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Compared to other Communist parties that were falling apart in the 1980s, the China Communist Party's success since 1978 is extraordinary. Deng did not start opening and reform, but he made it work. How? What kind of person was he? How was he prepared for his job? One important strategy was setting goals but not drawing bluebrints. He tried experiments, learnt from them, and then let new institutions develop organically. His key experiments were in Guangdong and Fujian. What were the politics and the economics of these experiments and what did they learn?

Ezra Vogel is Henry Ford II Research Professor of Social Sciences at Harvard, honorary director of the Program on US-Japan Relations and former director of Harvard's East Asia Research Center. He was also the second chairman of the Council for East Asian Studies, the first director of the Harvard University Asia Center and former director for the Program on US-Japan Relations at the Center for International Affairs. He has been a professor at Harvard since 1967. Vogel holds a bachelor's degree from Ohio Wesleyan, a PhD from Harvard and ten honorary degrees. He received the Japan Foundation Prize in 1996 and lectures frequently in Asia. Professor Vogel is currently writing a biography of Deng Xiaoping.

This talk is part of the Stanford China Program Winter 2009 China Seminar Series titled "30 Years of Reform and Opening in China: How Far from the Cage?"

Philippines Conference Room

Ezra Vogel Henry Ford II Professor of the Social Sciences, Emeritus Speaker Harvard University
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Japan's industrial landscape is characterized by hierarchical forms of industry organization that are increasingly inadequate in modern sectors, where innovation relies on platforms and horizontal ecosystems of firms producing complementary products. Using three case studies--software, animation and mobile telephony--two key sources of inefficiencies that this mismatch can create will be illustrated.

First, hierarchical industry organizations can "lock out" certain types of innovation indefinitely by perpetuating established business practices. Second, even when the vertical hierarchies produce highly innovative sectors in the domestic market, the exclusively domestic orientation of the "hierarchical industry leaders" can entail large missed opportunities for other members of the ecosystem, who are unable to fully exploit their potential in global markets.

Dr. Hagiu will argue that Japan has to adopt several key measures in order to address these inefficiencies and capitalize on its innovation: strengthening antitrust and intellectual property rights enforcement; improving the legal infrastructure (e.g. producing more business law attorneys); lowering barriers to entry for foreign investment and facilitating the development of the venture capital sector.

Andrei Hagiu is an Assistant Professor in the Strategy group at Harvard Business School. His research focuses on multi-sided markets, which feature platforms serving two or more distinct groups of customers, who value each other's participation. He is studying the business strategies used by such platforms and the structure of the industries in which they operate: payment systems, advertising supported media, personal computers, videogames, mobile devices, shopping malls, etc. Hagiu is using the insights derived from this research to advise a wide range of companies in all of these industries.

In addition, he is also involved in competition and industrial policy research and advisory projects, in Japan, China and in the United States. He graduated from the Ecole Polytechnique and the Ecole Nationale de la Statistique et Adminstration Economique in France with an MS in economics and statistics, before obtaining a PhD in economics from Princeton University in 2004. Prior to joining HBS, he spent 18 months in Tokyo as a fellow at the Research Institute of Economy Trade and Industry, an economic policy think-tank affiliated with the Japanese Ministry of Economy Trade and Industry.

This event is presented in conjunction with the Japan Society of Northern California.

Philippines Conference Room

Andrei Hagiu Assistant Professor, Strategy Unit Speaker Harvard Business School
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History Textbooks and the War in Asia is the first phase of the Divided Memories and Reconciliation project.  It carries out a comparative examination of the high school history textbooks in those five societies, focusing on the period from the beginning of the Sino-Japanese war in 1931 until the formal conclusion of the Pacific war with the San Francisco Peace Treaty in 1951.

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Somewhere on the long list of problems that President Barack Obama will inherit next January will be the ongoing negotiations to roll back North Korea’s nuclear weapons program. The announcement on October 11, removing North Korea from the U.S. list of state sponsors of terrorism in exchange for a verification mechanism, has the virtue of keeping the diplomatic
avenue open. But if we look carefully at what it took even to get to this interim point,
there should be no illusions about the difficulties of finishing the job.

The latest deal merely closes the second phase of an agreement that was originally signed in February 2007. This phase was supposed to be completed in 60 days. Instead it has taken 19 months. This 19-month saga of negotiation over what may be the easiest step in the process—freezing the status quo—should caution against any expectation that the next administration can easily step in and pick up the negotiating reins.

There are three options it can reasonably consider come January. One would be to try to regain what has been given away in these talks—the inclusion of undeclared sites and proliferation activities—by returning to tactics of international sanctions and Chinese pressure. Japan, which is unhappy with the deal, may be ready for this but there is no evidence that Beijing or even the conservative Lee Myung-Bak government in South Korea is interested in returning to confrontation. At the other end of the spectrum would be an effort to leapfrog the drawn-out phases by offering Pyongyang most of what they claim to want—normalization of relations, economic aid, security assurances, a formal peace treaty to end the Korean war—in a "grand bargain."

Finally, there is the least attractive but most likely course: to lock in the gains of plutonium containment and to continue the diplomatic slog into the dismantling phase, albeit with a more rigorous approach. The U.S. could also try to encourage regime transformation in the North through both engagement and pressure. Given the uncertainties over the health of North Korean dictator Kim Jong Il, this may be the only viable path to ending the North Korean nuclear threat.

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The Oriental Economist
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Will China come to dominate global high-tech innovation?

In the future, perhaps. Today, however, Greater China—Mainland China, Taiwan, and Hong Kong—is focused on the quest for innovation. The dominant paradigm on the Mainland is one of execution, not innovation. Beijing now aims to turn China—historically an adopter of technologies from elsewhere—into a major technology creator. Self-reliance has become the government’s watchword and its ultimate goal.

The talents and resources available are impressive. More Chinese young people are well-educated, international patents and research and development (R&D) spending are on the rise, and China boasts a growing presence in world scientific literature.

Still, negatives remain. China must overcome the legacies of a top-down, state-run research system that is largely disconnected from commerce, and an academic system not always supportive of independent scholarly inquiry. The government is working to change these outdated institutions, but such shifts do not occur overnight.

Taiwan and Hong Kong have followed different paths to high-tech innovation. Taiwan’s route has been dominated by government but implemented by mostly small- and medium-sized firms, with help from its Industrial Technology Research Institute (ITRI), a model for moving concepts to commerce. Significantly, Taiwan’s companies maintain strong links to multinational firms both in the United States and in Mainland China. Taiwan’s Hsinchu Science-based Park is seen as a model high-tech cluster throughout Asia and beyond.

Hong Kong has taken another road. While its formal R&D activity is small, it innovates in business models, particularly in logistics chains that reach into the Mainland and globally. It is a (largely unheralded) story of great success.

The big question is: When will Greater China’s high-tech innovation have a major impact on the world economy?

Examination copies: Desk, examination, or review copies can be requested through Stanford University Press.

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Henry S. Rowen
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Shorenstein APARC
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Lisa Lee received an MA in human resources management from Hawai'i Pacific University in Honolulu and a BA in civil law (Sarjana Hukum) from Tarumanagara University in Jakarta. Prior to joining the Walter H. Shorenstein Asia-Pacific Research Center, she held managerial and administrative positions at ISS International School in Singapore; Bank of Japan and Panasonic Finance America in New York City; and at Media Indonesia in Jakarta. She worked at APARC through March 2025.

Program Coordinator, Asia Health Policy Program, Southeast Asia Program, and Taiwan Program
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This event - the final in a series of 4 film screening which will be followed by a discussion with director Clint Eastwood - is part of the second phase of a three year research effort to compare the formation of the divided memories in Japan, China, South Korea, Taiwan and the United States. We will conduct a comparative study of popular cinema dealing with historical subjects focusing roughly on the period from 1931-1951.

Letters From Iwo Jima Synopsis

Sixty-one years ago, US and Japanese armies met on Iwo Jima. Decades later, several hundred letters are unearthed from that stark island's soil. The letters give faces and voices to the men who fought there, as well as the extraordinary general who led them.

The Japanese soldiers are sent to Iwo Jima knowing that in all probability they will not come back. Among them are Saigo (Kazunari Ninomiya), a baker who wants only to live to see the face of his newborn daughter; Baron Nishi (Tsuyoshi Ihara), an Olympic equestrian champion known around the world for his skill and his honor; Shimizu (Ryo Kase), a young former military policeman whose idealism has not yet been tested by war; and Lieutenant Ito (Shidou Nakamura), a strict military man who would rather accept suicide than surrender.

Leading the defense is Lt. General Tadamichi Kuribayashi (Ken Watanabe), whose travels in America have revealed to him the hopeless nature of the war but also given him strategic insight into how to take on the vast American armada streaming in from across the Pacific.

With little defense other than sheer will and the volcanic rock of the island itself, Gen. Kuribayashi's unprecedented tactics transform what was predicted to be a quick and bloody defeat into nearly 40 days of heroic and resourceful combat.

Almost 7,000 American soldiers were killed on Iwo Jima; more than 20,000 Japanese troops perished. The black sands of Iwo Jima are stained with their blood, but their sacrifices, their struggles, their courage and their compassion live on in the letters they sent home.

Cubberley Auditorium
485 Lasuen Mall
Stanford University
Stanford, CA 94305

Clint Eastwood Director Speaker
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In the waning days of the Clinton administration, the momentum for engagement with North Korea, building from the earlier agreement to freeze its nuclear program and a moratorium on ballistic missile launches, accelerated to the brink of full-scale normalization of relations. The U.S. presidential election in 2000 brought that diplomatic freight train to an abrupt halt.

Will the 2008 election bring yet another dramatic change in U.S. Korea policy?

The answer, based on the published positions of the two candidates and conversations with his senior Asia policy advisors, seems to be NO. There are important differences of emphasis in the approaches of both candidates, which I will discuss, but the bottom line is that both men are likely to pick up where President George W. Bush leaves off.

There are two fundamental reasons why U.S. policy toward Korea – and more broadly in Northeast Asia --- will not change dramatically. First, Asia will continue to suffer from a deficit of presidential attention. The arc of crisis – Iraq, Iran, Afghanistan and Pakistan -- will necessarily still command, as it has for almost 8 years, the attention of senior American policymakers. Even that will have to fight for space with the growing global financial crisis.

Second, both candidates agree on the broad outlines of an Asia policy, one that does not depart radically from the one pursued by the Bush administration. As a senior McCain advisor put it to me: “There is not a huge difference on Asia between Obama and McCain.” Privately, Obama advisors also stress that there will not be a huge break with current U.S. policy.

Both campaigns are critical of the lack of attention paid to Asia and the need for the U.S. to be more proactive to strengthen existing alliances and to join the discussion about new forms of regional integration. Both candidates support the need to engage, rather than confront, a rising China. Both men call for the U.S. to pay more attention to management of our alliances with South Korea and Japan. And both Obama and McCain support the North Korean nuclear negotiations carried out by President Bush in his second term, although privately both campaigns are critical of the deal that has been struck.

If there are differences, they can be found in two areas – support for the Korea US free trade agreement and the willingness to directly engage North Korea and its regime.

Free Trade and the KORUS Free Trade Agreement

If there is one single issue regarding Korea on which Senators Obama and McCain clearly part company, it is the future of the free trade agreement negotiated with the Bush administration. Senator McCain is an unambiguous supporter of the FTA, not only as a trade pact but also as a symbol of the broader partnership between the U.S. and South Korea.

Senator Obama also supports free trade but is critical of this and other agreements, such as NAFTA, for failing to ensure market access and the protection of labor rights and the environment. Privately, Obama’s advisors understand the symbolic value of the FTA to the alliance, but they plan to ask Seoul to reopen talks on market access, particularly for the automobile industry. Their position reflects the importance of trade unions and the role of some key states – Michigan most of all – in the election outcome. Even if Obama loses, the Democrats are likely to strengthen their control of Congress, making approval of the FTA difficult under any circumstances.

Negotiating with Pyongyang: Back to the Future?

Both the McCain and the Obama camps publicly back the Bush administration’s negotiations with Pyongyang, but both are also privately critical, though for different reasons.

The Obama team is heavily populated by former Clinton administration officials who were involved in the negotiation of the 1994 Agreed Framework with North Korea. They see the current deal as an inevitably flawed bargain, the result of the refusal of the administration to seriously engage the North directly until it had crossed the red line of nuclear weapons testing. With little leverage, not least the credible threat of coercion, we are left with containing the plutonium production of the North, and hoping that a grand bargain down the line can yield full denuclearization.

Obama recognizes the need for “close coordination and consultation with our allies South Korea and Japan,” as one of his advisors put it in a published interview, and supports continuing the Six Party Talks. But the emphasis is clearly on direct talks with North Korea, though conducted with a principled toughness that the Bush administration has not exhibited in its final months in office.

That readiness to conduct direct negotiations, up to conclusion of a peace treaty with Pyongyang and full normalization of relations, is where the two candidates part company. The Republican nominee is clearly uncomfortable with direct dealings with Pyongyang – his position resembles the first term of the Bush administration more than the second in that respect. His advisory team combines realists, mainly veterans of the Powell State Department, and neoconservatives, reproducing the divisions that thwarted coherent policy-making in that first Bush term.

In the end, the views of McCain himself may be decisive. He was an opponent of the Agreed Framework, an agreement he characterized as “appeasement.” He maintained this stance into the Bush administration, vocally opposing any direct negotiations with the North Koreans as long as they maintained the right to develop nuclear weapons. He has been critical as well of the main deal struck by President Bush in his second term – “I didn’t believe in the KEDO agreement that President Clinton made and I don’t believe in this one,” he said in January.

McCain, according to an interview with one of his senior Asia advisors, would “seek a return to the core principles of denuclearization known as CVID, or complete, verifiable, irreversible, dismantlement.” The demand for CVID was the watchword of the Bush administration’s earlier stance, in effect a call for Pyongyang to abandon its nuclear option as a first step. But that demand was dropped after Pyongyang called the Bush administration’s bluff by exploding a nuclear device in October, 2006.

McCain also wants to “broaden our policy goals related to North Korea” beyond nuclear issues, to including human rights, economic and political reform, and reduction of the conventional military threat from North Korea, goals also set out at the outset of the Bush administration. McCain has repeatedly referred to the North Korean regime, and its leader, Kim Jong Il, in harsh terms and embraced a policy of “rogue state rollback.”

Realistically, however, McCain offers no credible, practical means to reach these goals. He reserves, as does Obama, the option to use force. But concretely he comes back to the strategy of pressing China to bring North Korea to heel. Unfortunately the Bush administration also relied on China and found there were clear limits to Beijing’s ability to control or its willingness to press its North Korean client. In the end, McCain may have little option but to follow Bush to Pyongyang’s doorstep.

One Caveat – Events Matter

Despite the powerful impetus to maintain continuity in U.S. policy toward the Korean peninsula, no matter whom is elected in November, there is one important caveat to keep in mind – events matter. Unplanned, and unforeseen, developments could force Korea to the top of the President’s agenda. Already we have seen the reports of Kim Jong Il’s serious illness trigger fresh concerns about a possible collapse of political authority in Pyongyang. A simultaneous rush by China, South Korea and the United States to fill a vacuum of power in the North could upset all calculations. For South Korea, and President Lee Myung-bak, it is always best to prepare for the unexpected.

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