Cross-posted at Andrés Gentry

On October 6 Harold Brown, former Secretary of Defense during the Carter Administration, came to UCSD to give a talk at an IR/PS Dean's Roundtable.  His topic was "Managing Change: China and the U.S. in 2025".  I attended his talk and following are the notes I took.  Any errors are mine alone.

1.    Earlier spoke at Rand China Forum

• Last month spent a week in China (informed somewhat his view of the path of US/China relations)

2.    Clear major new force is rise of China

• Civil War in Islam may be a close 2nd

3.    In 2025, what will US and China look like?

• GDP: US: 3% growth will yield a 2 trillion USD economy: with a population of 350-370 million will yield 65,000USD per capita GDP
• GDP: China: 8% growth will yield 7 trillion USD economy: with a population of 1.4 billion will yield 5,000USD per capita GDP (but 12,000-15,000 at PPP)
• Both estimates perhaps over-optimistic because of:
  • US: effects of War on Terror, monetary/fiscal policy, energy shortages
  • China: urban/rural divide, no social safety net, demography (1-child policy), local differences
• China will be the world’s manufacturing center (today it’s the US: it produces 2x China’s output)
  • Rising wage rates will push some jobs from China to India

4.    Will pass over military balance question.  Just says if US defense spending is level US will continue to be the biggest power in the world and the West Pacific

• However, China is expanding its military
• Conflict on Mainland would be to China’s advantage but Taiwan Straits conflict to the US’ advantage

5.    China’s foreign policy is global

• Unlike Japan’s, it’s not only economic, it has strategic political and military components

6.    China is a rising power: historically leading power/rising power changes have yielded conflicts: this isn’t encouraging

• One exception: UK to US change
• 20th Century: particularly noxious: 1900-1945: attempt by Germany/Japan to replace powers, USSR tried  1945-1990
• And China?
  • Positives
  • Nuclear weapons: worked well with USSR, tamping down US/USSR conflict
  • Unlike USSR, Germany, Japan: China doesn’t have an ideology it wants to spread
  • US has this Wilsonian Impuse, this will damp down in next 10-15 years
  • China wants to be Asia’s greatest power
  • Brazil wants to be Latin America’s premier power and this doesn’t bother US too much
  • Both US and China have common interest in world trading system and we have “balanced” economies
  • Though this leads to some frictions: China’s intellectual property laws, contract enforcement
  • Possible problems
  • Protectionism in US, competition for energy, China already has ½ of US’ oil consumption and 3x US’ coal consumption

7.    Energy consumption effects

• Increasingly import oil from the Middle East, sea lanes are vulnerable to interdiction by US Navy
  • But China unlikely to challenge US Navy
• Global climate change
  • By 2025 China and India will produce more CO2 than US
  • Will industrialized countries pay to clean up the mess?

8.    Sensitivity

• China military expansion makes its neighbors nervous
• Some pressure may build for US to withdraw from Asia: he thinks this would destabilize East Asia
  • US/Japan cooperation especially makes China sensitive
  • Any Japanese military capability worries China

9.    Managing US/China relations

• a.    DPRK, Taiwan, internal PRC developments: key points
  • DPRK: we’ve had a good start
  • 6-party talks may be a start to Northeast Asia security architecture
  • Taiwan: things currently damped down
  • Internal PRC developments
  • Will PRC become a democracy?  Not likely
  • Question is how authoritarian will PRC be?
  • There is a lack of transparency in PRC
  • How will CCP try to stay in control?
  • Through greater social controls?
  • If faced with major threats to CCP control then perhaps they will use populism/nationalism to stay in power

10.    He’s fundamentally optimistic: common threats and concerns will trump genuine differences and conflicts of interest

Question and Answer Session

1.    China Navy: submarine fleet?  Local San Diego naval leaders worry about it

• Fundamentally, China military was a land force
• Recently made a move to joint land/air/sea operations and make navy/air force less subordinate to army
• US Navy is especially worried because it will have the primary role in the Taiwan Straits
• US Navy also trying to hype the China threat to get a better budget (especially since Iraq and Afghanistan have focused monies on US Army)
• It’s a legitimate worry: US Navy should focus on anti-submarine warfare

2.    US Navy is smaller than before, so how to be optimistic?

• During Brown years, US Navy was 2x as big, but USSR naval threat was much larger than Chinese Navy
• China has no aircraft carriers (save for in amusement parks)
• How to measure US Navy to its tasks?  On this level it’s pretty good
• China Navy lower power projection ability than UK or France
• To improve US Navy better to improve current ships than increase their number: communications, intelligence

3.    Higher education: is it in US long-term interests to educated Chinese in US universities and thus help China to catch up to US?

• Especially in science and technology this is a problem
  • Helps with making sensible decisions to deal with global climate change or pandemics
  • Helps improve productivity
• So US should continue to be open to foreign students
  • Many of these students will stay
  • Some will return to their home countries: this cuts both ways
  • They will improve their own economies which isn’t necessarily bad
  • If they develop positive opinion of US then that’s good
• Will foreign Ph.Ds swamp US?
  • If economic system isn’t good it doesn’t matter how many Ph.Ds you have (social and political systems are important too)
  • USSR and Japan produced many engineers and they didn’t overtake US
  • In China the problem is management skill level, also there’s the question of China’s political development

4.    Pros/Cons of Chinese buying US companies?

• If we’re an open economy we should allow this to happen
• Will we require reciprocity?  There should be some
• Outside of classified/strategic technology we should be open to China buying US companies

5.    Chinese leadership has many scientists and engineers.  What’s the effect?

• Partly this is because there have been no business/law schools
• Key is not to be a scientist, it’s to understand science

6.    Oil in South China Sea: is this a source of conflict in that area?

• Yes, but fortunately haven’t found much oil there
• Energy conflicts have so far been worked out
• Another reason China is increasing its navy

7.    What will Chinese leadership look like in 2025?

• Will be people born after Cultural Revolution but parents/grandparents will have suffered
• Will they have the vision to solve PRC’s problems?  Don’t know, but their style will be much different than the Founding Fathers

8.    Robert Barnett just wrote a book separating world in the connected and unconnected worlds.  US trying to make an enemy of China to justify their budgets.  What do you think of the book?

• Hasn’t actually read the book
• China clearly joining the industrial world
• Mistake to make China an enemy and it will be a mistake if we actively do that
• Risk in both nations: leadership will excite the public to believe the other is an enemy
• But we should also not let provocative actions go unchallenged (for either side)

9.    Doesn’t believe USSR is an apt comparison to China: thinks Korea is a better comparison.  Big concern is their legal system and protection of intellectual property

• That’s why he also made comparisons to Japan
• China might compete on entrepreneurial level (which USSR never did)
• Perhaps when China has its own intellectual property it will more vigorously protect intellectual property
• Chinese enforcement of contracts is quite weak
• Importance of connections leads to corruption and is a real risk for doing business there and for Chinese themselves