The Honorable Kevin Rudd: Address to the US-China Public Policy Forum

Now What about the Next 35 Years in US-China Relations?

Can China and the US Work Together to Construct New Global Public Goods?

24 March 2014

For all of us, anniversaries are important. They cause us to pause. To reflect. To take stock. To think for a moment about the future. And importantly to step outside the ebb and flow of the events of the day, to take the
broad view, the long view, and hopefully to harness the insights of history to help craft the future. That’s why the world is transfixed this year by the centenary of the outbreak of the World War I, the war to end all wars, a war which in fact determined the fate of much of the history of the last century. And that’s why, in a much smaller way, we have gathered here at Harvard to reflect on this 35th anniversary of the normalization of relations between this most ancient of civilizations and this most modern of democracies. And a relationship which will shape much of the history of the century that lies before us.

My argument to you tonight, as a longstanding friend of both these great peoples, is very simple. First, there is nothing determinist about history, because as nations and states we ultimately choose our own futures. Second, we are not destined to be forever captured by the primitive, atavistic nationalisms that scream from the collective memories of our past. Third, nor is the course of human progress inevitable, in some perfect linear projection pointing to some mythical end-point of history, as recent developments in the Greater Europe so painfully remind us. Fourth, consistent with this mindset, the leaders of these two great countries, China
and America, chose the sort of future they wanted for themselves by the decisions they took back in 1972 and 1979. And so they shaped the central thrust of their shared history for the last 35 years. This history could have been so radically different. And finally, the burden of leadership now lies with Presidents Xi Jinping and Obama. And that burden is to choose what shared, or unshared, history they want for their countries for the next 35 years. This burden is now much heavier because the underpinning geo-strategic circumstances of the relationship are so radically different than they were in 1979.

Their decisions will once again go to the great questions of whether there is peace or conflict; whether there is common or divided security; a shared prosperity or a return to mercantilism; whether together they resolve to save the planet itself from climate change.

The Journey so Far

China and America are the odd-couple of international relations. Their individual histories, in their own historiographies, are “exceptional.” Their shared history remarkable. Their differences, at times, untenable. History has rarely brought together two civilizations characterized by such an extraordinary cocktail of mutual fascination and mutual non-comprehension. Of all the nineteenth century western hegemons, America was seen by the Chinese, rightly, as the most benign. Americans wanted to trade, and they still do. And Americans wanted to save China’s soul, and still probably want to do that today as well. America helped defeat Japan, for which both Nationalist and Communist China were thankful, but never grateful.

In American foreign policy historiography, America then “lost China”, although in Chinese historiography, new China seemed to have found itself in the great events of
1949. For the Americans, China then became the “Red Menace” as part of the global spread of communism in partnership with the Soviet Union, and as reflected in theaters stretching from Korea to Indo-China.Meanwhile, for the Chinese, at the height of the Cultural Revolution, America in turn became the all-consuming ideological enemy – the source of unrepentant, capitalist imperialism.

Over the space of barely a hundred years, this represents a remarkable collage of conflicting impressions – hardly a promising canvas on which to paint a new strategic relationship. But this is precisely what the leaders of the two countries actually did in 1972 and 1979, following a quarter of a century of mutual hostility.

Mao and Nixon.

Kissinger and Zhou Enlai.

Deng and Carter.

And their many advisors, officials and ambassadors.

They saw a new strategic opportunity and grabbed it with both hands. On occasions such as this, we should never forget those who first dug the well. 吃水不忘掘井人.

While I do not have a decisively Carlylian view of history and the role of “great men” in shaping the ultimate course of events, I do believe that leadership matters fundamentally. Without these six men, it is hard to see how the history of the last 35 years could have unfolded in the way it has. Whatever the received narratives of the US-China relationship might now be for this period, the bottom line is that the last 35 years have been remarkably positive against the critical markers of common peace, stability and prosperity. The conceptualization of the relationship over this period has ranged across the whole spectrum of possibilities. This spectrum ranges from strategic co-existence, to cooperation, to contribution (i.e. the global stakeholder theory) to competition, to containment, to even low-level conflict, and then to plain old contradiction and complexity.

The latter (i.e. complexity and contradiction) effectively concede that it’s just all too hard to characterize at all. These are what I call the seven “C’s” of the competing taxonomies of US-China relations: co-existence, cooperation, contribution, competition, containment, conflict, and contradiction. None of these individually adequately describe the relationship over the period under review. Nor are they individually capable of providing a useful conceptual framework to prescribe the relationship for the future, given the changing strategic circumstances in which we now find ourselves. At different times, the US-China relationship has been a complex cocktail of all the above. But it has been a relationship anchored historically in a deep strategic rebalancing by the US and China against the then Soviet Union.

Now of course, this fundamental strategic logic has changed with the relative rise of China, the relative decline of Russia, the partial emergence of a new degree of strategic cooperation between them, and the beginnings of global questioning of the future of American power and the future strength and cohesion of the West.

US-China Relations Today

It is argued that in the period since the collapse of the Soviet Union, the US-China relationship has as a result lacked an underpinning strategic rationale, or at least one that is shared by both sides. It is also argued that the anti-Soviet logic of the relationship deriving from the sixties and seventies, in fact began to unwind a couple of years before the final Soviet collapse.

Remember: it was Deng, in the tumultuous days of June 1989, drawing on the strategic leverage afforded him by the US relationship, who successfully resolved the 4300 km Sino-Soviet land border during Gorbachev’s visit to Beijing. Resolving the border was a critical element in normalizing the longer-term China- Russia relationship. Certainly, the following two decades saw a degree of strategic drift unfold between China and the United States, as China began to conclude that both regional and global strategic circumstances were beginning to change in its favor, enabling China also to chart an increasingly independent course.

The critical change drivers in this period after 1989 included the growing success of China’s economic transformation, so that by the end of the following decade, China had emerged as a major economic partner of many countries in the region. Second, the Asian Financial Crisis caused a number of regional states to begin to look to China as a source of support, in the face of the perceived indifference of the US and the collective west as demonstrated by the IMF’s response to this regional financial crisis. Third, the Global Financial Crisis a decade later accelerated this emerging regional trend of deepening economic engagement with China. It contributed to an emerging global dependency on China as a new driver of global economic growth at a time of great duress. It also paralleled a growing perception of the US economy over the last five years that the US was now in deep structural trouble, and could no longer be relied upon as the fundamental bastion of the global economy. Fourth, the cumulative impact of two major wars in the wider Middle East also impacted Chinese perceptions on the future of American military power and resolve. And finally, there also emerged a number of Chinese conclusions that the US political system may have become so dysfunctional that structural problems that could have been fixed in the past, say on tax, debt and deficit, could no longer be fixed because the system was now broken.

None of this is to suggest that China is without deep political, economic, social, environmental and diplomatic problems of its own. These are great in number. Deep in complexity. Not least the current environmental crisis.
So in looking at America’s challenges, we must not yield to the sound of only one hand clapping.Nonetheless it must be recognized that China has plans to deal with each of its challenges.Although how successfully it does so remains to be seen. For these reasons, China’s priorities over the next decade will remain overwhelmingly domestic. At the same time, China is also deeply reappraising its own future foreign policy in Asia, its military posture, and its future role in the global order.

So we are, I believe, in a time of changing dynamics in the China-US relationship, driven by the accumulation of these various internal and external challenges and opportunities, how their respective leaderships are able to respond, and whether they are also capable of crafting a sufficiently common strategic vision for their common future. The truth is, there is great uncertainty as to where it will all land.

Future Directions

So a core question for the next 35 years of the US and China is whether the two governments can construct a new organizing principle for their future strategic relationship. And to do so with a China which is more powerful, confident and assertive than before. But also a China with a growing list of its own deep vulnerabilities. And similarly for the United States, as it contemplates its own future role in sustaining both the regional and global rule-based orders, given the domestic political and economic constraints it now faces.An America, whose people are growing a little tired of the world. And an America now with growing budget constraints.

I said earlier there is nothing determinist about history. We shape our own histories, either by the decisions we make, or the inertia that overcomes us. And so it will be for the China-US relationship too. I believe it is possible to carve out a common future for both these great countries. And one which upholds the interests of other states, great and small, that depend on the international order for their survival. To do this will require four core elements: committed leadership; a fresh, conceptual approach which does not ignore existing strategic realities, but seeks to build new habits, structures and content of strategic cooperation; a working agenda that
translates lofty words into operational reality; and finally a mechanism for doing so. On leadership, I believe both leaders are seized of the significance of the challenge, and are prepared to engage.

As for a conceptual framework, President Xi uses the term “a new type of great power relationship” to avoid the inevitability of conflict between an existing great power and a rising power. This concept is very much a headline waiting to be populated. President Obama has said he is prepared to work on defining such a relationship. My own tentative view, for what it is worth, is that conceptually we should do some work around the idea of a relationship that is characterized by what it can construct together in the future.

In Chinese, the words jianshe(建设) , the verb “to construct,” and jianshexing(建设性) , the adjective “constructive” are both overwhelmingly positive, pro-active, action oriented terms. They are about building stuff. Not just objects, but also attitudes. It may be possible, for example, to construct together new global public goods, gonggong chanpin (公共产品), a term which the Chinese themselves have only relatively recently begun to publicly embrace. In a certain sense, this can also be applied to construct new regional public goods as well. This is qualitatively different to classical “stakeholder” theory.

Under stakeholder theory, China is invited to share the burden of implementing the rules already set by others. Constructing new public goods, which either don’t exist, or barely exist, is something
else. Maybe we should even dust off our international relations textbooks and ask what the international relation theory of “constructivism” (建构主义) might have to say that is useful in this sort of conceptual discussion. On content, a new constructive relationship could take the form of a new regime, or new rules of the road, on cyber security. No such regime currently exists. China and the US could construct one.

Second, it could take the form a radically new form of climate change agreement between the world’s two largest polluters. At present, there is none. Nor are China and the US likely to sign or ratify a binding global treaty. But bilaterally they could construct a new bilaterally agreed approach that big polluters might then join. This would be constructing a new global public good.

Third, it might also take the form of working together to construct a robust regional institution over time, by building a new Asia Pacific Community out of the existing East Asia Summit and to build new regional norms around concepts of common security. For example, this can increasingly be done in areas such as natural disaster management, then progressively other harder security questions, including preventing incidents at sea, or even in time, managing territorial disputes. At present, such institutions and norms don’t exist. They need to be constructed. I have written about the range of issue areas for constructive engagement in various papers and articles elsewhere.

The overall point here is for China, the US and others to build new public goods together where they currently don’t, or barely, exist. And in Asia, that is everywhere. This approach directs energies at constructing together a common, external public good, rather than focusing only on zero-sum game calculations of an exclusively bilateral nature, where one side or the other either wins or loses. This in turn is a way of gradually changing strategic mindsets, or siwei (思维), over time. Or as Deng might have said in a different context:摸着石头过河 Or in English, feeling your way cross the river, stone by stone.

Finally on mechanisms, fortunately, as of last year, we have a new, emerging practice of annual bilateral summitry. This is where the work must be commissioned and agreed. Only the two Presidents, in both their political systems, have the authority to make the big strategic calls that will be necessary for the future.


The future of this relationship between China and the United States affects us all. It can’t just be allowed to drift. By working on it, we might just be able to defy history, although the odds are tough. By working on it, many tough questions will come to the surface on our respective values, and what common ground exists among us. Tough questions on national interests, including what common ground can be found, rather than simply assuming a priori that these interests are fundamentally opposed. Tough questions concerning strategic mindsets – mindsets which have often been anchored in generations of deeply-wired political and strategic thought, perception and analysis, and which by instinctive reflex, cause each side to fear the worst of each other.

A tough question for China will be what sort of global order does China precisely want to see for the future, so the world can make a judgment about it well before China becomes a dominant power, capable of acting unilaterally. For my Chinese friends, the uncomfortable truth is that remaining obscure on this will compound strategic opposition to China, not reduce it.

A tough question for the American body-politic is how will America respond when it is no longer “number one” in the world in terms of the size of its economy, when that has been the underlying assumption of American global power for more than a century. Or will American politics degenerate into a debate about “who lost America’s preeminent global position” rather than focusing on how to shape a future that maximizes
the values and interests of us all through the future global order. At the same time, looking beyond particular nationalisms, how do we constructivelyunleash the great, liberating energies of globalization in the future shape of the US-China relationship and its impact on the global order.

These forces include the rising generation whose socialization is increasingly digital and therefore global. And for whom many of the classical security concerns that have preoccupied their parents and grandparents begin to melt away. Where the passage of time produces an increasingly global culture, rather than one exclusively defined by narrow nationalisms.

In precisely 35 years from now, it will be 100 years since the proclamation of the People’s Republic. What sort of China will there be then, we do not know. Nor for that matter what type of America, other than it will be primarily Hispanic and Asian, and in an age when hopefully none of that matters anymore. These things we cannot know. But given what we do know now, it is now critical that we seize the day to maximize the prospects for our common peace, economic prosperity and planetary sustainability for the future, rather than allow the dynamics of strategic drift to unfold, driven by the darker, subterranean forces of nationalism.
President Xi speaks of “China’s Dream.” And here we are at this great university that lies at the heart of the American dream.

Surely it is within our collective wit and wisdom to begin to imagine precisely how we can dream together – and construct together the global order of the future.A global order grounded in the principles of open economies, free and stable societies, and a common security for us all.

Source: The Honorable Kevin M. Rudd