Game Theorists hope to solve World's Crises

What can I say about this... other than... things that make you go...hmmm.... interesting, especially since I just finished a term paper that used game theory modeling....

Game theorists hope to solve world's crises

Agence France-Presse

12/01/2009

By Andrew Beatty

WASHINGTON - North Korea will mothball its nuclear weapons for a billion dollars a year, Iran will not build nukes at all and Middle East peace is just round the corner, at least according to one game theorist courted by the CIA.

For someone who admits he is not an expert in the topics he studies and to "piggybacking" on predecessors' work, Bruce Bueno de Mesquita has become surprisingly influential.

A New York University professor, Mesquita has for decades been making predictions for the Central Intelligence Agency and the Department of Defense. He has even co-authored a book on political campaigns with former secretary of state Condoleezza Rice.

Today his predictive models are helping to reignite debate about the use of game theory beyond its normal habitat of mathematical and economic theory.

"It seemed to me, and others, quite natural to think about politics from game theory point of view," he told AFP, recalling his early steps into the field more than four decades ago.

Between 1982 and 1986 the CIA used his "Policon" model to make forecasts for over 30 countries.

In a now unclassified report, the agency said Mesquita's model "got the bull's-eye" twice as often as its traditional analysis. Taken together the two methods were accurate about 90 percent of the time, the agency said.

Two decades on Mesquita still has his sights on the world's hot button issues.

"My prediction on Iran is that they will not develop a nuclear weapon," he said with disarming confidence, "but they will develop enough weapons-grade fuel so that they can persuade people that they could build a bomb."

As he explains the relatively simple basis of his system -- listing actors and assigning each numerical values according to their policy stance and influence -- other predictions come thick and fast.

"I am quite optimistic that around the end of (President Barack) Obama's first term that there will be a serious peace agreement between the Israelis and the Palestinians, leading to the formal creation of Palestine.

"The contingency is that the current (Israeli) government, sometime in the next three years, will need to be replaced."

But he is less optimistic about the chances of a deal to reduce climate-changing carbon emission at Copenhagen in December.

Even if a deal can be reached, it will not work, he said, although the race to corner green technology markets may save the planet anyway.

The key to the model, he said, is understanding the self-interest of the parties concerned.

To convince North Korea to disassemble its nuclear weapons there is only one question, he said: "How much, quote 'aid' will be transferred to North Korea... to bribe the leadership into sticking to the agreement.

"The number that my model indicated was optimal was somewhere around one to 1.2 billion dollars a year."

Despite the obvious allure of predicting the future, some theorists urge caution.

Behind the apparent simplicity of Mesquita's work are the complex theories pioneered by John Nash, the Nobel-Prize-winning mathematician made famous in popular culture by the Oscar-winning film "A Beautiful Mind."

Nash's genius, according to his one-time colleague Avinash Dixit, was devising "a central organizing concept for games in which binding contracts cannot be reached."

In practical terms that means devising a status quo that is painful for actors to diverge from, despite the absence of a binding contract.

But Dixit, an economics professor at Princeton -- who has himself been tipped as a future Nobel Prize winner -- says some of the outstanding theoretical problems of game theory should limit practitioners' hubris.

"The theoretical analysis often assumed that every player was totally selfish, caring only for his or her own outcome," Dixit said.

"Increasingly we see in psychology and sociology that individuals have multiple goals, one of which might be concern for fairness."

He said practitioners should avoid black and white predictions, clearly marking out the range of possible outcomes in much the same way that meteorologists predict the path of hurricanes.

"Game theorists should be more humble or more careful and insist on producing these kind of cones of uncertainty around their forecasts," he said.

Another problem is the quality of data that goes into the model. In politics this means assigning quantities to abstract motives.

"The science tells you how to solve your model," said Dixit, "but what you put into your model is considerably an art."

For Mesquita the answer to this problem is simple: "If you put in garbage, you get out garbage."

"If you are looking at Israel-Palestine and your first cut of the data says Hamas is very eager for Israel to get whatever it wants, then there is something wrong with this data, you would know its garbage."

In the end, the only sure-fire way of testing game theory's usefulness may be to wait and see.

North Korea Revalues its Currency (Update)

According to China's Xinhua News Agency, the North Korea foreign ministry apparently orally confirmed to the foreign embassies stationed in Pyongyang today that it did, indeed, revalue its currency, with the exchange rate between the old and new notes being 100:1.

Here are some of the updated information from South Korea's Yonhap News Agency on the revaluation:

• According to the North's fixed exchange rate before the adjustment, a U.S. dollar was equal to 135 North Korean won.

• "Many citizens in Pyongyang were taken aback and in confusion. Those who were worried about their hidden assets rushed to the black market to exchange them with yuan or U.S. dollars. The yuan and the dollar jumped," one of the sources said.

• The revaluation was the first for North Korea since 1992 and the fifth since its government was founded in 1947. In the first reform in 1947 and the third in 1979 and fourth in 1992, currencies were exchanged 1 to 1 with no adjustment of denomination values. Only the second reform in 1959 raised the exchange rate to 100 to 1 as in the reported latest move.

• The latest reform appeared to be mostly aimed at tackling inflation as the local currency value has nosedived since the country made economic reforms in 2002 to make payments and prices more realistic and introduce market freedom. North Korea also may have sought to flush out money hidden in the underground economy, some stashed by citizens working abroad.

• South Korean officials said they could not yet confirm the report, as North Korea has yet to make an official announcement as it did all in its previous reforms. A currency reform was always reported by the country's official media, led by the Workers' Party newspaper, Rodong Sinmun, on the day it was implemented as a decision by the Cabinet or a central government committee headed by then President Kim Il Sung.

• "There have been no reports so far of a currency reform in North Korean media," Unification Ministry spokesman Chun Hae-sung said. "We checked the state media today, including the Rodong Sinmun, but there was no such report."

• No signs of currency reform were detected yet in joint industrial projects, such as the factory park in the North Korean border town of Kaesong, where South Korean investors pay North Korean wages in dollars, the spokesman added.

• Yang Moon-soo, an economy specialist at the University of North Korean Studies in Seoul, said he believes the currency reform has both economic and political aims. North Korea wanted to shed heavy inflation pressure, and in the process of exchanging the denominations, the government would be able to discover and question those who have amassed wealth, he said.

North Korea Replaces Currency

Just saw this article on Daily NK. If true, this would be a significant indicator of North Korean financial and economic situation.

North Korea Replaces Currency

Daily NK

11/30/2009
By Jung Kwon Ho

Shenyang, China – In a surprise move, the North Korean central bank has revalued and replaced its national currency as of today [30 November], according to several sources.

One source relayed that from 2 P.M. the old paper currency started being exchanged for a new one, while another source from Pyongyang claimed that the switch began at 11 A.M.

The exchange rate for the new currency is 100:1, so old 1,000 won bills are being exchanged for new ten won bills.

Regarding the purpose behind the currency reform, one source suggested, "It looks like an attempt to control inflation, but it may have the side effect of making consumer reliance on dollars or Yuan rise due to a loss of confidence in the value of the North Korean currency."

Another source agreed, "Since the July 1st Economic Management Reform Measure in 2002, prices have skyrocketed. Since Chosun (North Korea) money has lost its value, the authorities have undertaken this currency reform."

The North Korean authorities convened urgent meetings this morning to distribute information on how the currency should be exchanged.

A source in North Hamkyung Province told The Daily NK, "This morning, there was a decree to people's units. When the news spread in the jangmadang, people panicked."

A Sinuiju source reported, "Traders gathered around currency dealers. Chaos ensued when currency dealers tried to avoid them."

Dandong and Yanji, bases for smuggling into North Korea, were also full of confusion.

Choi, a Korean-Chinese trader in Dandong said, "All trade with North Korea ceased. Telephone lines are busy now with North Korean dealers trying to obtain Yuan."

Here's a Korean language version of the article about the new North Korea currency. One thing the Korean version mentions that the English version above does not is that the Ministry of People's Security is on full alert to watch the people's reactions and control any "problems" associated with the issuance of new money. The article also says the North Korean military is also on full alert. The Korean version also has some quotes from the North Korean sources who are clearly upset with the latest North Korean government's move.

北 내부 '충격'…"수령님 서거 이후 처음 통곡": [화폐개혁3보]北당국, 통치기관 총동원 주민 감시 나서

2009-12-01

이성진 특파원

중국 창춘(長春) - 북한 당국이 30일 오전 11시부터 화폐개혁을 전격 단행함에 따라 북한 내부가 큰 혼란에 빠진 것으로 전해지고 있다. 북한 인민보안성의 모든 인력이 주민 통제에 나섰고, 국가안전보위부와 보위사령부, 군 부대까지 비상대기령이 발령됐다.

이번 화폐교환은 구권대 신권의 비율이 '100대 1' 비율로 각 세대당 교환 가능한 최고한도 북한 돈1천원이며 이는 기존 북한의 구화폐 10만원에 해당되는 돈이다. 10만원 이상 되는 액수는 신권으로 교환이 불가능하다.

이날 함경북도 지역에서는 오전 8시 30분경 각 시군 별로 기관장 및 초급당 비서 회의가 열렸고, 이자리에서 화폐교환에 대한 방침이 전달됐다.

이어 오전 11시부터 인민보안서 보안원들과 각 부문 규찰대 인력들이 거리에 나와 주민 감시에 들어갔으며, 낮 12시부터는 군부대 비상대기령이 발령됐다. 이날 오전 부터 긴급 소집된 각 인민반 회의와 공장 기업소 강연에서는 "밤 10시 이후 이동을 금지하고 규정위반자를 엄격히 단속한다"는 내용도 공표됐다.

함경북도 지역에서는 이미 며칠 전부터 ‘곧 화폐개혁이 진행될 것’이라는 소문이 돌았지만 평소에 이 같은 소문들이 자주 들었던 대다수 일반 주민들은 미처 신경쓰지 못한 것으로 전해졌다.

이 소식통은 "아무리 화폐교환을 한다고 해도 이렇게까지 야만적으로 할 줄은 꿈에도 상상하지 못했다"고 말했다.

그는 "조선(북한) 돈 10만원이면 장마당에서 쌀 9kg을 살 돈 밖에 안된다"면서 "그동안 피타게 모은 돈들이 모두 물이 됐다"고 흥분을 감추지 못했다.

양강도 혜산시의 경우 오전 8시(북한은 출근시간이 아침 8시임)에 기관장 비상회의가 소집됐고, 모든 기관장, 초급당비서들이 모인 오전 9시부터 혜산시 경비를 맡고 있는 인민보안서 보안원들의 경호아래 화폐개혁 방침이 전달됐다.

혜산시당 책임비서는 화폐교환을 통지하면서 교환원칙과 방법, 화폐교환 과정에서 일어날 수 있는 주민들의 혼란에 철저히 대처할데 대한 문제를 가지고 약 1시간 가량 강연을 진행했다.

양강도 소식통은 "화폐교환 소식을 전하는 시당책임비서도 우울한 얼굴이었고 회의장은 침통한 분위기였다"면서 "회의에 참가한 여성 기관장들 중에는 허탈한 표정으로 눈물을 흘리는 사람도 있었다"고 전했다.

이어 공장 기업소들로 돌아간 기관장들은 곧 노동자들을 모아 놓고 긴급회의를 열러 화폐교환 소식을 전했다. 이자리에서는 "이번 화폐교환과 관련해 백성들의 동향을 모두 보고하게 됐으니 말과 행동을 특별히 주의하라"는 지침이 내려졌다.

같은 시각 혜산시 인민위원회 회의실에서는 각 동사무소장들과 인민반장들이 모여 인민위원회 간부로부터 화폐교환 소식을 전해들었다.

낮 11시부터는 인민보안서 보안원들과 각 부분 규찰대, 국가안전보위부 지도원 들이 시내 곳곳에 대한 순찰 업무를 시작했으며 정오 무렵부터는 트럭을 탄 군인들이 이동하는 모습이 혜산 시내에서 목격되기도 했다.

혜산시장에 화폐개혁 소식이 처음 전해진 것은 10시 15분경. 20대 초반의 한 여성이 생필품 매대에 급하게 달려와 낮 11시부터 ‘화폐교환’이 있을 예정이며, 교환한도는 '세대당 10만원'이라는 사실을 처음 알렸다.

소식을 전해들은 시장 상인들과 행인들이 여성들 주위로 모였으나 선뜻 믿기지 않는다는 분위기였다고 한다. "10만원 이상의 돈은 모두 무효로 한다"는 여성의 말에 한 노인은 "미친년"이라고 욕설까지 퍼부었다.

그러나 10시 40분경에 혜산시장 관리소장이 시장 입구에 나와 "곧 화폐교환이 있으니 모두 해당 기업소와 인민반들에 돌아가 위에서 내려온 지시에 따르라"는 방침을 전달했다.

화폐개혁이 기정 사실로 전해지자 한순간 공황상태에 빠졌던 사람들이 여기저기에서 눈물 섞인 분통을 터뜨리기 시작했다.

소식통은 "장사하던 여성들이 머리카락을 쥐어 뜯으며 통곡을 하다 여기 저기에서 실신해 쓰러졌다"면서 "식량 매대에 있던 한 여성은 그 자리에서 정신을 잃기도 했다"고 전했다.

그는 "다른 장사꾼들은 그나마 중국돈을 많이 가지고 있었지만 쌀 장사꾼들은 모두 우리 돈(북한화폐)으로 값을 계산하기 때문에 대부분 우리 돈을 많이 가지고 있었다"며 "그래서 그들이 받은 충격이 더 컸을 것"이라고 덧붙였다.

한편 북한 당국은 "수령님(김일성)의 초상화가 있는 돈을 훼손하는 행위는 역적으로 취급한다"며 주민들이 반항의 표시로 구 화폐를 손상시키는 행위에 대비하고 있는 것으로 전해졌다.

신의주 소식통은 "집집마다 실신상태에 빠진 주민들의 통곡소리도 그치지 않고, 부부간 싸움이 나는 가정들도 많다"며 "담당 보안원들과 보위지도원들이 싸움을 하거나 소란스러운 집들마다 찾아다니며 문을 두드리고 있지만 사람들이 응대조차도 하지 않는다"고 현지 표정을 전했다.

그는 "이번 화폐교환은 정말로 기막힌 협잡"라면서 "수령님(김일성) 서거 이후 사람들이 길바닥에 주저 앉아 통곡하기는 이번이 처음"이라고 현지 분위기를 전했다.

한편, 함경북도 회령시 강안동에서 젖갈장사를 하던 60대 부부가 화폐교환 소식에 비관해 목메 자살하는 안타까운 사연도 전해졌다. 이지역 인민보안서에서는 주민들의 동요가 확산될까 긴장하고 있다고 함경북도 소식통이 전했다.

North and South Korean Naval Vessels Clash off the West Coast

On 10 November, shortly after 11: 30 AM (KST), a North Korean naval vessel and a South Korean naval vessel exchanged gun-fire 1.6 miles south of the disputed Northern Limit Line (NLL) in the West Sea (Yellow Sea).  According to the South Korean media reports, the incident started by the South Korean naval vessel firing warning shots at the North's vessel for crossing the NLL after the North Korean vessel ignored numerous South Korean warnings for it to return north of the NLL.  The North Korean vessel apparently responded to the warning shots by firing aimed shots directly at a South Korean vessel, to which the South Korean Navy responded in kind.

This clash- deemed accidental by South Korea's prime minister, whch lasted roughly a minute and ended when the North's vessel withdrew north of the NLL, was the first time the two navies exchanged gun-fire in seven years.

South Korean Military details the Clash

• A South Korean Joint Chiefs of Staff official specified that at 11:27 AM (KST), a North Korean patrol ship crossed the NLL in an area east of the Taech'o'ng Island in the West Sea.  South Korea issued multiple warning communications followed by warning shots. The Northern ship then fired "directly aimed shots" at a South Korean vessel, which returned fire and undertook "evicting" the North's vessel. (KBS-1 TV) 

• Officials added that about 15 of 50 rounds fired by the North landed on the South Korean boat, which retaliated with roughly 200 rounds. The ships were a little over three kilometers apart when they exchanged fire. (Yonhap)

South Korean Government Calls For Calm Response 

• President Lee Myung-bak convened an emergency meeting of security-related ministers after learning of the clash and "instructed the military to react decisively, yet calmly to make sure the situation does not further deteriorate," a senior secretary's statement said. (Yonhap)

• The prime minister said that "it was an accidental clash, so we ask the people to have confidence in our military and government and carry on with their daily lives as usual." (Yonhap) 

• The country will continue exchanges with North Korea as normal, keeping its border open to workers traveling to the North and proceeding with planned humanitarian aid, officials said. (Yonhap)

• "With regard to this incident, there are no restrictive measures, such as minimizing the number of visitors to the North and other artificial control measures, under consideration," a Unification Ministry spokesman said. (Yonhap)

• The Unification Ministry did, however, issue guidelines for those traveling North to exercise special caution and some trips, such as that of UNESCO, were voluntarily canceled or postponed. 

North Korea Reports on Clash, Seeks Apology 

A Korean People's Army Supreme Command communique carried the same day by central radio reported that a patrol boat had been dispatched in routine guard duty to check an unidentified object in North Korean waters and while the ship was returning after having identified the object, a "group" of South Korean ships "chased" the Northern craft and opened fire.

The communique added that the North's ship delivered a "counter-strike," after which the South Korean vessels withdrew.  Foreign media have pointed out that the communique sought an apology for the incident.  It also went on to call for preventing a recurrence.

South Korean Expert Views Divergent

• Yoo Ho-yeol, a North Korea Professor at Korea University said, “It appears to be a move to raise tension ahead of Obama’s visit to South Korea.  North Koreans believe tension helps them strengthen their bargaining power.” (Yonhap)

• Kim Yong-hyun, Professor of Dongguk University said, “I believe North Korea is trying to show Obama the volatility of the peninsula. North Korea has demanded a peace pact be signed with the US to replace the truce agreement (which ended the 1950-53 war)." (Agence France-Presse)

• Ryu Gil-jae, professor at the University of North Korean Studies, disagreed, saying the incident appeared aimed at testing the South Korean government. “North Korea would have test-fired missiles if it had wanted to wex the US.  The Yellow Sea clash is more of a message to the South that it should be taken more seriously.” (Yonhap)

• Kang Sung-yoon, a North Korea specialist at Dongguk University, believes the attack serves more than one purpose. (Yonhap)

The White House Press Briefing on the President’s Trip to Asia

Office of the Press Secretary, White House

11/10/2009 KST (11/09/2009 EST)

By Ben Rhodes, Deputy National Security Advisor for Strategic Communications

Jeffrey Bader, National Security Council Senior Director for East Asian Affairs

Michael Froman, Deputy National Security Advisor for International Economic Affairs

(Via Conference Call)

MR. RHODES: Thanks, everybody, for joining. I'll just make some brief comments and then go through the schedule. Obviously this is a very important opportunity -- this is the President's first trip to Asia. This is the fastest growing economic region in the world. It supports an extraordinary amount of U.S. trade and jobs. It's also home to very critical political relationships to the United States in our efforts to combat a series of global challenges.

So the President looks forward to this attempt to really renew America's alliances in the region, to continue to forge new partnerships, and to make progress on a whole series of issues ranging from our economic recovery agenda; our efforts in Afghanistan, which are supported by several of our Asian partners; our efforts to stop the spread of nuclear weapons, including our continued efforts in relation to North Korea and Iran; and also our effort to make progress on clean energy and combating climate change.

So there's a broad agenda that overlays the President's whole trip. I think the overarching theme is that America is a Pacific nation, it understands the importance of Asia in the 21st century, and it's going to be very engaged in a very comprehensive way to make progress on a whole series of issues that are critical for our prosperity and our security.

Now, with that, I'll just kind of take you through the schedule, which obviously changed a little bit given the President's attendance at the memorial service at Fort Hood tomorrow.

We'll leave here on Thursday, the 12th. We'll be making our first stop in Alaska -- it's actually the President's first stop in Alaska. And while we are in Alaska he'll take that opportunity to speak to some troops at Elmendorf Air Force Base, and he's looking forward to that opportunity to visit with the troops there and to thank them for their service.

With that we'll move on to Tokyo, arriving there on Friday, November 13th. The first order of business in Tokyo will be a bilateral meeting with Prime Minister Hatoyama, which we currently have scheduled for roughly 7:00 p.m. that evening. And I will add that the President -- we've been in consultation with our Japanese friends as we've adjusted the schedule and are very appreciative for their willingness to work with us, due to the, again, the tragedy that took place at Fort Hood.

After the President's meeting with Prime Minister Hatoyama there will be a joint press conference.

That takes us to the next day, Saturday, November 14th. The first event of the day is the President will be giving a speech at Suntory Hall in Tokyo at 10:00 a.m. And in this speech he'll have an opportunity to discuss his view of American engagement in Asia as it relates to the political, security and economic dimensions, and to also reaffirm the strength of the U.S.-Japanese alliance.

Later in the day he'll have the opportunity that he is particularly looking forward to, to meet with the Emperor and Empress of Japan. And that will conclude the schedule for Japan. We'll be moving on to Singapore that evening.

On Sunday, the 15th, the first event of the day will be a bilateral meeting with Prime Minister Lee of Singapore. Then the President will be moving along to the leaders' meeting of the APEC Summit, where he'll have the opportunity to engage in a dialogue about our continued efforts to promote balanced and sustainable growth in the Asia Pacific region and around the world, building upon the strong efforts that have taken place at the G20 -- which Mike Froman can discuss in a bit.

Later in the day, roughly at 2:00 p.m. now, we will have a bilateral meeting with President Medvedev of Russia. President Obama has had a very close and constructive relationship with President Medvedev. They've met several times throughout the year and he's very much looking forward to this opportunity to continue their dialogue on issues related to nonproliferation, global economic recovery, and a whole host of bilateral issues.

Then he'll have a multilateral meeting with the ASEAN 10. Jeff Bader can speak to this further, but this, I believe, is the first meeting between a President of the United States and the ASEAN 10, and again, signals this President's strong commitment to work in a comprehensive way with our Asian partners.

Then he will have a bilateral meeting with the President of Indonesia. The President of course feels a great connection to Indonesia, having spent some time there growing up, and feels that this is an important relationship for the United States. We cooperate with Indonesia also on a range of issues from economic issues, trade, to counter-terrorism, and we're looking forward to this opportunity to have a dialogue with the Indonesians.

Then the President will be moving on that evening to Shanghai, and that takes us to Monday, the 16th, in Shanghai. The President will be starting his day with a bilateral meeting with the mayor there. Then we will be having an event where the President will have the opportunity to engage in a dialogue with Chinese youth, where he'll have the opportunity both to speak to them and also to take some questions and hear directly from young Chinese.

And after that, he'll be moving on to Beijing that evening, and we'll be able to begin his time in Beijing with a dinner with President Hu.

That takes us to Tuesday the 17th. That morning, he will have a bilateral meeting with President Hu where he looks forward to addressing a very broad agenda. China and the United States partner together on a range of global challenges, again, covering both economic recovery, nonproliferation issues, increasing cooperation on energy issues. And the President looks forward to building on the strong, positive, and comprehensive relationship that has been forged at -- particularly through venues such as the strategic and economic dialogue that we held earlier this year in Washington.

Following the meeting with President Hu, there will be a joint press conference. Then later that day, the President looks forward to some time to see the city of Beijing. This is his first trip to China, so he's very much looking forward to seeing Beijing. And then that dinner -- that evening there will be a state dinner in Beijing, which the President is very thankful for the gracious hospitality of the Chinese hosts.

The next day, the last day that we'll be in China, the President will begin with a bilateral meeting with the Premier where he'll be able to continue discussions on a range of bilateral issues. And then he'll also have some additional opportunity to see the city of Beijing.

After that, we'll be moving on to Seoul, South Korea. South Korea is obviously a critical ally and partner for the United States on a range of issues, as well. They recently, for instance, made a very strong commitment to Afghanistan that the President is quite appreciative of. And we continue to partner with them on issues related to economic recovery and nonproliferation.

The morning of Thursday, November 19th, the President will hold a bilateral meeting with President Lee of South Korea, and then he will be able to have a press conference with President Lee, as well. And then after that is complete, he'll have the opportunity to go and visit with some U.S. troops. Obviously we have many troops serving in South Korea, and the President is looking forward to this opportunity to thank them in person for their service.

And that will conclude what is a very busy few days in Asia and we'll be heading back to the United States the evening of Thursday the 19th.

So with that, I think before we open it up, I think both Jeff and Mike can speak in some greater detail about the political and economic aspects of the trip. I'll turn it over to Jeff Bader first, Senior Director for the NSC for Asian Affairs.

MR. BADER: The President's first stop is Japan. He'll be looking to build his relationship and his personal ties with the new DPJ government there. This is only the second time in 50 years we'll have a non-Liberal Democratic Party government in Japan. This government is looking for a more equal partnership with the United States. We are prepared to move in that direction.

We want to use the trip to reaffirm and update the alliance. The relationship and the alliance goes well beyond the details of the basic issues -- it goes to global issues that we look to cooperate on where Japan has a major contribution to make: things like energy efficiency, where they are a leader; climate change; aid to Afghanistan and Pakistan, where Japan is the third -- the third-largest contributor in the world; and our close cooperation with Japan as a member of the six-party process.

So this stop will be essentially a reaffirmation of the strength of the relationship and the alliance, and looking ahead.

The China stop -- we've had a smooth transition in the U.S.-China relationship, something that has not always been the case in the past with previous administrations. The relationship is off to a good start. China is an essential player on the global issues that are a part of our -- that are the center of our agenda: global economic recovery, which Mike will talk about; climate change; energy; North Korea; Iran; nonproliferation issues generally; success in Afghanistan and Pakistan; arms controls.

On none of these issues can we succeed without China's cooperation. So we don't see this relationship as a zero-sum one. We see it as a relationship where we're obviously going to have differences, where we are going to be competitors in certain respects. But we want to maximize areas where we can work together because the global challenges will simply not be met if we don't.

In terms of the issues that will get most of the discussion on the trip, it's by and large the ones I just mentioned -- I think North Korea, Iran, the economy, climate change, energy, human rights, and Afghanistan and Pakistan.

In terms of outcomes of what we expect to happen on the trip, I think that we'll -- we look for the President to have intensive conversations about how our two countries see each other, to try to build trust and cooperation. Obviously there's a historic, to some degree, of mistrust, and that's something we look to address.

And we want to chart our way forward on North Korea and Iran. We want to try to build a common approach on Afghanistan and Pakistan. I think people-to-people issues are ones where we look to increase activity. And I'd also highlight clean energy as something where we expect to have some accomplishment to show.

Finally, Korea -- that's a relationship that's working well. President Lee Myung-bak and President Obama have developed a close relationship. We've had close coordination on issues generally, and in particular, in the six-party process. We haven't taken a step in the six-party process without closely coordinating and checking with the South Koreans before we've done anything. North Korea obviously will be a principal focus of this stop. We'll be talking about how we reengage in the six-party process with the agenda of denuclearization and reaffirmation of previous commitments.

We'll be welcoming Korea's -- South Korea's increasing global role. Ben mentioned the contribution that they just made in increasing their PRT in Afghanistan. And we'll also be talking about climate change and economic issues with the South Koreans.

Just one brief word on Southeast Asia -- as Ben mentioned, the President will have the first meeting ever with the ASEAN 10 countries. There will be great interest in the new directions we're taking in Burma policy there. And the meeting with President Yudhoyono will highlight the new comprehensive partnership we're building in Indonesia.

MR. FROMAN: I'll just touch briefly on the APEC part of the trip and the economic issues. As many of you will recall, coming out of the Pittsburgh summit there was an agreement that countries would pursue strong balance and sustainable growth going forward. That means for the U.S. that savings will increase and exports will increase. And very importantly, for a number of countries in Asia, it means that domestic consumer demand and imports will increase.

So our engagement there, the President's engagement in the region, is focused on making sure that countries are pursuing balanced growth going forward, opening their economies, allowing us to expand our exports to the region and create more export-related jobs here at home.

As Jeff mentioned, this is the fastest-growing region in the world. It's expected to grow by over 7 percent next year. It already takes about a quarter of our exports, and those exports are expected to increase as the region grows and as they pursue balanced growth as the region becomes more open to our exports. And so we see a lot of jobs being created through our engagement in Asia. Right now, 1.6 million jobs in the United States are associated with exports to Asia. And as the Asian region grows, we could see hundreds of thousands of more jobs being created there as well.

APEC is a forum where those sorts of issues will be discussed. There will be a discussion of the G20 outcome, and we expect the G20 outcome to be embraced by the rest of the APEC countries. And we'll be talking about ways in which we can further integrate the regions and liberalize trade for exports to the region as part of that discussion.

MR. SHAPIRO: Thank you guys very much, and now we'll open it up to questions.

Q Thank you very much for taking this time to brief us. Mr. Bader, you talked about that human rights will be on the President's agenda in Beijing. I was wondering if you could expand on that, tell us what will be the President's message on human rights. Will he press the Chinese government to meet with the Dalai Lama? Do you think that effort is hurt by President Obama's refusal to meet with the Dalai Lama?

And a quick question for Ben Rhodes. With this busy schedule, will there still be time to roll out the new Afghanistan-Pakistan strategy on Friday?

MR. BADER: Well, the President will raise human rights concerns directly with President Hu in his meetings. I think the kinds of issues -- I wouldn't want to forecast exactly what he would say at this stage, but the kinds of issues that are on our minds are issues of freedom of expression, access to information, freedom of religion, rule of law, and certainly Tibet. I have every reason to expect that the issue of Tibet will come up on the trip. The President has made clear that he is prepared to meet with the Dalai Lama in the future at the appropriate time. He met with him in the past when he was a senator, and he will meet with him again.

MR. RHODES: This is Ben Rhodes. On Af-Pak rollout -- you mentioned a rollout on Friday. I don't know if you're trying to get me to confirm something that doesn't exist, but there's no rollout scheduled for any day right now. What I will say -- so what I will say, though, is that during the trip I think it is important to underscore that several Asian nations have been very strong contributors in Afghanistan through security means, through civilian assistance, through financial assistance. So the President will have -- and just to name a few, certainly Japan and Australia and South Korea have really carried a load in Afghanistan.

So the President will have an ability to consult with Asian partners about his strategic review, as well as their own commitments in Afghanistan and how that can -- how we can coordinate our efforts to best achieve our goals.

I believe that this will be a subject of his consultations certainly in Japan, as well as in South Korea, where as I said, the South Koreans have recently made a fairly robust commitment to increase their efforts within Afghanistan. But it will not -- beyond the fact that he'll be traveling, it will not affect the rollout date. We don't have a rollout date set, because the President has yet to make the decision. But we will of course let you know when that is the case.

Q Hi, and thanks for doing this. This is probably for Mike. I wanted to talk about the expectations that the South Koreans seem to have on moving the South Korean free trade agreement forward. Is there anything that the President can bring to Seoul on that front? And on the rebalancing front, what role will currency discussions and the U.S. budget deficit play in the rebalancing discussions likely in Beijing and also in the APEC?

MR. FROMAN: Thanks, Jonathan. On Korea, certainly the President is well aware of the issue regarding the U.S.-Korea free trade agreement and looks forward to having a discussion with the Koreans while he's there on the topic. He has noted in the past that there were some outstanding issues to address in it and that there were issues around timing as well. But he is prepared to have that conversation with the Koreans.

On rebalancing, rebalancing involves the whole array of issues that affect the economic landscape, including fiscal, monetary, and other issues. And my sense is that through the G20, and the finance ministers just met in St. Andrews over the weekend and agreed to further details of how the framework will be put in place for dealing with balance and sustainable growth going forward -- that those issues will be dealt with in the context of that framework.

MR. RHODES: I would just add -- this is Ben Rhodes -- just to underscore something Mike said at the outset, that this is a very dynamic region; it's a source of -- a substantial part of global growth. The United States does an extraordinary amount of business in this region, and the President is very committed to being competitive in this region in the 21st century, particularly in fields such as energy, where there are many jobs to be created; and that as you work towards the kind of balance and sustainable growth that has been on the agenda with the G20, that this is directly relevant to our recovery here at home, because our ability to have a dynamic economic engagement with this part of the world can help bolster U.S. exports and lead to the creation of U.S. jobs.

So the President is very committed to a strong and robust economic relationship with Asia, to a very successful and sustained global economic recovery that can enhance our common prosperity on both sides of the Pacific and also create a substantial number of U.S. jobs going forward.

Q Well, real quickly, on the outstanding issues on the free trade agreement, does the President and his team believe that progress has been made on the automobile -- U.S. automobile export issue?

MR. RHODES: Not yet.

Q Not yet?

MR. RHODES: Not yet.

Q Hi, gentlemen. Thanks for doing the call. A couple of short cleanup questions. Does the President expect to stop in Shanghai at the World Expo ground? Can you tell us more about the youth meetings in Shanghai? Is that a town hall format, and are those university students? And also, we had heard last week the possibility that the President might have time to meet with his half-brother in China -- no details on that yet. Can you fill us in on that?

MR. RHODES: Let me just try to take those, Margaret. The President will not be stopping by the Expo. He will be -- given his schedule in Shanghai, it's rather tight, he's only there for a day, really.

The youth will be a format similar to a town hall where he'll be able to address a group of young Chinese and take their questions. I think we're still working out some of the details that are related to that event, but he certainly looks forward to this opportunity and felt that it was important given the deepening engagement not just between the U.S. and Chinese governments, but really among the American and Chinese people, that he take an opportunity, as he has in other countries, to engage young people in a dialogue about the future of this relationship.

And as it pertains to the President's half-brother, I don't think we have anything to add to that right now. It's something that we have seen reports on, but we have nothing to add on it.

Q Does the administration accept the premise that's been put forward by a number of analysts, some people in the region, that the U.S. influence in recent years in Asia has diminished, while China has vastly increased its influence? And secondly, will the President have any personal interaction in the ASEAN meeting with Myanmar's Prime Minister?

MR. BADER: Well, I think it's a common perception in the region that U.S. influence has been on the decline in the last decade, while Chinese influence has been increasing. And one of the messages that the President will be sending in his visit is that we are an Asia Pacific nation and we are there for the long haul. So there is a perception issue that you alluded to.

And the other question was --

MR. RHODES: Yes, and I'd just say on that, I think that the President is the first President of the United States really with an Asia Pacific orientation given that he grew up in Hawaii and Indonesia for a large part of his childhood -- that he understands that the future of our prosperity and our security is very much tied to this part of the world.

And I think one of the central messages that he wants to send through this trip is that the United States intends to be a leader in this region in the 21st century on the full range of issues, and that we have old alliances such as -- for instance, our first stop is in Japan, of course -- that have served the region and the world extraordinarily well over the last several decades; that we intend to reinvigorate and renew those alliances. We have emerging partnerships with a whole host of nations -- for instance, he'll be doing the ASEAN meeting. He'll be meeting with the Indonesians -- and that these are countries that we have increasing ties with on the economic and security front, and we want to continue to deepen those ties.

And then finally, as it relates to China, we've seen a positive trajectory in our ability to partner together on a host of global challenges ranging from nonproliferation to economic recovery.

So the President very much wants to, through this trip, to send a message that the United States intends to deepen its engagement in this part of the world; that we intend to compete in this part of the world; and that we intend to be a leader in this part of the world. And that is very much a message that he will be taking to each of the stops throughout this trip.

And I'll just give it back to Jeff on your other question.

MR. BADER: On Burma, the meeting is with the 10 heads of state and governments of ASEAN. One of them will be the Prime Minister of Burma. The meeting is not called for the purpose of a bilateral or a private conversation between the two.

One of the frustrations that we've had with policy towards Burma over recent years has been that the inability to have interaction with Burma has prevented certain kinds of interaction with ASEAN as a whole. And the statement we're trying to make here is that we're not going to let the Burmese tail wag the ASEAN dog here. We're going to meet with all 10, and we're not going to punish the other nine simply because Burma is in the room. But this is not a bilateral.

MR. SHAPIRO: We have time for two more questions, please.

Q Jeff, will the Okinawa base issue be something that will be dealt with in Japan?

And, Ben, do you know anything about how the audience in Shanghai, of youth will be chosen, or anything about how you expect that to be broadcast around China, whether other people will get to see that town hall?

MR. BADER: I don't see the Okinawa base issue being a dominant or essential issue on the visit. We're having discussions with foreign ministry, with the Japanese defense forces and the Prime Minister's office on the issue. The new Japanese government is reviewing how it wishes to move forward on it. I don't see this issue as being ripe for resolution or a focus of the visit. I think that there will be ongoing discussions beyond the visit during which we will work out the differences.

As for Shanghai, Ben, do you want --

MR. RHODES: Yes, let's see. On the broadcast, obviously the President would appreciate the opportunity to reach the broadest possible audience. That's always a priority of his. And as it relates to the ticketing, that's really something that's taking place -- I wouldn't want to comment on it from here simply because we're working out the details of the event in Shanghai through our folks on the ground there, working closely with the event location.

So there's still some details to be worked out, but regardless to say the President is looking forward to this opportunity to have this kind of dialogue while he's in Shanghai. And I think to him it's important, as it has been in every -- I think you've seen, those of you who have come on trips with us, really on every trip that he takes he tries to take an opportunity to speak to young people, if he can, and engage in a dialogue with them. And this trip is no different. So he's very much looking forward to this event.

MR. SHAPIRO: We have time for one more question.

Q Hi, gentlemen. Thanks for taking the time out today for this. I was hoping somebody could flesh out a little bit more your expectations for what, if any, deliverable is going to come out of this meeting in Beijing with regard to climate change in particular. I mean, is this going to be something that has mitigation targets included with it; financing levels? Or is this going to be more sort of a technology sharing type of a -- a bit narrower of an agreement?

MR. FROMAN: Thank you -- it's Mike. The negotiations are obviously still ongoing in the U.N. CCC process towards Copenhagen. We do not expect that Beijing is going to produce a climate change agreement. But we do expect that the leaders will spend time together discussing how best to proceed and how to work together to make Copenhagen a success. So that's what our expectations are.

Q I mean, what would that say? Like what needs to be sort of written out or in stone to allow that to happen, to allow Copenhagen to be a success, springing from this bilateral meeting?

MR. FROMAN: Those are the sort of things that are being worked out between now and the visit.

MR. SHAPIRO: Thank you, guys. Again, sorry for the late start, but I think we've got to wrap it up right now. So, again, thanks for your patience earlier and for all your cooperation getting on the call.