Chuck Hagel, “Speech at the Shangri-La Dialogue,” June 1, 2013

Ladies and gentlemen I have, as John noted, a deep appreciation for the International Institute for Strategic Studies.  As John mentioned, I was present at the creation of this conference.  And I am so pleased and proud, and particularly hopeful to see how much this institution has grown over the years and how relevant it has become.

My perspective is different today from when I spoke at the first Asia Summit in 2002, but my message today about the Asia-Pacific region’s critical importance is similar to the message I gave 12 years ago.  The first decade of this new century has reaffirmed that this region is becoming the center of gravity for the world’s population, global commerce, and security.

My understanding of the region is based on some first-hand exposure to both its perils and to its promises.  I learned early in my life that America is a Pacific nation – the first ocean I ever saw was the Pacific Ocean – and I learned that U.S. security was tied to the security of others in this region.

As a child, I heard my father, a veteran of World War II, speak of flying in B-25 bombers as a radio operator-tailgunner in the South Pacific theater.  I recall when war broke out on the Korean peninsula in the early 1950s he was called up from the reserves.  Although he did not deploy, many from small towns across Nebraska did go to the Korean peninsula. 

Eventually, my turn came to serve our country.  As a young soldier in the United States Army, I volunteered, along with my brother Tom, to fight in the Vietnam War.  I had little insight into the decisions or global politics of the time – what the decisions were about to send American troops there.  I was simply doing my duty.  But out of that experience I learned how important it would be for America to engage wisely – engage wisely – in Asia, and throughout the world.

In the years that followed my service, I saw the region’s promise up close as a businessman, President of the World United Service Organization (USO) and a U.S. Senator.  As President of the USO, I witnessed America’s security role and its partnerships in the Pacific with our bases in South Korea and Japan – Okinawa – as well as on the U.S. territory of Guam.

When I co-founded a cellular telephone company in the early 1980s, my business partners and I traveled to Beijing, Tianjin, and Guangzhou.  We traveled to China to market this new technology.  I was impressed by the skill, motivation, and hard work of the young Chinese technicians and engineers we met across the country.  It became very clear to me that China had the potential to build a strong and dynamic economy in the years ahead.

Returning to China in the late 1990s as a U.S. Senator, I saw how China’s growth had created a new, more hopeful economic path for its citizens.  Trade between the United States and China had fostered understanding and mutual respect, building bridges between people and helping cement a stable relationship…in which other issues could also be discussed.  In 1999 I saw the same thing in Vietnam, where I returned with my brother Tom more than 30 years after we had served together in 1968.  I then also returned to Australia. 

As a U.S. Senator I visited many nations in the Asia-Pacific region.  What I took away from all these experiences was a firm belief that the arc of the 21^st century would be shaped by events here in Asia.  America has been a Pacific power for more than two centuries.  Our ties to this region – economic, cultural and security – are unbreakable and broadly supported by Americans of both political parties.  However, these long-standing, bi-partisan ties needed to be renewed and reinvigorated – they need this after a decade of war in the Middle East and Central Asia. 

For these reasons, when I left the United States Senate in 2009, it was apparent to me that the U.S. would need to rebalance its capabilities and resources toward the Asia-Pacific region as it was winding down from two wars and complications, and reviewing its global interests and responsibilities around the world. 

This rebalancing should not, however, be misinterpreted.  The U.S. has allies, interests and responsibilities across the globe.  The Asia-Pacific rebalance is not a retreat from other regions of the world. 

Nevertheless, the world is undergoing a time of historic transformation, and Asia is at the epicenter of that change.  The 21^st century will be defined by the rise of new powers; the rapid spread of information, goods, and technologies; innovation and economic integration; new security coalitions that take on shared challenges; issues of trade, energy and the environment; and greater opportunities for all people of all nations to have a voice in shaping their own futures.

With this incredible promise come complications and challenges.  In Asia, we see a range of persistent and emerging threats.  These threats include:

• North Korea’s nuclear weapons and missile programs, and its continued provocations;
• Ongoing land and maritime disputes and conflicts over natural resources;
• The continued threat of natural disaster, the curse of poverty and the threat of pandemic disease;
• Environmental degradation;
• Illicit trafficking in people, weapons, drugs, and other dangerous materials – including the proliferation of weapons of mass destruction;
• And the growing threat of disruptive activities in space and cyberspace.

These are the challenges of the 21^st century.  This morning I want to describe, from my perspective as the Secretary of Defense of the United States, what we can do together to meet these critical challenges.  In particular, America and other nations of the Asia-Pacific must continue to strengthen existing alliances, forge new partnerships, and build coalitions based on common interests to ensure this region’s future is peaceful and prosperous.

In support of this goal, America is implementing a rebalance – which is primarily a diplomatic, economic and cultural strategy.  President Obama is increasing funding for diplomacy and development in Asia, including a seven percent increase in foreign assistance in the Asia-Pacific region.  The United States is providing new resources for regional efforts such as the Lower Mekong Initiative, which helps improve water management, disaster resilience, and public health.  We have built strong momentum toward implementing a next-generation trade and investment agreement through the Trans-Pacific Partnership negotiations.  We are fostering regional trade and investment through our work in APEC and our support to ASEAN.

The Department of Defense plays an important role in securing the President’s vision of rebalance.  Our approach was outlined in the President’s 2012 Defense Strategic Guidance,which is still guiding the U.S. military as we reorient its capabilities, its capacities to better prepare for future global security.

As we carry out this strategy, it is true that the Department of Defense will have fewer resources than in the past.  It would be unwise and short-sighted, however, to conclude that our commitment to the rebalance cannot be sustained – particularly given the truth that even under the most extreme budget scenarios, the United States will continue to represent nearly 40 percent of global defense expenditures.  Like the employment of all resources, it is always a matter of the wise, judicious and strategic use of those resources that matters the most and has the most lasting impact. 

The fact of the matter is that new fiscal realities present an opportunity to conduct a thorough and much-needed review to ensure we are matching resources to the most important priorities. 

With that goal in mind, I recently directed a Department-wide Strategic Choices and Management Review.  Although the review is not final, the direction I provided was to follow the President’s defense strategic guidance, to focus new energy, new thinking on addressing long-standing challenges, and to make our defense enterprise one that better reflects 21^st century security realities – including the rise of Asia. 

For the region, this means I can assure you that coming out of this review, the United States will continue to implement the rebalance and prioritize our posture, activities and investments in Asia-Pacific.  We are already taking many tangible actions in support of that commitment.

For example, the United States is adding to the capacity of our ground forces in the Pacific after Iraq and as we unwind from Afghanistan.  The 1^st and 3^rd Marine Expeditionary Forces and the Army’s 25^th Infantry Division are all returning to their home stations in the Pacific theater.  The United States Army is also designating 1^st Corps as “regionally aligned” to the Asia-Pacific region.

In addition to our decision to forward base 60 percent of our naval assets in the Pacific by 2020, the U.S. Air Force has allocated 60 percent of its overseas-based forces to the Asia-Pacific – including tactical aircraft and bomber forces from the continental United States.  The Air Force is focusing a similar percentage of its space and cyber capabilities on this region.  These assets enable us to capitalize on the Air Force’s inherent speed, range, and flexibility. 

The United States military is not only shifting more of its assets to the Pacific – we are using these assets in new ways, in new ways to enhance our posture and partnerships.  For example, we are pushing forward with plans for innovative rotational [deployments] in the region.  Last year, we noted at this forum that the U.S. Navy had committed to rotating up to four Littoral Combat Ships through Singapore.  In recent weeks, the first of those ships, the USS Freedom, arrived to begin a busy schedule of regional maritime engagements.  I look forward to visiting the ship tomorrow.  Meanwhile, the second company-sized rotation of U.S. Marines recently arrived in Darwin. They are there to deepen cooperation with our treaty ally Australia and other regional partners.  Eventually, 2,500 U.S. Marines will be deployed to Australia each year.

America’s enduring commitment to peace and security in the Asia-Pacific region depends on sustaining the ability to deter aggression and operate effectively across all domains, including air, sea, land, space, and cyberspace. 

Our five year budget plan submitted to Congress this year put a premium on rapidly deployable, self-sustaining forces.  These forces – such as submarines, long-range bombers, and carrier strike groups – can project power over great distance and carry out a variety of missions.  In the future, this region will see more of these capabilities as we prioritize deployments of our most advanced platforms to the Pacific, including the F-22 Raptor and F-35 Joint Strike Fighter deployments to Japan, and a fourth Virginia-class fast attack submarine forward [deployed] to Guam.

Even further over the horizon, we are investing in promising technologies and capabilities that will enhance our decisive military edge well into the future.  For example, last month, for the first time, the U.S. Navy successfully launched an experimental remotely piloted aircraft from an aircraft carrier, ushering in a new era in naval aviation. 

Having achieved a series of technological breakthroughs in the directed energy area, next year for the first time the U.S. Navy will deploy a solid-state laser aboard a ship, the USS Ponce.  This capability provides an affordable answer to the costly problem of defending against asymmetric threats like missiles, swarming small boats, and remotely piloted aircraft.

Combined with new concepts, doctrine, and plans that integrate these new technologies and other game changing capabilities, we will ensure freedom of action throughout the region well into the future. 

Our investments in Asia are not just about cutting-edge technology and platforms, they are also about cultivating deeper ties between our people and building a network of professional military personnel and security experts across the region.  

We have prioritized investments in people, including:

• Expanding the size and scope of our exercises in PACOM, allocating over $100 million in funding for joint exercises in the PACOM region;
• Setting aside new funding for defense education that will allow us to significantly increase the number of students who can attend the Asia-Pacific Center for Security Studies in Hawaii.

These investments in people, technology, and capabilities are critical to our strategy and to the region’s peace and stability.  Even more important is America’s continued investment in our alliances and partnerships, and the region’s security architecture.

Relationships, trust, and confidence are what matters most to all people and all nations, including the region.  America’s partners must have confidence in their bilateral ties and alliances with us and our commitments to them and the region, including our treaty alliances.  These remain essential to our long-term vision of regional peace and stability. 

That is why we have initiated processes with each of our treaty allies to define a new, forward-looking agendabased on enhancing security for our allies and partners, increasing the ability of militaries to work together seamlessly, and building their capacity to contribute to the region’s security: 

• With Japan, we have agreed to review the Defense Guidelines that underpin our Alliance cooperation, and are making substantial progress in realigning our force posture and enhancing Alliance missile defense capabilities;
• With the Republic of Korea, we are working to implement the Strategic Alliance 2015 and discussing a shared vision for a more globally-oriented Alliance out to 2030;
• With Australia, we are expanding cooperation related to cyber security and space situational awareness.  The U.S. and Australian Navies recently reached an agreement to deploy an Australian warship in a U.S. carrier strike group in the Western Pacific, giving our naval forces new practical experience operating together cooperatively and seamlessly;
• With the Philippines we are discussing an increased rotational presence of U.S. forces and helping the Philippine armed forces to modernize and build greater maritime capacity; and
• With Thailand, six months ago we announced our Joint Vision Statement, the first such bilateral document in over 50 years.

Our Allies are also working more closely together.  In this vein we are encouraged by growing trilateral security cooperation between especially the U.S., Japan, and the Republic of Korea, as well as the U.S., Japan, and Australia.  The United States is also looking at trilateral training opportunities such as jungle training between the U.S. and Thailand that could also expand to incorporate the Republic of Korea.  Similarly, the United States is working to build trilateral cooperation with Japan and India.

Complex security threats facing the United States and our allies – which go beyond traditional domains and borders – demand these new approaches to Alliance cooperation, and they also demand new and enhanced partnerships as well.

Here in Singapore I look forward to building on our new practical collaboration under the U.S.-Singapore Strategic Framework Agreement, which has guided security cooperation not only in this region, but in the Gulf of Aden and Afghanistan as well.

With New Zealand, the signing of the Washington Declaration and associated policy changes have opened up new avenues for defense cooperation in areas such as maritime security cooperation, humanitarian assistance and disaster relief.  This week, in Guam, a New Zealand Navy ship is visiting a U.S. Naval facility – the first such visit in nearly 30 years.

With the Vietnamese, we are expanding our cooperation – as set forth in a new memorandum of understanding – in maritime security, training opportunities, search-and-rescue, peacekeeping, military medical exchanges, and humanitarian assistance and disaster relief. 

In Malaysia, we are expanding maritime cooperation, including the first-ever visit of a U.S. aircraft carrier to Sabah. 

In Myanmar, we are beginning targeted, carefully calibrated military-to-military engagement aimed at ensuring the military supports ongoing reforms, respects human rights, and a professional force accountable to the country’s leadership.

The United States is also working to enhance our partners’ capacity to provide for their own security and the security of the region.  Ultimately, the United States’ goal in the region is to encourage allies to work together to design the next generation of platforms.  With our closest and most capable allies and partners, we are already working to jointly develop and deploy cutting-edge technologies to tackle emerging security challenges. 

An important example of this cooperation is with India, one of the leaders in this broader Asia region, where we are moving beyond purely defense trade towards technology sharing, technology trade and co-production.

The world’s largest democracy, India’s role as a stabilizing power is of growing importance with the increase of trade and transit between the Indian and Pacific Oceans.  The United States considers India’s efforts to enhance its military capabilities as a welcome contribution to security in the region. 

Our vision for the Asia-Pacific region is an open and inclusive one.  Along with India, other rising powers also have a special role to play in a future security order as they assume the responsibilities that come with growing stakes in regional stability.  To that end, a critical element of our long-term strategy in Asia is to seek to build strong relationships with rising powers – including India, Indonesia and China.

The United States and Indonesia – the world’s largest Muslim-majority nation – are building new habits of cooperation.  That cooperation reflects a shared vision for a peaceful and prosperous region.  As a large, diverse, and democratic country, Indonesia has a key role in helping lead this region.  The United States and Indonesia are working together on humanitarian assistance and disaster response preparedness, maritime security, international peacekeeping, and combating transnational threats. 

Building a positive and constructive relationship with China is also an essential part of America’s rebalance to Asia.  The United States welcomes and supports a prosperous and successful China that contributes to regional and global problem solving.  To this end, the United States has consistently supported a role for China in regional and global economic and security institutions, such as the G20.  We encourage our allies and partners to do the same.

The United States strongly supports the efforts made by the PRC and Taiwan in recent years to improve cross-Strait relations.  We have an enduring interest in peace and stability in the Taiwan Strait.  The United States remains firm in its adherence to a one-China policy based on the three joint U.S.-China communiques and the Taiwan Relations Act.

While the U.S. and China will have our differences – on human rights, Syria, and regional security issues in Asia – the key is for these differences to be addressed on the basis of a continuous and respectful dialogue.  It also requires building trust and reducing the risk of miscalculation, particularly between our militaries.

President Obama and President Xi will soon meet for a summit in California, and they have both been clear that they seek a stronger military-to-military relationship.  And I am pleased that the dialogue between our armed forces is steadily improving.  Over the course of the past year, positive developments have included:

• We hosted then-Vice President Xi Jinping at the Pentagon, and later hosted China’s Minister of Defense;
• Secretary Panetta, General Dempsey and Admiral Locklear led delegations to China recently;
• The first ever Chinese observation of the US-Philippine Balikitan exercise;
• The first-ever joint counter-piracy exercise in the Gulf of Aden;
• The U.S. invitation for China to participate in RIMPAC, the Pacific’s largest multilateral Naval exercise;
• An agreement to co-host a Pacific Army Chiefs Conference with China for the first time; 

Later this year, I look forward to welcoming the Minister of Defense to the Pentagon.

While we are pleased to see this progress, it is important for both the United States and China to provide clarity and predictability to each other about each other’s current and future strategic intentions.  

Accordingly, China, the United States and all nations of the region have a responsibility to work together to ensure a vibrant regional security architecture that solves problems.  America’s bilateral relationships and Alliances will continue to underpin the region’s security and prosperity, and multilateral institutions provide critical platforms and opportunities for countries to work together.

The United States strongly supports a future security order where regional institutions move beyond aspiration to achieving real results, and evolve from talking about cooperation to achieving real, tangible solutions to shared problems, and a common framework for resolving differences.  We are working toward a future where militaries can respond together rapidly, seamlessly to a range of contingencies, such as providing immediate humanitarian assistance and disaster relief.

ASEAN has set the stage for regional cooperation by developing a network of viable institutions.  ASEAN nations play a critical role in this region’s security architecture, and will continue to do so.  In addition to the East Asian Summit and the ASEAN Regional Forum, the relatively new ASEAN Defense Ministers Meeting Plus (ADMM+) provides an important framework – and important framework for nations in the region to pursue common security objectives.

One encouraging example of tangible and practical security cooperation of the ADMM+ is China, Vietnam, Singapore and Japan co-hosting this month a Humanitarian Assistance/Disaster Relief and Military Medicine exercise with Brunei.  The United States will participate in this exercise and also conduct bilateral military medicine exchanges with our Chinese counterparts.

The United States supports Asian nations taking the lead in pushing their region towards greater cooperation and I look forward to meeting with my ASEAN counterparts at the upcoming ADMM+ Ministerial in Brunei later this summer. 

Our relationships with ASEAN nations are critical, and ASEAN leaders extend great hospitality to members of my government every year and work closely every day with members of my government.  This weekend, in my meetings here in Singapore, I am reciprocating this hospitality and I am extending an invitation to ASEAN Defense Ministers to meet together next year in Hawaii.  I believe this first-ever U.S.-hosted meeting of ASEAN Defense Ministers will provide another opportunity for us to discuss a shared vision for a dynamic, peaceful, and secure future for the region.

This future can only be realized if we work together to create an environment where all can prosper and succeed, and where coercion and conflict are put aside in favor of open dialogue.  This requires a continued commitment to certain foundational principles that have enabled this region’s success for generations.  These include free and open commerce; a just international order that emphasizes rights and responsibilities of nations and fidelity to the rule of law; open access, by all, to the domains of sea, air, space, and now, cyberspace; and the principle of resolving conflict without the use of force. 

Threats to these principles are threats to peace and security in the 21^st century.  Unfortunately, some nations continue to dismiss these values and pursue a disruptive path – most notably, North Korea. 

The United States has been committed to ensuring peace and stability on the Korean Peninsula for sixty years.  That means deterring North Korean aggression and protecting our allies, and achieving the complete denuclearization of the Korean Peninsula.  The United States will not stand by while North Korea seeks to develop a nuclear-armed missile that can target the United States. 

The United States has been clear that we will take all necessary steps to protect our homeland and our allies from dangerous provocations, including significantly bolstering our missile defense throughout the Pacific.  No country should conduct “business as usual” with a North Korea that threatens its neighbors.  We are working closely with our Republic of Korea and Japanese allies to strengthen our posture and ability to respond to threats from North Korea.  The prospects for a peaceful resolution also will require close coordination with China. 

Beyond the peninsula, the United States also remains concerned over the potential for dangerous miscalculations or crises posed by numerous competing territorial claims in the region. 

The United States has been clear that we do not take a position on the question of sovereignty in these cases.  That does not mean, however, that we do not have an interest in how these disputes are addressed and settled.  The United States stands firmly against any coercive attempts to alter the status quo.  We strongly believe that incidents and disputes should be settled in a manner that maintains peace and security, adheres to international law, and protects unimpeded lawful commerce, as well as freedom of navigation and overflight.

In the South China Sea, the United States continues to call on all claimants to exercise restraint as they publicly pledged in 2002, and to seek peaceful means to resolve these incidents.  In that regard, we support the recent agreement between China and ASEAN to establish crisis hotlines to help manage maritime incidents.  The U.S. also welcomes efforts to start talks on a Code of Conduct for the South China Sea.  We encourage claimants to explore all peaceful means of settling their territorial disputes and the use of the dispute adjudication resolution mechanisms provided by the Law of the Sea Convention.  Such efforts should not hinder progress towards developing a binding Code of Conduct.

Even as we seek to uphold principles in well-established areas, we must also recognize the need for common rules of the road in new domains. 

The U.S. and all nations in the region have many areas of common interest and concern in cyberspace, where the threats to our economic security, businesses and industrial base are increasing.  In response, the United States is increasing investment in cyber security and we are deepening cyber cooperation with Allies in the region and across the globe.  Next week I will attend a meeting of NATO Defense Ministers with many of my NATO colleagues in attendance here this morning devoted to cyber issues.

We are also clear-eyed about the challenges in cyber.  The United States has expressed our concerns about the growing threat of cyber intrusions, some of which appear to be tied to the Chinese government and military.  As the world’s two largest economies, the U.S. and China have many areas of common interest and concern, and the establishment of a cyber working group is a positive step in fostering U.S.-China dialogue on cyber.  We are determined to work more vigorously with China and other partners to establish international norms of responsible behavior in cyberspace.

The United States and ASEAN nations, Pacific allies, and all nations are far more likely to be able to live peacefully and prosperously in a world where we are bound together by strong economic ties, mutual security interests and respect for rules, norms, and the institutions that underpin them. 

This is essential because we are living at a defining time.  For Americans, the words of Franklin Delano Roosevelt at his Fourth Inaugural on January 20, 1945 echo even more loudly today, when he said:  “We have learned that we cannot live alone, at peace; that our own well-being is dependent on the well-being of other nations, far far away…We have learned to be citizens of the world, members of the human community.”

In the 20^th century, America’s role as a leader in the world community helped this region grow and prosper.  It came at a cost – one I experienced first-hand as my father, my brother and I were sent off to war in Asia.  Many others here in this audience this morning from other nations across the region understand, far better than I, the high price so many have paid for the peace and prosperity we have enjoyed.

We must not squander those precious sacrifices.  I do not want my children, nor your children, nor anyone’s children, to have to face the same brutal realities that were visited on this region in the last century.  Instead, I, like each of you, want them to have an opportunity, all of them to live in a century of peace and prosperity.  We owe that to future generations.

This is a complex and challenging time, but it is also a hopeful time.  It is hopeful because of the tremendous legacy that has been built through the shared sacrifices of many nations and millions of their people.  It is hopeful because there exists today more real possibilities for more people than ever before in the history of man to prosper.  Whether those possibilities will be fulfilled depends on us. 

The world’s seven billion people are being brought closer together than ever before in human history, and we will add two billion people to the face of the earth in the next twenty-five years.  Together, we have the opportunity to forge a secure, prosperous and inclusive future.  The decisions we make today will help determine how that future unfolds in what will undoubtedly be a Pacific century.

Thank you.