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The 1996 Architect of the New Century Dinner

THE FOUR SEASONS HOTEL, WASHINGTON, D.C.
MONDAY, MONDAY, 1996

JAMES SCHLESINGER, CHAIRMAN, DINNER STEERING COMMITTEE: Please allow me to place this evening’s festivities in their larger international context. When President Richard Nixon, accompanied by Dr. Kissinger and by others, made his historic trip to China in 1972 he fundamentally altered the geopolitical landscape. For almost 20 years thereafter, there existed between the United States and the People’s Republic of China a strategic understanding critical to international stability. Largely due to the end of the Cold War and the collapse of the Soviet Union, but also to our own clumsiness and to Chinese suspiciousness, that strategic understanding has now been gravely weakened. Yet, the relationship between the U.S. and the PRC remains as critical to international stability as it was before the collapse of our common foe.

Our ambassadors to Japan have repeatedly asserted that the U.S.-Japan relationship is the most important in the world. But the U.S.-PRC relationship is at least equal in importance. If that relationship is solid, East Asia will remain stable. But that relationship must, as earlier, be based upon a sound strategic understanding which has now been impaired — and which must be restored. That is the challenge to our statesmen. A strategic understanding would permit minor upsets — to remain minor. If that U.S.-PRC relationship is sound, then there will be stability in East Asia. All the nations of East Asia will be able to grow and to prosper. If there is no such strategic understanding, East Asia will be unstable.

Ladies and Gentlemen, our honoree this evening is one who is known, from time to time, to speak bluntly. He also has a special relationship with the PRC and with its leaders, who repose in him unique trust. He is also prepared and willing to state home truths. In a speech in Beijing on September the fourth he stated some truths — truths others dare not say. Let me cite three examples. First, "many medium and small countries in Asia are concerned about China's prospective preeminence. They are uneasy that China may want to resume the imperial status it had in earlier centuries. And they have misgivings about being treated as vassal states." A second example: "any clumsy, high-handed or apparently brutal action can arouse resentment

or fear in Hong Kong or Taiwan. If China mishandles Taiwan or Hong Kong, the political and economic costs will be high." A third example, and perhaps the most pointed: "to achieve the levels of technology of Japan, America, and Western Europe, China will have to educate its population. Such a China will need to be governed differently." Comments such as these were not necessarily welcomed by his Chinese hosts, but from Lee Kuan Yew they are accepted.

In closing, Ladies and Gentlemen, you may have heard that, from time to time, our honoree has been criticized for directing some home truths, not only towards China, but towards the United States itself. He does not always flatter us — the way we like to be flattered, and the way others regularly flatter us. Yet, the Old Testament, in the Book of Proverbs, rightfully reminds us: "faithful are the wounds of a friend; but the kisses of an enemy are deceitful."

Let me begin by making a historic statement which the Presidents we both served rarely heard: I agree with every word that Jim Schlesinger has said.

I had the privilege of meeting the Senior Minister when I was a professor at Harvard and he came to meet with the faculty of School of Public Administration. The Dean of the Faculty, deceived by the fact that the Senior Minister was head of what was called the "Socialist Party of Singapore," and therefore, a brother under the skin, tried to turn this into an anti-Vietnam teach-in. And so he asked every member of the faculty to make some comments. The comments ranged from the dilemma of whether one should call President Johnson "medically insane" or simply a "war criminal." When finally the Dean turned toward the Senior Minister, expecting him to complete the round, the Senior Minister said "You make me sick."

Sometimes scolding is good for us. As many or all of my predecessors and my successors, and every other senior official in America, I over the decades benefited enormously from the Senior Minister's advice and counsel. At the time that we met at Harvard, he explained to the faculty that there were hundreds of millions of lives at stake in Southeast Asia, and that America was vindicating the freedom of all of them. And when Vietnam fell, the Senior Minister came to the White House. At dinner, he made a toast to President Ford and spoke, as very few people did in America at the time, of the great service America had rendered, the gratitude he felt, and the confidence he retained in the American mission in Asia. Those of us who were present will never forget it.

But beyond any of the personal reminiscences, the seminal role that the Senior Minister has played in educating this provincial country, thrown into sudden contact with cultures that it never had to deal with, is of signal importance. We Americans have a tendency to demand that other nations adopt today what it took 800 years of evolution to produce in the West. We have to fashion a common destiny simultaneously with every part of the world; none is more complex or developing more dynamically than Asia.

The Senior Minister’s contribution to bridging that gap, his ability to be able to speak frankly in China, in Taiwan, in Japan, and of course in his own region, is a major contribution to the development of policies in all these countries. In 1959, when he took over, Singapore was an underdeveloped, tropical backwater, and he has made it into a dynamic metropolis based on the understanding that Singapore can survive only if it stays intellectually and socially ahead of all surrounding countries. He has not demanded from us passively that we take care of the security of Southeast Asia. Beyond his resources he has given us his advice, his friendship and, as a true friend, his criticism.

We keep reading this-or-that revelation, of this-or-that conversation that took place in the White House. I would urge the journalists here to file a Freedom of Information Act request for the conversations between the Senior Minister and President Nixon. They would learn something. They would see what statesmen talk about. They would see that government is about moving a people from where it is to where it has never been.

I admire the Senior Minister enormously. I want to thank him on behalf of all of us who have had the honor to participate in policymaking for being a loyal friend and for helping us to find a direction in a complicated world.

I thank the Nixon Center for Peace and Freedom for the high honor bestowed on me and on Singapore.

I first met Richard Nixon in April 1967. He was on a journey to update himself on Asia. I had expected his visit to be just an exchange of courtesies. Instead I found myself in a serious discussion about the different peoples in Asia, their prospects and their places in the world as nation states. He was alone and I spoke my mind.

We discussed the Vietnam War. But his main interest was China. The Cultural Revolution was then at its height. What was it all about? I said that Mao was trying to do something which the first Chinese emperor Qin Shi-huang had failed to do, to remake the country by destroying its past. Qin Shi-huang burned all existing books so that recorded thoughts would begin with him. Mao was trying to do the same, with his little red book, his poems and his pithy aphorisms. But Mao was painting on a mosaic. One day he would be gone, the rains would come, his painting would be washed away and the mosaic would be revealed. Mao had only one lifetime and could not change 5,000 years of Chinese history. For every aphorism that Mao had coined, there were hundreds by other sharp minds in the past 5,000 years.

His other major interest was Japan. I said I did not see the Japanese merely as a maker of transistor radios for the amusement of the world. They were destined for greater things.

He reverted back to China. What should US policy be? I said China shared a 4,000 mile boundary with the Soviet Union, a boundary which the Russians had changed only in the last century. So they had unresolved problems. There was no boundary between the US and China. The US had drawn a line across the Taiwan Straits with the Seventh Fleet, but this was a line drawn on water, and need not be perpetual. There was much to be gained by re-engaging China.

I gave no further thought to this exchange. Years later after President Nixon left office, I read the books he wrote where he referred to this discussion. Then only did I realize that he had made notes after the meeting. He was a very thorough man, and was also discreet and had not quoted those assessments I made which could have embarrassed me.

In May 1969 I called on him now as the President. This time Henry Kissinger, his National Security Advisor, was present. We discussed Vietnam, but again his main interest was China. I had not changed my view that the line drawn by America on water across the Taiwan Straits could not and should not be permanent. And there was something to be gained by engaging China because it was a key player in Asia, including Vietnam.

I met him again in 1970 and in 1971. Again the focus was on China. I did not know he had already made up his mind and that Henry Kissinger had, via the Pakistanis, made contact with the Chinese to arrange for Nixon to visit China in February 1972. This visit changed the balance of power between East and West.

It was a turning point and a major contribution to world peace and stability, by one of America’s ablest presidents after World War II, one whose vision and global grasp matched America's global reach.

Now after the Cold War, will there be another President of the United States to take another historic initiative to engage China in a comprehensive way and give China a vested interest in becoming a cooperative player, one which abides by established international rules?

In the next decade or two, Asia will compel America’s attention. The economic reasons for this are already manifest.

But the US has more than economic interests in Asia. It has vital strategic interests. America fought Japan in World War II. It helped to reconstruct Japan in a non-militaristic mold. America fought the North Korean Communists from 1950 to 1953. After the Korean armistice US forces helped to rebuild South Korea, stabilized the region and enabled it to grow. America fought the communists in Vietnam, on a small scale from 1954, and on a big scale from 1965 to 1973. By fighting and negotiating with the North Vietnamese, Nixon bought time for South Vietnam to build up and fight on its own. The South Vietnamese did not succeed, but that extra time Nixon bought, enabled Southeast Asia to get its act together, and to lay the foundations for ASEAN's growth.

America’s military interventions and its economic initiatives hastened industrialization throughout East Asia. By the early 1980's China joined in the growth. Hong Kong and Taiwan exporters relocated their labor intensive industries on to the Chinese mainland, and the US allowed their Chinese plants to export to America both directly and through Hong Kong. This enabled China to accumulate foreign exchange and sparked off the most spectacular economic transformations in the history of man. Without this special boost China could not have made such dramatic progress in less than twenty years. American policies, driven by Cold War objectives and a generous spirit, have started a process which in the next 20-30 years will move the economic center of gravity of the world from the Atlantic to the Pacific.

The leaders of ASEAN know that their present progress and prosperity would not have been but for the US. They also know that to continue this growth there has to be continued stability.

In the triangular relationship between the US, Japan and China, the US-China leg is the most important factor for stability in East Asia. US-China bilateral relations will set the tone, structure, and context for all other relationships in East Asia. A stable US-China relationship will mean stability and growth. An ad hoc and spasmodic relationship will cause uncertainty and instability, and inhibit growth throughout East Asia. China is still a poor country with many backward provinces. Its main concern is with domestic problems which require economic growth to resolve. It may take China some 25 years to attain the living standards and industrial capacity comparable to present day Taiwan or South Korea. It will take another 50 more years for it to approach today’s Japan, let alone the present US. But a China with a per capita GDP of a Taiwan or South Korea will already have enormous weight.

As China's development nears the point when it will have enough weight to elbow its way into the region, it will make a fateful decision — whether to be a hegemon, using its economic and military weight to create a sphere of influence in the region for its economic and security needs, or to continue as a good international citizen abiding by international rules to achieve even better growth.

China has repeatedly stated that it will never become a hegemon. It is in everyone’s interest that before that moment of choice arrives, China should be given every incentive to choose international cooperation which will absorb its energies constructively for another 50 to 100 years. This means China must have the economic opportunities to do this peacefully, without having to push its way to get resources like oil, and have access to markets for its goods and services. There are fair and equitable rules in multilateral organizations like the WTO for a free exchange of goods and services, so that each country can stay within its borders and improve its people’s well being through trade, investments and other exchanges.

This was the way the Germans and the Japanese rebuilt themselves after World War II. Their territories shrank even as they had to receive back their nationals expelled from territories they had occupied and colonized. But both flourished as never before, with smaller territories and less natural resources, because they had access to markets through the IMF and GATT.

If such a route is not open to China, the world must live with a pushy China. In this event the United States will not be alone in being concerned about what China will do when it is able to contest the present world dispensation. All countries in Asia, medium and small, have this concern: will China seek to re-establish its traditional pattern on international relations of vassal states in a tributary relationship with the Middle Kingdom? Any signs of this will alarm all the countries in the region, and cause most countries to realign themselves closer to the US and Japan.

The United States should use the time available to encourage and help China to integrate itself into the world community, and to play a part in shaping the international order. Then China will find it worthwhile to accept its obligations as a global citizen. China will slowly understand that integration with other major economic powers will be much more beneficial than going it alone and trying to extend its sphere of influence. The old Soviet Union tried the other course and failed.

America and China need to reach a new strategic understanding. During the Cold War their understanding of each other’s position and objectives created the stable relationship of the 70s and 80s. The United States can, through dialogue and cooperation with China, chart a course to manage China’s transition in the next 20-30 years into a big power. On several issues of global concern, like nuclear proliferation, drug trafficking, global warming and international terrorism, cooperation is achievable. China should be brought into the WTO after a short period of transition as a developing country. The world will not be better off with a China that is not bound by its rules. The recent US decision to de-link MFN from human rights is an important advance in the right direction.

China is an old civilization and will not easily change because of external pressure or sanctions. But changes will come when their leaders, thinkers, and intellectuals become convinced on their own that adopting certain attributes and features of other societies will benefit China. Chinese students who have studied in America, Europe and Japan, and know that China has much to learn from other countries, will increasingly influence the views of China’s leadership, as they assume more responsible positions over the next 20-30 years.

But the key issue of Taiwan must be resolved before there can be a stable strategic understanding between the US and China. China will pay any price to prevent Taiwan from breaking away. The only country with the capability to help Taiwan in any bid for separate independence is America. A major cause for instability will be removed if China believes that America is not helping Taiwan split away.

There is at present little hope that the two sides can agree on the terms for reunification. Both agree that there is one China and each claims to be sovereign as China, one calling itself the PRC, the other the ROC. But the long term prospects are not so bleak, if the two are able to set aside the issue of who has this single sovereignty and leave it to the next generation to resolve. This had been the PRC’s position in 1972 as Mao told Nixon: "We can do without them [Taiwanese] for the time being, and let it come after 100 years . . . Why such great haste? . . . This issue [Taiwan] is not an important one" (recorded by Henry Kissinger in his White House Years, page 1062). They have much to gain by pragmatic policies to maximize their complementary economic circumstances. Economic cooperation will give both sides the incentive to avoid disastrously costly conflict. Over time, economic, social, and cultural differences will narrow. At some stage the two should be able to agree on qualitative guidelines which make eventual reunification a natural evolution. The alternative is a stand-off which will stifle growth across the straits. China's Fujian province will suffer, but so will Taiwan.

The problems are difficult to resolve at present because the key leaders have opposing ideological and world viewpoints, the result of their different experiences. Those on the mainland are communists who suffered during the brutal Japanese invasion of China; those on Taiwan are anti-communists who experienced a more benign regime in the Japanese colony of Taiwan, and were educated at Japan’s top Imperial Universities. With time and a different generation, a peaceful evolution is not all that improbable.

Next Hong Kong. Will Hong Kong suffer a setback when it returns to China on July 1, 1997? China's enterprises have invested over $50 billion in Hong Kong. China's leaders realize that Hong Kong has been the catalyst for their growth. Therefore they will do nothing intentionally to diminish its usefulness as an economic dynamo. But there will be teething problems. With the best of goodwill on both sides it will be difficult to have a smooth transfer of power. On-going disputes between the Governor and his Chinese counterpart have not made things easier, especially for the civil servants who have carried out the Governor’s policies but are staying on loyally to serve the new chief executive. Moreover, Britain has no experience in handing over a territory back to the sovereign power it took it from. It has always handed power over to people it prepared for independence. In Hong Kong, the British did not groom such a generation. So there will be some crashing of gears during the transition.

In the closing years of British colonial rule, large numbers of foreigners, especially Americans, have made Hong Kong a cosmopolitan center for international business. After July 1, 1997, gradually, almost by osmosis, Hong Kong will become a more Chinese city, retaining some features and traces of the cosmopolitan international city it was. The social ambiance will change. Hong Kong’s new masters will be Mandarin speaking with the accents of Beijing and Shanghai not Oxford and Cambridge. Their social style and manners are not those of the Royal Court of St. James. Once returned to China, there is not much that can check Hong Kong’s gradual reabsorption into its original Chinese milieu.

The China-Japan relationship is the most difficult to manage. It is not easy for Japan and China to have a ‘normal’ relationship. Proximity and history complicate their relationship. Nevertheless, Japan and China are complementary with each other. Japan has the technology and capital that China needs for its development. China offers Japan the markets. The obstacle is history whose legacy of suspicions can stunt the growth of a relationship that could benefit both.

A United States presence can make easier the evolution of a new China-Japan relationship, since both China and Japan see their relationship with the US as their single most important bilateral relationship.

ASEAN has played a role by creating a setting that will encourage cooperative relationships between all the countries of East Asia. That was the reason ASEAN launched the ASEAN Regional Forum. Of course it will take much more to take disputes between parties beyond discussion and conciliation to conflict resolution. The ARF is a framework, at present the only one, where all parties in the region are able to talk across the table and air their difference without increasing the level of acrimony. From this start we should be able to bring the joint weight of all members to bear on disputing parties to have their differences resolved peacefully.

Japan, China, Vietnam, India and nearly all the countries of Asia went through convulsions and revolutions to reconstitute their nations. They have not and will not lightly discard cultures and values which have helped their survival. But where these values are obstacles to progress, they have been and will be discarded or modified. Asians have quietly adopted useful Western values, social practices and management methods to varying degrees, and now have a blend of East and West in their value systems.

America played a seminal role in the present transformation of Asia. Without America’s interventions which stabilized the region and without American trade, investments and market, this flourishing East Asia would not have been. Differences over human rights, democracy, intellectual property rights and other economic issues notwithstanding, there is a deep reservoir of goodwill and no antagonism towards America.

What would President Nixon do in these circumstances? Contain or engage China? In his last book Beyond Peace (1994) he gave an unequivocal answer: "It is true that the United States will get a run for its money from China as both an economic and a military superpower by the middle of the next century. But in purely economic terms, Asia’s skyrocketing growth, and with it the growth of a massive Asian middle class of consumers, will create incredible new opportunities for the West if we rise effectively to the challenge . . . These opportunities are there to be grasped. We will end up on the sidelines only if, by our own shortsightedness, we take ourselves out of the game. If we stay in, if we compete and cooperate as a full member of the Asian-Pacific community, everyone will score, and everyone will win. Trade does not prevent wars, but it does require peace . . . It is profoundly in our interest that the nations of Asia grow the peaceful way."

President Nixon was a pragmatic strategist. He would engage, not contain, China, but he would also quietly set pieces into place for a fall back position should China not play according to the rules as a good global citizen. In such circumstances, where countries will be forced to take sides, he would arrange to win over to America’s side of the chess board, Japan, Korea, ASEAN, India, Australia, New Zealand and the Russian Federation, for in 30 years, Russia may again be on the march.

Meanwhile for America to walk away from this exciting arena of growth and dramatic change is to throw away the premium which America has earned, a premium the Japanese and the Europeans do not command. Having labored in East Asia for the last 50 years, there are rich rewards waiting for American enterprise.