HILLARY CLINTON: [LAUGH] Whoa!

Hi!

[LAUGH] Thank you!

Thank you!

Great.

Thank you!

Oh, thank you.

[APPLAUSE ENDS]

ERIC SCHMIDT: Well, Secretary Clinton,

welcome back to Google.

HILLARY CLINTON: It's great to be here, Eric.

You've grown a little bit, since I've been here last.

Just a little.

ERIC SCHMIDT: Are you talking about my weight?

HILLARY CLINTON: [LAUGH]

ERIC SCHMIDT: I knew I gained some pounds, here.

No, the company is much larger and even more successful.

And thank you for your first visit.

We're here to talk about your book, which, you know,

I've actually read.

HILLARY CLINTON: Thank you.

ERIC SCHMIDT: I did want to present you--

[LAUGHTER]

I did want to present you with my book.

And I want-- it's entitled "How Google Works."

And I want you to notice something

that's different between your book and my book.

Now, your book is 600 pages and very-- lots and lots of words.

My book is 37 pages, and it uses big type.

And my book has black and white photos,

and yours has color photos.

So, on a pound for pound basis, my book is more valuable.

[LAUGHTER]

HILLARY CLINTON: Well, but there are many things

you can do with my book that you can't do with this book.

ERIC SCHMIDT: Such as?

HILLARY CLINTON: Well, you can work out--

ERIC SCHMIDT: Foreign policy?

HILLARY CLINTON: No, you can work out, with my book.

ERIC SCHMIDT: You can work out with your book?

HILLARY CLINTON: Absolutely.

And if you get two copies--

ERIC SCHMIDT: Weightlifting?

HILLARY CLINTON: --you'll be balanced,

while you're working out.

You can use it as a doorstop.

This would just slip under the door.

You can't imagine using that as a doorstop.

I don't know.

I think it's kind of a-- just a draw, don't you think?

ERIC SCHMIDT: Well, at some point,

we're going to be talking about my book.

But I want you to notice that my book is--

[LAUGHTER]

My book is so short, you can read it during this interview.

HILLARY CLINTON: Well, I have to say

there is a particularly attractive picture of you,

on page 31, wearing some kind of ridiculous hat,

with some model of an airplane.

ERIC SCHMIDT: And a picture of Bill Gates, in the back.

HILLARY CLINTON: [LAUGH]

ERIC SCHMIDT: Let's get to work.

So, Secretary Clinton, your book is entitled "Hard Choices."

And what we're going to do is, we're

going to have some questions from me,

we have some [INAUDIBLE] questions--

that is, submitted from the audience--

and we have some live questions, as well.

And the first question I want to ask

is that you and I had a very dear friend-- Richard

Holbrooke-- who died, unexpectedly,

of a heart attack.

And you had appointed him to do the negotiation in Afghanistan.

Do you think that his death affected the outcome

in Afghanistan?

As a brilliant negotiator, did we miss him that much?

Did we end up in, roughly, the right place

in Afghanistan, at the end of it all?

HILLARY CLINTON: Well, there's two parts to that question.

Let me address our friend, Richard Holbrooke, first.

He was, in my view, the premier diplomat of our generation.

He was dramatic, when called for; he was persistent,

he was tough-minded, but he believed, passionately,

that you couldn't end a war if you didn't

talk to the people on the other side.

Now, that may sound simplistic, but, indeed,

that's a huge obstacle for many in diplomacy--

politics, governments-- to get over.

How do you end a war, if you talk

to the people you despise-- who you view

as the troublemakers, the instigators?

And Richard came at the assignment I asked him to take,

on behalf of the President and myself,

with that strong conviction-- borne out

of his many years of experience, and, in particular, his ending

of the wars in the Balkans, when my husband was president.

He spent a lot of time with Milosevic--

a most unsavory character.

He drank with him, he yelled at him, he bullied him,

he listened to him and, eventually,

was able to get to the Dayton Peace Accords, which

ended the war, even though it didn't

end all of the political and ethnic

and other problems that are, unfortunately, still prevalent.

When I asked him to take on the task in Afghanistan

and Pakistan, he went at it with his same level of commitment--

even relish.

And, as I write in the book, we were

beginning a process of reaching out to, and responding

to outreach from, the Taliban.

And I gave a speech that tried to make the case that that

might be distasteful; it certainly

was to me, for many reasons, as to how

they treat people in general, and women in particular.

But there had to be a political negotiation, in order

to try to end the conflict.

And literally, the day he died-- and he

suffered a terrible attack in my office--

we were talking about the first meeting

that we had engineered between an American diplomat--

one of Richard's lieutenants-- and a representative of Mullah

Omar.

I guess the short answer, Eric, is that Richard would never

take No for an answer.

We had a lot of difficulties, both with President Karzai--

because he didn't want us talking to the Taliban--

and we had problems with the Taliban,

because they didn't want to talk to President Karzai.

So we were playing a kind of multilevel chess game

and trying to move the parties closer

to talking to each other.

And, unfortunately, with Richard's death,

we kept up the initiative, but we

didn't have that same overpowering presence

that he brought to it.

Now where we are with Afghanistan-- and Pakistan,

because we looked at them, very much, as presenting

similar challenges to a lasting peace and to threats,

first of all, to the region, and even beyond--

is an election that was held that has been criticized

for irregularities that now, finally--

and I give Secretary Kerry credit for going there.

There's no substitute for going to these places

and staying and trying to engineer some kind of solution

That there will now be a total audit of all the votes,

in Afghanistan, to determine who the next president is.

So things are, kind of, on hold, until we know that.

What I think of as the three biggest challenges is,

number one, getting a new president in who

could keep Afghanistan unified.

Despite all of the problems that many of us

had with President Karzai, that was his primary goal.

To try to keep the country unified,

and not fly off in different ethnic directions.

And we need to support whoever that next president is and do

our best to give him the authority that he needs,

to try to keep the country unified.

Secondly, continuing to work with the Afghan security

forces.

They have proven to be much more dependable, effective fighters,

taking the fight to the Taliban--

because the Taliban is very clear that they intend

to reoccupy territory they lost to coalition troops,

in the last several years, following

the surge that President Obama ordered.

So continuing to work and support the Afghan security

forces.

And then, finally, being well aware that so many

of the problems in Afghanistan are incubated in Pakistan.

And the Pakistani government is now

facing some of the most serious threats

that it, historically, has, because, as I say in the book,

they had an idea that was never going to be workable,

for the long term, which is, you can

keep poisonous snakes in your backyard

and expect them only to bite your neighbors.

And the Pakistani military and intelligence establishment

have, unfortunately, over years, worked with-- supported-- lots

of the terrorist groups-- extremist groups--

for their own purposes, some of which

was to keep Afghanistan kind of off-kilter.

So there has to be a lot of effort

made to work with the Pakistanis, as difficult

as that is.

And that's something that I spent some time on,

in the book, because I worked very

hard to try to have as effective a relationship as we could.

But at the end of the day, the Pakistanis

have to stand up to the threat from within, which is also

a threat to Afghanistan-- and, by the way, a continuing

threat to India.

So it's a-- we've made progress, but not nearly enough.

ERIC SCHMIDT: I was in Pakistan a little bit after you were,

and I found it incredibly confusing to figure out.

In fact, while I was there, the president I met with

was gotten rid of by the supreme court

over-- something involving financial and his child.

In the book, you spent a fair amount of time on, I think,

one of the significant foreign policy

achievements during your tenure, involving the pivot to Asia.

HILLARY CLINTON: Right.

ERIC SCHMIDT: And when I lay it out-- right,

we've got the Pakistan problems.

You were the first person to really open up

Burma-- Myanmar-- you met Aung San Suu Kyi, et cetera.

But you start looking at, like, the--

as an example, the Spratly Islands,

and this line called Line Nine, between China and Japan

and the others-- it's getting more confusing to an outsider.

HILLARY CLINTON: Mhm.

ERIC SCHMIDT: You talk about the pivot.

Do you think that we understand how to navigate, now,

between these-- each of these countries

is becoming more nationalistic, as it becomes stronger.

HILLARY CLINTON: Right.

Well, that is a trend that I saw really beginning to take off.

And it has a number of implications,

both for the region, but also for us,

and the rest of the world.

As China has gotten much more economically powerful,

it's understandable that they want to project their power.

But it's quite threatening, to the rest of the region.

And what I saw as a growing threat was the increasing

budgetary resources going to the People's Liberation Army,

to build up their naval capacity so that they

could project power on the seas.

Now, the United States, primarily,

has kept the peace in Asia, in navigable waters,

for the protection of commerce, and our navy

has been a very positive force.

But it's clear to me that the Chinese

intend to challenge American naval superiority.

That's their perfect right, to do so.

They are a sovereign country; they

get to make those decisions.

But the problems that Eric alluded to

are having a rebound effect around the region.

So that, if you see China developing its first aircraft

carrier, with plans for a number of more carriers,

and you see China being quite aggressive

on territorial claims-- not that they're

willing to arbitrate those claims,

but they're merely asserting them,

against the Philippines and Vietnam and Japan, primarily,

now.

And you see that this could lead to increasing tension,

and maybe even conflict, in the region.