Remarks by Secretary Hagel at the IISS Asia Security Summit, Shangri-La Hotel, Singapore

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 21st 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 21st 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 21st 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 21st 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 1st and 3rd Marine Expeditionary Forces and the Army's 25th Infantry Division are all returning to their home stations in the Pacific theater. The United States Army is also designating 1st 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 agenda based 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 U.S.-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 20th 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.

JOHN CHIPMAN: Secretary of defense, thank you very much for your speech, which as trailed not just provided the facts and statistics that explain how the rebalance to Asia has been implemented in practice, but also explained in considerable detail how that rebalance has been executed within Asia and across the many alliances, partnerships and relationships that you enjoy in the region.

We'll now open it up for questions and comments from the floor. If you could please put your nametags up, I will recognize two or three straight away, but be assured that the rest of you will also be on my list. And I'll just call out the first three who I'll ask to intervene in order. Professor Heisbourg from France, Igor Yurgens from Russia, and Bonnie Glaser from the United States, but the others, if you put your nametags up, your requests will be recorded.

So, first, Francois Heisbourg. We'll take a group of about five or six, and then perhaps the secretary can give answers after many of you have had your points made. Francois Heisbourg first.

Q: Thank you very much. And, Chuck Hagel, it's really great to see you here again, as someone who was indeed present at the creation. As chairman of the IISS, I really would want to thank you.

Now, last year, your predecessor, Leon Panetta, presented the New American Strategic Posture, now known as the rebalance, and in answer to a question of mine, he said two things. One is that sequestration was not going to happen, and the second one was that, if sequestration happened, the new strategic guidelines would be very severely challenged. He actually used a rather more colorful expression than what I've just said.

Now, we know that he was wrong on sequestration -- it actually did happen -- but was he really wrong on his second statement? And if not, if he wasn't wrong, that is, if the guidelines needed not to be revisited through -- because of sequestration, could you explain how that miracle somehow happened?

And I ask this question, as it were, both from the regional perspective, that is, the rebalances, the reinforcement of the U.S. footprint in this region, but also the flipside. You know, you said earlier in your speech that the rebalance was not a retreat from the rest of the world. Are you managing to hold the two ends of the ring, as it were? Thank you.

MR. CHIPMAN: As the secretary thinks about that reply, Igor Yurgens next?

Q: Mr. Hagel, thank you very much for your very impressive analysis of what's going on in security in the main in Asia. Russia was absent from your analysis. I probably understand why. But two-thirds of our territory is Asia, impressive security developments happening in Asia. We have our own rebalance to Asia, so far diplomatic and economic, but could you tell us, where do you see Russia in this equation? So much so that in Russian and American expert community, there is a term, dual containment, which means Russia and China contained by the United States. Thank you.

MR. CHIPMAN: Bonnie Glaser?

Q: Yes, thank you, John and Secretary Hagel. In your speech, secretary, you noted that the United States stands firmly against the use of coercion to change the status quo in some of the maritime spaces, including the South China Sea and the East China Sea, and yet we have seen in recent years the use of various means, including coercion, to change the status quo, for example, in the Scarborough Shoal in the South China Sea last year, and now in the East China Sea, which China has effectively contested Japan's administrative control over the disputed Diaoyu-Senkaku Islands. So I'm wondering what more you think can be done to prevent further use of coercion to change the status quo in these areas.

MR. CHIPMAN: Mr. Kato on front right, from Japan?

Q: Thank you, Mr. Secretary. The defense strategic guidance, which you touched upon in your speech, names China and Iran as a state that, I quote, "will continue to pursue a symmetrical means to counter our power projection capabilities." And you explained all sorts of new technologies and doctrines to be deployed and applied to this region, and I think it was very reassuring.

But my question is, to what extent, with all those new technologies and doctrines applied, are the U.S. power projection capabilities still countered by the growing anti-access area denial capabilities of China? And to what extent can friends and allies of the United States, like Japan, can depend on U.S. deterrence and defense? Thank you.

MR. CHIPMAN: I'll take on more in this round. Don't worry. There will be at least two or three more rounds. Mr. Lloyd Parry was next on my list.

Q: Richard Lloyd Parry of the Times. A very simple question. Does the North Korean government of Kim Jong-un have a right to exist? (Laughter.)

MR. CHIPMAN: You want to take that group?

SECRETARY HAGEL: Okay. Thank you. Let me begin with Francois' question regarding Secretary Panetta's comments last year. As you so artfully noted, Secretary Panetta is a very significant user of colorful language, which I've always admired, actually.

On sequestration, I am sure, as was the case with every policymaker, every American at the time, we were hopeful that there would be some accommodation, some agreement to replace sequestration as the current law and essentially, as you know enough, about across-the-board cut in our federal budget. But so far, that has not occurred, and that is the law of the land.

Now, your I think more specific question, with that being the reality, how is it possible that you can continue to fund the programs and the policies that you have laid out and established?

Two very quick answers. I noted in my remarks that, soon after I came in to office, about three months ago, I directed a strategic choices management review of our budget, of our assets, of everything, because it was clear to me that we were going to need to be prepared to deal with worst-case scenarios and the possibility, which right now is the reality, of evolving sequestration.

So what we are doing -- and this is really the answer to your question -- like any entity, individuals, you prioritize your resources to match your strategic interests. And I think in my remarks today I've made it pretty clear -- I suspect as Secretary Panetta did last year, President Obama has, Secretary Kerry has -- that our strategic interests are very clear in Asia Pacific. And we will continue to match our resources -- and as I noted also, as a reminder in my speech, they are considerable resources -- to fulfill the commitments that we have made to our allies, to our partners, in this region, because it is clearly -- will continue to be clearly in the interest of this country.

The question Igor raised regarding Russia, I think it was my speechwriter's fault that -- (Laughter.) I picked up bad habits in the Senate. You know, you blame everybody.

No, it wasn't their fault, and there was no intentional reason that Russia was not included. As you know, Igor, we -- the United States government -- starting with the president, who is going to see President Putin this month at the G-8, have an opportunity to see each other -- Secretary Kerry was there recently in Russia -- we stay very closely connected. I just met with the Russian national security adviser two weeks ago at the Pentagon, because our futures are very closely connected. You know that. They will stay connected, certainly -- not just the geographical responsibilities that include the boundaries of Russia, but your interests are global, as well.

And so that bilateral relationship between Russia and the United States remains to be a critical element of every component of our strategies, of our interests, and that includes every -- every corner of the Earth.

Bonnie's question regarding coercion and disputes in South China Sea, as you noted, I mentioned what our general position is. There are mechanisms, as I noted in my comments, to resolve these issues. They need to be resolved within the boundaries of those laws and agreements and forums. And I also noted that a continuation of that dialogue is the only way to resolve those disputes.

We believe -- I suspect most countries do -- that military options should not be considered in these -- in these difficult, complicated issues. I said clearly we don't take a position, except that we do feel strongly that the mechanisms that were put in place to resolve these kinds of disputes should be used.

Mr. Kato's points about Iran, China threats, I would answer your question this way. With emerging technologies, we know there are always accompanying new challenges with those technologies. And as I noted in my comments, I believe -- I think most nations believe or governments believe -- that the best approach to resolving these challenges in these areas -- and particularly cyberspace -- is through mutual cooperation, mutual interests, rules of the road that apply to all of us.

Cyber threats are not just a threat to the United States or a threat to any one country. They're threats to China. They're threats to every country. And we share those -- those common interests. So we think the best approach is the common interest approach to all of us cooperating on dealing with these threats.

I recognize -- as everybody else does here -- these are complicated. I mean, to try to figure out where a cyber attack has come from, who initiated it, for what reason, that's not quite as easy as the days when you could identify a navy sailing across the ocean to attack you or an army crossing a border to attack you. You knew whose army that was.

This is different. This is also one of these situations that puts in risk dangerous miscalculations and mistakes as to who was behind an attack. So the only answer to this is working through these mechanisms of common interests, common approach, threats to all.

On the last question of North Korea, North Korea's leadership and their government is not an issue that is of any responsibility of the United States. That's the North Korean people. But it is the responsibility of the United States to maintain our security and to take seriously threats against our country, against our allies, and we will continue to respond to those, as I noted, pretty clearly, I think, but more importantly, try to work with the nations of this area to help resolve these differences and give North Korea every opportunity to step forward and denuclearize, step forward and become a responsible member of the nations of the world.

If -- if they would be willing to do that, certainly all the nations of this region, including the United States, would be willing to -- to reach out. But until that step is taken, we have to deal with the realities that we see coming out of North Korea and the threats.

Thank you.

MR. CHIPMAN: I'd like to take another round. If everybody makes crisp points, we should be able to get seven or eight more people in. First, Major General Yao from the People's Republic of China. Yes, if you press your microphone, yes, I recognize you. Now you can speak. Thank you.

Q: Thank you for a very comprehensive presentation, and also thank you for mentioning China several times in your presentation. (Laughter.) Since the rebalance has been raised last year, China and some -- also some other countries, experts in China and in outside China, has been widely interpreted -- has been widely interpret the rebalance as attempt to contain China's rising influence and to offset the increasing military capabilities of the Chinese PLA.

And the U.S. government officials have using -- have on several occasions clarified that the rebalance is not against China. However, China is not convinced.

How can you assure China that the U.S. rebalance to Asia Pacific, with all the enhanced deployment, 60 percent naval assets, 60 percent air force assets, and military capabilities you have just mentioned, how can you assure China that this is part of the effort to build a more positive and constructive relationship with China?

And how can you compromise or balance or prioritize the two responsibilities you mentioned in your presentation when they come into conflict? One is to assure allies, and another is to positively engage China. Thank you.

MR. CHIPMAN: Sanjaya Baru from India and the IISS?

Q: Mr. Secretary, I was wondering how you see the U.S. drawdown, if not withdrawal from Afghanistan, impacting on regional security?

MR. CHIPMAN: Thank you. Mr. Norodom?

Q: Thank you, John. Norodom, privy councilor to his majesty, the king of Cambodia. Mr. Secretary -- (inaudible) -- you mentioned a lot of cooperation between ASEAN country. It seemed to me that Cambodia is not mentioned on your future cooperation. So my question is, can you elaborate on this?

And second question is, we hear that Myanmar is ready to join the Golden Cobra Operations. How do you expect that more ASEAN state member will join this operation? Thank you.

MR. CHIPMAN: And Mr. Abbasi on the back left, Mr. Abbasi?

Q: This is Ms. Abbasi.

MR. CHIPMAN: Ms. Abassi, sorry.

Q: Thank you -- (inaudible) -- I would like to draw your attention briefly towards Pakistan and mature democratic transition, actually, in Pakistan and your engagement with a new establishment in that particular country. Thank you.

MR. CHIPMAN: And, finally, Dana Allin?

Q: Thank you. Secretary Hagel, among the principles you mentioned in your speech was fidelity to the rule of law. Happens that President Obama gave a rather important speech last week, both about moving away from an overriding focus on -- strategic focus on terrorism, but also about how the residual threat can be battled while remaining faithful to the rule of law. And he quotes James Madison, to the effect that no nation can preserve its freedom in the midst of continual warfare.

I just wonder if you can say something about the implications of this speech for the U.S. military establishment, but also the principles he laid out, it seems to me, require a cross-party political consensus in the United States, really, to be implemented. And I wonder if your party, the Republican Party, is going to accept them.

MR. CHIPMAN: I'll take one from Malaysia, Mr. Abdul Majid?

Q: Thank you. Thank you, John. I've got a very specific question. Mr. Secretary, in Washington, at a conference last month, the Indonesian foreign minister suggested the negotiation of an Indo-Pacific regional security treaty. What is your response to that suggestion? Thank you.

MR. CHIPMAN: Thanks very much. I know there are a few people that I haven't been able to include in this session, but perhaps Secretary Hagel will be answering your question anyway, as he addresses those that have already formerly been asked. Secretary Hagel?

SECRETARY HAGEL: Thank you.

As I have made notes of the six questions which I will respond to, I saw last night -- and I see again this morning -- my dear old friend, the former secretary of defense, Bill Cohen, who was one of our best. And so if I really was as smart a secretary of defense as -- as occasionally some people say I am -- that's not a majority, by the way -- (laughter) -- I should have had Cohen up here sitting next to me, giving me the answers to the questions. But it's too late now, and, Bill, I wanted to recognize you this morning. And thank you for your service, what you've meant over the years to this region, as well.

I'll reverse the order of the -- answering the questions. I'll start with the last question on India. And I would answer it this way. You recall what I said in my remarks about -- or Indonesia, I'm sorry -- about the remarks about Indonesia and specific exercises, programs, bilateral arrangements that we are initiating.

I think what your question really is about falls within the large framework of those bilateral initiatives. And those initiatives are very important -- we see them, very important for certainly us -- and I had an opportunity to meet last night with the Indonesian defense minister to go over some of these -- these arrangements and exercises and initiatives.

So we will continue to work very closely and strengthen those engagements and those initiatives with Indonesia, because as I noted in my comments, Indonesia is one of the real anchors to this part of the world and their leadership will continue to be very important.

Dana Allin's question, let me address the last part of that question and then work back, regarding my political party, the Republican Party, from whence I came, whether the Republican Party would be agreeable to accept the principles that President Obama laid out in that speech last week.

First, I don't speak for the Republican Party. I can't predict where the party will be, but I think what is more important than where the party will be is the assessment of individual members of Congress who especially have responsibility for national security issues based on their committee assignments. We have many legislators here in the audience who are former legislators.

And so each individual will assess based on what he or she thinks is in the best interests of the future of our country and our security and whether they agree with the president's statements and principles, as he laid them out, or not. I believe -- not just because I'm his secretary of defense, but I've been on the record pretty clearly on this, that the speech he gave last week and his position he's taking is the correct position. I've supported that position long before I had this job.

It is complicated. It does include all the dynamics that Dana noted, when we're dealing with asymmetrical threats and terrorism and all the uncontrollables that are out in the world today. Yes, as he quotes Madison and did quote Madison, those are -- those are principles, but also, the reality of these kind of threats. The world's never seen these kind of threats.

But I think what is fundamentally key in what the president said and what I know he believes strongly is that we have to stay within the framework of law. And we can't go preach law and order to other nations unless we are complying with that, and that's -- that very much was the centerpiece of what the president's speech was about, as he tried to also enunciate all these other imperfect realities and real threats that face us all.

On Cambodia, there was no particular reason why Cambodia was not mentioned in the speech. Cambodia is emerging as more and more of an important part and player and leader in this region. We recognize that. We also recognize that, as that occurs and evolves, the United States is looking forward to a stronger bilateral relationship and as part of the overall alliance that will further strengthen this part of the world.

On India, a question -- good question regarding -- as we transition our forces out of Afghanistan, will that have an effect on the stability and security of certainly Central Asia, South Asia, and what kind of an effect could it have?

I would answer your question this way. You all know, the United States and its ISAF partners, many are here in the audience, and I would like to, once again, thank our ISAF partners represented in this room for your contributions, continued contributions. I know it has been a -- it's been difficult for your countries, your budgets, your people, but it's been important.

Twelve years. And over that 12 years, we have all worked very hard to help develop an Afghan national army, police force, government that -- that can govern and protect and defend themselves. I mean, that -- that should be the goal of every exercise, not to be an occupying power indefinitely, and that was never the intent.

So I think that's important to always keep in mind as we frame up the future of Afghanistan and how that future certainly has an effect -- will have an effect on the future security of Central and South Asia. I can't predict any of that. I'm hopeful. I think the Afghans have made strong progress, imperfect. Our ISAF partners in the United States will transition out over the next two years. There will be some residual responsibilities that we will have, as the president has said, train, assist, advise. Most of our ISAF partners will continue to assist there. So I think that's the answer.

On China, the question -- many parts to it, but essentially, I think it comes down to, how can the United States assure China of our intentions, in spite of the inventory of issues that I enunciated this morning, as we are moving 60 percent of our naval asset base, our combat aircraft, our capabilities here? Doesn't that essentially really say it all?

No, it doesn't. I would answer it this way. I said in my statement here this morning that we welcomed a strong and emerging and responsible China. We do. As I said that about other nations, about India and -- and Indonesia, other nations, and we do.

We look forward to that emergence for many reasons, but one -- as -- as among them all is as important as any other, and that's the new responsibilities that great nations take on, responsibilities for security in their region, and -- because they have huge stakes in that stability and that peace. We recognize that. We want to be part of that.

As I also said, as has been noted up here and was noted last night -- the United States has been a Pacific power for 200 years. This isn't new. We've had interests, partnerships, relationships in this part of the world for a long time. We have interests here, too, just as China and Russia and other nations have interests all over the world.

So working together on these issues -- and last point I'd make, your -- your point about, how can the U.S. assure China of our intentions? That's really the whole point behind closer military-to-military relationships. I've noted in my comments, we don't want miscalculations and misunderstandings and misinterpretations. And the only way you do that is you talk to each other. You've got to be direct with each other. You have to share with each other. You've got to be inclusive with each other.

And I think we're -- we're on track with that. I think we've made good progress on that. I think we've made continued progress and will make more progress with that. Thank you.

MR. CHIPMAN: Secretary of Defense, thank you so very much for a very comprehensive speech, answers to questions --

SECRETARY HAGEL: Thank you.

MR. CHIPMAN: -- and I hope you appreciate the warm regard of the Shangri-la Dialogue community for all of your work in the Asia Pacific region. Thank you very much, indeed.

SECRETARY HAGEL: Thanks. Thank you. Thank you very much.