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Michèle Flournoy on Russia, China, and global risk

Octavian Report: What are the big strategic threats the U.S. faces at the moment globally and what should our policy posture be towards them?

Michèle Flournoy: I think the biggest threat that we’re facing is a return to true great power competition. First and foremost with China in terms of economics, trade, technology, but also increasingly in the security sphere. Secondarily, and primarily in the security and political sphere, with Russia in and around Europe and elsewhere where Russia’s trying to reestablish its influence. They’re really quite different challenges but you can lump them together in the sense that they are both great power competition. We really haven’t wrestled with that since the end of the Cold War. I’m not suggesting we’re returning to a Cold War because I don’t think we are, but we are returning to a much more competitive global environment, where we really have to play our cards very well and very carefully.

One of the things I think we need to do is recognize the unique strategic value of our alliances and partnerships. We are the only country in the world that has an alliance like NATO behind us, that has strong political and economic partners throughout Asia. China doesn’t have that. Russia doesn’t have that. No other country in the world has that and right now, we’re seeing things through more of a transactional bilateral lens that greatly discounts the strategic value of those relationships in this more competitive period.

OR: Can you outline the differences in U.S. strategic competition with Russia and China and give a sense of what “playing our cards right” looks like through both of those lenses?

Flournoy: I think China is clearly a rising power with expanding influence throughout Asia and more broadly. It has aspirations to become the dominant power in the Indo-Pacific Region. Tremendous growth in its economy. A tremendous resource in its population. Pretty good success in bringing millions of people out of poverty and raising the standard of living — not universally, but pretty remarkably in a reasonably short amount of time. China has a government that now, having consolidated power, has a strategic plan to drive government investment in key areas of technology and their economy to take us on head on.

I think with regard to China, it’s clear that the trade landscape is not level or fair. We’ve had probably an historic transfer of wealth in the form of stolen intellectual property from the United States to China over the last many years. They continue to restrict access for a number of U.S. companies and sectors. The complaints about unfair trade practices and a lack of a level playing field are valid. But I think the way to go after that is to marshall all of our allies and partners who also have the same experience to push back on China together. We’re going to be much stronger pushing as a group than the U.S. will be via imposing some tariffs bilaterally. We’re not using the leverage of like-minded states with similar interests and experience. We’re not using those as leverage to be more effective in pushing back on China.

OR: Does Trump’s trade policy vis-à-vis China bring political risk with it?

Flournoy: I do think there’s political risk in the sense that some of these tariffs are going to really hurt sectors of the American economy. Depending on the particulars and how this goes in the future, you’ll have parts of agriculture hurt as the Chinese impose reciprocal tariffs as they already have announced. This will not be cost free to the American economy or to the American workforce. I think if this really escalates and it becomes a prolonged trade war, it could very much backfire against Trump politically at home.

No one’s sure whether this is simply a tactic to get something else or whether this is sort of the one card he’s going to play. The problem is it’s not clear what his strategy is to actually get at the more fundamental issues that are at the root of the imbalance and the lack of a level playing field. Tariffs are not going to get at the intellectual property issues. They’re not going to get at the market access issues that are fundamental to the problem.

One more thing about China: in the security domain, they really are trying to change the rules of the road in Asia-Pacific in terms of international law and international norms. I think it’s very important that the U.S. stays present, that we consistently enforce the rules of the road, whether it’s freedom of navigation, whether it’s standing up to provide support to a partner whose sovereignty is being violated, whether it’s stepping up to help defend an ally. It is very important that the U.S. also remains consistently present and a stabilizing influence in Asia Pacific as China starts to flex its military muscle more.

OR: What should our Russia strategy be?

Flournoy: Russia is not a rising power by any objective measure. Its economy is struggling. It’s one of the few developed countries where the average life span is actually going down, not up. It has an authoritarian system that is providing for the few and the wealthy but not the majority of the population. This is not a rising power. It’s not a terribly successful state by any objective measure. But what Russia does have is a deep sense of grievance that Putin has tapped into.

Russia has not been respected or treated appropriately since the end of the Cold War. Putin wants to reassert Russia as a great power by reexerting influence on his periphery, as we saw in Crimea and then Ukraine. He wants to project power abroad as we’ve seen in Syria, trying to reestablish a foothold in the Middle East. He wants to call into question the biggest threat to his approach to government, which is democracy. The more he can cause chaos in Western democracies, whether it’s in Europe or more recently in the United States through meddling in elections, the less credibility democracy has as a threat to the political system he’s tried to put in place in Russia itself. Putin is also continuing to invest quite substantially in the Russian military in ways that try to exploit some of our weaknesses and undermine some of our strengths. We do have some serious military technology and capabilities that we would have to contend with if it ever came to that. That’s another aspect.

OR: What does a successful pushback from the U.S. look like on that front?

Flournoy: I think the first thing is to reestablish a clear sense of deterrence, to make it clear that we are willing to impose costs if Russia tries to meddle in our elections again in the future and that we are serious about our commitment to NATO and in our statements and our military posture that Russia should not make the mistake of testing that resolve or coming across a border into the Poland or the Baltics. Not with military forces but with non-military measures. I also think we do have areas of common interest and can we get back to trying to work together those areas. Is there another chapter of arms control? Is there a way to try to negotiate some sort of settlement in Syria? Is there a way to work on other nonproliferation issues together? Or climate, if we had an administration that cared about climate.

These relationships are not purely competitive or they’re certainly not purely cooperative. They’re elements of both and even when you’re in a very competitive relationship, you need to try to find areas where if you do have common interests, you can try to develop some habits of cooperation around those.

OR: What is the shape of U.S. foreign policy now? How is it affecting our our national security?

Flournoy: Despite the fact that the administration has put out some strategy documents — they published a national security strategy and a defense strategy; the latter in particular most people on both sides of the isle thought was a reasonable document — neither of those strategies appears to be the actual strategy of the president. The biggest question right now is trying to make sense of where this administration actually stands. Are they isolationists? Are they unilateralist? When you have the U.S. president objecting to the G7 using the term “rules-based international order” in a communiqué (when we were the ones who architected that order and have always been its staunchest defender), you’ve gone down the rabbit hole.

You listen to different officials, you get different answers to that question. You listen to the President and, depending on the day, you get different answers to that question. I think the biggest challenge we have right now is a lack of clear strategy, the lack of clear U.S. leadership, and direction in terms of what role are we going to play in the world and how are we going to treat our allies and our competitors and opponents. The stark images of the atmospherics of the G7 and the atmospherics of the Kim Jong-un summit, if you were arriving from another planet, might have suggested that the G7 was a bunch of adversaries and Kim Jong-un was our ally. We’re in a period that I think our interlocutors internationally find very confusing and very hard to make sense of.

OR: To what extent has it, if you think it has, compromised our national security?

Flournoy: I think that we’re certainly missing opportunities to leverage the strength of our alliances to get things done together, lie I said. I think a trans-Atlantic unity in approaching China would be much more effective than the way we’re approaching the China trade issues today. But I also think there’s damage being done. Whether its failure to go forward with the Trans-Pacific Partnership, which leaves a huge vacuum economically in the region into which China will happily step and create an alternative trade set of agreements or arrangements that are not as supportive of our interests. Whether its relationship damage being done in the sense that our allies, if they feel that we’re not on the same page, they feel that we’re unpredictable, they feel that they can’t really on us, are likely to start hedging in terms of turning elsewhere to safeguard their own interests.

The question is: can we limit that damage and can we recover from it — or is going to be permanent?

OR: Do we live in a post-American world?

Flournoy: It depends on what we mean by post-American. To the extent we believe we had a unipolar moment after the end of the Cold War, I think that moment has passed. We’re already in a much more multipolar world. The question is, will the US still lead a coalition of like-minded states to remain the most influential power in the world, able to pursue collective interests and objectives effectively? I think there, the jury’s out. I think it depends on what happens in the next presidential election and whether we have more of this or whether we elect a president — Democrat or Republican — who is more mainstream and understands the value of our alliances and the importance of our continued leadership role in the world.

Playing our cards right here means investing in the drivers of our economic competitiveness. Higher education, technology, and the ecosystem that supports our innovation and infrastructure. If you look at what China’s doing, they’re investing heavily. Now, we’re not going to do it in the way they do it because we have a different system. But the government does have a role to play in creating the incentives for that investment to occur.

We have the best military in the world. But if we stand still, and we don’t reinvest in new technologies in the cyber domain, artificial intelligence, hypersonics — there’s a whole list of these — and we don’t continue to stay on the cutting edge, that superiority will be harder to sustain. Deterrence will be harder to sustain in the face of other great powers who are making those investments. There’s a lot of work that we need to be doing, and it’s not clear to me that we have the focus and the sense of urgency that’s required to be ready for this much more intensive competitive period.

OR: What do most analysts and observers miss about the risk profile of the contemporary world? Where do you see the next big crisis, be it political, economic, or social, breaking out?

Flournoy: I think that one of our biggest risks is assuming that our advantages are inherent as opposed to something we have to work for to sustain, whether it’s technological edge, economic edge, military edge, even soft power.

As far as the next big crisis — I’m the first one to say that the approach to North Korea diplomatically was terribly unorthodox and probably not how I would have advised an administration to go about it. The biggest risk is that we run out of diplomatic options and the president decides to go to war. The problem with the military approach in North Korea is it’s likely to be ineffective because their nuclear arsenal is dispersed and deeply buried.

Secondly, North Korea would likely respond to any kind of military strike with strikes on Seoul, a city of 25 million people. That means lots of civilian casualties. Any limited strike would almost certainly escalate and start a wider conflict. That conflict would be nothing like an Afghanistan or Iraq. It would be more intense, more bloody, with tens of thousands of casualties on both sides. It would be something that the American people are completely unprepared for and would define and derail this administration if it happened. I think that’s the thing that I don’t want: to wake up one morning and hear that diplomacy’s over. I think that would be truly catastrophic, certainly for the Korean peninsula but also for us.