The New Great Game in the Pacific Islands

**Mike Green** (0:00)
Welcome to The Asia Chessboard, the podcast that examines geopolitical dynamics in Asia and takes an inside look at the making of grand strategy. I'm Mike Green of the United States Studies Centre in Sydney and the Centre for Strategic and International Studies.
Welcome back to The Asia Chessboard. I'm Mike Green and I'm joined by a distinguished American diplomat and friend of many decades, I think I'm allowed to say, Ambassador Laura Stone. Laura is Senior Advisor at DGA Albright Stonebridge Group and is about to head to Stanford for an exciting chapter teaching about U.S.-China relations in Asia. She served most recently in government as the US. Ambassador to the Republic of the Marshall Islands, and she's also been the Deputy Assistant Secretary of State for China and Mongolia, the DAS for India, Bangladesh, Sri Lanka, and she's had key positions on trade, investment policy throughout her career in the State Department. Laura, great to have you. We'll talk Marshall Islands, but we'll also talk China and Strategy and State Department.

**Laura Stone** (1:03)
Sounds great.

**Mike Green** (1:04)
Let's start with you. When we first met, you had one foot in academia and you had one foot in the State Department. You were working in INR. I remember I was in a similar place. A lot of us were trying to decide what to do. You went down the diplomatic route.

**Laura Stone** (1:16)
I did.

**Mike Green** (1:17)
Tell us a bit about that.

**Laura Stone** (1:19)
Yeah. At the time, I was studying a lot about how these emerging economic states essentially in Asia were affecting geopolitics. I had no idea then that I was hitting such fertile ground because these were, in many ways, very, very nascent, very emerging states, and they were developing very rapidly, but I don't think anyone expected what has happened. In particular, no one has expected what's really happened with China. I started out doing Japan, and I really had this fundamental idea, which I think was being tested at the time, that their economics was going to lead to stability, to democratization, to all these wonderful things that were going to happen, that were going to take over Asia. At the time, it was an emerging Japan and a Japan that could say no. This was the late 80s, early 90s.
What ended up happening was that I ended up gradually shifting in those early years over from doing Japan to doing China, because China, at the time, there were many questions about whether China was, in fact, a real destabilizer on an economic front in the region. There was a lot less concern about it as a geopolitical force, but the Asian financial crisis had just ripped through the region. Things were collapsing and it really looked like some of the Chinese banking system and possibly the Chinese economy was going to collapse as well.
At the same time, we just come out of Tiananmen, which at least in part had been inspired by some hyperinflation and a Chinese unwillingness to do some of the reforms that it needed to do. That's why we were looking at things like integrating China into the global economic system. Now, obviously, that has not proved to be a incredibly stabilizing effort. In fact, it's rather had the opposite, but it was where I started and then it was early enough that my brain was spongy enough that I could learn Chinese still and so ended up really spending most of my career working either on China or on issues related to China.

**Mike Green** (3:25)
It was really great time to be coming into the field in some ways. Although at the time, it filled like chaos and we all felt that the Clinton administration and senior people were making all kinds of mistakes about China and Japan. Kurt Tong, who is just new to the State Department, and David Asher and Kurt Campbell, and we all thought we'd figured it out. But the prevailing mood at the time was that Japan was on this inexorable rise and China was weak. The guys who taught me Japan, they came up in an era when our main concern was Japan was too weak. Then by the early 90s, we thought Japan was too strong. In the 80s and in the 70s, we thought China was too weak and now we think China is too strong. Are we ever happy?
Our American foreign policy makers ever happy?

**Laura Stone** (4:09)
Well, it's more like we have this inherent arrogance that we can somehow put our hand on the tiller and drive these really strong geopolitical currents in a way that maybe we have a little less influence over than we thought. But actually, to get back to your original question, why did I go into foreign policy as opposed to academia? I think I really did want to have an immediate impact on what I was doing. I really enjoyed sitting around and thinking deep thoughts. I think that's often one of the criticisms that folks have about me as I sit back and I try to really think and really test the assumptions that we're working on.