Before I begin, I want to say a few words about the unfortunate and counterproductive resolution at the United Nations General Assembly that just passed, because it places further obstacles in the path to peace. We have been clear that only through direct negotiations between the parties can the Palestinians and Israelis achieve the peace that both deserve: two states for two people, with a sovereign, viable, independent Palestine living side by side in peace and security with a Jewish and democratic Israel.
And I see my longtime friend and colleague, Ehud Barak, here, and I know he would agree with that, as both the most decorated soldier in Israeli history and a distinguished public servant. I'll have more to say about this later, but I did want to begin by recognizing the challenge that this will surely present.
I want to add my words of welcome to all of you. I want to thank Admiral McRaven for being here. It's wonderful that you are here, Bill. We very much appreciate your participation. Foreign Minister Sikorski, a good friend and colleague, who himself is a top global thinker - well deserved because of the careful, comprehensive views he's developed over many years of hard work about issues as fundamental as freedom.
And of course, I see right before me a wonderful friend and colleague, former Senator John Warner, who has been just a great example of public service - military and civilian - his entire life. And to all of our friends and colleagues from the diplomatic corps. And thanks, of course, to David and Susan and Deb and everyone at Foreign Policy for joining with the State Department's Office of Policy Planning to organize this conference about transformational trends. And I want to thank Jake Sullivan and everyone at Policy Planning. When Jake Sullivan first came to work for me, I told my husband about this incredibly bright rising star - Rhodes Scholar, Yale Law School - and my husband said, "Well, if he ever learns to play the saxophone, watch out." (Laughter.) Now we travel all over the world together and people say how excited they are to meet a potential future president of the United States, and of course they mean Jake. (Laughter.)
Well, I will state the obvious to begin. We do live in a rapidly changing world. And many of the constants that shaped American foreign policy for decades are shifting. That poses new challenges but also new opportunities for our global leadership. Let me offer a few examples.
First, our alliances in Europe and East Asia are stronger than ever. After four years of repairing Iraq-era strains and answering questions about America's commitment to diplomacy, our staying power, our global leadership, we are working across the board on so many important issues to all of us. At the same time, however, many of our allies are struggling with serious economic challenges and shrinking military capabilities. This will have implications for how we uphold the global order going forward.
Second, China's peaceful rise as a global power is reaching a crossroads. Its future course will be determined by how it manages new economic challenges, differences with its neighbors, and strains in its political and economic system.
Third, in the Middle East, the Arab revolutions have scrambled regional power dynamics. And the energy revolution around the world will likely further change the region's strategic landscape in the coming years. Indeed, America's increasing energy independence will have far-reaching implications not only for our economic future, but for our security relationships around the world.
Fourth, economics are increasingly shaping international affairs alongside more traditional forms of national power. Emerging powers like India and Brazil are gaining clout because of their size, of course, but more the size of their economies than of their militaries, more about the potential of their markets than their projection of what we used to think of as power. Meanwhile, the global economic system - open, free, transparent, and fair - that fueled unprecedented growth is now under unprecedented pressure from trade imbalances, new forms of protectionism, the rise of state capitalism, and crippling public debt.