The Lee Shau Kee World Leaders Forum on “US and the Asia Pacific” was held on November 13^th, 2017. This event that brought 250 participants to the Center also marked the 5^th anniversary of the Stanford Center at Peking University’s (SCPKU) anniversary and 10^th anniversary of the Stanford China Program.  Stanford Political Science Professor and SCPKU Director Jean Oi welcomed the audience with remarks highlighting Stanford’s initiative to build China studies at the home campus with the creation of the China Program and in China with the construction of SCPKU -- Stanford’s “Bridge Across the Pacific.”   Professor Michael McFaul, Director of the Freeman Spogli Institute for International Studies at Stanford University, opened the forum with a stimulating keynote address on “The Historical Origins and Contemporary Consequences of President Trump’s Worldview.” In his talk, Prof. McFaul examined the President’s views and characterized them as fitting within but standing on the extreme end of long-standing foreign policy traditions.  Combining his scholarly expertise with his experience in the Obama administration, Prof. McFaul offered the audience a sharp, wide-ranging but balanced overview of the continuities between Obama’s and Trump’s policies and the stark difference in rhetoric between these two Presidents. He used dynamic representations of isolationists versus internationalists, and realists versus liberals to explain that foreign policy differences exist within political parties rather than between them. Prof. McFaul took the audience around the globe, with timely accounts of the continuities, the positive changes and the adverse changes in US foreign policy under President Trump in, for example, the Middle East, Europe and Asia.  Overall, he argued that democratic institutions in the US are open to evolution and renewal; that the structures of American leadership are still robust; and pointed to different historical periods (as during the inter-war period in the 1930’s; the rise of communism in the 1950’s; the rise of the Soviet Union in the 1970’s and Japan’s rapid ascendance in the 1980’s) when pundits declared America’s demise only to be proven wrong. Prof. McFaul asserted that current “predictions of permanent American decline is premature.”  Prof. McFaul, however, did point to North Korea as a major point of worry, which segued into the panel discussion that followed.

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Professor Michael McFaul, Director of Stanford's Freeman Spogli Institute for International Studies,
keynotes SCPKU's Lee Shau Kee World Leaders Forum.
Courtesy of Stanford University.

What will happen with North Korea was a focus of the lively high-level panel discussion chaired by Professor Jean C. Oi on “The US, China and Asia Pacific” with Karl Eikenberry, Former US Ambassador to Afghanistan, Director of US-Asia Security Initiative at Stanford; Kathleen Stephens, Former US Ambassador to the Republic of Korea and William J. Perry Fellow at Shorenstein APARC of Stanford; Thomas Fingar, Former chairman, National Intelligence Council; Former Assistant Secretary of State for Intelligence and Research; Shorenstein APARC Fellow; Yu Tiejun, Associate Professor and Vice President of the Institute of International and Strategic Studies at Peking University; and Zhu Feng, Executive Director, China Center for Collaborative Studies of the South China Sea and Director, Institute of International Studies at Nanjing University.

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SCPKU World Leaders Forum panelists discuss future of US-Asia Pacific relations.
Courtesy of Stanford University

Prof. Fingar started the discussion on US-China relations, flatly rejecting the realist theory of conflict between rising and declining powers and the notion that “two tigers cannot get along.” He pointed out that interdependencies between the US and China have grown and that the US and China have more in common than ever before. Yet, with growing interdependence, chances for friction have also increased; thus, “having more issues,” he stated, “does not necessarily mean that the relationship is more fragile – perhaps the opposite [is true].” He also stated that China faces enormous challenges domestically and internationally, and that the US will be reacting to China rather than the other way around.

Amb. Stephens, Prof. Yu and Prof. Zhu all turned the discussion more squarely towards the intensifying North Korea missile crisis. The panelists all characterized this as a critical moment not only on the Korean peninsula but in all of Northeast Asia.  Amb. Stephens stressed how important this is in the working relationship of the US and China as they strive to manage future crises and issues. While everyone found agreement on one common point – i.e., the implausible prospects of a “complete, verifiable, irreversible denuclearization” of North Korea -- each gave unique perspectives on what might happen on the Korean peninsula as the situation unfolds. Prof. Yu outlined three possible scenarios of (i) accepting North Korea as a nuclear power de facto; (ii) imposing increasingly draconian sanctions; and (iii) turning towards the military option against North Kore. But he did not express much optimism that any of these options would, in the end, provide good outcomes. Amb. Stephens, on the other hand, emphasized the strength and resilience of the US-ROK relationship stating “I wouldn’t underestimate [the US’] commitment to the ROK.” She also foresaw a future in which the US will conduct more military exercises, and install more anti-missile defense systems across Northeast Asia as a result of the North Korean threat – a prospect which, she surmised, the PRC would not welcome.

Prof. Zhu, on the other hand, offered a more optimistic perspective on the North Korean nuclear standoff by pointing to the increasing cooperation between the US and China. Asking the listeners to “please take the report that China is actively opposing North Korea seriously” he held out the hope that North Korea might return to the negotiating table once it saw that China was supporting the United States.

Amb. Eikenberry, as the final panelist to share his remarks, took the discussion to the broader Asia Pacific level and drew distinctions on “Asia Pacific” and “Indo Pacific,” as the latter description better reflects maritime flows, the geographical layout as well trade flows more accurately. He invited panelists to depict what would happen in different possible scenarios and outcomes relating to military crisis in the region. The panelists shared their views on action options involving sanctions and multilateral agreements, and agreed that countries should focus on achieving shared goals. 

The Shorenstein Asia-Pacific Research Center (APARC) at Stanford is now accepting applications for the Shorenstein Postdoctoral Fellowship in Contemporary Asia, an opportunity made available to two junior scholars for research and writing on Asia.

Fellows conduct research on contemporary political, economic or social change in the Asia-Pacific region, and contribute to Shorenstein APARC’s publications, conferences and related activities. To read about this year’s fellows, please click here.

The fellowship is a 10-mo. appointment during the 2018-19 academic year, and carries a salary rate of $52,000 plus $2,000 for research expenses.

For further information and to apply, please click here. The application deadline is Dec. 20, 2017.

Countries like the Asian “tigers” that experienced rapid economic growth inevitably encounter slowdowns that signal a fundamental shift in their economies. At this juncture, transitioning their institutions and policies often proves to be a most daunting task. Cautionary comparisons like these set the tone for the conference titled “China’s Possible Futures” on May 12, 2017, when the China Program celebrated its 10th anniversary.

As China nears the end of four decades of reforms, “China’s Possible Futures” was a fitting theme to mark the China Program’s first decade at Stanford’s Shorenstein Asia-Pacific Research Center. The launch of the Program in 2007 began with an international conference titled “Growing Pains: Tensions and Opportunities in China’s Transformation,” which resulted in a book of the same title. This year’s 10th anniversary conference appropriately heralded both change and continuity of the themes that were explored in 2007. A decade ago, the conference showcased the tremendous reach and rise of China as an economic and international powerhouse, and in 2017, the conference expanded to highlight the critical juncture that China is again facing on its developmental path.

The full-day conference, held under Chatham House Rule, was divided into four sub-themes with speakers addressing China’s economic future; its political future; the future of its international relations and global economic engagements; and a comparative panel that examined China’s prospects from experiences drawn from Japan, South Korea and former Soviet and Eastern European countries.

Panel I: China’s Economic Future

Speakers agreed that China’s tremendous growth over the last 40 years has no easy parallels in history. Some argued, however, that the policies realized over the next few years will prove critical to China’s long-term growth. Favorable factors, such as demographic, migratory and structural changes supported by a stable international order, enabled China’s spectacular, double-digit growth over the last 40 years. When “miracle growth” countries of Northeast Asia – like Japan, Korea and Taiwan – entered their periods of moderate growth, however, painful readjustments were necessary. Restructuring was required because the very policies and institutions set up to enable rapid growth were counterproductive to creating a foundation for moderate, sustained growth. Speakers variously emphasized China’s need to invest in human capital and undertake financial reforms, urban-rural reforms and state-owned sector reforms.

In addition, several speakers noted that China is facing mounting demographic challenges as its population ages and as its elderly population lives longer. According to one speaker, people who are aged 60 and over in China will equal the population of people aged 0 to 14 within the next couple years; and by year 2045, the population of people who are 65 and older in China will be as large as the entire population of the United States today. This situation implicates rising costs in healthcare and calls for major institutional reforms in China’s health sector.

One speaker spoke of the rapid rise in China’s returns to education, i.e., the rise in income for each additional year of education, over the past four decades, which now looks more closely aligned with that of the international average of approximately 10 percent. Another speaker asked whether China was now pursuing a different developmental model with increasing focus on inland industrial development and explored what this might mean for social inclusion and labor conditions of workers.

Panel II: China’s Political Future

One speaker argued that Chinese President Xi Jinping’s reform agenda does not mark a break with the past, as many have argued, but rather continuity with his predecessors’ policies. Other speakers discussed the scope and scale of Xi’s corruption crackdown; fiscal imbalances in central-local state relations that underpin China’s corruption problems; and the implications of social media on Chinese governance. All speakers spoke about mounting difficulties in the political sphere, including powerful interest groups; local paralysis arising from corruption crackdowns; mounting local government debt and misalignment of central-local interests; and governance challenges stemming from the social media revolution. Overall, speakers seemed to suggest mounting difficulties for Xi’s reform agenda, which the Chinese government must push through to avoid a sharper downturn and slower growth prospects for China’s future.

Panel III: China’s International Relations and Global Economic Engagements

Speakers spoke at length regarding the history of U.S.-China relations since Deng Xiaoping’s “reform and opening”; territorial disputes in the South and East China Seas; China’s “Belt and Road” policy; and China’s outbound capital flows into various regions of the world. The speakers held varying views regarding Beijing’s motivations and intentions in the world, both militarily and economically. Speakers held different opinions about whether Beijing has a well-defined vision for its global role. One speaker questioned whether China’s maritime assertiveness in the South and East China Seas characterizes the expansionary policies of a rising power; or whether it represents something more singular as China protects what it considers its “core interests” in the region. One speaker expressed the view that the United States and the U.S.-led international order is still too important for China’s development for it to threaten its functioning in any meaningful way. Another speaker discerned a “broad brush strokes” of a developmental concept in China’s “One Belt, One Road” policy that the United States might do well to heed as it considers whether to join any parts thereof.

Panel IV: China’s Future: A Comparative Perspective

The conference also included speakers who provided comparative examples from Japan, South Korea, the former Soviet Union and Eastern Europe to inform their views on China’s “possible futures.” One speaker warned against directly applying Japan’s development model to China, warning that Japan experienced a massive credit boom and debt accumulation in the 1980s like China is experiencing today. Zombie firms were a key factor in Japan’s economic stagnation. As the speaker warned, zombie firms also proliferate in China’s economy. Another panel member highlighted Korea’s struggles to attract and retain global talent and drew lessons for China as it strives to escape the middle-income trap and build an innovation-driven economy.

Another panel member spoke of the key difference between China’s political environment in 1978 when Deng Xiaoping announced his “reform and opening” policy and today when Xi is implementing his Third Plenum decision of 2012. Vested interest groups are stymieing the implementation of urgently-needed reforms, especially in the state-owned sector and in China’s financial sector. In 1978, by contrast, the catastrophic results of the Cultural Revolution ironically enabled Deng to successfully champion and implement his agenda because bureaucratic interests had been gutted by Mao. The speaker spoke of the urgent need for Xi to change course in the next 3-4 years and use his personal power to push through tough, market-oriented reforms. Beijing’s leaders must not only craft correct policies and identify the most effective structural correctives, they must also break through the political logjam of entrenched interests that have benefited from the current system.

Panelists pointed to the increasingly difficult challenges that the government faces as China tries to avoid the middle-income trap after four decades of impressive gains and usher in sustained economic growth driven by innovation and domestic consumption. Speakers also agreed that the leadership is encountering a more complex and diverse society, a fractured elite, and the Gordian knot of economic and demographic predicaments, which require not only painful structural adjustments but also tremendous political will to realize policies that will ensure an optimal future for China.

Related links:

Brochure: Celebrating the First 10 Years of the China Program

Former ambassador reflects on US-China relations, Thucydides Trap