. 
Thank you all.  We are adjourned.
---