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ACCJ EVENT | FIRESIDE CHAT

NOVEMBER 2014

Tension and Prospects

General (Ret.) David Petraeus warns about China and Russia, sees hope for Japan

By David Hulmes

Life for General (Ret.) David Petraeus is full of tension: tension in the Middle East, tension in Eastern Europe, tension between Japan and its neighbors, and tension in energy markets. So getting these matters off his chest in front of an audience at the Conrad Tokyo must have seemed like one big therapy session.

And yet amid all that gloom, the one-time director of the Central Intelligence Agency and former commander of coalition forces in Iraq and Afghanistan can see the light, particularly for Japan and the business community here.

Addressing a question about the prospects for a new superpower relationship between the United States and China, Petraeus promised that Japan and other nations in the Asia–Pacific region would not be snubbed just because there was a new kid on the block.

“There is no question of shunting aside a country of 130 million people in favor of one of 1.3 billion. Let’s include South Korea and others in the overall region. There are strategies and realities in the way competition is playing out,” Petraeus said.

He acknowledged, however, that China’s economic surge was “accompanied by some friction” that had led to caution in the corridors of power. “When you look at some of the actions of China, the US is right to be concerned.”

Last year, the Chinese government insisted airlines give it advance warning of intended flight paths near the disputed Senkaku Islands, and stated that failure to do so would prompt emergency defensive measures. This provoked anger in Tokyo.

“Many of the leaders with whom we have talked in the region have stated cautious optimism that these tensions have calmed a bit. Time will tell, but I think it’s worth all the participants recognizing you should be cautious that an action doesn’t spiral out of control,” said Petraeus, who turns 62 in November.

“It’s very important to recognize that not only should we not try to contain China, [but] China can’t be contained.”

Flashpoints
On Eastern Europe, Petraeus warned about a significant geopolitical risk premium posed by Russian leader Vladimir Putin in relation to a bloody civil war in Ukraine, and his apparent desire to redraw boundaries “at the point of a gun.”

The warning should resonate loud and clear with Japan, which is in dispute with Russia over islands that lie between the nations. Known in Japan as the Northern Territories, they became a political flashpoint in August when Russian forces conducted military drills there.

“His ambitions are to resurrect the Russian Empire and be remembered as Vladimir the Great or something like that … It threatens the post-Cold War landscape. Europe does depend on Russia for energy needs, so the ramifications are very important. If they turn the oil and gas off, they may not turn it back on,” said Petraeus.

With the world’s eyes on the march of the Islamic State (IS), Petraeus reckons more “boots on the ground” are needed to win the battle, which would take “many years” in the case of Syria.

Since his abrupt departure from the CIA in 2012, following revelations of an extramarital affair, Petraeus has overseen investment firm KKR’s Global Institute, with a focus on geopolitical and macro-economic trends, as well as governance, social, and environmental issues.

This year, KKR spent almost $2 billion to buy Panasonic Healthcare.

“We’re very hopeful about Japan. KKR wouldn’t have invested $2 billion here if we weren’t sure we could get a very good return for our investors,” said Petraeus.

“The demographic downturn or, as some have characterized it, the death spiral, definitely needs to be addressed,” he said, adding that in relation to China, “Japan has at least got rich before it’s got old.”

DavidHulmes

 

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A former Bloomberg and Reuters editor in Japan, David Hulmes recently returned to Tokyo from London.

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