Since opening its doors to the world in 1978, China has pursued a sometimes erratic but reasonably steady course leading to increasing global economic and political interaction. Its interests now extend from Pyongyang to New York and Sydney to Riyadh. U.S. President Barack Obama’s announcement of a new “pivot” toward Asia, recent events on the Korean Peninsula, and China’s upcoming leadership transition provide additional reasons to seek greater understanding of China’s goals and interactions with other nations.

Thomas Fingar, Stanford’s Oksenberg-Rohlen Distinguished Fellow, is leading a new multiphase Shorenstein Asia-Pacific Research Center (Shorenstein APARC) initiative to explore the nuances and complexity of China’s foreign relations and domestic issues. The China and the World research project aims to contextualize and better understand China’s regional and global interactions, both from the perspective of China itself and from that of other countries. Beginning with Northeast Asia, the project will analyze China’s relations region-by-region throughout the world, and will involve experts from Stanford, China, and the regions studied. It kicks off with a Shorenstein APARC-organized workshop held Mar. 19 and 20 at the new Stanford Center at Peking University.

Fingar discusses the development of China’s foreign relations since 1978, and describes the project and workshop’s background.

In the three decades since Deng Xiaoping enacted his 1978 Open Door reforms, what have been the main trends in China’s global engagement?

The general trend since 1978 has been for China to become increasingly active and engaged in a growing number of places around the world. There have been a number of phases to this.

The “honeymoon period” of U.S.-China relations (1979–1989) was a period of essentially no competition to China’s interaction within the U.S.-led world economic system. China concentrated on the OECD countries—especially the United States, Japan, and Western Europe—that had money to invest and willingness to trade.

After the 1989 Tiananmen Square Incident, China’s international options became more constrained as its relations with the developed world plateaued. It began to reach out to the places that would deal with it: Southeast Asia and particularly Africa. This was in part diplomatically motivated, and in part a search for new markets for the low-end goods it was beginning to produce. It was also the beginning of its search for energy.

Around 2000, China transitioned from building a more modern economy towards being one—beginning the era of its “rise.” China’s demand for resources went up, as did its capacity to supply more markets and its ability to invest more of its growing foreign exchange earnings. It became globally active, proclaiming that it had a new, less exploitative model than what the United States and Europe offered.

What Northeast Asia issues do you think China will focus on this year, especially as it plans for a major leadership transition?

North Korea’s stability and China’s growing investments in the DPRK. Beijing is acutely interested in whether Kim Jong Un will prove a viable leader and whether the regime will be able to manage its new challenges. China is concerned about possible North Korean provocations that might trigger responses by South Korea and/or the United States, putting at risk the peaceful regional and international situation China needs for its political and economic development.

The second issue is answering the question: what does the U.S. pivot toward Asia mean? What does it mean in terms of security, economics, and relations with Japan and Korea? China is the largest trading partner for each of these countries. They value it as a market, and as a source of resources. Yet they also worry about being excessively dependent on China. They appear not to have worried about this quite so much when their dependence on the U.S. market was comparable.

Two full workshop sessions will be devoted to Japan and South Korea, both countries with close U.S. ties. What are the most important factors with regard to China’s rise for these two countries? What about for Southeast Asia?

One of the reasons for our upcoming Beijing workshop is to develop a general template of questions we can ask for each region. We want to avoid focusing the questions too narrowly on Northeast Asia.

For Japan and Korea, one factor has to do with economic opportunities and with their own vulnerabilities. The other has to do with the security challenges of China’s rise, and the uncertainty of its military aspirations. Japan and Korea do not want to be drawn into U.S.-led activities, but they still value the United States for protection. They are concerned about managing the decoupling of economic and security dependence, about no longer being dependent on the same country for both.

Many regional issues are interrelated, such as maritime territorial claims and naval expansion. China is an economic player in Southeast Asia, and the Philippines and Thailand have an alliance with the United States. Indonesia is a rising county in Southeast Asia, and India is an outside player in the region. The U.S. 7th Fleet currently defends the shipping lanes to Northeast Asia that go through Southeast Asia, which probably is not the long-term solution.  

Russia played an important role in shaping the political ideology in the early days of the People’s Republic of China, and the politics of both countries—especially Russia—have changed so much. What is their relationship like now?

Correct and limited. The West imposed a military hardware embargo on China after Tiananmen, so Russia is a limited alternative for that, and it is also a source of energy and other resources. It is fair to say China has something close to disdain for Russia, for what it sees as political confusion and economic mismanagement. The idea of a strategic triangle—using Russia to balance U.S. influence—is something China sees as unviable.

As you move forward with this project, what is the ultimate goal?

The goal is to understand the dynamics of interaction—to understand the bigger picture. Other countries have objectives and concerns with regard to China, while China has objectives and concerns of its own. It is about identifying things such as where they see the same and different kinds of opportunities; what concerns they have about third country interests or involvement; and how they evaluate the success of policies to date.  

South of Mount Fuji, along Japan’s central eastern coast, sits Shizuoka Prefecture. Home to green tea plantations, hot springs resorts, and Yamaha pianos and motorcycles, Shizuoka Prefecture is a vibrant agricultural, tourist, and manufacturing region. It is also home to Katsunori Hirano, a current Corporate Affiliates Visiting Fellow at the Shorenstein Asia-Pacific Research Center (Shorenstein APARC).

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Nearly a year has passed since an earthquake triggered a tsunami that swept away entire communities on Japan’s northeastern coast, leading to a series of accidents at the Fukushima nuclear complex. Since the March 11 disaster, Japan is experiencing a growing sense of community, and it faces a potential opportunity for innovation in the energy industry and economy. Masahiko Aoki and Kenji E. Kushida discuss post-March 11 developments, and a related conference at Stanford scheduled for February 27.

Aoki is the Henri and Tomoye Takahashi Professor Emeritus of Japanese Studies, and director of the Japan Studies Program at the Shorenstein-Asia Pacific Research Center at Stanford University.

Kushida is the Takahashi Research Associate in Japanese Studies at Shorenstein APARC, and a Stanford graduate (BA ’01, and MA ’03).

One Year After Japan's 3/11 Disaster will bring together experts from Stanford, Japan, and Europe for a discussion of the major economic, political, energy, and societal challenges and growth in post-Fukushima Japan.   

Looking back a year later, what do you think are important lessons we can learn from March 11?

Masahiko Aoki: Japan has often faced disasters leading to the complete destruction of cities and enormous losses of life. In the last century alone, there was the great Tokyo earthquake of 1923; wartime damage in Hiroshima, Nagasaki, and other metropolitan areas; the Kobe earthquake of 1995; and so on. Each time, Japan rebuilt its life and infrastructure anew. Accepting the reality of a disaster and making efforts to rebuild is in a sense deeply embedded in Japan’s collective DNA. However, the March 11 disaster was not only just a natural disaster. People are now well aware that there were lots of elements of human and institutional error in terms of preparing for and coping with natural disasters. Recent geographical studies and historical documents reveal that large-scale earthquake-tsunami disasters comparable to March 11 have occurred four times in the last 4,000 years. It provides Japan with a good opportunity for thinking about how to build sustainable societies and cities.  

Kenji Kushida: Big shocks always cause big changes, and the type of change depends on the kind of shock. With March 11, there was the human tragedy of people literally getting washed away. It also raised the question of how to restructure energy markets, which is an area where outcomes in Japan can affect worldwide restructuring. This particular shock then is triggering a whole set of fairly slow moving, but very transformative changes that could take place over the next few years.

What trends are we seeing in Japan’s energy industry now, and what are the implications for Japan’s future energy policy?

Aoki: When I flew into Tokyo the day after the great earthquake, the city was quite dark. But by the summertime, it was not only lit up, but there was a blue hue to the light—this was due to the wide adoption of energy-efficient LED lighting. Even with the nuclear plants down and 25 percent of the electric capacity gone, there were no major blackouts thanks to energy-saving measures. This kind of incident motivates people to explore ways to innovate the energy industry. For example, Japan’s energy-efficient auto industry took off in the late 1970s in reaction to the Oil Shock.

Japan’s energy industry is currently run by regional monopolies. Tokyo Electric Power Company (TEPCO), for example, monopolizes everything from power generation to retail distribution. In the past, there had been an attempt to break up the different parts of the power monopolies into separate entities. But only a bit of reform was made because of very strong resistance from TEPCO. Now TEPCO is on the verge of insolvency, so Japan has a very good chance to restructure its power industry. People are again starting to think about breaking up the regional monopolies and about innovation, which several experts will discuss during our conference.

Kushida: We will also draw on Stanford’s being in California to think about how to prevent Enron-style market manipulation and rolling blackouts from happening in Japan. A lot of it has to do with the rules and regulations that create an energy market. In the tsunami-devastated areas of Japan, there is also a tremendous opportunity for ground-up investment in new forms of energy. Silicon Valley technologies and companies can help design the next generation of renewable, sustainable energy systems in those areas.
In Japan, there is a sense that people have rediscovered their ties to one another after the disaster.

-Masahiko Aoki, Director, Japan Studies Program

During the recovery, many Japanese citizens demonstrated a remarkable strength and collaborative spirit. Has this changed?

Aoki: Annually on New Year’s Day in Japan, a high-level Buddhist priest writes the calligraphy for a word representing the spirit of the people. This year he wrote “絆”—“bond” (kizuna)—signifying the ties both among Japan’s citizens, and between Japanese and the generous help and aid that poured in after March 11.

In Japan, there is a sense that people have rediscovered their ties to one another after the disaster. Before March 11, there was some worry that young people were not so concerned about others and about tradition. Many young people now want to become volunteers, and there is also a better sense of community.

What has the impact been on Japan’s economy, and what are the prospects for recovery?

Aoki: There is an increasing awareness that Japan cannot sustain the same kinds of export-oriented, manufacturing-based industrial structures it has over the past decades.

Since 2007, Japan’s net foreign exchange receipts from royalties, investments, and the like have exceeded those from trade. The economic structure is becoming less export oriented, so the March 11 disaster might trigger the acceleration of a more domestic-oriented economy. It might also lead to an increase in foreign direct investment, prompted in part by population aging and partly by appreciation of the yen. Japan will become more domestic market oriented, while at the same time more internationally active. A lot next year depends on what will happen with Europe’s economy, but otherwise the prospect for Japan’s GDP is not bad because of reconstruction demand.

Kushida: Recovering from March 11 presents a potentially more productive experience than the 2008 global financial crisis. In 2008, Japan’s exports dropped dramatically for a few months and then there was a sharp recession that recovered quickly. There was not a whole lot that people or companies could do, other than adjust to the potential decline. March 11 provides more opportunities for innovation at the company and individual level. 

As it is finding growth in the domestic market, Japan has been criticized lately for being “inward-looking.” But two things from this latest crisis are contributing to looking outward a little more. One is the sense of vulnerability and transience, so strengthening Japan’s economic base becomes a much more urgent matter. The second is that in the aftermath of the euro crisis, the very strong yen has also led to a huge move toward outward acquisitions that are becoming integrated with the domestic economy.

A year has passed since the Egyptian uprising, one of the defining moments of the democratic wave that surged across the Arab world. Since Jan. 25, 2011, three long-standing Arab dictatorships have toppled and citizen movements continue to challenge entrenched autocratic regimes. Reflecting on this pivotal moment, five scholars at Stanford's Center on Democracy, Development, and the Rule of Law talk about how these events changed the course of democracy – if at all – and what they mean for the region as a whole.

What are the prospects for democracy in the Arab world today?

Larry Diamond: The near-term prospects for democracy are mixed and uncertain – but far better than they were a year ago. Within the space of a single year, Tunisia has become an electoral democracy – the first in the Arab world since Lebanon fell apart in the mid-1970s. This is an astonishing achievement, and Tunisia’s prospects to build democracy are quite good. Egypt has a chance to turn the corner politically, but it depends on whether the Muslim Brotherhood will evolve in a truly democratic and tolerant direction, and whether the military will step back from power. Libya must still disarm its militias and build democratic institutions and a viable state. Syria and Yemen remain much more deeply troubled, with a risk of civil war.

In examining the arc of history, was the Arab Spring inevitable? Should we have been surprised by what happened?

Francis Fukuyama: Economic growth and technological change foster the rise of a middle class that fosters demands for political participation. This is the social basis for democratic revolutions around the world. Some people argued that cultural factors – Islam, Arab passivity –would prevent this from unfolding in the Middle East, but this has clearly been proven wrong. These structural shifts do not imply inevitability, since it is human agents who must translate social demands into political action. This is why the general phenomenon of a revolt may have been predictable, but the timing absolutely uncertain.

Have living conditions improved in the Arab world, or are they worse for the average citizen?

Lina Khatib: The Arab Spring has brought immense change in the lives of Arab citizens. Political taboos have been broken, and the wall of fear that used to govern their everyday lives has crashed down. The Arab world still has some way to go before it can be called democratic in the full sense. While the economy in particular has taken a hit in the current period of transition and uncertainty – making conditions worse for many in the short term – the average Arab citizen today can actually look forward to seeing freedom of expression, human rights, and political and economic reform. These are no longer unrealizable dreams.

What are some of the lessons U.S. policymakers have learned from the Arab Spring?

Jeremy M. Weinstein: A number of fundamental ideas that underpinned 30 years of U.S. policy in the Middle East were upended by the events of 2011. The idea that Arabs do not care about democracy, are politically apathetic, and are too frightened to resist oppressive regimes has been disproved. The notion of authoritarian stability is now questioned, and it is no longer taken for granted that “the autocrats we know” are the safest bet to secure U.S. interests. And the fear of Islamists is slowly receding among policymakers as they confront the electoral success of Islamist parties and begin to directly engage a new cadre of leaders.

How did Arab monarchies weather the storm and avoid the experiences of Egypt, Libya, and Tunisia?

Ahmed Benchemsi: Except in Bahrain, where security forces opened fire on unarmed crowds, Arab monarchies generally managed to outflank their respective protesters in a peaceful way. They did so either by implementing illusory reforms while in fact playing for time (in Morocco and Jordan) or by buying off the opposition with huge social spending (in the Gulf). As this last tactic may remain effective for some time, non-oil monarchies’ victories are more likely to prove short-lived. New rounds of popular anger could be spawned sooner rather than later by, if anything, growing economic difficulties. These will be harder to quell by subterfuges.

Looking forward, are you hopeful that democracy will prosper in the Arab world?

Diamond: Yes, I am quite hopeful that democracy will develop in the Arab world, but I think there will be wide variation among Arab countries in the near term, and much will depend on whether there emerges an instance of clear democratic success that inspires other countries. This is why I think we should bet heavily now on Tunisia, while also intensively engaging Egypt, the largest Arab country.

Fukuyama: In the long run yes, in the short run, no – a safe answer.

Khatib: Even if democracy takes decades to materialize, the Arab world has finally taken the first steps in what – as history has taught us – is always a long and difficult journey, and that’s an important milestone.

Weinstein: All of us know that the road to democracy is uncertain and filled with obstacles. But I take comfort in the fact that no one could have predicted a 2011 in which Ben Ali, Mubarak, Gadhafi, and Saleh would leave the stage. Something profound has changed in the region, and I am confident that – having lost their fear – citizens will make their voices heard as the struggle for democracy continues.

Benchemsi: For democracy to have a real chance in the Arab World, liberals must build grassroots organizations – ones that would be large and strong enough to challenge both autocratic regimes and Islamist groups. When this is done, I will have reason for optimism.

China possesses vast coal reserves, and coal accounts for 70 percent of the country’s total energy consumption—3 billion tons per year. But China also consumes oil, natural gas, and an increasing amount of renewable energy.

Xuteng Hu, a Corporate Affiliates Visiting Fellow Program alumnus (2007–08), manages energy and materials development projects at PetroChina’s Petrochemical Research Institute in Beijing, where he serves as vice president.

Hu received his master’s and doctorate degrees in chemical engineering from Tsinghua University. 

PetroChina, one of China’s largest energy companies, has recently developed its own biojet fuel. The company is also researching other renewable energy technologies, including biofuel made from plant fiber.

During his year at Stanford University, Hu conducted research on the governance of China’s state-owned enterprises, focusing on energy companies like PetroChina, Sinopec, and China National Offshore Oil Corporation. He also studied strategies for the development and promotion of different forms of energy, ranging from coal to chemicals and oil to natural gas. Jean C. Oi, a political science professor and director of the Stanford China Program, served as Hu’s research advisor.

Since returning to China three years ago, Hu has managed the research and development of synthetic petroleum-based materials, and the construction of major pilot petrochemical plants. Perhaps most exciting of all, the biojet fuel project he led conducted a successful demonstration flight in October.

Of his time at Stanford, Hu says: “My experiences helped me think about corporate governance structure, energy development, and other issues related closely to my work from different perspectives, such as culture and society. It also enhanced my understanding of cultural and business exchanges between China and the West.”

Computers and the networks that connect them are powerful storehouses of information. They're also vulnerable to sabotage, and the data they handle can be stolen, altered or erased. President Obama has called cyberattacks "one of the most serious economic and national security threats our nation faces." 

To help tackle the problem, researchers at Stanford’s Center for International Security and Cooperation are exploring issues in cybersecurity and keeping a close eye on the policy discussions. Earlier this month, CISAC brought together a group of lawmakers and industry leaders from Silicon Valley to discuss new efforts to prevent cyberespionage and related crimes. 

Rep. Mike Rogers (R-Mich.) talked about a bill he’s introduced to safeguard technology. "The intelligence community believes strongly that it's just a matter of time before we have a catastrophic cyberattack," said Rogers, chairman of the House Permanent Select Committee on Intelligence. "We have admired this problem for a very long time and it's time to do something." 

Among the other speakers were Rep. Anna Eshoo (D-Calif.), Intel Chief Executive Officer Paul Otellini, and security experts from Google, Cisco Systems and Oracle. 

After the invitation-only event, CISAC's Mariano-Florentino Cuéllar, Otellini and Rogers discussed the future of the Internet, the scope of the cyberthreat and government's role in defending against it. Excerpts: 

There are core questions about where the world is going  

"Cybersecurity problems are real and they’re immediate. And the threats are probably growing and the problems we face require solutions. But it’s just as important to think about where we’re going to be 20 to 30 years from now as it is to deal with the immediate problems. That’s because the choices we make about how to secure cyberspace are going to be choices about what your identity will be online, what powers government will have, what nation states will be able to do to each other, what companies will be able to do when they deal with cyberthreats, how aggressively they will be able to respond on their own -- those are essentially choices about the architecture of the world. So it's useful for us to understand as scholars and as people engaged in policy, that choices about cybersecurity are not just technical. They’re really core questions about where is the world going."

-- Mariano-Florentino Cuéllar, co-director, Center for International Security and Cooperation

Preventing electronic pickpockets 

"On the commercial side it's no secret that there's industrial espionage going on through cyberhacking. There are also rogue groups that are not nation states, but people who just want to steal your identity. So the ability to see those attacks coming, to see those profiles coming, and to be able to improve the quality of the computer network and the phone networks and the phones themselves will also allow us to protect our own intellectual property as companies, and protect the identity and potentially the financial assets of our collective customers. When your cell phone is your wallet -- as it will be in the not-too-distant future -- all of a sudden that's like having an electronic pickpocket. An attack is going to compromise everything you have. Beyond that, many large technology firms feel that as good corporate citizens and as good local citizens, we have a responsibility to try and make sure the world's computer networks are not disrupted. If computers aren’t trusted, we don't have much of a business. We are commercially incentivized to make all this stuff so much better."

-- Paul Otellini, chief executive officer, Intel. 

We can be a partner with industry 

"Individually, a company gets hacked for espionage purposes -- that's a criminal event. Collectively, it becomes a national security issue because of the sheer volume of intellectual property that would be compromised. You also have the other level: a disruptive cyberattack that shuts down certain capabilities, whether it's financial, in the energy sector or otherwise. We've fought this fight with dot-gov and dot-mil for quite a long time. Dot-com has, too, but they've been a bit on their own. This proposal has the government weighing in and saying, 'Hey, maybe we can be a partner.'"

-- Mike Rogers, chairman of the House Permanent Select Committee on Intelligence.