This transcript is drawn from an interview between Hudson Institute Senior Fellow Rebeccah Heinrichs and Assistant Secretary of Defense for Asian and Pacific Security Affairs Randall Schriver. It has been lightly edited for clarity.

Key quotes from Assistant Secretary Randall Schriver:

* “Over time, we would be open to trilateral arms control discussions. The Chinese, of course, rejected that. I wonder why, given what they've got developed and deployed. But it would make no sense for us to self-limit in an environment where the Russians have cheated and the Chinese have no limitations, and in fact, have exploited the limitations we've put on ourselves, significantly.”

* “I think, given the asymmetrical advantage that the Chinese have developed with the deployment of these [intermediate range] systems, these are systems we're going to have to look at deploying when the options are available to us--- it could certainly be stabilizing in the sense that it could create a deterrent quality, and put some limitations on Chinese adventurism.”

* “The Australians are going to be extraordinarily important in our partnership, and that's what's happening in the Pacific Islands in Oceania. Those countries are small, vulnerable, and susceptible to Chinese influence through their promises of economic assistance….Fact is that we sort of need all hands on deck for every relationship. And the Australians have a new policy they refer to as the Step Up where they're literally moving resources from other regions and within their budget to commit to the Pacific Islands.”

HEINRICHS: Good afternoon, everybody. You all know Assistant Secretary Randy Schriver, and, we are thrilled that he's here. He just got back from the Pacific region. And so what I think we would like to do is begin by asking him about how his trip went, some highlights from that, what he'd like to share with us. I will follow up with some questions, and then I would like to turn it over to you all to ask any questions that you might have. And for that Q&A portion, it will be off the record. So with that, sir, I will turn it over to you.

SCHRIVER: Well, thank you. Appreciate it. Just returned from a bit of a whirlwind trip, five stops in eight days. But that's pretty typical for us. So Secretary Esper-- first of all, just to broaden it and-and put it into perspective, this is his second trip to the Indo-Pacific in three months. Like his predecessor, Jim Mattis, when he talks about the Pacific region being a priority, he's living it out in terms of how he spends his time, where he travels. This particular visit, we had a couple of anchoring events. We had our annual security consultative meeting with the South Koreans. In Bangkok, Thailand, there was the ASEAN Defense Minister Meeting Plus.

Accurate. Yeah.

But it's the event where, not only ASEAN countries, but the plus countries, China, Russia, India, and others participate, so there are a lot of bilateral meetings on the side. We then continued on to Manila and Vietnam and Indo-Pacific Command. He had previously made a visit to Australia, New Zealand, Mongolia, Japan, and South Korean, so a lot of stops in three-months' time. And again, that's a reflection of this being the priority theater. Our-our National Defense Strategy says it is the priority theater, not one of the priority theaters, not a priority, but the priority theater. And I would tell you that, it certainly can go into depth on any of these stops or any of the issues that were covered in-in any of the bilateral meetings. But I would say, the general theme that ran throughout the visit was the increasing concern about Chinese assertiveness and ambitions in the region, and therefore, increasing convergence among allies and partners on the need to respond to that in the most effective manner. Thus, there is a willingness to partner with us on terms that may not be, in all cases, alliance like or, certainly in some instances, will have limitations, but a clear demand signal that, in the interest of protecting their own sovereignty and the interest of upholding international law and international norms, seeing us as a partner of choice. China, for us, is the organizing principal for the department. It's clear in our National Defense Strategy, and so that means a number of things. We spend a lot of time, as a defense enterprise, thinking about how to improve the joint force, we say increase the lethality of the joint force, but it's with China as the pacing mechanism.

So when you look at investments, and our friends in Congress are very supportive of this, shifting into things like emerging domains, cyberspace, hypersonics, artificial intelligence, all these areas where, it's an increasing-increasingly competitive space because of where China's investing and where they're making progress in their military modernization. But the second line of effort is partners and allies, and it's very key for us. You know, we're a Pacific nation, and sometimes in Washington, that takes a little convincing. I was born in Hawaii, raised in Oregon, have a daughter from the Marshall Islands, but my perspective is a personal one. But pull out a map and look at Hawaii; look at the Aleutian Island chains, how far it goes into the Pacific; look at American territory such as Guam and American Samoa. We are firmly in the Pacific, but we're not resident in the Asia-Pacific in the way that our allies are. So for us to be competitive with China, we're heavily reliant on our allies and partners. We're relying on them to have their own capabilities to bring to bear to support the free and open Indo-Pacific concept. We're reliant on them for basing and access and opportunities for us for diversification and dispersal, and we're reliant on them to support international law; international norms that are embedded in our free and open Indo-Pacific concept. So that's a-a political military aspect. We work very hard on those relationships and if you disaggregate, you certainly find relationships that are at different states of maturity and different levels of cooperation. Historically, we have very mature alliances like Japan, South Korea, Thailand, Philippines, Australia, certainly, but even within those relationships, there's significant work underway to modernize those alliances, Japan, being a great example of that.

There's no country that's more important to us in the Indo-Pacific than Japan. Part of that is because of the grand bargain we struck in our treaty years ago that we are allowed to forward deployed forces there but not just for the protection of Japan, but to promote security throughout the region. That's a unique relationship and a unique agreement we have. But if you look at that relationship, we have our new National Defense Strategy; they have their National Defense Program guidelines. Tremendous alignment, in terms of how we view the strategic landscape. That's a great starting point, but we have to make that meaningful. So even in a very mature relationship like Japan, there's a lot of work to be done. But the emerging partners are also very key to this. Relationships that aren't allies, but are, again, creating a demand signal because of their own concerns and creating opportunities for us to strengthen defense size. Take a country like Vietnam. We poll, as a country, 94% favorable in Vietnam. Very remarkable. I'm not even sure there's a single state we poll 94% favorable, but in Vietnam, we're that popular. But we're starting from a very low base, right, because of our conflict and our complicated history with Vietnam. So last year, we had the first aircraft carrier visit since our conflict. We're going to do another one in 2020; they just agreed to that during Secretary Esper's visit. But we still don't do a lot of unit-to-unit training. We need to further that, and ultimately, create the access opportunities that we want to be effective in contingencies.

The Vietnamese are very concerned about Chinese assertiveness, particularly, in their EEZ. They're a claimant state on some disputed features in the South China Sea, but more importantly, they want what is rightfully theirs in international law to be able to extract resources out of their territorial waters and their EEZ. China is, harassing and making exploration, if not extraction, difficult, and there's instances of commercial companies pulling out because of that. So we're active in those relationships. India, if you look at sort of the broader Indo-Pacific, we're about to have our second 2+2 Meeting, in December, with our Secretary of Defense and Secretary of State meeting with their counterparts, together. But I support, on my level, a mini 2+2 process. We've had three meetings with the Indians this year. And the defense side is becoming more and more robust. We are exercising and selling military equipment, but I think, most important, to my mind, is, we're sharing intelligence, developing joint intelligence assessments on the PLA and then modifying our training and activities with the Indian military, so that it's appropriate for the shared China challenge. So those relationships are really interesting and important, too, beyond our traditional, treaty allies. We, of course, still maintain engagement with China. Secretary Esper met with Minister Wei in Bangkok on the margins of the ADMM Plus. It was a pleasant enough conversation. They both agreed continuing to talk is good. Secretary Esper was invited to China, he'll probably have a chance to go in 2020. They talk about risk reduction and confidence building with the Chinese operating further from the shores. We're operating in close proximity with greater frequency now, and we want to make sure that that environment is safe and professional.

I've lived through a few instances like the EP-3 in 2001 and other instances that resulted in accidents that sort of spiraled into political dispute and controversy. So we want that environment to be safe and professional. But frankly, the meeting, a lot of it was talking about areas of disagreement. Minister Wei identified four and mind you, this was a 30-minute meeting with translation. That is a lot of time talking about the South China Sea, Taiwan, Hong Kong, as we're apparently the black hand behind everything that's going on in Hong Kong, and INF, interestingly enough. The Chinese are very concerned that, having pulled out of INF, that we might eventually deploy these systems in the Indo-Pacific region. Our view is, despite what China was doing in their missile buildup and deployments, we would have stayed with the treaty had Russia been in compliance. If they got a problem, talk to the Russians. That's what really led to the end of the treaty, from our perspective. But even beyond that, it's a little hypocritical for the Chinese with thousands of these missiles in this category of-of intermediate range, deployed, that they would have an issue with us exploring deployment of those same types of systems. Now, I say exploring because we're at a pretty early stage in looking at this. We actually were honoring the treaty, imagine that. We don't actually have these on the shelf ready to go.

So we're in a development phase where we're looking at what may be available to us. We'll begin a process of talking to our war fighters, particularly, Indo-Pacific Command, Admiral Davidson, about how he could foresee these systems being useful in his plans and thoughts about contingencies. Then we'll have to have a conversation about partners and allies about potential deployment. It's doesn't have to be exactly sequential, but in a way, we do have to know what the system capabilities are. We do have to know how our war fighters would want to incorporate them before we can have that more detailed conversation with allies. We're talking about it at a very general level and conceptual level now, but we're probably years away from a point where we can have a conversation with an ally that is along the lines of, "We want to put this system on that spot. What do you think about that?" So are a bit away from that, but the Chinese are aggressively lobbying us and others. They have talked to each of our allies, and basically, threatened them should they make the decision to allow us to deploy those systems. This'll all play out over time, but I think, given the asymmetrical advantage that the Chinese have developed with the deployment of these systems, these are systems we're going to have to look at deploying when the options are available to us. Is that a good enough introduction?

HEINRICHS: That's great. And then just a follow up on that. I mean, you covered everything I was going to ask you about, so on that last point, you know, I continue to hear from folks from the arms control community, who say, "You know, if the United States does deploy these ground launch systems that were previously prohibited by the INF treaty, that that would be destabilizing," which is kind of China's argument. But can you talk about how that's actually-- again, you said that we're in the early stages of it, but it's stabilizing if the Chinese have a huge missile advantage over the United States in the region.

SCHRIVER: Right.

HEINRICHS: And so bringing in some firepower, maybe, from the United States perspective, could have a stabilizing effect.

SCHRIVER: Well, it could certainly be stabilizing in the sense that it could create a deterrent quality, and put some limitations on Chinese adventurism. Obviously, the decision was made in 1987 to do this because these are inherently dangerous systems, the short missile flight times and the warhead payloads. These are dangerous systems. But I think, given the Chinese advantage, if we were to make this decision, we would have, I think, greater deterrence, and therefore, greater stability. Over time, we would be open to trilateral arms control discussions. The Chinese, of course, rejected that. I wonder why, given what they've got developed and deployed. But it would make no sense for us to self-limit in an environment where the Russians have cheated and the Chinese have no limitations, and in fact, have exploited the limitations we've put on ourselves, significantly. So I think in the near term, a deployment on our part would be more stabilizing than destabilizing.

HEINRICHS: And, perhaps induce the Chinese to talk about an arms control architecture or framework if they have an incentive to do so. And, right now, we don't have an environment conducive to that, from our perspective.

SCHRIVER: That's right.

HEINRICHS: And then, kind of sticking with this theme a little bit, missile defenses -- we've talked a lot about offensive, and, we're concerned about the Chinese hypersonic threat and some of their other advanced missile capabilities that they've developed to go around--

SCHRIVER: Yeah.

HEINRICHS: --the ballistic missile defense systems we have. So now we must look at other kinds of missile defense systems to fill those deterrent gaps that exist. Can you speak to that?

SCHRIVER: Sure. Just given the numbers of missiles the Chinese have developed, we would be already be challenged to have significant missile defense to have 100% confidence we could knock everything down. With hypersonics, it gets even, a magnitude of difficulty greater. We think about it more in defense against missiles than missile defense because then you look at the entire architecture. The defense against Chinese missiles will likely come from disrupting ISR because you have to find, track, target, and put hot metal on target. The longer pole in the tent, at least until technology evolves, would be to knock down a hypersonic missile coming at you. The shorter poles would be to disrupt ISR, blind them, and deal with the greater architecture involved in the power projection through the use of missiles. So the good news is, that's where we do have some advantages, and although the Chinese are trying to erode those advantages and do the same to us, blind us and complicate our ISR, I think, in the near term, we can address the Chinese threat through a more comprehensive approach to defense against missiles. And then, of course, to the earlier point of partners and allies, why we need diversification and dispersal opportunities, we can't fight these possible wars having 100,000 troops split between South Korea and Japan. And most of that in Japan being in one place, Okinawa. We have to think about being dispersed and more difficult to target and track for them.

HEINRICHS: And then I would just say to that--General Hyten, who's now Vice Chairman of the Joint Chiefs of Staff, whenever he was the Commander of STRATCOM, has said that we at least need to be able to see these hypersonic weapon systems. So regardless, if we're going try to intercept them left of launch or intercept them once they've taken off, if we can't hit anything or disrupt anything that we can't see. And so to be able to get that particular weapon system threat, you've got to be able to have a persistent tracking from space. That's the best vantage point.

SCHRIVER: Yep. Absolutely.

HEINRICHS: I want to shift over to, if I can, to the extent that you're able, to talk about what's going on the Korean peninsula.

SCHRIVER: Sure.

HEINRICHS: And then, specifically, this concept of time as the President of the United States continues diplomacy and tries to negotiate a peaceful solution to the nuclear missile problem that the North Koreans have. Even if they're not testing ICBMs, they can obviously test short ones that reach our troops, reach our allies, and they can build capacity. Can you give us an update on how we're doing, how we're thinking about that, and the status of our military preparedness and how it strengthens diplomacy?

SCHRIVER: Well, military preparedness is good, and, you know, the expression that our force uses in South Korea is, "Ready to fight tonight." It's really, "Ready to fight tonight and win tonight," and we have complete confidence, given our capabilities versus the North Koreans, that that remains the case. We continue to work on that and strengthen that. I think that's one of the enduring qualities of the dynamic there is that our preparedness will always strengthen the hands of diplomats. Two to tango; the North Koreans are in a particular mood, it seems, where they don't want to engage at the working level. I supported the first two summits on the negotiation team and then was at both summits, Singapore and Hanoi. I would tell you that President Trump is 100% genuine and believes that we can have a different relationship with North Korea, 100% believes that there could be a brighter future there, but they have to deal with our core issue of concern. Hanoi, which is probably mostly known for us walking away and not having an agreement, I can tell you that, we negotiated a comprehensive agreement-- or pardon me. We were attempting to negotiate a comprehensive agreement. We could have had agreement on end-of-war declaration leading to a peace treaty. We could have talked about, and did talk about, opening liaison offices. We would have been prepared to talk about economic assistance and sanctions relief over time. There are all-all kinds of things we've put on the table, and the North Koreans were not willing to talk about our issue of core concern, which is denuclearization. In fact, they didn't even bring the right people. We brought people from CIA, from Department of Energy, Department of Defense, Treasury to talk about sanctions. They brought people from the United Front Department and Ministry of Foreign Affairs. They only wanted to talk about us relieving sanctions, which we're not prepared to do. So that was not particularly constructive.

And the last round that Mr. Biegun led in Stockholm was similarly unconstructive because again, they are insisting we somehow changed our hostile policy and do things that would make no sense from exactly the construct you're talking about. So we'll see if what happens in the next few months. We might be at an inflection point if they are serious about this deadline that they've created. It's arbitrary, in a sense, but they seem to be of a mind that they're going to do something or change the dynamic after the deadline if we don't change. I think we've made significant gestures, and just made another one in Bangkok where Secretary Esper and Minister Jeong announced suspension of, another air exercise, done to create space for diplomacy. But, you know, our ability to keep doing that is limited in the sense that we don't want to erode readiness and of course, if you cancel exercises, eventually, that has an impact. But it's also limited in that, we won't continue to try the same thing if the North Koreans aren't receptive, so.

HEINRICHS: And then on the point, that I'm concerned about and watching this is, even though the ICBM missile flight tests have stopped for now, that obviously, the shorter ones are still concerning not only to South Korea, but the longer ones, to the Japanese and they can build out the number of missiles.

SCHRIVER: Yeah. Yeah. The President has made a decision. You can have your own opinion on it, but he did not want North Korea's testing of short-range missiles to be an obstacle to another round of diplomacy. But I can tell you, at the table across from the North Korean's, we have always insisted that all U.N. resolutions be implemented and that all classes of missiles be removed, and we've been very explicit, short-range, medium-range, long-range. Certainly from our security interests, returning to testing a longer range in ICBM would be a pretty significant development, which they've refrained from doing. But across the table, we've always been insistent that it's all classes of missiles.

HEINRICHS: And then my last line of questioning is on Taiwan. How do you see a relationship there and are the Taiwanese looking at the right weapon systems for self-protection, and are you encouraged by progress there?

SCHRIVER: I think they're on a better track. Taiwan developed a defense concept called the Overall Defense Concept, ODC. And by the way, the man who created that, Admiral Lee, is actually resident at a think tank in Washington for the next few months having just retired as Chief of the General Staff there. I'd encourage you to seek him out and talk to him. We feel that this is a more appropriate plan for the military threat that Taiwan faces, and if implemented, would give them the best chance for survivability, and there-therefore, give us the best chance to get to the fight and support Taiwan should National Command Authority decide to do that. They are starting to make investments in the right things, things like coastal missile defense, naval sea mines, mobile short-range surface-to-air missiles. They're still spending money on-on legacy conventional platforms, and I think they need them as well. We approved the F-16, the next batch of F-16s. I think they need those for peace time and for a range of other missions. Arguably, they'd be less effective if China decides to go all in with the full-out attack because of the ballistic and cruise missiles, but that doesn't mean they don't need an air force. So our view is, they're on the right track. I mean, my personal concern is-- was it Mark Twain or Will Rogers? Even if you're on the right track, you can get run over, still, if you're not going fast enough. They need to have a little more sense of urgency and make those investments in a larger way.

HEINRICHS: That's great. And I said that was my last one, but this is really my last one. And then [laughter]-- and then I'll turn it over for questions from you all. I don't know if we hit this hard enough, but I would love to hear your thoughts on just how important the Australian relationship that region. But can you comment on just where they are as we're shifting to INDOPACOM as our priority theater. We're going to be in it for a while. It's not going to be a short-term solution here, and we need the Australians. Can you talk about that?

SCHRIVER: Sure. Well, the shame is that there's not a great river that runs through that continent, so there's only 20 million of them all around the coastlines. If we had triple or quadruple that population, that would be great. But it's a country that punches well above its weight, and it's a great ally for us. I think everybody knows the, sort of, mantras, of every war we've been in, in the 20th century on, the Australians have been there side-by-side with us. That remains true with current conflicts we're involved in. So they're a very critical ally. They're becoming more and more important when it comes to basing and access. This year, we hit the 2,500 number at Darwin, which was target of having, a rotational force of US Marines, and training in Darwin. So we went above 2,500 this year. Our view and the Australian view is that can be expanded in the Darwin area and surrounding areas, so that there's more training opportunities. And we'd grow the complexity of the training over time and include multi-lateral training, so bringing the Indonesians in, for example. So that's in-increasingly important, and when you look at threat rings from Chinese missiles, obviously, there's some-- not complete safe haven, but Australia is further from that than other places where we're forward deployed.

I think there's a niche area where the Australians are going to be extraordinarily important in our partnership, and that's what's happening in the Pacific Islands in Oceania. Those countries are small, vulnerable, and susceptible to Chinese influence through their promises of economic assistance. I think our old mentality was, the US sort of looks after Micronesia; Australia looks after Melanesia, and New Zealand looks after Polynesia. Fact is that we sort of need all hands on deck for every relationship. And the Australians have a new policy they refer to as the Step Up where they're literally moving resources from other regions and within their budget to commit to the Pacific Islands. They've got a major effort underway in, Papua New Guinea right now, a major effort in Fiji. There's only three Pacific Islands that have militaries, PNG, Fiji, and Tonga. So we bring in Coast Guard, and we bring in others, but the Australians are stepping up their assistance and involvement in a way that's going to be very helpful to us. We have to sustain this. The expression is, a little bit goes a long way, but you need to have the little bit, and we're doing better, but the Chinese come in with a lot of resources, a lot of promises, and it's very attractive to some of these countries. But Australia, given their history, their proximity, their willingness to focus on this region, that's going to be very key to us.

HEINRICHS: Great.