DATE: 18:00-19:00, Tuesday 22nd May 2018
VENUE: Committee Room 11, House of Commons, Palace of Westminster, London, SW1A 0PW
SPEAKER: Dr John Hemmings, Director of the Asia Studies Centre at The Henry Jackson Society
Mr Hayato Hosoya, Academy Fellow at Chatham House
Veerle Nouwens, Research Fellow for Asia Studies at the International Security Studies Department of the Royal United Services Institute
EVENT CHAIR: Sir Hugo Swire MP
SIR HUGO SWIRE MP
Good evening ladies and gentlemen. It being 1800 hours- 6 o’clock, I am delighted to invite you to the House of Commons. My name is Hugo Swire and I’m very honoured to be asked to chair this event and launch this remarkable report. On my right, I have Dr. John Hemmings who is the founding director of the Asia Studies Centre at The Henry Jackson Society and adjunct fellow at the Centre for Strategic and International Studies. He has a PhD in International Relations at the London School of Economics, where he focused on security issues in the Asia-Pacific region. He authored a number of book chapters, academic journals and newspaper articles, commenting on Asia, contributing to the Telegraph, the Diplomat, the Lowy Interpreter and the National Interest. On my left is Mr. Hayato Hosoya who is an academy fellow at Chatham House. From 2014 to 2016, Mr. Hosoya worked as a Diplomat in the North East division of the Japanese Ministry of Foreign Affairs where he conducted in-depth research about the security issues in the Korean peninsula and led one of the economic sanctions project against DPRK. His research at Chatham House focuses on cybersecurity and export control. He also writes papers and articles about diplomacy in East Asia. He received his Masters of Public Policy from the University of Oxford and BA from the University of Tokyo. And last but not least, on my right is Veerle Nouwens. Veerle is a Research Fellow for Asia Studies at the International Security Studies Department of the Royal United Services Institute, focusing on geopolitical relations in the Asia-Pacific region. Prior to joining RUSI, Veerle worked for the European External Action Service at the Delegation of the European Union to Singapore’s Political Press and Information Section. She holds an MPhil in Modern Chinese Studies from the University of Oxford and an MA in International Relations and Diplomacy from Leiden University and a BA in International Relations from Macquarie University.
So ladies and gentleman, this is a panel who know what they are talking about so beware of questioning them although [inaudible]. I read this report- it is a remarkable report, extraordinarily timely report. Particularly interesting for me, I read it over the weekend but this morning at the Atlantic Council Breakfast, we had Professor Niall Ferguson talking about the rise of China among other things. And this phrase I hadn’t heard which he claimed he coined a decade ago- Chimericans. It doesn’t say much about Chimericans in the report actually, if anything- with this big issue being in 10,15,20 years’ time, are the Chimericans- Chinese Americans- if pushed, going to owe their allegiance to China or to United States. He thinks this is going to be a very significant issue. Anyone who studies international affairs will be aware of the ongoing militarisation of the South China Sea- the fact that the Chinese landed, I think [inaudible] in the last week or so, the stalled peace process or denuclearisation talks, I should say, with DPRK and the United States. That remains to be seen whether this is another example of the North Koreans only moving so far and then walking away as they’ve done. Hence we haven’t had the Six Party Talks for a long time. But also this report is about the opportunities for the United Kingdom post-Brexit, and the rise of China with the Belt and Road Initiative and what that means, its relations with India, India’s problem of how to deal with China’s rise in terms of SAARC countries and what China is doing in Sri Lanka and the Maldives- hugely important to the UK, not least because of the vast amount of trade that goes through the South China Sea at any one time, hugely important as a trading partner and a place for investment bilaterally, and we cannot afford to ignore it. What I found perhaps most interesting, and I shall mispronounce this as I have done successfully with most of our panellist’s names, certainly so will be accused of consistency- Tianxia: this extraordinary idea that everything flows to and from China and what the implications of that are- if that is what is really influencing thinking at the heart of Beijing.
Ladies and gentlemen, I can ask for Dr. Hemmings to kick us off and them I’m going to ask Veerle and then Hayato to come in last. And then the questions will all be coming in from the floor.
DR. JOHN HEMMINGS
Thank you very much to everyone for coming on a very hot day and coming to listen to what I hope will be a good contribution to what I think is a very necessary national debate. This report is not meant to be the final product- I’m hoping there will be many more. I followed in the shoes of John Bew at Policy Exchange and I think many of us in the think tank community and academia as well, are trying to get to grips with what happened in the Referendum and where Britain’s foreign policy posture is going to go. Just to give you a warning, I come to the topic as a security analyst so obviously my report focuses more towards those challenges. You’re welcome to pick me up on some of the economic opportunities I’ve missed. Furthermore, I should also like to say that this report covers, in short order, shipping, infrastructure, security, naval security, geopolitics, Britain’s foreign policy, Britain’s defence budget- I cannot speak to all of these at the level I like and so, some of the sources if you’d like to challenge them and question them deeper, I’m more than welcome to go into where I got those. Many of them are very open and some of them are commercial sources, some of them are the usual suspects like military balances, IISS, and many of course in academia or what I call the respectable media- FT and up.
So anyway, it’s not a findings report- there’s no snazzy headline for the journals to say ‘This is what this report found’. It’s a position paper- I’m taking an argument and making a normative argument that is both trying to address Britain’s new found drift at the moment. I make an argument that is both normative as well as in self-interest, so realist. I understand that there’s a lot, in these four walls particularly, there has already been some debate about this concept of a Global Britain- what does it mean? And some of you will wonder- is it a strategy? Is it just words? Is it fluff? Baroness Ashton said it is an aspiration capturing an idea in a way you can later expand into an underpinning set of principles. What I like about that, having watched national strategy making in the US and also in the UK and Europe, there’s always a lot of media attention about whether this thing is really real. And I can see that at the moment, there’s a lot of hot air about Global Britain, but I also point out as Baroness Ashton said, ‘Nations need vision, the vision thing is important, we can fill in the details’. And indeed we should fill in the details, quoting Tom Tugendhat, Foreign Affairs Select Committee Chairman who said, ‘A clear statement of objectives and priorities but it need a commitment to the sufficient resources to achieve them’, and I entirely back that. So, we can allow it to be a vision for so long but at some point, it will need to be realised in terms of resources and in terms of actual resources, both domestically for policy makers here but also in the region, to show regional countries that Britain actually means what it says.
So the two big fundamental arguments that I make in this piece really are that it’s in Britain’s self-interest, and I define it as the first kernel of self-interest being quite narrow but to be honest, realist, and that’s prosperity. We should go to the Indo-Pacific and Asia generally because that’s going to be the heart of the global economy by 2030. It is universally agreed by almost every serious study- I base my facts on the Asia Development Bank, not just their very famous 2011 report which was ‘Asia Century 2050’, but also on their more recent figures which have, in fact, surpassed what we expected Asia to achieve in terms of its economic centrality to both global growth and also, global economic activity. That’s the first one- it’s good for business for us to go. The second one is the systemic self-interest and that’s the wider normative argument. So I very much believe that the international rules-based order by which we live under and that we helped and as Britain too found in the post-war period that it is a good thing. You can challenge that and say that you don’t think it is or it doesn’t live up to its aspirations and we can debate that back and forth, but I believe it’s a better thing than some of the things on offer and if you go into the report a little bit, you can dig and scrape at what I’ve investigated in terms of some of the debates that are occurring inside Chinese academia and have been since the financial crisis, around this topic Tianxia, which is a Chinese imperial concept which has been- if I can put it this way, if you remember Huntington and The Clash of Civilizations. So not everyone you meet in China at the academic level is going to be believing in Tianxia and imperial Chinese precepts but in the same way that Huntington defined the whole debate for at least 10-15 years in the West, the way that that civilizational thing became ‘either you argued against it or for it’, it had a dominant role in academia. You will find that in Tianxia and the tributary system in some of the imperial precepts in Chinese academia. Much of my work on that, by the way, is completely borrowed from experts who know far better that I- Bill Callahan at the LSE who’s a great expert on that, and I also look at Zhao Tingyang who is one of the great writers on Tianxia in China.
So those are the two structures- it’s good for us financially and there’s something to say that we have an oar in this, you know, we have stakes of our own. And the reason that Tianxia and some of the stuff that I point out there is being probably something we should either try to get Chinese academics to define, or we should try to let it evolve is because it has inbuilt in it a sort of hierarchical nature, and you can argue of course that the current rules-based system is hierarchical but I would debate that and say that in fact, there’s nominal equality. States under international law are nominally equal- they can sue each other at the WTO, they have in the General Assembly equal voting rights, some are equal more than others for example, in the Permanent 5, but I’d say that that’s an exception- the entire system is not built on hierarchy of power. So, what can we expect when we get there? What can we expect if we do go to the Indo-Pacific? Well, we can expect a region that is not just defined by US-China rivalries although many of us in the West tend to see China’s rise through the perceptions of Thucydides, Clash. You know, in many cases, this is a bit European-centric. Actually, India and China also have their own rivalry and their own game. And also, Japan and China have their own set of tensions and their competitions. These are not outright gunboat diplomacy and rivalries but there’s something there- there is a sense that in terms of power projections, in terms of naval build-ups and modernization, in terms of port strategies, in terms of even- I mention someone who’s quoted here: An American naval scholar saying that when he was in Beijing conferences, he couldn’t not hear the word Mahan mentioned by at least by one or two of the Chinese attendees and that Mahan, Alfred Thayer Mahan who was a great US naval strategist from the nineteenth century who himself was studying the British empire and looking at how sea power and sea commercial trade are both unified together, that this is a part of the thing that Britain will go out to.
We’re not just going out to a nice region where trade is only happening- it’s trade and it’s geopolitics at large and because as I mentioned earlier, the stakes are quite large. They’re not just large in terms of financial terms, in terms of 50% of shipborne trade increasing and going to the region, it’s not just large in terms of the structure of the system, the debate of the system happening out there, it’s not just large because India and China make up 40% of the global population. This is important to Britain to go to and also important to engage in these debates- important for Britain to establish itself as an economic partner in many of these countries, and important- and I am very careful with this phrase- not take sides but certainly support the system. I entirely believe that as China and India rise, they have a right to evolve the rules-based system, they have a right to more power within it. That is not a thing that I argue against. Indeed, I think evolution is what confers legitimacy to the very system. However, when you start to build artificial islands and militarise them, then you’re moving outside of what we might accept to be as evolution and going into the realm of revolution. European, and I’ll wrap on this- the reason that we cohere to the rules-based system is not just because, as one might perceive, our interests are guarded by it- yes they are, to some extent, but because we fought and died in large numbers. A lot of European blood has been shed trying to build this system. We now have 60 years of fairly peaceful relations on this system and we’ve decolonised under this system, and done great things for a lot of countries under this system including rising China and India. So with that, I can’t cover everything in the report- I do urge you to have a look online at it and I will open myself up to my fellow participants and colleagues. Thank you.
SIR HUGO SWIRE MP
Thank you John. And some may want to discuss a bit more about Russia in the region, and also the Chinese threat to Silicon Valley and more about the post-war settlement Bretton Woods and the re-writing of the international system, how the systems work- been attempted by China to take power, things may change but the good news is that the Chinese have Tianxia, North Koreans have Juche, we have the GREAT campaign. So I can hand over now to Mr. Hayato Hosoya. Oh no, not at all, I’ll go to you.
VEERLE NOUWENS
I don’t really mind, it’s okay but thank you so much. And thank you for having me here John and Sir Hugo. Just as John wasn’t able to cover just about everything in the report, I also, in my short five minutes, won’t be able to do so. I think it’s a fantastic report, certainly really covers just a variety of issues that we see within this idea of the Indo-Pacific. And I think a lot of the issue that we have about defining what Global Britain’s role in the Indo-Pacific is going to be, is that we don’t really know what the Indo-Pacific is as a strategy, where its borders really lie- there’s various interpretations of this. So that’s one thing but that aside, John has eloquently said that the Asia-Pacific region- Info-Pacific region, my bad- is going to be a dynamic economic force in the global economy.
I couldn’t agree more and I think it’s- he’s spoken already with reason why the UK should be there and should be present and have a more proactive role. I think that it should be doing so in various ways really- it can do so bilaterally. John, in his report, pointed out a number of different countries that the UK should be drawing its resources into such as Singapore, such as Japan, such as the countries in the Quad, and also do so on multilateral platforms such as the ASEAN, with the Quad itself, the FPDA comes into play- these are all very valid points. But I think when we start talking about the UK’s engagement in the Indo-Pacific as a counter-balance to China, then I think it kind of defeats the purpose of why you’re there. Yes, there are ties between, certainly, Chinese economic activity and in my view, Chinese more security-focused objectives. It is logical that where you have investments and where you have chokepoints in your energy routes and in your trading routes, you’re going to want to protect those. So I don’t think we can say that economics and security do not go hand-in-hand- they absolutely do and I think that’s the case for China as it is for others. What we’re seeing in the South China Sea is certainly worrying- I think that the landing on the bomber, at least in the [inaudible], most likely will see developments in the Spratlys as well. And this goes complacently against assurances that the South China Sea and the Spratlys would not be militarised- and that is a cause for concern, not only for us given that we depend on trade routes in that region as much as countries in the region do. But for countries in that region, this is really a pivotal moment of trying to understand how they can pave out their future together with partners like the UK. But when it comes to what the UK can do, absolutely this is an economically vital area for the UK- it should engage economically.
Post-Brexit, it is also going to have to redefine how it engages with ASEAN. When it engages with ASEAN and China tries to [inaudible] its future with ASEAN it will need to do more, quite frankly I think, than simply trade with countries in the region. So there needs to be more investment in the region, there needs to be more of a strategic outlook as to how you work with countries in the Indo-Pacific region, and specifically in South-East Asia. I think South-East Asia, and this is a personal bias having lived in Singapore, is fascinating and I think you were right to point out Singapore, absolutely, as a key player. But there are more countries- you quite rightly defined various opportunities. I think you say a US-aligned group of countries in the Indo-Pacific and also a non-aligned group of countries that you can engage with. I would honestly go beyond that- you haven’t mentioned Indonesia which is a vital player in the region, you haven’t mentioned Vietnam, but you also haven’t mentioned- and I think this is where we come into tricky territories- what about Chinese-allied countries or countries that have swayed towards more engagement with China than with others. I think the UK needs to have a balanced approach in that sense- we can’t simply carve up the world. There’s enough for us to engage on within the region without pinpointing certain countries to engage with and others not. So that’s certainly an issue.
Then in terms of the security domain, the maritime domain- how does the UK engage in that? We’ve seen that the UK has three ships in the region which is a good contribution to regional security. There’s more to be done but there’s also real limitations for the UK and what can be done. So whilst the maritime domain is absolutely crucial to regional security, to international security, I think there’s ways to engage with in counter-terrorism, ways to engage with organized crime, fighting illicit trade and combatting on numerous levels really, in that security domain. So, don’t really know how to sum it all up and tie it all together because you’ve just really touched on so much, but these were my two cents. Congrats for that, it was a fascinating read.
SIR HUGO SWIRE MP
Thank you very much and again, on the ASEAN issue, we may want to discuss in a minute how some ASEAN countries are more biddable to China than others- Cambodia, [inaudible], Vietnam and so on. And on the Belt and Road, it was brought out again this morning its disconnect between the West in Asia, or China in particular, China and the West in terms of the short-term versus the long-view. British private companies are crawled over by teenage analysts who know far better than the management and demand quarterly growth. China, they take a much longer view as you all know, and somebody said to me when I asked if there were any military implications of the Belt and Road, they said ‘No, no, no- for the first fifty years it will be purely commercial. After that, anything might happen.’ Right, and with no further ado, now I do hand over to Mr. Hayato Hosoya.
HAYATO HOSOYA
Thank you Sir Hugo and also thanks John for inviting me to this wonderful event. I read the report and it was very fascinating and the whole discussion was covered in terms of China so I think I should talk about the North East Asia region, especially its relationship with Japan. So in terms of the UK-Japan relationship as John stated in his report, London with Tokyo has developed into a highly developed secure relationship around 2+2. As a matter of fact, UK was the fifth country to establish its 2+2 with Japan- though it was the fifth but the frequency of these 2+2 meetings is quite frequent between Japan and the UK. So Australia and Russia were earlier in establishing their 2+2 meetings with Japan but in terms of frequency, in terms of 2+2 has been holding this debate and this meeting for the last three years every year. And as you stated, the agreement between Japan the UK last year was quite important because it was the first time in the history of Japan to hold a joint-development of weapons with a country except the United States. So for the past 50-60 years, Japan was only coping with the United States in terms of a US-Japan alliance. However, it was the first step for Japan to actually step outside the US-Japan alliance and to reach out to the UK for this joint weapon development. And also, it wasn’t just about the cold development of weapons but it was [inaudible] I think- Japan had its first joint America exercise with the UK, which was also an opportunity for Japan to hold a joint exercise.
Bu then we have to think about the reason why the UK is succeeding in terms of strengthening its relationship with Japan. I think there are three reasons that we have to focus on. One is their relationship with the United States, as you mentioned in the report- because US and Japan are enjoying its relationship, a string alliance between the two countries for 50 years. It’s quite easy for Japan to choose UK as its strategic partner because UK has its good relationship with the United States. However, that’s not the only reason.
There’s reason number two which is the historical context between Japan and UK. It is quite surprising because, as you mentioned in the report, Japan was a former for. I mean, UK and Japan fought during World War II which was 60 years ago. But we have to also remember that before that, until 1923, UK and Japan had the Anglo-Japanese alliance. It is kind of interesting but in the Japanese context is regarded quite important in terms of the Japan-UK relationship. For instance, I had the chance to go to Etajima, which is a which is an island near [inaudible] couple of years ago. We have a Japanese naval academy in Etajima and if we go there, they have this memorial hall, a museum which has drawings and fixtures of the Japanese naval history, which date back to the late nineteenth century. And of course, the Japanese navy kind of admires Togo which fought with Russia back in 1905 and destroyed the Russian Baltic fleet. So they have this huge of him, you know, Togo and next to him is the huge portrait of Admiral Nelson, which is a famous figure in the UK naval history. We have the portrait of him and also his lock of hair- his hair is in this locket which is there and it was kind of interesting for me to see that but it kind of explains that there is historical context in the Japanese navy. And also, it’s not just in the navy- I think the whole context of historical relationships between Japan and the UK is helping out the UK to strengthen its relationship with Japan. And that’s reason number two.
Reason number three is the current administration- so as you may know, Prime Minister Abe is quite- he has a strong mind. He’s trying to push forward Japan to be a country which could be- could defend its own country in terms of its law and in terms of its ability in terms of war. So he became a Prime Minister- first time as a Prime Minister- in 2006. He proposed this idea of ‘Arc of Freedom and Prosperity’, which kind of overlaps with the Indo-Pacific idea, and this is staying with the Abe administration until now. So that’s why, I assume, that’s why Abe is quite looking forward to strengthen his relationship with the UK. However, these three reasons might change in the future because for instance, in terms of Abe, he might resign in the next two or three years. And who knows who will come after Abe. There are many leaders in Japanese politics which know US-Japan relationship is important and they should strengthen the US-Japan alliance. However, nobody knows whether those leaders- the future leaders- are interested in strengthening its relationship with the UK. So those reasons are quite important in terms of Japan and the UK’s relationship with the US, and also the historical context, and also the political power which is in charge of Japan. And this doesn’t apply to just Japan- it also applies to other countries I think. For instance, reason number two, historical context – the friendship that has been going on for decades between Japan and UK. But who knows with other countries- other countries have their own historical context with the UK and that might be good or bad. So we have to think about these historical contexts and also the other two reasons.
However, talking about the North-East Asia region, I must point out that the paper wasn’t covering the Korean peninsula which is quite interesting because I think it was in the news today about the British media being invited to North Korea to cover the closing of the North Korean nuclear test site. And it was the US media, the UK media, Russian media, Chinese media and South Korean media. So why was the UK media invited? Like, I see there is kind of an opportunity, a chance of UK intervening into the diplomacy in the Korean peninsula. So that’s my question to John and [inaudible].
SIR HUGO SWIRE MP
But of course, the UK is not party to the Six Party Talks, although it would look to me like there party talks are going to be bilateral rather than Six Party. Or trilateral.
HAYATO HOSOYA
That’s the interesting part- UK is not part of the Six Party Talks. However, they were invited.
SIR HUGO SWIRE MP
Just the indulgence of the Chair, just one issue on the- you talk about historic relations and of course, the UK 2+2 has just been supporting Japan in peacekeeping and doing military stuff which, before, it was not doing for reasons we are all familiar with. But it would also be true to say, would it not, that the disputes we had sort of 4-5 years ago, between China and Japan over the islands in West China Sea- we saw quite bad protests in Tokyo and in Beijing, have died down a little.
HAYATO HOSOYA
Is that the question?
SIR HUGO SWIRE MP
Well, in terms of that, in both Japan and China, the temperature has gone down in.
HAYATO HOSOYA
Well I think it has gone down. About 10 years ago, maybe 5 or 6 years ago, there was a huge tension between China and Japan of course because of the regional dispute in terms of South China Sea. But it was not just a regionalised dispute because it was kind of related with the [inaudible] issue and also other historical issues too. It was combined into one which arouse a huge dispute between Japan and China. But nowadays I think Prime Minister is acting quite wisely in terms of trying to avoid this historical context between- historical debate between – Japan and China. And of course, the issue and debate around the South China Sea still remains. However, the tension among the people of China and Japan is staying in the low context because it hasn’t involved the whole population to be involved in this debate.
SIR HUGO SWIRE MP
Thank you. It is a remarkable report, this, for those who haven’t read it and we could debate it into the small hours of the morning and we’d only still be skimming the surface. But I’ll throw the floor open- if you could say who you are, where you’re from and ask questions through me, the Chairman. Thank you. Sir.
ANDREW LEUNG
Well thank you very much indeed for a most enlightening dialogue. My name is Andrew Leung. I used to be Hong Kong’s chief representative before Carrie Lam. In fact, I know a distinguished member of the family at [inaudible]. My question is focusing on the dynamics in the Indo-Pacific region- there’s no doubt that the region is going to be a contest theatre for emerging powers, existing powers. When we talk about international relations, it’s not just about theories, it’s about power. Armed force power, we talk about comprehensive power, and relative power, strategic power.
Now in the case of the UK and Japan vis a vis China, there’s again no doubt especially with the rise of China. And then the case of the UK, particularly after Brexit. And of course with the unpredictable superpower under Donald Trump. So I think countries are beginning to recalibrate their approach to China. In the case of Japan, by the recent visit by China’s Prime Minister. In the case of India, again, the meeting. So my question to the panel is that, bearing in mind these power dynamics- relative power and so on, so forth, and strategic power- what kind of policies the UK would adopt towards a rising China? And what kind of policy would Japan adopt, bearing in mind of course as I said, the unpredictable superpower and the impact on world order?
SIR HUGO SWIRE MP
And what would relations look like between China and the UK over Hong Kong in the next decade as well? Right, Veerle first.
VEERLE NOUWENS
Oh gosh, you’ve really not answered a very easy question. I think I will pick China- so what should the UK policies be towards a rising China? Is that correct? Was that your question?
ANDREW LEUNG
What strategies will the UK and Japan adopt in the [inaudible] policy changing dynamics towards a rising China? Not directly necessary in the confrontational sense but how, what-
SIR HUGO SWIRE MP
To accommodate rather than to confront.
ANDREW LEUNG
To accommodate a rising China, or to gain benefits out of it.
VEERLE NOUWENS
Sure, I mean- okay, let’s take Belt and Road. We’ve done a lot of work on the Belt and Road. The UK has expressed its interest in joining the Belt and Road or working with the Belt and Road, and I think that’s a great way to accommodate a rising China. Look, Asia-Pacific region, I mean, we spoke of ADB statistics- according to the Asian Development Bank, until 2030, the Asia-Pacific region will need 1.7 trillion US Dollars each year in infrastructure investment. China is meeting that gap- it’s helping meet that gap and that deficit- that is dearly needed. Now you can think that it’s a one-and-all grand strategic ploy to dominate the region in Chinese investment insure. Chinese investment will have some sort of influence in economic terms, potentially in political influence terms, but you can also work with it. China has expressed an interest in working with other countries, in third countries, implementing and rolling out the Belt and Road- take them up on that offer. Now that is difficult at this moment- studies have been done on the Belt and Road. I think 80%- roughly 80% of contractors are Chinese, roughly 20% are local host economies and only around 10 upwards% or so are third countries- so there are real challenges there. But I think to dismiss this effort is unhelpful. I think there is a need to engage with it, to engage with China to work together on the Belt and Road to make sure that these projects are successful, that they truly help local economies, that they are sustainable, that they don’t have negative impacts or at least that those negative impacts in environment, social, economic aspects are mitigated. That’s an opportunity- that’s an opportunity that the UK can certainly gauge on. But there’s more to be done- the UK can engage through the Quad, through Japan, through India, on setting up other infrastructural initiatives. I think this is a way to not necessarily make it such a bipolar discussion, there are both costs and opportunities and that’s certainly one of them. It’s challenging but that’s one to be pursued.
SIR HUGO SWIRE MP
And of course, we join China’s bank in the [inaudible] of opposition to the United States.
DR. JOHN HEMMINGS
Can I put it into- just real quick- just because I think this is really an important point and you mentioned you don’t like the theoretical stuff, it’s all about power. But actually there is a good theoretical approach that’s happening right now in academia on how countries are getting along with each other and I’ll just be very quick on it. If you think about balancing, building up your military force, joining alliances- all that kind of good Mahanian stuff. But if you balance with one hand and you engage very deeply with the other with the same state, for example China, I think Medeiros calls that Hedging. So countries are now hedging. So I would describe that as very much a useful approach for Britain is to hedge- it’s that ‘yes we should develop very close ties to BRI, also to other infrastructural projects. We should be aware of the geopolitical things that are occurring in the region but we should also be willing to engage with some of them because there are power balances that may not be favourable to our own sea lanes. Thank you.
NICHOLAS McLEAN
Nicholas McLean, Tories Against Brexit. I wanted to bring Brexit into the debate because Global Britain and its interest in East Asia, South Asia has been there for a very long time. My question to the panel really is how much difference does Brexit, if it happens, make, and will it lead to a delicate parliamentary system where nothing is certain about the future- there’s still a lot to play for? I’m very very worried by what I feel is misleading rhetoric from some people in Parliament who seem to think that the only way we can engage with Asia is be free of the so-called shackles of Europe. That doesn’t seem to hinder Germany who sells four times more to China than we do-
DR. JOHN HEMMINGS
It’s not about selling.
NICHOLAS McLEAN
-or the fact that you need trade agreements, and we should be having a trade agreement with India- a nice [inaudible] economy. In fact, the reason the EU doesn’t have a trade agreement with India is that the British blocked it because we didn’t want to make concessions on visas. So I think there’s a need for clarity.
SIR HUGO SWIRE MP
And one of the reasons Germany’s lost more to China is because Germany makes more heavy machinery that China wants which the UK doesn’t. Quickly on that one?
DR. JOHN HEMMINGS
Just very quickly- I think Brexit is the stalking horse back here and you should address it but my point is that: what next? We have to move forward. Yes, short-term there will be bandwidth problems with the Civil Service dealing with exiting the European Union and to be fair, just to add a tiny dash of personal, I voted Remain. But now that we’re out, you know, what’s next I think is the force of this paper.
SIR HUGO SWIRE MP
Again to quote Niall Ferguson this morning- he said, ‘Nobody outside the United Kingdom is remotely interested in the issue of Brexit. However, it does dominate us 24 hours a day.
CHRIS PAUL
Chris Paul. In fact, I spent four years with [inaudible], the Chairman of the [inaudible] Bank [inaudible].
For me it’s very naïve to think that China is anything other than controlled by the army and police. 90% of their economy and everything is controlled by the army and police. And if you think you’re going in one equal terms, forget it. Don’t even go. Because they link trade with military, military with trade. It’s exactly that. For me, the real potential is Japan [inaudible]. Now to me, it’s Japan and India because the Chinese only have one philosophy, and it’s ‘Me, me, me, me and me’. With the Japanese, once you have an agreement, you don’t need any new agreement, just a handshake. You can trust the Japanese, but you can’t trust the Chinese- it’s a game they play if they can get one over on you then you are to blame, you are the fool, you are the idiot.
So Mr. Hosaya- what is it the UK can do? You’ve opened up, you’ve got an equivalent CIA now, you’ve developed your policy. We’ve got Eurasia happen, and that is a significant factor with Russia coming along with [inaudible], picking up with [inaudible] a hundred odd years ago. We are two island nations. For me, it’s England-Japan- India. How do you make that work?
HAYATO HOSOYA
You mean the relationship in those three countries? Or just-?
SIR HUGO SWIRE MP
As a bloc, as a viable bloc. China, I mean India- I’m thinking of an acronym to beat BRICS, or even Brexit. We’ll think of a name- a prize for anyone who thinks of a good one.
HAYATO HOSOYA
Yes well, I mean, if I quote what Prime Minister Abe said- Japan and UK share a common interest and also law. And also, Japan shares the same with India according to Prime Minister Abe- he states that India is the largest democratic country in the world. So as you stated, maybe Japan and the UK and India have a potential over there. However, I don’t think that’s the only solution to this whole question because maybe China is controlled by the army and also by the police. However, because they established their navy quite recently and they’re trying to become a world power. I mean they’re already a world power but they’re trying to become a more powerful nation which means they have to follow some kind of international order as well in terms of coping with the whole international community. So I agree with you that maybe there’s a potential in Japan and the UK for the future, and of course Prime Minister Abe and his diplomatic advisors are kind of trying to connect the whole region with this ‘Arc of Freedom and Prosperity’- that’s what they said ten years ago, but I don’t think that’s the only solution here. I think for Japan, there’s many options out there, and there’s options out there for the UK too, and India-UK-Japan is one of the options for both countries and China is also one option for us.
CHRIS PAUL
And if we’re talking from a selfish perspective, the liberal that I am, bearing in mind port trends in Kazakhstan, you know –
SIR HUGO SWIRE MP
This is what we call a supplementary. Not gone through the usual channel in this rules-based Chairman. Yes, there was somebody here- you, sir and then the gentleman behind.
PAUL SHAW
Paul Shaw- King’s College and Birmingham. I haven’t read the report but it sounds admirably ambitious. But can the panel help me- reading the sceptical reactions we’ve been talking about economics. What is it that this will do that would change the decisions investment managers and global companies who will go looking for advantages where they can find it in the region- which is great, it might be India, it might be Japan? What is to be done to change that or to improve that? If it’s security and diplomacy, presumably the underlying project is sometimes down from China. Well, we stopped trying to think it would make much difference in 1968. Since then, our global percentage for power and income has dropped certainly relative to China. So what actual leverage do you think we could maintain at such a distance with defence budget has a 6 billion pound [inaudible]. And perhaps more important are the priorities, how do we say that this is more important than security in say Eastern Europe or North Africa or the Middle East?
SIR HUGO SWIRE MP
And on the dynamics changing, when you have the biggest threat to the Silicon Valley now that Jack Ma, the Chinese are beginning to make serious inroads into Silicon Valley in terms of technological superiority. So is this relentless march from China- is it- can you accommodate it all?
DR. JOHN HEMMINGS
So I want to make clear we’re not going to balance against China. I admire China, and I think that China has a lot of things that it’s doing that we can engage with. What we’re going to do is shun the rules-based order and we’re also going to where the money is, and we’re going by sea where it’s particularly going and we’re going to protect our shipping by sea because a lot of other people are moving there and trying to do things with sea links. And we have the capacity, we could build up more capacity and I argue for a slow incremental push towards 3%. If you argue that we had around 5% during the whole of the Cold War, defence spending to GDP, you know 3% is not that much. I’m depressed, as many people are, in the security committee, how year after year after year every government comes in saying they’re going to have more money and they just take and take and take- they don’t even allow for inflation. I’m not arguing that we should go ad balance against the Chinese or do anything like that, but we should be a part of the game- there’s going to be a lot of shifting going on, a lot of people have been doing deals, we want to be in there. And as a power with ships in the region, we’d be taken seriously on some of that. We should finance them from the city and we can also build more commercial and maritime knowledge which we once were the best in the world at.
SIR HUGO SWIRE MP
And back up soft power with hard power otherwise-
Gentleman over there.
DR. JOHN HEMMINGS
Otherwise, it’s meaningless. Thank you.
SHAO
I’m Shao from [inaudible]. I just have a question about the UK’s policy towards Asia because I think some of the FCO issues they’ve been talking about [inaudible] of Asia, putting more emphasis on Asia. So how would you like to [inaudible] importance of Asia with Transatlantic relations and other relations after Brexit?
SIR HUGO SWIRE MP
Very good question- there’s no one on the panel from the FCO but maybe someone from the panel who was once connected to the FCO but no longer. But does anyone want to answer that?
DR. JOHN HEMMINGS
I’ll say quickly in the report, and then I can hand it over to Veerle. In the report- by the way, I don’t say this is going to be the number one priority of the British government. I follow the FCO’s recommendation that it’s the Atlantic, the British Channel and the Indian Ocean in that order.
VEERLE NOUWENS
I think as your report makes clear, this is not going to be just the number one priority but it is a strong priority. You know, Shao, quite frankly, of course this is going to have to be recalibrating I think some of the UK’s foreign policies not only just within the Asia-Pacific region but also its relationships with other countries. And its relationship with China will also have to be discussed I think, when it comes to not putting forward, as John has said, the image that the UK is there to contain China. I don’t think that is the case- I think we have to see this as a, as you stated, an economically important region that is also important for the British economy quite frankly. Important and also an opportunity for the British private sector to engage further. So that is something that I think the UK wants and the UK should want to engage in and I think that’s also something that a lot of countries in the Indo-Pacific region would welcome- that relationship, that growing relationship with the UK that is redefining its foreign policy as a Global Britain.
SIR HUGO SWIRE MP
But isn’t China also redefining itself- isn’t this the first time that China with its Belt and Road Initiative has actually sought to expand outside China in such an expansive way?
VEERLE NOUWENS
Can I just quickly add on to that? The Belt and Road is not an entirely new concept. It has initiatives that have been global, that have been incorporated into that- it started with a ‘Go West’ movement as well within China, it’s been developing and investing in Africa including in infrastructure for decades. So it’s not entirely a new thing-
SIR HUGO SWIRE MP
It is something new isn’t it, really? It’s not just getting resources from-
VEERLE NOUWENS
I think it’s a rebranding, let’s put it that way.
SIR HUGO SWIRE MP
You don’t think it’s part of President Xi’s determination to do something-
VEERLE NOUWENS
I think it’s a vision that has encompassed a lot of things that China has already been doing and, to a certain extent, yes there’s been a rebranding.
JOHN DOBSON
My name is John Dobson. I write for the Indian newspaper [inaudible] Guardian. Belt and Road actually links in very nicely with my question because as the gentleman over there said about China forgetting actually, I spoke to a number of Pakistani industrialists who are trying to get involved in the Belt and Road gang through Pakistan which is a very major exercise. They say, ‘We can’t get in’, and there are other Pakistani people I speak to who are really worried that Pakistan will become a colony of China because there are so many there. It does seem to me- I hold no grief for India at all- but through my work with the newspaper I began to realise that the Indians are very worried about the Belt and Road going through Pakistan, not just the disputed front at the top of the country but there is, they are very indifferent towards China. From our point of view, if I were the Foreign Secretary, I would be putting all my, most of my eggs into the Indian basket because I think that is where you’re most likely to get trade relationships. I would not bother with China at all other than- we have to buy their things, we’ll try and sell their things as well. So that’s where the bias would be, long after I’ve gone I’m sure.
SIR HUGO SWIRE MP
And of course India, as I said earlier, are slightly paralysed by what China is doing in their Southern flank, in their own backyard of Sri Lanka and Maldives.
JOHN DOBSON
Absolutely, absolutely. That’s why they’re buying Russian submarines.
SIR HUGO SWIRE MP
Yes. You sir, gentleman at the end.
MATTHEW HENDERSON
Thank you. Matthew Henderson, [inaudible]. Picking up on the points that you’ve already made, I’d like to note that democracies are not good systems under which to try to run strategies and [inaudible]. It’s not the case with authoritarian systems which are [inaudible] especially if your President is [inaudible]. So in that point of view, we’re up against someone [inaudible].
I’m very interested in this conflation of the rules-based and[ inaudible]-based and I would argue that while that shining armour fits Britain very well, and I believe it fits beautifully Japan to a degree, I think the fact is that the other force for describing this massive BRI thing is not rules-based. As our colleague said, draws together some very long, deep-rooted transactional relationships with very dysfunctional aims that impact players to create a desperate mass of action moving forward on a very broad front. Now if this succeeds, I’m not necessarily convinced that British interests or the interests of the rules-based world will be furthered back very much. If it fails, it’ll probably be the same is also true because there’s a lot more in the international than China leading us also to reflect on the fact that we’re taking it as a given. The fact is it’s fuelled with a huge amount of space and banking on from China, and [inaudible]. Now we have to be very sure there is a different set of risky equations around how much you can spend for, maybe in around fifty years [inaudible]. Fine, that’s the idea. This does not fit with the Davos-approach to Win-Win, and I think we need to be very clear about that.
SIR HUGO SWIRE MP
And the example, I suppose, is also- does China have the write to say they want to rewrite the rules-based system because of its rise and its different position in the global front. John?
DR. JOHN HEMMINGS
If they have a write to, then we have a write to response. Of course, I mean this is international politics. All of us in the room make the rules. As I said previously, I admire Chinese history and its civilization but I’m afraid they don’t get to make all the rules unilaterally- we are in the room, this is a conversation. Europeans who have been through power-based systems where power itself and hierarchy were the things that set the relations between states- I would advise them would be not a good idea. Particularly because, you know, how do small states fare? How do we govern relations between states? All of that starts to break down when it’s based around power, and we’ve seen that on governance issues already with, as we said the BRI projects- they’ve been plagued by bad governance and if you do that at large, it would corrupt the entire system.
SIR HUGO SWIRE MP
Okay, gentleman on the right first and then gentleman on your right next.
ROBERT
Thank you Sir Hugo. Robert [inaudible]. Serving member of British military, starting my postgraduate at King’s College in September. My question concerns the suggested incremental rise in defence money from two percent of GDP to three percent. I’m assuming it works out to a really good idea. Where would you consider, John, the additional spending of resources going towards the Indo-Pacific region, into Britain’s military role that’s currently split between NATO’s presence in Estonia, continued support in Afghanistan, also bilaterally with Afghan training missions? Where do consider the capability to be developing in the Indo-Pacific- would you consider it maybe with ASEAN, or developing more bilateral relations to come forward with Japan or Australia?
DR. JOHN HEMMINGS
So I had borrowed someone’s brain for this- James Rogers, who is the Director of the Global Britain Project. I have to say, my research on the three percent figure is actually his research. I will say quickly that naval flotilla in the Indian Ocean perhaps working with the Australians, working with the Indians or whoever, working with the Chinese even. James, would you care to add anything about what I’ve missed out, if I may introduce you in this awkward way? Maybe just some thoughts to what Robert’s asked us?
JAMES ROGERS
Well I think it would be a case of building on what’s already been established in the last few years. There’s been some movement of the UK which began in the early 2010’s towards the Indo-Pacific region, the reason being a centralisation of the role it’s been playing in Britain’s wider posture. So we’ve seen, as John pointed out, the emergence of new relationships with Japan, re-established relationships- new relationships with Australia, India and some other states, and there’s already been a movement of British interest into the region corresponding with its own impact both economically and geopolitically. So I see no reason why if we were to leverage additional defence spending or military spending, that this cannot be used to further this and project Britain into the region further. After all, if Britain’s not going to be in the region itself, it’s going to be out of the equation. So there’s no reason why in the years to come- let’s say in the next 10-15 years- the UK cannot procure more vessels and establish its position in the region more actively than it has in the past. And also, not just only in actual hard military aspect- it can go as far as to dissuade conflict or contributing to helping prevent conflict in the region from breaking out but also for humanitarian reasons because after all, British assets sort of poured into the region in 2013 in relation to the typhoon that struck the region.
DR. JOHN HEMMINGS
The French. We often see- you know, everyone’s thinking, ‘How can the British do this?’ but we don’t just see the British as a unitary actor. We see them also working closely with France.
MARK
Mark [inaudible], I’m with the [inaudible] and the editor in China [inaudible]. I’ve been debating [inaudible]. I have one comment and one question. So my comment is…
SIR HUGO SWIRE MP
Could you speak up a little bit? Sorry.
MARK
So what’s — about last year is how China sees the new policy like the Global Policy- so it’s standing up and taking up a much more global role. This started with the speech at Davos and actually, just little bit before then. One point about this which I found was very interesting is how China’s trying to take up a stance here but it’s actually justifying its success to the nation of how it is increasing its perception and its reputation amongst the world. You look at the [inaudible] Chinese nation and indeed the world. He actually made that point specifically this year, earlier this year- he was talking about how China’s improving its reputation around the world and this is partly because of globalisation. What’s interesting about this is that if you raise the bar of how China is perceived by Britain and the world, you ought to maintain it. So having worked out this global policy, you don’t want to then damage it, or in other words, China now has a stake in the game to straighten its reputation.
My question is actually more about how- I can only see how China and the UK engage in Asia. So the moment it seems to me UK has a delicate deal where we have, with China, we kind of agreed not to criticise China directly in public, not to make public statements. And in response, China has broken what it normally refuses to do and that is to basically- they normally don’t separate defence and economic issues. But on the other hand, Britain has been making some statements with have slightly escalated- so like ‘What are we doing with warships in Asia’. So I think we’ve got this where we can both have trade and China doesn’t seem to- it seems to kind of allow this. So my question here is, how do we maintain this kind of balance- it seems quite effective going forward in terms of more engagement in the-?
SIR HUGO SWIRE MP
And it is your belief that China by being more aware of its international reputation will make serious changes to human rights in Tibet, or these other issues which we don’t talk about?
MARK
No, I don’t think so. I think those are domestic issues but if you’re talking about issues like the environment or maybe issues on trade and what about other issues of rights, women’s rights- it’s quite good at that. There’s a whole plethora of areas in between- why engage with people on an area which they consider as crisis generic when you can move ahead on issues where you can work together on?
SIR HUGO SWIRE MP
What’s your response to that?
VEERLE NOUWENS
Can I just quickly, on that last point you said? Absolutely move ahead on issues that you can engage together on- that’s vital and that’s why I think the UK can actually, despite its difficulties and challenges in doing so, engage on things like the BRI. But I don’t think it needs to be either-or. I think the UK should still- I mean the UK has its normative values and principles that it stands for and I think that should still be underscored. I mean there’s nothing wrong in saying that these are the values that we hold dear and we would like to see those reflected and respected as well. It doesn’t need to be with either-or at all. Thanks.
SIR HUGO SWIRE MP
Gentleman there, with the blue shirt.
MEMBER OF AUDIENCE
My question to John is- post-Brexit, what do you think is the UK’s policy towards maybe immigration when dealing with countries like India and China?
DR. JOHN HEMMINGS
That’s a very good question, I know Theresa May didn’t like being asked that one. I think it’s very difficult for her- she had her hands tied by 51%, 53% of the population, and it really is quite- it’s the irony of global Britain. Advanced economies as I mentioned in this report, are essentially dealing with the outcomes of two decades of post-Cold War policies of importing cheap labour and exporting manufacturing. Of course, the pressure that’s held on that middle classes but overwhelmingly the working classes, has resulted in what we’ve seen- the election of a populist President on immigration issues that were inconsiderable thirty years ago, and a referendum with immigration being very high on your list. So of course, that arm is to hide behind the back. I always throw it open- you know, why is it a one-way conversation? Does India have immigration policies that can accept British citizens? Does China? It’s something that the advanced world doesn’t usually ask, but now that you’re arriving amongst the wealthy countries, perhaps there could be a reciprocal conversation going forward.
SIR HUGO SWIRE MP
It’s worth saying that visas in particular are the top of every single bilateral conversation between India and the UK. And I would just add that in the Brexit debate, when I was Minister for the Commonwealth, I regret the fact that some of my colleagues who were on the other side of the argument were sort of suggesting that if we came out of the EU, we would unlock the doors on immigration in the Commonwealth. And when you think, some of the Commonwealth countries include the likes of India, Bangladesh, Pakistan and Nigeria- it ain’t going to happen anytime soon, let me tell you.
Any other questions? Goodness, that is the most remarkably chaired event I’ve ever been to. We’re ending pretty much on time. Thank you very much indeed for coming. It’s a remarkable piece of work, and I congratulate you, John, and others who helped put this together. Thank you to the panel. Thank you all very much for turning up tonight. Thank you.