Brief Remark
Joseph Nye

Moderator
Byungkook Kim

Moderator
Let me share the little chat I had with Professor Nye. While we were waiting for the talk, professor Nye said “So, you are going to be the moderator who asks tough questions?” I said to him with a great stance of humility that I won’t be doing that. I am an admirer of his work and I hope that I would be a facilitator that facilitates his opportunities, Professor Nye to elaborate further on his thoughts on global issues. That’s the role that I see myself of playing today. Let me ask and raise a few questions, issues that I know that professor Nye will use to elaborate, further develop and clarify his thoughts.
The first question will be a negative one. I agree with most of what you said that people are underestimating the resilience of U.S. power. But at the same time there are a lot of skeptics who make a different kind of argument. I agree with your argument but let me ask you hypothetical questions that I think will allow you to further clarify what you mean by the American century. The question will be ‘what will be the signals in the global security reality that you will say “Ah-ha, we are in trouble, the U.S. in trouble, maybe [the] American century is nearing its end.” I understand that you are emphasizing an importance of perception because perception affects policies. So keeping a global reality which I agree with you, what made you so concerned, prompted you to write a book with a title “Is the American Century Over?” What are the policy measures you would see as glorious for the future of the U.S. and its allies?”

Nye
It’s a good question. How would we know? [laughter] If the American economy were to go through a period of very low growth like Japan has in the last two decades say one per cent or less, then I think I would begin to worry. Another example would be if the Americans were unable to continue their investment in military capabilities for example, if you weren't able to have the investment in the defense budgets that are necessary. Or if the United States turned inward if the attitudes inside the United States were to say ‘no more immigrants’ Americans always complain about immigration but we fortunately can’t do anything about it. But if we actually did something about it, if we really stopped immigration then that would violate this Lee Kuan Yew proposition, we would lose all the creativity that comes from the immigrants we get. So those are three indicators to me: low growth, military budget that can’t keep up and inward turning-ness which cuts us off from our sources of external refreshment that comes from immigration. Those will be three indicators.

Moderator
What is your assessment of the likelihood of that happening?

Nye
There was a feeling after the financial recession of 2008, there was a feeling that this was the beginning of that period of low American growth. In fact, there were many people in China who wrote articles saying that this is the proof of American
 
about U.S. decline. And in fact, Chinese foreign policy became more assertive as a result of their belief that the low growth after 2008 while Chinese growth was high was proof that China was rising and U.S. was in decline. What they did was take a cyclical downturn and assume it was a sectoral trend. The fact that American economy is growing at 3 percent now indicates that that was a mistake. So I think if the Americans hadn’t recovered from the great recession, then I think I would be worried. That doesn’t mean there are no problems in the American economy, there obviously are. But I think a period of very low growth that continued after 2008 would be a cause for concern.

Moderator
When you were talking about the argument about the absolute decline of U.S. power, you listed up factors that gives [a] more optimistic view on the future of U.S. power. What are the weaknesses of United States as [a] super power? And how do they balance against the strength of the U.S.?

Nye
One of the problems that the Americans are having right now is a political polarization and people talk about it as a gridlock they say it is very hard to get things done. I think that is true but I think it is not unprecedented. If you look at the American government system, it was created to be inefficient. I mean the American founding fathers created the political system to preserve liberty not to maximize efficiency. And the net effect of that it is very hard at times to get things done. On the other hand, there is still a fair degree of power in the executive, particularly when it comes to foreign affairs. And even in a period where people say there has been this terrible gridlock, the congress before this, the first two years of the Obama administration, you passed legislation on health care which even though is controversial, nobody had been able to pass this since the days of Harry Truman, and you also were able to pass major stimulus package which was very important in getting out of the recession you were able to pass regulations on governing the financial industry to try to reduce some other risks of another financial crisis. So the argument that congress can’t do anything is a bit exaggerated. But on the other hand it is true that the American system is a system full of vetoes. I mean it was designed to be full of vetoes. So if you want an efficient system, don’t imitate the United States. If you want liberty, yeah, but not efficiency.

Moderator
Let me ask you the same question but focused on China. China has a very authoritarian political order. It is proud of its efficiency and effectiveness. What is your view on the argument that that kind of system is more effective in resolving foreign policy issues and even remodeling international order?

Nye
I think I didn’t want my comments earlier to in anyway denigrate the extraordinary accomplishments of the Chinese. I mean, I said as I started, Korea is a great success story and it is, when you look at Korea in 1960 and Korea today as a leading country in the OECD. That is an extraordinary accomplishment. China hasn’t reached that level yet. But China has raised hundreds of millions of people out of poverty. And Deng Xiaoping’s use of market has been quite extraordinary. So let’s give China credit for what has been done. The question is whether it is a political system, one that can be exported, sometimes people call the Chinese system market Leninism. You combine markets with an authoritarian political structure. But it is not clear that’s a market export. Notice, if you take that to Zimbabwe you get the authoritarianism but not the market, so it is not clear; unlike the Soviet ideology which they wanted to export throughout the world. It is not clear that the Chinese system is for export. But the other question is domestically how well will the Chinese system work as you get per capita income about $10,000. If you look at the history of South Korea or Taiwan, you will notice the ability to run a country in an authoritarian fashion becomes very difficult when you reach around $10,000 per capita income and a large middle class.

Moderator
It came earlier for Korea.

Nye
For Korea it came about 7 or 8 I think, so China is now approaching about $10,000 per capita income in purchasing power parity. They have at [that] stage have to deal with the problem of political participation. India was born with a constitution from Britain which solved part of the problem of political participation. China hasn’t figured out how to do that yet. So I think the interesting question for China is: will this system continue to work efficiently as you begin to have more demands for political participation? And particularly with a lot of information that you get on the internet, even with control of the internet there’s just a lot more information leaking around in the system. So I think the question for China is, they’ve done very well and can they continue in the same fashion?’

Moderator
When I was listening to your lecture on the issues of power, I put myself not in the role of great power but middle power countries, especially ally middle power countries and asked the same question on East Asia. China is our big neighbor. When we see the trend we review that, we should not make a linear projection. But when we see the trend, we see middle power countries’ economy is getting deeply integrated into the orbit of China’s economy. When we talk about the global level, I buy all the arguments that you’ve made, but when we come down to the regional level and look at the same issue not from the position of super power but from middle power countries, issues become much more complex and maybe even full of security risks. So if the trend in economic side is linear, deeper integration into Chinese economy, but at the same time as you mentioned in your lecture, many of East Asian countries are militarily allied to the U.S. and even more are cooperating militarily with the U.S. So we see two different kinds of trends. One trend, Korea in the realm of military is running in the opposite direction of the trends in economic realms. I would like to ask you to put this continue. I ask that question in a different way. Would it be unimaginable to think about the possibilities of some of East Asian countries changing, adapting, adjusting security policy that would be in more conformity with economic trends?

Nye
It is a very good question and the answer may vary with different countries. So the answer you will get in Cambodia and Laos would be very different from the answer you will get in Korea and Japan. But let’s take Japan as probably the largest in terms of it's the 3rd largest economy and it has in the Japanese self defense forces. a considerable military capability. Some people would have said “but as Japan, as China gets more and more powerful economically, Japan would move away from its American alliance and find the Chinese alliance makes more sense. I think that is very unlikely for a couple of reasons. One is, China wants to be clearly ahead of Japan and when Japan wanted to join the UN Security Council China blocked it. So China’s picture of East Asia doesn’t have a picture of Japan as an equal. And in addition, you have territorial disputes Senkaku – Daioyu island dispute, it is not clear that China is willing to accommodate Japan on that or that Japan is willing to accommodate China on that. So in that sense, I think, if you ask ‘what’s happening?’ What’s interesting is in last few years, as the disputes has become more difficult, trade between China-Japan has maintained fairly high levels, Japanese investment in China dropped [by] half last year. And the Japanese are looking at this situation and saying not only is there cheaper labor in Vietnam or Bangladesh but also we are not so secure what’s going to happen to our plan if there’s another incident. So there’s a case where instead of the economics leading to tighter integration is actually reducing. Vietnam would be another example. When China put the oil rig in the Paracel islands, you got riots, anti-Chinese riots in Vietnam. Even though there is an increasing economic interdependence between China and Vietnam. There’s also a considerable degree of nationalism in Vietnam in terms of not wanting to be dominated by China. So I think it would vary by country. I mentioned also the Philippines as another case. I think if your country is like Cambodia or Laos, China can use its economic power pretty easily to control. There are cases in-between Myanmar or Thailand where they may have more influence on cases like Japan or Vietnam, doesn’t look to me like it is going in that direction.

Moderator
One could also argue that alliance could be a safety net if the trend of economic integration deepens and widens into the future.

Nye
I think the fact the most countries in the region don’t want to have to choose between the United States and China, they want to have their cake and eat it too, which is understandable. That maybe a good thing, it may be actually something that keeps the relations in the region more peaceful.

Moderator
You talked about smart power strategy; the ability to combine soft power and hard power in ways that make policy workable within the 21st century context of power diffusion. When we talked about alternatives to the American century, we have to also think about what their alternative would be and whether China could play that role. If the right strategy to pursue for any great power in the 21st century context of power diffusion and economic multi-polarity and military polarity, do you think China has the capabilities, willingness to combine soft power and hard power in ways that not just, promotion of Confucianism, but promotion of wider, regional and global agendas?

Nye
It is an interesting question and I guess, you know, if China could overcome some of these territorial disputes, it might be able to do better. I have sometimes said to Chinese friends you ought to go back to the so called charm offensive that you had at the beginning of 2000s. And, if you did, you would do much better with your neighbors than the policy you are taking now. And, when I asked them why don’t you do this? They say it’s very hard given the climate of nationalism at home. But if they could overcome that, In other words, if China could say instead of insisting on dealing with each of these disputes bilaterally, where we can overall each of the separate countries, we will do a multilateral code of conduct for the mediation of disputes in the South China Sea, then China's natural advantages would have a better chance to play out. But it's very hard for them to do that in terms of their domestic politics, is it impossible for them to that? At some point in the future it could be possible, I don't see it right now.

Moderator
I have a lot of questions from the audience for you. What is your assessment on South Korea’s smart power?

Nye
I use the term smart power to refer to the fact that you need to combine both hard power and soft power. Sometimes after I wrote about soft power, people said oh he thinks all you have to do is be nice and you'll get what you want but unfortunately that’s not the way the world is, but if you combine hard and soft power, you’re likely to do better than if you just use hard power alone. So I’ve argued that a smart power strategy is one in which a country has hard and soft power reinforce each other. The Americans sometimes do it right and sometimes do it wrong. If you take the invasion of Iraq, the hard power, very quickly overthrew Saddam Hussein, but there was no soft power and the result was a mess. So that was what I would call not a smart power strategy. Smart power means the ability to combine the two. Let me give you an example from a small country, Singapore. Singapore is pretty good at smart power the following example. Singapore is never big enough militarily to defeat Malaysia or Indonesia or much less than China, but it does say if we have enough military capability that when somebody attacks it will be uncomfortable they call it being a ‘poison shrimp’, then it’s less likely to be attacked. And at the same time we can be a hub of Asian relations if we can have people coming from other countries in the region to pass through the National University of Singapore, in other words if we can develop both soft power and enough hard power to be a poison shrimp, we can be a success. I think they have been. So I would argue that Singapore has a smart power strategy.

Moderator
I have a question on Japan. If Japan’s Abenomics fails, and Japan’s economic situation gets aggravated, would the balance of power and regional order in East Asia be changed? How would the U.S. and its alliances be affected?

Nye
I think that the Abenomics has had a setback in the last quarter as we’ve seen. We have to see what happens after the Japanese elections, whether this will continue and whether there'll be a rejuvenation of the efforts that Abe has been making. I don’t know the answer. I think the US-Japan alliance will remain strong regardless. I mean the U.S.-Japanese alliance was strong when Japanese growth was 0 to 1 percent and I think Americans were delighted with the Japanese economic recovery to 2 to 3 percent, I don’t think even if Japan’s growth rate retreats back to 1 percent or 0 percent, I don’t think it will change the U.S.-Japan alliance because that’s based on this general proposition that we need to shape the environment in the region to provide incentives for China. There is also the fact that keeping close relations with Japan will be important in terms of whatever happens in North Korea, nobody knows what’s going to happen in North Korea, but having strong capabilities with Japan is going to be important at the same time that we have strong capabilities with South Korea.

Moderator
What is your view on the issue on trilateral cooperation?

Nye
I have said to my Japanese friends when I'm in Tokyo and I say to my Korean friends when I'm in Seoul ‘get over history’ you know, you have wasted the last several years disputing things that are 80 years old when you have just north of here, a real unpredictable threat and the idea that Japan and Korea are not cooperating in defense as closely as they should when they face something as dangerous as the Kim Jung-un regime. It doesn’t make sense. Think ahead, not backwards.

Moderator
Another interesting question, this one is on China’s relationship with Middle East. The question is this, can the conflictual situation in the Middle East somehow influence even prevent the rapid economic industrial growth that China needs so much for domestic political order, social stabilities and so on, I think this question reminds me of a comment from one of my colleagues abroad that U.S. presence in the Middle East and its proactive engagement has benefited China.

Nye
I think if there were real disaster in the Middle East, if there were a revolution in Saudi Arabia or if there were wars in which the Straits of Hormuz were closed or if there a nuclear Iran which led to something with wider conflagration, this would be terrible for Chinese growth. It would be terrible for the world. The world economy would suffer badly, but it will certainly be a major setback for China. I think this is one of the incentives for China to be responsible in the Middle East and it’s interesting if you look at the Chinese behavior in the Iran negotiations, the permanent countries plus one the Germans, the Chinese have been actually pretty supportive on that so they haven’t been a spoiler on it. I think they realize that if they spoil they were to spoil the P5+1 arrangements, it would probably hurt them. so I will give them credit for being far-sighted on that...(Continued)