The Rise of Asia and its Impact on the Global Order

HARVARD – Asia Society

21 September 2015

BILL ALFORD: Thank you all for coming. I’m Bill Alford, Vice Dean of the Law School. On behalf of the Law School I’d like to welcome our very distinguished panel of guests today from the Asia Society Policy Institute. We will quickly introduce each and offer a few words of welcome.Our principal guest in terms of him leading the Asia Society Policy Institute is the Honourable Kevin Rudd, former Prime Minister of Australia twice and been a visitor to Harvard in the past. He has enriched our surroundings greatly. We also have a number of other guests. Jin-Yong Cai is from the International Finance Corporation of the World Bank, he is Executive Vice President and CEO of the IFC which is, as you know, one of the largest supporters of private development among multilateral institutions. Our next guest is Barry Desker who is a distinguished former Ambassador from Singapore and former Head of the Singapore Trade Development Board. Our next guest is Pratap Mehta who is President and CEO of the Centre for Policy Research and a very distinguished academic and advisor and ambassador. And then our own Professor Joe Nye. Joe Nye held extremely important positions in the State Department, the Defence Department, intelligence agencies and has been the Dean of Kennedy School and eminent professor and occasional novelist here at Harvard.I want to just say a few quick words of welcome, regrettably I will have to leave for the airport right after this. I want to thank Prime Minister Rudd for bringing us this great convening that will spur a very comprehensive study of global order. One of the many gifts that Prime Minister Rudd has given us, last year he came to my class and brought a pet koala bear – a stuffed koala bear – he called on the students to raise the koala bear when he went on too long. This policy commission is of importance not just for Asia, although its theme is how best to accommodate the rise of Asia, and not only for the United States and the West, but for the entire global order.To be sure, graduates of this university were very central in the creation of the Post-World War Two order that we’ll be speaking about today. Just to name a few from the US, Franklin Roosevelt, Dean Acheson of this school, George Marshall who received an Honorary Degree, John Kennedy, McGeorge Bundy, Henry Kissinger were all central either to the formation of this global architecture or its important articulation during the ‘60s and ‘70s. Many who are graduates of this university are today trying as best they can to grapple with the challenges of a global architecture that is perhaps not up to the challenges it needs to be – think of UN Secretary Ban Ki-moon from the Kennedy School, World Bank President Jim Kim, President Obama from the Law School, Navi Pillay Head of the UN Human Rights Commission, Chinese Vice President Li Yuanchao was a former visiting scholar to the Harvard Kennedy school.So the challenge is how to retain what is best about the global architecture that has been with us since World War Two, it’s evident some parts of it work very well, and yet as will hear some pieces of it have been frayed and are in need of updating if not very substantial revision in light of economic, environmental, social, political, sociological and other challenges of our time. Clearly, one vital factor is the rise of Asia. I myself view this very much as an opportunity. That is that the gene pool of ideas, about what makes for a strong, vibrant, just international order, can well be enhanced because of the strong world order and it’s commissions like this that will be very important in shaping that. Again, I regret very much that I am not able to stay and hear this all in real time, however it is being live streamed by the Asia Society and there will be opportunities in the future for you to follow its findings.I will turn the floor over the Prime Minister Rudd, members will speak and there will be opportunity at the end for questions and answers. Thank you very much and thank you for coming.KEVIN RUDD: Thank you very much Professor Alford and I know you’ve got to duck off to Washington DC and may you win friends and influence people there. It’s great to be back at Harvard, listening to the list of names from this great institution who have been fundamental parts of the shaping of concepts and realities of order – international order – throughout the twentieth century and into this century as well. So it is a humbling experience to think of those from this institution who have had their intellectual formation here and have gone out into the world to make extraordinary contributions and I’m sure each of you seated here will follow in their footsteps and we’ll be tracking each of your careers to make sure that’s the case.We’ve had a discussion this morning – some members of this policy commission put together by the Asia Society Policy Institute in conjunction with the Harvard Kennedy School. We had a discussion this morning on what is the question we are trying to answer here about the current global order? That is, how do define such an order before we analyse carefully what may constitute current pressures for change to that order? Further, what could or should any future reform of the current order look like? On the question of order itself, those of you who are students of international relations – I’m not, I’m a mere practitioner – it boils down to two sets of considerations: one is, how is power in the world in all of its dimensions currently constituted, currently aggregated, currently deployed between a range of nation states and in certain cases other non-state actors? The second dimension to order is, what are its implied or explicit rules, what are its normative standards and how is that reflected in what we call the post-45 rules based order?In answer to those two sets of questions on reflections on the reality of order post-45 the answer to those questions so far has been: one, most of the post-45 power reality has rested on the United States as an unchallenged global superpower. More complex than that in the Cold War and other factors as well but that is its primary assumption. As Joe Nye reminded us this morning, there are periods in the post-45 period that if America was such a unique polar power then how come it didn’t always prevail in various areas where it sought to? On the other part of the question of order at least as it exists in the world today, the question we face is what are the normative institutions – not just where does the power lie but where are the normative institutions? What are the standards and where are they entrenched? Or course, as good students of law and international law your answer lies in that broad codex of law in all of its unenforceable splendour and might. The truth is our post-45 world – when it comes to questions of global political and security governance, comes to questions of global economic and financial governance – it has resided at least in large part in the UN Charter and the UN based multilateral system on the one hand and what we blithely call the ‘Bretton Woods Institutions’ on the other (the Bank, the Fund, the General Agreement on Tariffs on Trade, the World Trade Organization). The question we face if those are our analytical underpinnings then is what are the challenges to those elements which constitute the order as we’ve known it for a long time? And the challenges exist at multiple levels. One, as a question of power – geo-political and geo-economic – that’s where the entire terrain of Asia becomes relevant. But also are we beginning to see the hollowing out of the institutions of global normative governance, in fact the UN and Bretton Woods institutions as well? In other words, against those two sets of standards that I referred to before, are we now seeing directly or indirectly, forcefully of less forcefully the forces for change and pressures for change that we are not yet fully comprehensively conscious of?If you are students of history you will know that orders are very difficult to create and very easy to destroy. It’s worth reflecting on that. If we look at the last couple of hundred years, we emerged out of the Wars of Religion to create what is blithely described as the Westphalian Order. If you look at the order that emerged from the Napoleonic Era in 1815 at the Congress of Vienna whose bicentennial we celebrated or at least reflected on earlier this year and the concert of great powers which proceeded to effect one form of governance or another at least in Europe during the course of the 19^th century. We had the Great War, the war to end all wars except it failed to do so. After the destruction of many parts of Europe, as a consequence of course, Versailles and the order which it sought to create through the League of Nations. And then of course the war that followed the war to end all wars, the Second World War, and our current order. So the point from all that is fundamental changes to order, at least in a Eurocentric view of the world, has only occurred on the back of cataclysmic war at least in recent centuries in history. The question we set for ourselves as a policy commission is, if there are pressures for change to the international order today what could they, what should they be and how could such changes be affected peacefully in a process of reform rather than one day waking up to a cataclysmic set of events which would bring about much more dramatic sets of change.My final point, before I turn the discussion over to my distinguished colleagues from around the world, is therefore why are establishing this particular policy commission as part of the Asia Society Policy Institute in New York of which I am President? It is because this is one of those challenges that, frankly, always goes into the ‘too hard’ basket of any foreign ministry or chancery or think tank around the world. Simply because, my experience of government and I’m sure the experiences of my colleagues’ experiences of governments at various levels is that we are all madly in pursuit of the immediate and, frankly, if we have time available then we’re at least thinking about what might happen over the next three to six months. Beyond that is called ‘strategic long term planning’ and when you start thinking of much more fundamental forces for long term change such as those I’ve referred to already in my remarks today, frankly, it is often way off the agendas of most of our institutions of government.Which is why I asked these distinguished individuals to join me in thinking through this question over the next twelve months. Think through it in a couple of very basic ways which particularly apply to Asia. This policy commission on the rise of Asia and the impact on the global order has three objectives: one, to analyse the implications of Asia’s rise for the current global order over the coming decade; two, if we can to provide a compelling vision for the future of the order including possible reforms to it; and three, to catalyse public awareness and, if possible, diplomatic support for any such reform agenda. They are our noble aspirations. In terms of the specific question we confront, here are those we seek to address:

• Defining the core relevance of the current global order and global governance, noting in fact that those are distinct albeit related concepts, including current norms rules and institutions.
• Identifying the emerging political, economic, technological, environmental and humanitarian questions which change the current order.
• Identifying the extent to which these and other pressures are likely to emerge from rising Asia, in particular China, India and South East Asia.
• Identifying which specific norms, rules and institutions are likely to be the subject of change in the coming decade and, if we can, agreeing on a possible program of reform for the order.

These are the questions we’ve set for ourselves and here at Harvard University at the US is where we are launching publically the work of this policy commission for the next year. We’ll be inviting other friends and colleagues to join us from around the world in the course of the next few months but we’re beginning our work here today, we’ve already spent three hours of these questions this morning.If I could now turn to my fellow panellists and I will have them speak in this order: Ambassador Desker, Ambassador Mehta from India, my good friend Jin-Yong Cai who is President of the International Finance Corporation in Washington DC, and then Professor Joe Nye known and loved by your all down here. I’ve asked them all to speak for about seven minutes and then I’m going to throw it open to you good folks in the audience. If you could ask really sharp, hard and intelligent questions they will all be answered by Professor Nye and my colleagues, if it’s really dumb and easy for a politician then I’ll be answering those. Over to you Ambassador.(16.30 – 33.00)RUDD: There was a timely reminder in the initial part of your remarks about historically the dangerous times we face in periods of real or perceived transition with the emergence of new great powers and the continuing function of previous and continuing great powers. We’ll come back to those questions in a moment. Jin-Yong Cai is President of the International Finance Corporation, part of the World Bank Group in Washington DC. We have boldly, in the work of this policy commission sought to ask ourselves questions which go way beyond the normal comfort zones of international relations scholars in what’s called broadly the political and security domain. But to recognize that the global order questions are today in this age of globalization fundamentally integrated. So therefore, without the order on finance and economic governance for the international community, whether that goes affects the political and security order as much as it does in the reverse direction. Jin-Yong Cai thank you for being with us, the floor is yours.(34.30 – 40.30)RUDD: Thank you so much Jin-Yong for those remarks. You anticipate some of the discussions which will flow here which are about how here we are 70 years after the birth of the United Nations, 71 years after the birth of the Bretton Woods institutions and the underlying question in the minds of many of us as diplomatic practitioners or analysts is, are these institutions still fit for purpose against the underpinning realities we now confront? Power realities as well functional responsibilities. You correctly pointed to the fact that institutions at least on the financial and economic side of the operation have through crisis, economic and financial crisis and the events post-2008, been forced to evolve. Hence the creation of the G20, hence the evolution of the Financial Stability Board which you could argue is where most critical financial and economic stabilization decisions are taken rather than the Board of Governors of the International Monetary Fund. We’ll come back to that. Professor Joe Nye, authority on power, how will power be distributed Joe? Over to you.(42.00 – 50.00)RUDD: Out there in the world no one is ten foot tall but America remains on average six foot two. Before we turn to questions I just want to throw one question at the panel which I haven’t warned them of. One word is not being clearly mentioned on this discourse on the return or the rise of Asia and the impact on the global order, and that is what happens with Europe. Because if you look at the order so far as it has evolved there has been an extraordinary role – sometimes negative, more often than not positive – for our European friends. Joe, some thoughts on where Europe fits into the future equation because they are not simply irrelevant to it.JOSEPH NYE: I think it is a great mistake to talk about G2 – that China and the US rule the world. For one thing when Europe acts as an entity which it sometimes does in economics it is the equivalent of the United States in size, larger in population and much larger than China in terms of the economy. So to ignore Europe is a great mistake. On the other hand as you look at that situation in Europe, the Europeans have a demographic problem. They also have a problem in figuring out how to maintain their institutions in the face of immigration and population challenges and a period of economic growth that is likely to be slow for the next decade or so. So there is enormous potential in Europe and they definitely have to be included in any efforts to deal with major grand issues like climate change or financial stability and so forth but I don’t think they’re going to have the capacity that they’ve had in the past.RUDD: Professor Desker, you are in Singapore and you see the world in both hemispheres. Your thoughts on Europe?BARRY DESKER: I think that with the rise of Asia – China, India and others – what happens is you will have a situation where Europe will have to recognize that it cannot play the same role in international role in international institutions that it has hitherto. There has however been an effort by Europe to maintain its disproportionate influence in international institutions. Whether it is the WTO, the IMF, World Bank, United Nations. As a consequence what is happening is that the efforts to change quotas, to redistribute power, tends to find itself blocked because of a European desire to maintain its existing influence. In fact even in Asia you often find that if you’re dealing with European diplomats one of the issues that always comes up is why is it that the EU is not invited to participate in Asia Pacific institutions such as the East Asian Summit. My response to that is, would you agree to the Asian powers sitting in at your European summits?RUDD: A good rhetorical question. A question which I know from experience with our European cousins, they don’t have an answer for. Jin-Yong, you’re from the International Finance Corporation, you’ve got many European stakeholders. Tell me how you see Europe in the global order in the decade ahead.JIN-YONG CAI: I don’t think I have a lot to add to Professor Nye and also Ambassador Desker. I would say Europe will continued to play an important role as an international architect because the culture, because of the value they have. They have been a critical part the organization. But one thing I would say – we did talk about Africa – I think Europe can be an important player in bringing Africa into this conversation. Although right now for Africa, in Sub-Saharan Africa the projection is that by 2050 it will be 2 billion into a single bloc. That will be a critical player. How do we integrate Africa into this? Europe I think in many ways, together with the US and China and also India, can play an important role in really being part of this global integration.PRATAP MEHTA: I think if you’re following the logic of greater disbursement of global power that should actually be an opportunity for Europe because in principle Europe could have a bigger voice, a more powerful presence if it plays the systematic game more deftly and perhaps facilitate in a sense the conversation with each other rather than be recognized for pre-committed positions. The question will turn on whether Europe can actually can develop an independent and creative perspective to global diplomacy and I suspect that the answer to that is that there is no theoretical obstacle to that but there are practical considerations which are as long as it remains preoccupied with issues of European integration it is harder for it to do it.RUDD: I think that’s probably where I come out as well in the sense that Europe and the European Union seems to be locked into this rolling debate between supranational and national politics for structural reasons we are all familiar with in this room, both in terms of the Euro and the associated concerns with national debt levels and now on international security and humanitarian law questions such as the flow of asylum seekers and refugees. So the challenge to, let’s say, domestic polity seem to be formidable and, if you’re in Brussels as I was last week, almost overwhelming to the point where a voice for future directions for the global order seems to be a one per cent conversation at the absolute margins. I may be wrong but I think the European voice historically has been enormously constructive. But I think there has been a period of sustained introversion. I’d now like to open the floor to any participants who have questions they’d like to ask on the matters we have before us?AUDIENCE MEMBER: Thank you very much for your comments today. My name is Patty Kim and I’m a research fellow at the Belfer Centre and a PhD candidate at Princeton. I want to ask today, in your experience what has been the most effective strategy for eliciting China’s cooperation on international activities such as non-proliferation or peacekeeping or cyber security?NYE: I would argue that China has two things that happen. One is it learns in terms of what its self interest is. And the other is it hates being isolated and losing face by being isolated. I have covered readings sent to Beijing in the Clinton Administration that talks about non-proliferation and at that time there was a general feeling that we don’t do it and we don’t talk about it. Gradually what is interesting to watch is how China has become a defender and a promoter of the non-proliferation regime. I think that’s a combination of those two things. China learned that it was not in its interest to see the spread of nuclear weapons and as you develop a broad consensus around multilateral treaties – whether it was the non-proliferation treaty or the missile technology control regime and so forth – China didn’t want to be isolated. I think those are the two mechanisms.RUDD: That evolution has been profound if you remember – I worked in Beijing in the ‘80s as a junior woodchuck at the Australian Embassy. My responsibility was dealing with the Chinese Foreign Ministry on non-proliferation questions. These were the days when China routinely attacked the non-proliferation treaty for its inherent (CHINESE) which is non-proliferation was seen frankly as simply a recipe for Western nuclear monopoly. To go from that position to where we are today is a profound illustration of China’s direct experience of some of the imperatives of global governance and therefore what it’s voice as a great power should be within it.AUDIENCE MEMBER: Hi my name is Isabelle, I’m from the Law School. Mr Kevin Rudd you’ve been very silent and modest today but –RUDD: I’ve never been modest in my life but go on.AUDIENCE MEMBER: Everyone knows that your insight to China is very substantial and one of the quotes that you provided to the New Yorker article earlier this year on the feature on Mr Xi Jinping, you famously said that, “Any effort to understand Mr Xi’s policy and his agenda for China needs to focus on his view of the Party as an institution.” So underlying that quote I think you implicitly stated that the Chinese government still sees itself as an institutional alternative for the way that our government is run, as an institutional alternative to what we’ve aspired to in general as international norms are concerned. And interestingly, when Lee Kwan Yew passed away earlier this year, this debate has again been revived in Asia and a lot of the development community. The recent efforts of China starting the new development banks – the infrastructure bank, BRICs Bank and Silk Road Fund – you see that as raising their focus on development outcome in terms of very tangible measureable yardsticks. Isn’t that the real challenge to the existing global order, is we’re slowly moving away from a rule based institutional world order to a more tangible development outcome based institution?RUDD: Thank you for the question, it is a deeply acute question and certainly goes to profound alternatives in national and international governance. Professor Desker I might flip to you.DESKER: Perhaps I should let you respond first before me?RUDD: I couldn’t dare comment on Singapore. On the question of Xi – I’ll do something there and then in the Singaporean reflection on Chinese politics Professor Desker will come in. Then I might ask Jin-Yong Cai frankly what China’s aspirations are with the new set of financial institutions beyond the Bretton Woods structure.My view of Xi Jinping is pretty simple really. I have met him a couple of times and had long discussions about this, that and the other. I’ve read a lot of what he has written. I don’t think it is all that complicated. Xi Jinping is a deep believer in the central role of the Chinese Communist Party. He does not see the Chinese Communist Party as a transition point to a form of Chinese social democracy over time. He does not see it as a division point to a Singaporean form of government as we see under the Peoples’ Actions Party. He does not see that. He sees it as uniquely position both in practical terms and historical moral legitimacy through the Civil War and the Revolution as the vehicle to achieve the historical Chinese mission of international wealth and power. Which as you know has been an historical mission for more than 100 years and certainly in part of the Chinese Restoration (CHINESE) which Joe has correctly referred to in his remarks about the return of Asia and, within that, the return of China to the global order. He sees the Party as central to that and, therefore, his model is one that holds central political control in his argument in comfortable tension with a program of liberal economic reform. Is that sustainable in the long term? I don’t know. But what I can describe to you is that very much is the roadmap and I think anyone who pretends it is not the roadmap doesn’t know Xi Jinping.DESKER: Any Singaporean who thinks China sees Singapore as a model for themselves is deluding himself or herself. What China has done however, is take the best practices from Singapore which is why at Nanyang Technological University where I’ve spent the last fifteen years, there has been each a year a Mayor’s class which is made up of children who are Mayors, Deputy Party Secretaries come and spend a year doing a Masters and learning by just experiencing life in Singapore. What I think is more interesting is that if you look back to December 1978 when Deng Xiaoping visited Singapore, what he saw was a society of largely ethic Chinese could compete globally and could be open to the world. This was the key message that he brought back to China with him. In fact, I was then in the bureaucracy when he said goodbye to Lee Kwan Yew the expression which he made quite clearly indicated that the brief he received was inaccurate. That he had learned much more by exposing himself to Singapore’s society which led shortly thereafter to his visit to the southern provinces and the shift in Chinese policy with the establishment of Special Economic Zones.CAI: This question has very much come back to governance. I do agree that at this stage not only Xi Jinping but also a majority of the Chinese leadership, view the current system as deliberate. Xi Jinping said something very interesting. He said, “If the system works or not is like a good pair of shoes on your feet. Only you know if it fits or not.” 30 years from now when China accomplish a different level how the government should be done, I think everyone is asking that question including Xi Jinping I would said.Coming back to the AIIB. I think this, unfortunately, has been portrayed as China trying to compete with the World Bank. There are certain elements of that but fundamentally what has been happening is that the Chinese view the world in such a way, very much based on their own experience. They felt if you develop an economy the first thing you have to do is build the infrastructure. You need to basics in place – electricity, power stations. In Asia in particular they have become, for several countries, their largest trading partner. They feel there is a way they can help those economies to develop and export their certain sometimes excess capacity and turn those countries into a consumer of more Chinese goods. There are positive elements of that. Eventually AIIB has become an institution with 57 shareholders. The World Bank, who has been very much involved in helping to developing the environmental, social operating backlines and in many ways at least so far they have been saying, this is very much complementary to the World Bank. This is very much achievable, in the sense that besides the World Bank there have been multiple regional development banks and there is also an Islamic Development Bank – very focussed on particular regions. There is a blueprint at least so far in the multilateral development community that certain specialized institutions can work. In this way there is this very interesting media description – China versus the World Bank. At least from the World Bank’s perspective, we don’t feel this. If anything, if I’m honest, I think it would be good to have some competitors to help the World Bank’s efficiency. We need to change as well.AUDIENCE MEMBER: Thanks, my name is Hamish. I’m a Niemann Fellow here at Harvard. Two questions. Have you discussed any specific arbitration mechanisms for the South China Sea? I know you mentioned that you’re looking at policies, but was that discussed today and can you offer any of your ideas? And secondly, as far as a new global order is concerned, do you think that a global digital economy might uphold whatever that new order is or be something that undermines it?RUDD: Those are both excellent questions. On the South China Sea question, obviously it figured in our discussions but not specific arbitral mechanisms. We have here someone who follows this very closely in Ambassador Desker. On the digital economy do I have takers on that from across the panel? If not I’ll have a go at it myself.DESKER: The South China Sea, as I indicated, China’s position is that it does not agree to third party arbitration or mediation. That will mean any recourse to international arbitration is likely to be undertaken without a Chinese presence at the table. Which, in my view, defeats the purpose. So it is unlikely at the ASEAN level that efforts will be made to push in that direction unless there is a Chinese agreement. This does not preclude individual states, such as the Philippines, proceeding with third party arbitration.RUDD: My own private aspiration in this department, which has probably marginal prospects of success in any real way, is not through formal arbitration – because as Ambassador Desker said, I think that is so far off the table with questions of deeply entrenched perceptions of Chinese territorial claims and questions of national face. So the practical question of diplomacy, in my mind, becomes one of – is it possible through private external diplomacy over time to engineer a set of circumstances which returns us to the status quo ante? That is, you cannot status quo ante land reclamations. They’ve been going on for a long time and Chinese ones have been on a large scale. But in terms of the active assertion on the ground, of particular territorial claims as opposed to the period which prevailed for some time but for a long time, of simply the return to the universal Deng Xiaoping rostrum which is that it is far better to leave these things to be resolved by heads wiser than ours at some future juncture in history. Easy to scale but very difficult to do, but with that you need to deescalate the underpinning political tensions which may itself be a contradiction in terms against dealing with the immediacy of the issues today.The digital economy. I think if you look at the impact on, let’s call it, global order questions it is something which those of us in the international relations business – either as practitioners of theorists – are almost systemically uncomfortable with, because we don’t in those terms systemically. But already those of us who are engaged as practitioners see its disruptive impact everywhere. Is this creative disruptivism, creative destructivism? I’m not sure. But the digital domain and the application of Moore’s Law in terms the rapidity of digital change, I think is leaving the practitioners of diplomacy and the way in which it is conducted and the complexity of the challenges they have faced, increasingly in a vulnerable position. So I would simply leave my observation at that. Other questions.AUDIENCE MEMBER: My name is Amy, I’m a Senior at this college and I am from China. One of the panellists mentioned that China traditionally has been a land power but is now looking to become a naval power in Pacific and shifting its focus to the Pacific. It seems to be supported by all these reports about South China Sea and disputes with Japan. However, if we look at the two major economic initiatives that are to complement the AIIB: one, the One Belt One Road initiative which stretches through the Eurasian continent pointing towards Eastern Europe; and the other maritime which also points westward goes through East Africa to Europe. When we see these do we see China strategic focus as pointing still westward to avoid a conflict or hostile engagement with the US in the Pacific and, in addition, we also a strategic US withdrawal from the Middle East – Iraq and Afghanistan and more recently the Iran deal. Amid all of that where do you see China’s strategic focus as being put?RUDD: Can I do a bit of a division labour here? Ambassador Mehta, on the question of, let’s call it, China’s continental and maritime focus – always beware the great problem we all face in these analyses which is the temptation of the binary. China is capable of walking and chewing gum at the same time, which is to be both maritime and continental. I’ll throw that there. And I’m sure Joe will have something to say about the question of the Middle East.NYE: One of the interesting questions is to what extent China is going to play a larger role in the Middle East. As the Americans are going to do less Middle Eastern energy imports, China is going to increase its dependency on that region. Notice that in the Iran case it has supported the UN sanctions and been a responsible player. But what is going to happen in the future is very much up in the air. We’ll have to see because China doesn’t have a great deal of experience or background in the area and yet it will have an increasing interest. So, open question.RUDD: Ambassador Mehta.MEHTA: Obviously, both the Pacific and Indian Oceans are marginally heating up in terms of naval competition. India also announced great expansion plans for its navy and to a certain extent that is inevitable. When 50 or 60 per cent of your global trade goes through two or three key points any power would take all means necessary to secure them. But that’s exactly the reason why creating frameworks where misunderstandings and accidents don’t happen and, secondly, in the case of navigation, a commitment to open and equitable access to all lanes of navigation is going to be a very important norm for the international order. That’s where I think there is some concern about whether that norm is about to be challenged or not, especially in the way the lines have been drawn in the South China Sea.The One Belt One Road initiative, I suspect that there will be multiple reasons behind it. Others can speak to this question. At one level it is something to be welcomed, I think that one of the things that has been neglected in global development for a long time is actually infrastructure. If you think of all the years the World Bank’s development paradigm it is actually amazing that it has taken this long for infrastructure to be put on the agenda. So to the extent that this infrastructure integrates the regions of the world and lowers transaction costs I think it is to be welcomed. Although I do suspect the drivers are multiple – also a quest for investments. I think we sometimes overestimate the degree to which there is a deep strategic logic behind such things. I think like with any complex society there will be different forces at work producing this.AUDIENCE MEMBER: Thank you. I’m Chan Eyung, a student from Fletcher School of Law and Diplomacy and I have a question for Ambassador Mehta. You talk about India and my question is do you think that compared to other countries in Asia, India has more advantage in hedging between China and the US? India joined AIIB while Japan refused to do that. While Japan has a mutual defence alliance with the US, India do not have that relationship. I also have a quick question to Professor Joseph Nye, do you think that the pursuit of power is a zero sum game and what do you think about the concept of new relations between great powers?RUDD: That’s cheating but I’ll let you get away with two.MEHTA: Very briefly, there is a term a lot of Indians like to use for defining India’s great power aspirations. I myself don’t like that term but it tries to capture something important. That is, India is a bridging power. You can ask questions about what is it trying to bridge? But I think what the term refers to is the fact that, if India plays its cards right, it actually doesn’t have to push itself into cornered solutions where it is either or. I think culturally and economically it is located in Asia but it is very much a Western power. So in that sense it doesn’t have to make the choice. I think in terms of alliance structures, again, it has always pursued a fair degree of strategic autonomy and independence depending on its national interests. Fortunately, most of those actually happen to be congruent with a range of countries. Certain issues, it may actually be closer to China – possible climate change is one such issue, fortunately or unfortunately. In that sense India is placed in a position where the structure of choices that it sees itself facing are not these either or solutions or binary choices. In that sense it does have certain advantages if it plays its cards right.NYE: Power can be positive sum or zero sum depending on the intentions on the parties involved in the contest. It can be both. As for a new type of great power relationship, it is an interesting concept. But it is not at all clear what it means.RUDD: Thank you for these questions and these contributions. If I could just leave you with one thought. That is, all of us as we analyse this question wherever we come from in the world – and legitimately, understandably driven by our own national circumstances. But on questions on the order, despite Henry Kissinger’s reservations about whether there is any such thing as a world order, but I think we would agree there is some form of international order. On the questions of international order or world order, by definition it has no particular national personality.Therefore, the challenge for all of us engaged in this hard question is to be mindful of national political realities but to also put ourselves in the position of the order itself. Almost a conceptual impossibility, but unless some of us seek to do that – and I do worry about where things we call orders ultimately go to. As I said in my introductory remarks, history is not a helpful guide on this other than in a pessimistic way, which is the destruction of orders is pretty easy and the construction of orders is pretty hard. It is difficult to find orders which have been evolved through intelligent cooperative arrangements between a number of great powers linked to the inherent value of the order itself. The challenge for all of you good folks who are obviously interested in the subject, that’s why you’re here, and those of us who have been analysts, advisers, practitioners on these questions is to achieve that level of, shall I say, intelligent detachment and speak on behalf of the order itself.My concluding thought is this, I remember in 2012 when I was Foreign Minister of Australia I came up with the idea of establishing yet another international group. This one was called the M7. Someone thought it was a motorway in England. I’ve got to say that the traffic was much thicker on the English motorway than it was on the M7. My point was this, there is a group of middle and constructive powers in which I certainly place Singapore where we have to, because we are not great powers, think intelligently and clearly about the nature of an international rules based system which works for everybody. Because what is the difference between a great power and a non-great power, whether they are constructive or otherwise, is that those are who are non-great powers actually rely upon a functional rules based order ultimately to exist and to have our being. The position of a great power, deluded or otherwise, is that they believe – and sometimes in history have had the power to sustain their national interests and values unilaterally, to which the order is simply a helpful addition. The question I leave everyone here to think about is, if we are personalities of the order itself, how do we think about it intelligently, how do we construct it for the decades and generations to come? Or the reverse, which is a somewhat dangerous course to simply sit back and observe how it unfolds and perhaps unfortunately see elements of the order die the death of a thousand cuts.On that very cheerful note, thank you for your attendance and I look forward to your ideas and participation in the work of this policy commission over the next twelve months. Please put your hands together for this fantastic panel.