A Note by the Director (Ditchley 2007/04)
19-21 May 2007
This conference saw Ditchley in partnership with the Asia Society of New York returning to one of the fundamental strategic questions of the era, the rise of China and the effect of that on its neighbourhood and on the world. The aim of the debate was to try to reach a consensus on what the coming period would bring by way of change, shifting relationships and security developments. We could not resist the temptation to define security in its broadest sense, but participants felt that this approach reflected the reality of China’s impact not just on the stability of its region, but also on the world economy, the energy sector, environmental policy and the future of Asia as a continent.
The current situation was analysed in depth, centred inevitably on China’s growing weight and influence. Participants saw some things as clear and probable: the legacy of history and the tensions arising from continuing disputes; national and domestic imperatives within all the countries of the region; resource competition in a globalised but increasingly unpredictable world; and steady economic growth, particularly in China, for some time to come. There were significant reasons for countries of the region to work more closely together: the prospect of greater economic growth through cooperation; the incentive to grow a more solid Asian identity; the wish to avoid debilitating conflict; the need to preserve financial and currency stability. We found it difficult to judge whether these trends would outweigh the centrifugal forces: particularly the tension between China and Taiwan and the unpredictable consequences of developments in North Korea; but also the rising strength of nationalism, both cultural and economic, in China and Japan, as well as further afield in India and Russia. Participants were by no means sure that a growing sense of an Asian identity, pursued more consciously by the smaller states of the continent than by the larger ones, would be enough of a constraint.
There were other areas of much greater uncertainty. Developments in North Korea featured strongly in this category and are covered below. We came back again and again to the role of the United States, which was expected in the medium term to continue its inclination to run individual relationships with each of the countries in the region, in a structure which might not remain stable for very long. US public support for hard decisions in the event of a crisis could not be guaranteed after the experience of Iraq. Economic cooperation could come under pressure in the struggle not just for resources, but also for territorial control and for the right answers to climate change and other environmental threats.
China’s internal political evolution was seen as affecting all of these areas. Its emergence as a global power had long been predicted, but the speed and scale of the changes had surprised even the Chinese themselves. Their record of solid economic growth over such a sustained period was an enormous historic achievement. We had come a long way from the China of the 1970s. There were important implications for China’s neighbours and for the wider international community, whose capacity to adjust to the rise of China was being strongly tested. If crises, particularly over territory, could be avoided and China played by international rules, there could be benefits for everyone. China had a right to compete for resources and to trade on a well-regulated basis and its growing weight would have to be absorbed. The Chinese decision to invest $3 billion in Blackstone, announced during the weekend, was the latest illustration.
On the other hand, nothing could be taken for granted. China was perfectly capable of overplaying its hand, particularly during a period when American credibility and influence was low, a situation which could well change within a five-year period. It also faced very considerable problems internally. Water scarcity and environmental pollution on a huge scale were significant challenges. The maintenance of a strongly centralised political structure during a period of such rapid economic liberalisation was a severe test. Yet the capacity of the Chinese leadership to cope with problems on such a scale might be greater than we imagined. Most outside observers were in the dark on what was happening under the surface. A tight central government had managed this huge territory for so long that its ability to cope with massive difficulties had to be treated with intense respect.
The question arose as to whether the Chinese people themselves might be the final arbiters of how things developed in the longer term. Some participants wondered whether this was too rational or conventional a question. From the outside, it was difficult to see, even with all the history and the suffering, whether there was much of a gap between the Chinese people and the leadership. Economic opportunity was of enormous interest to the individual citizen. There was a new sense of national pride and assurance. It might be a mistake to base political analysis on the expectation of a “correction” in the balance of power between the central leadership and the people. Others wondered how long this could be true as China increasingly connected with a more open outside world. Economic opportunities were unevenly spread, with massive poverty continuing in rural areas. Corruption was rife and bitterly resented. There were stories of constant demonstrations and protests, all too likely to be true when there were no other channels for the expression of dissent. The majority felt, nevertheless, that the leadership was showing a sophistication of approach which we might not have expected twenty or thirty years ago. At least in the medium term, there was no sign of an impending breakdown.
The conference looked carefully at the latest developments over North Korea. Participants felt strongly that the world could not live with the DPRK as a nuclear power. The importance of the US-negotiated agreement of February was discussed in detail. While there was respect and admiration for the hard work and professionalism which the United States was injecting into the process, it was also recognised that the six-party talks framework was a necessary structure to underpin the more direct contacts. The role of China would continue to be important. There was also some useful discussion of the part to be played in the next stages of this process by the offering of carrots as well as sticks for the DPRK.
Some regret was expressed that Japan was not more actively involved in the process, for instance through the offer to participate in the funding of oil deliveries. The importance of the abductee issue for Japan was clearly explained at the table and the conference was made fully aware of the sensitivity of the whole subject. There were some who believed, nevertheless, that the main priority had to be a peaceful solution to the nuclear question, one way or another, or the consequences for every state in the region might be severe.
We also covered the prospects for the eventual reunification of the Korean peninsula. This too was an emotional issue and there was no doubt in most people’s minds that reunification would eventually happen. But the timing was wholly unpredictable. Participants considered it important for the international community to make clear its support for reunification, a support which the Republic of Korea largely deserved, even if its relationships within the region and with the outside world were not always well maintained. The more visible streak of nationalism perceived in current ROK attitudes were tending to make these relationships more difficult. As for the continuation of a US military presence in Korea if the North Korea problem were solved, most participants felt that it would depend on the attitude of the South Koreans themselves. If they wanted the United States to stay or to leave, Washington would have little choice but to respond accordingly.
We touched on most of the other bilateral and regional relationships, although we could have spent more time on Russia and India. No regional state, not even China, was regarded as driving for regional, let alone, global hegemony. If the role came in the course of things to China, the Chinese would not refuse. But Beijing was seen as pacing itself for the longer term, rather than as trying to force the issue. The softer tone in recent Chinese-Japanese exchanges suggested that this more cautious approach was likely to continue into the coming period. This analysis extended, for the majority at least, to the tension between China and Taiwan. The conference was all too conscious of the sensitivity of the subject, since an official Taiwanese presence at the conference had deterred a matching attendance from Beijing. While acknowledging that the emotional strength of the dispute could provoke a crisis at short notice, the prospects seemed to be for a continuation of the unsettled status quo for some time to come. There seemed to be no need to force the issue. Moreover, large numbers of Taiwanese citizens were now living in China and it was possible that people-to-people relationships could develop in a way which stabilised the situation further. Against that background, perhaps the American position on Taiwan could be gradually developed. The deep strategic suspicion between the United States and China remained a profound problem and a deterioration should not be risked, but it was worth considering a deepening of the military-to-military relationship between the United States and China, in the search for continual small steps towards a more “normal” relationship.
In summary, the conference accepted that the place of China was central to a whole swathe of global business. For regional security, even where the road began in Washington, it was bound to pass through Beijing. The key point to bear in mind was that we were in unprecedented territory in all sorts of ways. The speed and scale of the changes in and around China were breathtaking; and the fact that China was now for the first time an exporter of capital and the world’s top trading nation was in itself a powerful new element. While in previous eras China had never managed to modernise itself without a disaster, and while the challenges facing it remained formidable, no-one could say that China was bound to fail on this occasion. The region around it, and the rest of the world, could decide to resist the trend; but a wiser move might be to avoid the risk of a zero-sum game and turn China’s strengths into a global benefit.
With that in mind, it was suggested that the international community should engage with China on all the major issues where there would be general advantage in collective action. That category included energy, the environment, economic integration, health issues (given the genuine risk of pandemics) and military transparency. More open exchanges on all these areas were recommended, together with the promotion of international institutional machinery to take them forward. Some of this sounded quite ambitious, but there was a general feeling from this whole debate that this kind of active, forward-looking approach would bear more fruit than waiting and watching in suspicion. These recommendations were accompanied by the strong feeling amongst all participants that the reactions of the United States to the evolution of the region, and the quality of leadership which the US could show in its approach, would be paramount in deciding whether stability and shared prosperity would win over tension and competition.
We were fortunate in having around the table for this fascinating discussion a wide range of people from different professions and nationalities who knew the region well. We were fortunate, too, in having a chairman who not only made us focus on the most important issues, but who also kept us in mind of the overwhelming importance of sheer politics in everything we debated. Ditchley and the Asia Society certainly benefited from being in partnership with each other and plans were laid for a further round in a year or two’s time.
This Note reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression.
PARTICIPANTSChairman : Ambassador Richard Holbrooke
Chairman, The Asia Society, New York; Vice Chairman, Perseus, New York. Formerly: United States Permanent Representative to the UN (1999-2001); Assistant Secretary of State, Bureau of European and Canadian Affairs, US Department of State (1994-96); Ambassador to Germany (1993-94).
Mr Donald Campbell
Executive Vice-President, CAE Inc, Montreal. Formerly: Deputy Foreign Minister of Canada and Personal Representative of the Prime Minister for G8 Summits (1997-2000); Ambassador of Canada to Japan (1993 97); Ambassador to Korea (1984-85).
HE Mr Joseph Caron
Canadian Foreign Service (1972-); Ambassador of Canada to Japan (2005-).
Professor Wendy Dobson
Professor and Director, Centre for International Business, Rotman School of Management, University of Toronto. Formerly: Associate Deputy Minister of Finance, G-7 and Financial Institutions (1987-89); President, C D Howe Institute (1981-87).
Dr Paul Evans
Co-CEO and Chairman, Executive Committee, Asia Pacific Foundation of Canada; Professor, College of Inter-Disciplinary Studies, University of British Columbia. CHINA/UNITED STATES OF AMERICA
Dr Gary Dirks
Group Vice President, BP Group; Head of BP, Asia Pacific Region; President, BP China; Board Member, China-US Centre for Sustainable Development; Board Member, China Business for Sustainable Development. FRANCE
Mr Jean-Pierre Cabestan
Senior Researcher, French National Centre for Scientific Research, Paris (2003-); Associate Researcher, Asia Centre, Paris. HONG KONG
Mr Daniel Fung
Chairman, Des Voeux Chambers, Hong Kong; Senior Counsel, Hong Kong Bar; Chairman, Silkroad Capital; Chairman, China Law Council; Special Advisor to the UNDP on corporate governance in China. JAPAN
Ambassador Yukio Satoh
President, Japan Institute of International Affairs, Tokyo. Formerly: Permanent Representative of Japan to the UN (1998 2002).
Mr Koji Watanabe
Senior Fellow, Japan Center for International Exchange, Tokyo. Formerly: Executive Adviser Japanese Federation of Economic Organizations (1997 2005); Ambassador of Japan to Russia (1993 97); Ambassador to Italy (1992 93); Deputy Minister for Foreign Affairs, Sherpa for the G-7 Houston and London summits (1990 91). KOREA
Professor Oknim Chung
Assistant Professor, Department of International Relations, Sunmoon University, Republic of Korea (2006-); Advisor, Ministry of Foreign Affairs and Trade (2004-); Advisor, Ministry of National Defense (2003-); Advisor, National Intelligence Service (2003-). SINGAPORE
Mr Bilahari Kausikan
Second Permanent Secretary, Ministry of Foreign Affairs, Singapore. SWITZERLAND
Mr Claude Smadja
President, Smadja & Associates (2001-). Formerly: Managing Director, World Economic Forum (1996 2001). TAIWAN
Dr Parris Chang
President, Taiwan Institute for Political, Economic and Strategic Studies (2006-).
Mr Wen-Cheng Lin
President, Taiwan Foundation for Democracy and Editor-in-Chief, Taiwan Democracy Quarterly; Dean, College of Social sciences and acting Director, Institute of Mainland China Studies, National Sun Yat-sen University, Taiwan.
Dr Jiann-Fa Yan
Chair, Research and Planning Committee, Ministry of Foreign Affairs, Republic of China (Taiwan) (2006-). UNITED KINGDOM
Dr David Anderson
Desk Officer, Asia Branch, Ministry of Defence, London.
Mr Ashish Bhatt
Principal, The Canonbury Group (2007-); A Director, United Nations Association of the UK (2005-).
Dr Kerry Brown
Director, Strategic China Ltd (2005-); Associate Fellow, China Modern History and Politics, Chatham House (2005-); Fellow, Royal Society of Arts (2005-).
Mr Hugh Davies CMG
Senior Partner, Orient Asian Partners (2005-); Chairman, Gt Britain China Centre (2003-); Chairman, China Association (2002-).
Mr Guy de Jonquières
Formerly: The Financial Times: Asia Columnist and Commentator, Hong Kong (2004-07); World Trade Editor; Staff Correspondent in Paris, Brussels, Washington and New York.
Professor Rosemary Foot
Professor of International Relations and John Swire Fellow in the International Relations of East Asia, St Antony’s College.
Sir Stephen Gomersall KCMG
Chief Executive for Europe, Hitachi Europe Ltd (2004-). Formerly: HM Diplomatic Service (1970-2004); Ambassador to Japan (1999-2004).
Mr Chris Holtby
Deputy Head, Security Policy Department, Foreign and Commonwealth Office, London (2007-).
Ms Christine MacQueen
HM Diplomatic Service (1982-); Counsellor, Foreign and Commonwealth Office, London.
Dr Rana Mitter
University Lecturer in the History and Politics of Modern China, University of Oxford; Fellow, St Cross College, Oxford (2001-).
Mr Richard Pascoe
Director, China Policy Institute, University of Nottingham (2004-).
Professor Dame Jessica Rawson
Warden, Merton College, Oxford (1994-); Professor of Chinese Art and Archaeology, University of Oxford (2000-). Author.
Dr Steve Tsang
Louis Cha Senior Research Fellow in Modern Chinese Studies, University Reader in Politics, Director, Taiwan Studies Programme and Director, Pluscarden Programme for the Study of Global Terrorism and Intelligence, St Anthony’s College, Oxford.
Mr Sanjay Wadvani
HM Diplomatic Service (1987-); Team Leader, East Asia Regional Team, Far Eastern Group, Foreign and Commonwealth Office, London (2006-). UNITED KINGDOM/MALAYSIA
Professor Yuen Foong Khong
Professor of International Relations, University of Oxford; Faculty Fellow, Nuffield College, Oxford. UNITED STATES OF AMERICA
Dr Ashton Carter
Co-Director, Preventive Defense Project, John F Kennedy School of Government, Harvard University; Chair, International Relations, Security and Science Faculty.
Mr Thomas Gibbons
Special Assistant, Bureau of East Asian and Pacific Affairs, US Department of State.
Professor Harry Harding
University Professor of International Affairs, George Washington University; Visiting Fellow, Asia Society; Counselor and Chair, China Task Force, Eurasia Group.
Senator Gary Hart
Wirth Chair in Environmental and Community Development Policy, Graduate School of Public Affairs, University of Colorado; Co-Chair, United States Commission on National Security 21st Century; Senior Counsel, Coudert Brothers. Formerly: United States Senator for Colorado (1975 1987).
Ambassador Christopher R Hill
Assistant Secretary of State, Bureau of East Asian and Pacific Affairs, US Department of State (2005-). Formerly: Ambassador of the USA to the Republic of Korea (2005).
Mr Jing Huang
Senior Fellow, John L Thornton China Center, Foreign Policy Studies, The Brookings Institution (2004-).
Dr Michael Kulma
Director, Policy Programs, The Asia Society, New York (2007-).
Dr Kenneth Lieberthal
University of Michigan: Arthur Thurman Professor of Political Science; William Davidson Professor of Business Administration, Ross School of Business; Distinguished Fellow and Director for China, William Davidson Institute; Research Associate, Center for Chinese Studies; Non-Resident Fellow, Foreign Policy Studies, The Brookings Institution, Washington DC.
The Hon Winston Lord
Co-Chair of the Overseers, International Rescue Committee, New York. Formerly: Assistant Secretary of State for Asian and Pacific Affairs, US Department of State (1993-97); US Ambassador to China (1985-89).
Dr Jamie Metzl
Executive Vice President, The Asia Society, New York.
Dr Marcus Noland
Visiting Professor, Yale University; Senior Fellow, Peterson Institute for International Economics, Washington DC.
Mr Alan Romberg
Senior Associate and Director, East Asia Program, The Henry L Stimson Center, Washington DC (2000-).
Dean Orville Schell
Dean, Graduate School of Journalism, University of California, Berkeley (1996-); Director, Center on US China Relations, Asia Society.
Professor Dali L Yang
Professor and Chairman, Department of Political Science, University of Chicago. UNITED STATES OF AMERICA/INDIA
Mr Pramit Chaudhuri
Bernard Schwartz Fellow, The Asia Society, New York; Foreign Editor, The Hindustan Times.