[music] please welcome to the stage, michael froman, president of the council on foreign relations. and dr. condoleezza rice, the 66th us secretary of state and current director of the hoover institution at stanford university.

this is a big room. it is a big room, yes. well, it's great to have to see you all here. and it's great to be part of this. apec ceo summit. and i'm delighted to have dr. rice here to be able to have this conversation. you know, it's been a rather tumultuous couple of years. it has been. we've seen the return of great power politics. we've seen the emergence of a real multi element rivalry with china, military, political, economic. we've seen global challenges like climate change and the pandemics, the emergence of new technologies like ai and quantum computing. some would say this is the most complex international environment we've had to navigate in the last 75 years or so. what the heck happened? wasn't this supposed

to be the end of history? the american century? well, certainly when i left office the first time around, from 1989 to 1991, the cold war had ended. we really thought that the era of great power competition was over . we had some agreement on a few principles that we wanted an open economy. we wanted to trade in freedom. we wanted, of course, to have no access to military power, certainly for territorial conquest of the kind of 19th, 20th century variety. and there was a disagreement about whether or not democracy was at the core of the future for some of us believe that it was maybe others did not. but we could not have imagined. i think what we see today and you really, i think, might recite it, the reasons when great powers get back into the arena in a conflictual way, it looks different because they bring a

lot of military force. they bring a lot of economic power. they shake the international system in ways that regional conflicts don't. and we now have kind of three fronts in a sense. we have obviously, in europe, the invasion of ukraine in kind of a kind of 19th century principles of a big country trying to extinguish its smaller neighbors. we have competition with china that i hope will not turn violent at any time, but our military forces, those of the united states and china, are coming into constant contact act in ways that i think are really quite concerning. and one of the things that i hope will come out of the meeting between presidents xi and biden is some kind of agreement for military to military contact, again, because we don't need an accident in the asia-pacific. and then finally, you have now the emergence of another problem with iranian backed disorder in

the middle east. so, yes, it's a very disorderly time and the international system is not very strong right now. the un is essentially not functioning in the security council. you mentioned covid. when you think about the way that it became my ppe, my travel restrictions, my vaccines, the international system was sidelined. and so it is a very difficult time and we're going to have to figure a way to reintroduce some sense of order, because this kind of chaos makes it extremely difficult for the people sitting in this room to know what to do in terms of investment, in terms of especially longer term investments, all of which we forget really do depend on a security commons and a calmer international environment. well, let's talk about that, because we were off stage talking about what the international order looked like at the end of the second world war, what the various principles or the

pillars of that were and how much things have changed since then. tell us a little bit about the three pillars that you've identified and where they are today and what do we hope to where can we take them going forward coming out of world war two? a lot of very wise people looked back at what had gotten them there. they looked back at the period between world war one and world war two, and they said we had currency manipulation, we had violent, violent conflict over resources. we had beggar thy neighbor trading policies. we had protectionism. um, that led to a depression and it led to a great war. so let's not do that again. and they came up with the notion which was really pretty novel, that maybe the international economy didn't have to be zero sum. it could actually be a positive sum game in which if everybody grew, everybody could be more prosperous. we would trade for resources, not go to war over

them. we would have some relationship between our currencies through the imf. we would have means for countries to get richer through the world bank. and it was actually a system that produced a lot when you think about china emerging out of that system, deng xiaoping deciding china's now going to join that international system. it worked very well. that really has broken down and we're seeing now not very much leadership on what you spent your your life concerned about. not much leadership on on trade. we are seeing when it comes particularly to technology decoupling taking place between the two largest technological giants, china and the united states. and so that's breaking down. then we had the issue of the security commons. people forget that the united states, after world war two took some really pretty amazing pledges and attack upon. one is an

attack upon all in europe. article five of the nato treaty. by the way, when the when the soviet union had exploded in nuclear weapon five years ahead of schedule, we took that pledge in 1949, an american agreement to protect japan, to later protect korea, and, of course, to protect the sea lanes that's being challenged. it's being challenged by vladimir putin in europe, but also no questions about the south china sea, about the taiwan straits claims by china that these are chinese national waters, american claims to the to the contrary, these are international waters and thus our military force is bumping up against one another. and then finally, some were convinced at least, that it's better to be an democracy than to be an authoritarian. and while i still believe that, i'm sure you still believe that there are others who who claim that we're really in a contest. so i think those big pillars,

international economy, that was not zero sum. so we didn't have to fight over it. my growth didn't have to be at your expense. a security commons where everybody was protected. and then finally, a what seemed at least to be a movement toward greater and greater democratization. those are all now challenged. and yeah, as you said, on a macro level, that system produced an awful lot of positive progress, including alleviating poverty for hundreds of millions, if not over a billion people. but it also created income inequality within countries between countries. people feeling like their way of life was being questioned. you talk about the four horsemen of the apocalypse and how that ultimately affected the domestic context in which american foreign policy and that international system has evolved. yes, i've always said that these four horsemen of the apocalypse, nativism,

isolationism, protectionism, these all seem to ride together and populism is the fourth. and it is sort of bundles all of these together and says those people that other are those are your they're the reasons you're not doing well. and for people for whom globalization didn't work very well, the unemployed coal miner in west virginia, the unemployed steel worker in great britain who goes and votes for brexit, you you do have we who believed in globalization, and i still do. and frankly, mike, i think globalization is a fact. it's not a policy. and it is still a fact. however for those who didn't benefit, we sort of left that thought behind. well, it was going to be beneficial because you could get cheap goods as a result of it. but if you were left with no skills and

no prospects, it's not so great. the story i always tell is that when i when i teach at the stanford business school, as i do, i'll always have a student of the following characteristic. s born in brazil, went to college at oxford. it then first job was in shanghai, now is in graduate school at stanford. your next job will be in dubai. moves easily around the world and that's the world that we all live in. but many people never live more than 25 miles from where they were born. their prospects are different. their expectations are different. and when populists come along and say those, those globalist, those elites, they aren't your people. they come to me and i will i will be your, your, your saving grace. that's what we're seeing in so many places. and so we've got to deal with that domestic unease first. and then i think we will do better in

certainly in terms of american leadership, but in terms of leadership globally as well. to go back to the international context, the cold war basically lasted 40 years. you were present at the creation of the post cold war period, which basically lasted 30 years. and that is now over. we don't know what this new period is or exactly what its defining features are. your colleague neil ferguson has talked about polyamorous cold war. that sounds like neil, doesn't it? it does sound like neil doesn't it? by which he means countries will. it'll be sort of coalitions of the willing coalitions of the ambitious variable geometry. you're not with one and against the other on every issue. you it's not really bipolar. it's not really multipolar. it's much more complicated. and i think about it as the best case being a country like india, which loves the united states for technology

cooperation on civil nuclear cooperation, increasingly strategic cooperation on but loves iran for oil, loves russia for arms and it's going to require a very different kind of diplomacy for the united states to manage the complexities of not saying you're with us or against us. that's right. but you're with us on this issue. we understand you've got other interests. how do we manage that? and do you think the us can manage this much more complex international environment? well, i think i think of it more as concentric circles. i do think that there are a group of countries that largely because they share values and largely because over a number of years the dna in those relationships is of shared interest as well. that that will be there. so i think of japan, australia, the i think of the european bloc, i think of south korea. there these are countries i when people talk about being

in the us orbit, that's not the point. these are alliance forces and relationships that have just been forged through a number of difficult times and they're going to mostly be together on mostly everything in the european case, of course, mr. putin has assured that there are stronger ties than ever. whether it's the european union and the germans finally realizing that maybe it wasn't a great idea to be dependent on russian natural gas after all, whether it is finland and sweden joining nato, that bloc is stronger. some of the reaction to china's rise has produced strong, stronger relationships among japan, australia, korea and some and a number of nations of southeast asia as well. so i don't think it's right to say every country is moving. it is true that there are some very important

countries and let's take india where they have always valued their strategic independence, their ability to choose a partners given the issue. but i would argue that india is moving closer to the united states for a couple of reasons. one is the concern about china and china's rise. and i have to say, whoever in beijing or wherever it was decided that going and beating up indian soldiers on a border that had been quiet for 40 years was a good idea, wasn't a very good idea. and so when it comes to the concerns about china, that also will shadow the relationship with russia because if russia and china are in a relationship without limits or whatever that was, that they decided at the beijing olympics, that doesn't look so great. if you're sitting in india. it's also the case for india that

you've got to take a look at what the russians are doing on the battlefield and wonder if that's really where you want to pitch your military future. and so because for the last several years, several administrations starting really with a declaration in the clinton administration, but then we were able to deliver the civil nuclear deal, which which removed a lot of restriction on india for defense and technology cooperation. now now we have an open path way with india on some of these issues. and so i think you will see india move closer. we just don't need to engage in loyalty tests with anybody. we have a tendency to do this in the united states. we have a little trouble with with nuance sometimes. and so if we can simply let the natural course of affairs take place, i will say that all of us should look hard at what the global south is saying about the institute asians that we created after world war two and their absence

of a sense of a voice in them. it's a real problem to try to think about how you might reform the un security council. we've tried several times. it's hard to do, but but the imf and other institutions where perhaps the wait isn't quite right or the 20 emerged because the g7 wasn't the right right group of countries. so it is multiple and variable geometry is. but maybe not quite as chaotic as as what neil would have said. the g20 is an interesting case in point because you're absolutely right. we at the pittsburgh summit in 2009, we said this is the premier forum for international economic cooperation. we explicitly said this is the way to go over the last 20 years, 15 years ago or so, the g7 has proven to be more effective, more robust, including dealing

with a number of the issues right now, the g20 is sort of floundered a little bit when there hasn't been a crisis, an economic crisis, to focus on is it so is it really is it the institutional framework or is it the willingness of countries to step up and play a more constructive role from their different perspectives? well, i believe in institutions, but i think we all have to remember that there is really no such thing as the international community or the institution. there are a group of their member states who have their interests and sometimes those interests align. then the institutions stronger. sometimes they don't. and then the institutions weaker. when in after 911, the interest of all states against non-state actors is aligned very strongly so that we were within days able to get a un security council resolution to track terrorist financing across borders. we were able to get something called with 90 countries. the proliferation security initiative agreeing to

stop suspicious cargo. why because the underlying interest in keeping those non-state actors from destroying the state system was very strong. but then you look at and let me just make one other point. you know, you can go to an airport pretty much in in tokyo or paris or new york or mexico city, and it all kind of looks the same. so the security requirements are pretty much the same. we harmonized travel in just a very short period of time. now, fast forward to covid there. the interests didn't align and we really was. my border controls, my travel restrictions. and so i think it's not fair to blame the institutions. you have to look at what the underlying interests are unless you've got an institution where the values are so aligned like like like nato, i, i do think that the g20 was is very important at the time of

the financial crisis. i remember the g20 coming to meet in washington in november of 2008 and agreeing to some principles not to engage in beggar thy neighbor trading policies, etcetera. not everybody was completely fully in line, but that was a time when the g20 was was really very helpful. so the time it may be times when it is and times when it isn't, i think trying to have one central institution that does everything those days are over. this is the third time that the apec has been hosted by the united states. 30 years ago, president clinton first hosted the leaders meeting. it was at the beginning of that post cold war period. a lot of optimism around globalization, around trade. and 2011. president obama hosted it. it was a lot about us commitment to being engaged in the region, being a pacific power again in a

multi dimensional way. trade military, political. and now that we're here today, what's the significance of this meeting and of the us hosting this meeting? and in retrospect, what will people look back on and say , this is what us hosting of apec meant in 2023? well, let me just start by saying i loved coming to apec because they were fast growing economies, seas along the asia pacific and talked about real things like trade and economic growth. that's still the dna of apec. and so the question is what are the challenges today to that agenda? and i would say that there are three that i hope these discussions at apec will address are first of all, there is the technological bow wave that is coming at us with

technologies that are so transformative, so powerful and we as governments, the way that i put it, is everybody's learned to spell. i they don't really know quite what to do about it. and so, so i would hope that given the countries that are at these frontiers, that there can be some understanding of how we want to approach some of these transformative technologies. they have enormous benefit written all over them. they also have a lot of cautionary tales about how powerful technology energies can be misused so that that's one thing. a second thing is about the big challenges of climate food security coming out of that these are countries that are in large part fast growing. these are countries that in large part do have technological capabilities. but one of the

themes coming out of the global south is we're being left out of this and we're the ones that are on the front line. how do you feel if you are sitting in the caribbean at this point about the potential if we're too late on climate change? so what are we going to do? and i know people like to go to cop and talk about 1.5 and they like to talk about 2050. and it's not just that it's not helpful, right? what every country has three e's economic economic growth, energy mix and environmental sustainability. and how are we going to harmonize those to get better outcomes on sustainability. so that's another thing i think here. and then finally, what about china? what about the us and china? right the president and they may be meeting, as a matter of fact, right now as we speak, i think, yes. and there are a couple of things that we

can be hopeful for. one is that we agree that we do not want a hot conflict with china. and that means to me, being military to military talks, we have exquisite deconfliction measures with the russians, exquisite. it came out of the fact that nobody wanted an accidental nuclear war . and so we have notification procedures when that russian airplane shot down an american drone near ukraine, chiefs of staff were on the phone in minutes. the first person i talked to on nine over 11 was vladimir putin, because the president couldn't talk to him. he was on his way to a safe location. our military forces were going up on alert. i called the president. putin actually called us. i took the call. i said, mr. president, and our forces are going up on alert. he said, yes, i know. i thought of course you can see that. and then he said, ours are coming

down. we're canceling all exercises. excellent deconfliction measures. we have nothing like that with with china. i'm a veteran of the hainan crisis of 2001. china a chinese pilot hot dogging in international airspace, knocked down an our reconnaissance plane . they had our crew for seven, nine days for three days. they wouldn't take our phone calls. now, that's dangerous. i was national security advisor. the chinese, my counterpart happened to be in latin america with, of all people, xi jinping, who was on the politburo at the time. and so i called the argentines and i said, where are they? they said, i'm sorry, the chileans. they said they've left for argentina. so i called my counterpart in argentina. i said , where are they? said, they're at a barbecue. i said, take a phone, go find them. so i found my counterpart at a barbecue and i said, you haven't taken our

phone calls for three days. do you think the american president can tolerate this with a crew captive in china? contrast that with the way we would have handled it with the russians and so that needs to come out of this meeting, an agreement that we don't want a hot conflict. but even if we don't want one, one could happen from an accident. and then finally, it goes back to the technologies i we are decoupling with china on technology. you can call it de-risking if you wish, but because of the challenge laid down by china on supply sourcing, the united states and frontier technologies, like i and quantum computing, it got the backs up of the united states and you are seeing controls on inbound investment and outbound investment. that's only going to continue. you're going to continue to see

questions about how we got into a situation where our supply chains were completely dependent on china for things like rare earth minerals, where you're going to continue to see questions about it, the health of the semiconductor industry, when the great bulk, maybe as much as 90% of high end chips are made at tsmc, which is vulnerable in taiwan, you're going to continue to see that and i don't think you can solve that yet. but can we leave the rest of the runway in us-china economic relations open as as we decouple on the technology side? and those are the three things that i think could come out of here. i mean, there's a remarkable degree of consensus in the us, bipartisan consensus on the nature of the china challenge. it seems to me that less consensus, maybe even less, thought about where we want the relationship to ultimately end up. what's the new equilibrium

with china? you you were initially a great student of us soviet relations. as you said, the cold war. is it a cold war? is it detente? is it peaceful coexistence? is it some new formulation that's particular to the us-china relationship? i think it's particular to the relationship, but one reason that i don't like trying to borrow terms from the period of the cold war is that it's just such a very different situation. we had a huge ideological overlay of competition for hearts and minds. as you know, the soviets had their view of how human history ought to unfold. we had ours. we competed at everything. you know, when we defeated the soviet national hockey team in 1980, it was like we defeated their system. it was a big deal. it was a big deal. and so i always said, if you didn't have the soviet union, you would have had to invent them, right? because it was this was a big ideological competition. the soviet union was a military giant, but it was a technological and economic

midget. that is not the case of china. and so the united states has not seen and let me use the word adversary advisedly, because i don't think it's in all aspects of the relationship. but we've not had an adversary where you had military, technological and economic competition across the board and so this is different now. now that means that you i'm not going to label it. i'm just going to say that the policy is that you make sure that your deterrent is strong, your military forces are strong. you do have to challenge on issues like freedom of navigation and so forth. so be strong. you are going to decouple in technology because if the chinese aren't going to do it because they want indigenous development, the us is going to do it because they don't want, quote, stolen technology to go to the pla. so forget that realm, find other areas of cooperation in the economy because it's still a huge market, it's still a place

to invest, it's still a place to manufacture all though even there some of the arbitrary nature of what happened with zero-covid has people looking for supply chains, other places looking for manufacturing in india and vietnam and other places. and then finally, i do think that we will cooperate on areas like climate change because we will have to. now, that said, i've just said what i'd like to do in the united states, but you need beijing's help and it doesn't help if beijing says on the one hand, we want foreign investment and then rates beijing, it doesn't help. and so when i'm constantly asked what should the united states do , i say to my chinese friends and i think i still am a friend of china. we had a very good relationship. what can beijing do to make this relationship better? and it doesn't help up if you have economic policies

that look like they are not just statist and nationalist, but kind of a harbinger back to even marxist, leninist, even within your own environment. so you know, china has to decide does it want to be a part of the entrepreneurial revolution or not? if you years ago china led the world in online education, then let it come. colonies that were exploding all over the world shut it down because you couldn't control it. the biggest worry that i have for china because we need a robust china, we need a prosperous china. we need a stable china for the international system. but the biggest concern that i have right now about china is that the leadership will not see what is happening to the chinese miracle. the alibaba's and the tencent's have been reined in. i

mentioned the online education problem. you say you want foreign investors, but you're making it harder and harder for foreigners to live there and to the hong kong example is not so great in terms of the national security law. and so we need some help from beijing, not just from washington. that's a great place to end our conversation on. thank you so much. it's great having you here. and thank you, everybody. if you join me in thanking dr. rice.offer.

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