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The Honorable Kevin M. Rudd

Based in New York, NY, USA

  • The 26th Prime Minister and former Foreign Minister of Australia
  • A leading voice on global politics and the economy
  • President of the Asia Society Policy Institute (ASPI)
  • Co-Chair of The International Finance Forum (IFF)
  • Senior Fellow, Belfer Center for Science and International Affairs at the John F. Kennedy School of Government at Harvard University
  • The 26th Prime Minister and former Foreign Minister of Australia
  • A leading voice on global politics and the economy
  • President of the Asia Society Policy Institute (ASPI)
  • Co-Chair of The International Finance Forum (IFF)
  • Senior Fellow, Belfer Center for Science and International Affairs at the John F. Kennedy School of Government at Harvard University

The Honorable Kevin M. RUDD served as the 26th Prime Minister (2007-2010, 2013) and as Foreign Minister (2010-2012) of Australia. He led Australia’s response during the Global Financial Crisis, reviewed by the IMF as the most effective stimulus strategy of all major economies. Australia was the only major developed economy not to go into recession. Mr. Rudd was a co-founder of the G20, established to drive the global response to the crisis, and which through its actions in 2009 prevented the global economy spiraling into depression.

As Prime Minister and Foreign Minister, Mr. Rudd was active in regional and global foreign policy leadership. He was a driving force in expanding the East Asia Summit to include both the US and Russia in 2010, having in 2008 launched an initiative for the long-term transformation of the EAS into a wider Asia Pacific Community. On climate change, Mr. Rudd ratified the Kyoto Protocol in 2007 and legislated in 2008 for a 20% mandatory renewable energy target for Australia. He represented Australia at the 2009 Copenhagen Climate Change Summit which produced the Copenhagen Accord, for the first time committing states to not allow temperature increases beyond two degrees. He was  a member of the UN  High Level Panel on Global Sustainability and is a co-author of the of the report “Resilient People, Resilient Planet” for the 2012 Rio+20 Conference. Mr. Rudd drove Australia’s successful bid for a non-permanent seat on the UN Security Council for 2012-14. His government also saw the near doubling of Australia’s foreign aid budget to approximately $5 Billion, making Australia then one of the top ten aid donors in the world. He also appointed Australia’s first ever Ambassador for Women and Girls to support the critical role of women in development and reduce physical and sexual violence against women.

Domestically, Mr. Rudd delivered a formal apology to indigenous Australians. In education, his government introduced Australia’s first nation-wide school curriculum, undertook a record capital investment program in Australian schools with the building of thousands of new state-of-art libraries, as well as introducing the first mandatory national assessment system for literacy and numeracy standards. In health, Mr. Rudd in 2010 negotiated the National Health and Hospitals Reform Agreement, the biggest reform of and investment in the health system since the introduction of medicare 30 years before. His government established a national network of leading-edge cancer-care centers across Australia, before introducing the world’s first ever plain-packaging regime for all tobacco products. To improve the rate of organ and tissue donation, he established the National Organ and Tissue Transplant Authority. In 2010, he introduced Australia’s first paid parental leave scheme and implemented the biggest increase in, and reform of, the age pension in a century. He also founded the National Broadband Network to deliver high-speed broadband for every household, business, school, hospital and GP in the country.

Mr. Rudd is President of the Asia Society Policy Institute in New York. ASPI is a “think-do tank” dedicated to second track diplomacy to assist governments and businesses on policy challenges within Asia, and between Asia, the US and the West.  He has been Co-Chairman of The International Finance Forum (IFF).  He is also Chair of the Independent Commission on Multilateralism where in 2015-16 he leads a review of the UN system. Mr. Rudd is a Senior Fellow at the Harvard Kennedy School where in 2014-15  he completed a major policy report on “Alternative Futures for US-China Relations.” He is a Distinguished Fellow at Chatham House in London, a Distinguished Statesman with the Center for Strategic and International Studies in Washington, and a Distinguished Fellow at the Paulson Institute in Chicago. Mr. Rudd is a member of  the Comprehensive Test Ban Organization’s Group of Eminent Persons. He is proficient in Mandarin Chinese, serves as a Visiting Professor at Tsinghua University in Beijing, and co-Chairs the China Global Affairs Council of the World Economic Forum.

Mr. Rudd in his private capacity has established the National Apology Foundation to continue the work of reconciliation and closing the gap with indigenous Australians, as well as the Asia Pacific Community foundation to promote regional security, economic, and environmental cooperation, and the development of effective regional institutional architecture for the future.

 

Kevin Rudd, Asia Society Policy Institute, discusses Donald Trump’s series of tweets slamming China about its currency and military policy.

1 April 2015 – Vancouver, Canada

Kevin Rudd: Are China and the US doomed to conflict?
Kevin Rudd: Are China and the US doomed to conflict?

G’day, my name’s Kevin. I’m from Australia. I’m here to help. (Laughter)

Tonight, I want to talk about a tale of two cities. One of those cities is called Washington, and the other is called Beijing. Because how these two capitals shape their future and the future of the United States and the future of China doesn’t just affect those two countries, it affects all of us in ways, perhaps, we’ve never thought of: the air we breathe, the water we drink, the fish we eat, the quality of our oceans, the languages we speak in the future, the jobs we have, the political systems we choose, and, of course, the great questions of war and peace.

5You see that bloke? He’s French. His name is Napoleon. A couple of hundred years ago, he made this extraordinary projection: “China is a sleeping lion, and when she awakes, the world will shake.” Napoleon got a few things wrong; he got this one absolutely right. Because China is today not just woken up, China has stood up and China is on the march, and the question for us all is where will China go and how do we engage this giant of the 21st century?

You start looking at the numbers, they start to confront you in a big way. It’s projected that China will become, by whichever measure — PPP, market exchange rates — the largest economy in the world over the course of the decade ahead. They’re already the largest trading nation, already the largest exporting nation, already the largest manufacturing nation, and they’re also the biggest emitters of carbon in the world. America comes second.

So if China does become the world’s largest economy, think about this: It’ll be the first time since this guy was on the throne of England — George III, not a good friend of Napoleon’s — that in the world we will have as the largest economy a non-English speaking country, a non-Western country, a non-liberal democratic country. And if you don’t think that’s going to affect the way in which the world happens in the future, then personally, I think you’ve been smoking something, and it doesn’t mean you’re from Colorado.

So in short, the question we have tonight is, how do we understand this mega-change, which I believe to be the biggest change for the first half of the 21st century? It’ll affect so many things. It will go to the absolute core. It’s happening quietly. It’s happening persistently. It’s happening in some senses under the radar, as we are all preoccupied with what’s going in Ukraine, what’s going on in the Middle East,what’s going on with ISIS, what’s going on with ISIL, what’s happening with the future of our economies.This is a slow and quiet revolution. And with a mega-change comes also a mega-challenge, and the mega-challenge is this: Can these two great countries, China and the United States — China, the Middle Kingdom, and the United States, Měiguó — which in Chinese, by the way, means “the beautiful country.”Think about that — that’s the name that China has given this countryfor more than a hundred years.Whether these two great civilizations, these two great countries, can in fact carve out a common futurefor themselves and for the world? In short, can we carve out a future which is peaceful and mutually prosperous, or are we looking at a great challenge of war or peace? And I have 15 minutes to work through war or peace, which is a little less time than they gave this guy to write a book called “War and Peace.”

People ask me, why is it that a kid growing up in rural Australia got interested in learning Chinese? Well, there are two reasons for that. Here’s the first of them. That’s Betsy the cow. Now, Betsy the cow was one of a herd of dairy cattle that I grew up with on a farm in rural Australia. See those hands there? These are not built for farming. So very early on, I discovered that in fact, working in a farm was not designed for me, and China was a very safe remove from any career in Australian farm life.

Here’s the second reason. That’s my mom. Anyone here ever listen to what their mom told them to do?Everyone ever do what their mom told them to do? I rarely did, but what my mom said to me was, one day, she handed me a newspaper, a headline which said, here we have a huge change. And that change is China entering the United Nations. 1971, I had just turned 14 years of age, and she handed me this headline. And she said, “Understand this, learn this, because it’s going to affect your future.”

So being a very good student of history, I decided that the best thing for me to do was, in fact, to go off and learn Chinese. The great thing about learning Chinese is that your Chinese teacher gives you a new name. And so they gave me this name: Kè, which means to overcome or to conquer, and Wén, and that’s the character for literature or the arts. Kè Wén, Conqueror of the Classics. Any of you guys called “Kevin”? It’s a major lift from being called Kevin to be called Conqueror of the Classics. (Laughter) I’ve been called Kevin all my life. Have you been called Kevin all your life? Would you prefer to be called Conqueror of the Classics?

And so I went off after that and joined the Australian Foreign Service, but here is where pride — before pride, there always comes a fall. So there I am in the embassy in Beijing, off to the Great Hall of the People with our ambassador, who had asked me to interpret for his first meeting in the Great Hall of the People. And so there was I. If you’ve been to a Chinese meeting, it’s a giant horseshoe. At the head of the horsehoe are the really serious pooh-bahs, and down the end of the horseshoe are the not-so-serious pooh-bahs, the junior woodchucks like me. And so the ambassador began with this inelegant phrase. He said, “China and Australia are currently enjoying a relationship of unprecedented closeness.” And I thought to myself, “That sounds clumsy. That sounds odd. I will improve it.” Note to file: Never do that. It needed to be a little more elegant, a little more classical, so I rendered it as follows. [In Chinese]

There was a big pause on the other side of the room. You could see the giant pooh-bahs at the head of the horseshoe, the blood visibly draining from their faces, and the junior woodchucks at the other end of the horseshoe engaged in peals of unrestrained laughter. Because when I rendered his sentence,“Australia and China are enjoying a relationship of unprecedented closeness,” in fact, what I said was that Australia and China were now experiencing fantastic orgasm. (Laughter)

That was the last time I was asked to interpret. But in that little story, there’s a wisdom, which is, as soon as you think you know something about this extraordinary civilization of 5,000 years of continuing history,there’s always something new to learn.

History is against us when it comes to the U.S. and China forging a common future together. This guy up here? He’s not Chinese and he’s not American. He’s Greek. His name’s Thucydides. He wrote the history of the Peloponnesian Wars. And he made this extraordinary observation about Athens and Sparta. “It was the rise of Athens and the fear that this inspired in Sparta that made war inevitable.” And hence, a whole literature about something called the Thucydides Trap.

This guy here? He’s not American and he’s not Greek. He’s Chinese. His name is Sun Tzu. He wrote “The Art of War,” and if you see his statement underneath, it’s along these lines: “Attack him where he is unprepared, appear where you are not expected.” Not looking good so far for China and the United States.

This guy is an American. His name’s Graham Allison. In fact, he’s a teacher at the Kennedy School over there in Boston. He’s working on a single project at the moment, which is, does the Thucydides Trap about the inevitably of war between rising powers and established great powers apply to the future of China-U.S. relations? It’s a core question. And what Graham has done is explore 15 cases in historysince the 1500s to establish what the precedents are. And in 11 out of 15 of them, let me tell you, they’ve ended in catastrophic war.

You may say, “But Kevin — or Conqueror of the Classics — that was the past. We live now in a world of interdependence and globalization. It could never happen again.” Guess what? The economic historians tell us that in fact, the time which we reached the greatest point of economic integration and globalizationwas in 1914, just before that happened, World War I, a sobering reflection from history.

So if we are engaged in this great question of how China thinks, feels, and positions itself towards the United States, and the reverse, how do we get to the baseline of how these two countries and civilizations can possibly work together?

Let me first go to, in fact, China’s views of the U.S. and the rest of the West. Number one: China feels as if it’s been humiliated at the hands of the West through a hundred years of history, beginning with the Opium Wars. When after that, the Western powers carved China up into little pieces, so that by the time it got to the ’20s and ’30s, signs like this one appeared on the streets of Shanghai. [“No dogs and Chinese allowed”] How would you feel if you were Chinese, in your own country, if you saw that sign appear?China also believes and feels as if, in the events of 1919, at the Peace Conference in Paris, when Germany’s colonies were given back to all sorts of countries around in the world, what about German colonies in China? They were, in fact, given to Japan. When Japan then invaded China in the 1930s the world looked away and was indifferent to what would happen to China. And then, on top of that, the Chinese to this day believe that the United States and the West do not accept the legitimacy of their political system because it’s so radically different from those of us who come from liberal democracies,and believe that the United States to this day is seeking to undermine their political system. China also believes that it is being contained by U.S. allies and by those with strategic partnerships with the U.S.right around its periphery. And beyond all that, the Chinese have this feeling in their heart of hearts and in their gut of guts that those of us in the collective West are just too damned arrogant. That is, we don’t recognize the problems in our own system, in our politics and our economics, and are very quick to point the finger elsewhere, and believe that, in fact, we in the collective West are guilty of a great bunch of hypocrisy.

Of course, in international relations, it’s not just the sound of one hand clapping. There’s another country too, and that’s called the U.S. So how does the U.S. respond to all of the above? The U.S. has a response to each of those. On the question of is the U.S. containing China, they say, “No, look at the history of the Soviet Union. That was containment.” Instead, what we have done in the U.S. and the Westis welcome China into the global economy,and on top of that, welcome them into the World Trade Organization. The U.S. and the West say China cheats on the question of intellectual property rights, and through cyberattacks on U.S. and global firms. Furthermore, the United States says that the Chinese political system is fundamentally wrong because it’s at such fundamental variance to the human rights, democracy, and rule of law that we enjoy in the U.S. and the collective West.And on top of all the above, what does the United States say? That they fear that China will, when it has sufficient power, establish a sphere of influence in Southeast Asia and wider East Asia, boot the United States out, and in time, when it’s powerful enough, unilaterally seek to change the rules of the global order.

So apart from all of that, it’s just fine and dandy, the U.S.-China relationship. No real problems there. The challenge, though, is given those deep-rooted feelings, those deep-rooted emotions and thought patterns, what the Chinese call “Sīwéi,” ways of thinking, how can we craft a basis for a common future between these two?

I argue simply this: We can do it on the basis on a framework of constructive realism for a common purpose. What do I mean by that? Be realistic about the things that we disagree on, and a management approach that doesn’t enable any one of those differences to break into war or conflict until we’ve acquired the diplomatic skills to solve them. Be constructive in areas of the bilateral, regional and global engagement between the two, which will make a difference for all of humankind. Build a regional institution capable of cooperation in Asia, an Asia-Pacific community. And worldwide, act further, like you’ve begun to do at the end of last year by striking out against climate change with hands joined together rather than fists apart.

Of course, all that happens if you’ve got a common mechanism and political will to achieve the above.These things are deliverable. But the question is, are they deliverable alone? This is what our head tells us we need to do, but what about our heart?

I have a little experience in the question back home of how you try to bring together two peoples who, frankly, haven’t had a whole lot in common in the past. And that’s when I apologized to Australia’s indigenous peoples. This was a day of reckoning in the Australian government, the Australian parliament, and for the Australian people. After 200 years of unbridled abuse towards the first Australians, it was high time that we white folks said we were sorry.

The important thing — (Applause)

The important thing that I remember is staring in the faces of all those from Aboriginal Australia as they came to listen to this apology. It was extraordinary to see, for example, old women telling me the stories of when they were five years old and literally ripped away from their parents, like this lady here. It was extraordinary for me to then be able to embrace and to kiss Aboriginal elders as they came into the parliament building, and one woman said to me, it’s the first time a white fella had ever kissed her in her life, and she was over 70. That’s a terrible story.

And then I remember this family saying to me, “You know, we drove all the way from the far North down to Canberra to come to this thing, drove our way through redneck country. On the way back, stopped at a cafe after the apology for a milkshake.” And they walked into this cafe quietly, tentatively, gingerly, a little anxious. I think you know what I’m talking about. But the day after the apology, what happened?Everyone in that cafe, every one of the white folks, stood up and applauded. Something had happened in the hearts of these people in Australia. The white folks, our Aboriginal brothers and sisters, and we haven’t solved all these problems together, but let me tell you, there was a new beginning because we had gone not just to the head, we’d gone also to the heart.

So where does that conclude in terms of the great question that we’ve been asked to address this evening, which is the future of U.S.-China relations?The head says there’s a way forward. The head says there is a policy framework, there’s a common narrative, there’s a mechanism through regular summitryto do these things and to make them better. But the heart must also find a way to reimagine the possibilities of the America-China relationship, and the possibilities of China’s future engagement in the world. Sometimes, folks, we just need to take a leap of faith not quite knowing where we might land.

In China, they now talk about the Chinese Dream. In America, we’re all familiar with the term “the American Dream.” I think it’s time, across the world,that we’re able to think also of something we might also call a dream for all humankind. Because if we do that, we might just change the way that we think about each other.

[In Chinese]

That’s my challenge to America. That’s my challenge to China. That’s my challenge to all of us, but I think where there’s a will and where there is imagination we can turn this into a future driven by peace and prosperity and not once again repeat the tragedies of war.

I thank you.

(Applause)

Chris Anderson: Thanks so much for that. Thanks so much for that. It feels like you yourself have a role to play in this bridging. You, in a way, are uniquely placed to speak to both sides.

Kevin Rudd: Well, what we Australians do best is organize the drinks, so you get them together in one room, and we suggest this and suggest that,then we go and get the drinks. But no, look, for all of us who are friends of these two great countries, America and China, you can do something. You can make a practical contribution, and for all you good folks here, next time you meet someone from China, sit down and have a conversation. See what you can find out about where they come from and what they think,and my challenge for all the Chinese folks who are going to watch this TED Talk at some time is do the same. Two of us seeking to change the world can actually make a huge difference. Those of us up the middle, we can make a small contribution.

CA: Kevin, all power to you, my friend. Thank you.

KR: Thank you. Thank you, folks.

Source: The Honorable Kevin M. Rudd

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.

Conclusion

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

Speech

15 April 2015 – New York, NY

 

I pride myself in being a friend of America.

I equally pride myself in being a friend of China.

And thus it has been throughout my adult life.

From the time I first picked up a calligraphic brush more than a third of a century ago to draw, with no small sense of wonder, and an even greater sense of trepidation, my first Chinese character.

Just as, at the same university, and in the very same year, I was first intoxicated with the sheer poetry, cadence and power of Lincoln’s address on the field at Gettysburg – reflecting as we do this day, on the sesqui-centenary of his untimely death.

These two great civilizations, China and America, have achieved much.

One over the span of 4000 years.

The other over some 400 years.

They have both given much to humanity.

They have more still to give.

And far better they make this contribution together.

For these reasons, and despite the urgings of some, I find no inherent contradiction between these two propositions: of being a friend of China, and of being a friend of America.

Complexity yes.

But contradiction no.

In fact in this turbulent 21st century, it is far better we have more who are friends of both, rather than less.

For in the history of international relations, I have rarely encountered two countries and civilizations as utterly fascinated in one another, yet as utterly non-comprehending of one another, as China and the United States.

As I read the history of CV Starr, I see something of a kindred spirit from a century now long past.

Yet in Starr’s case, he embraced these two countries, China and America, well before it was ever remotely fashionable, or even acceptable, to do so.

Starr’s China was the China of nearly a century ago, when the early Chinese Republic had not long replaced a Chinese empire older than Rome’s.

When Starr established AIU, Asiatic Insurance Underwriters, in 1919, the Paris Peace Conference had just decided to give Germany’s former colonies in China, not to the fledgling Chinese republic, but to the Empire of Japan.

This was also the year that saw the birth of the May the Fourth Movement that was to transform classical China into modern China.

And a movement which, in part, within the next few years was to give rise to the establishment of the Chinese Communist Party, which continues to govern China to this day.

Starr therefore arrived in China to start a business in one the most significant periods in modern Chinese history.

He also reminds us that, despite the long shadows of history and geopolitics, individual people like Cornelius Vander Starr can, and did, make a mark on the life of peoples and nations.

He spoke of a “Chinese century” well before any of us ever thought of the term, let alone conceive of the reality.

He hired Chinese managers when this practice was almost unheard of.

He treated his Asian and Chinese friends and colleagues with deep respect and even deference, at a time when the theory of racial superiority was still the prevailing western orthodoxy.

He moved comfortably across cultures and classes.

He saw no nationalities, nor races – only ordinary men and women.

He also spoke truth to power, living through Japan’s brutal occupation of China.

At a time when most Westerners were silent, Starr opposed Japanese propaganda through his own Chinese-language newspaper.

This cost him dearly.

His publication’s office was bombed in 1939, and its editor assassinated in a café.

CV Starr also genuinely cared for people.

During the Chinese civil war, Starr airlifted his staff and their families 1,000 miles to Hong Kong, and out of the jaws of death.

And all without missing a day of work, as a good captain of industry would.

Every now and then, there are giants who live among us.

Individuals confident enough in the ethical and practical imperatives of their mission to paint the future with bold brushstrokes.

Not minor dabbling around the edges.

A capacity for courage, creativity, enterprise and compassion – to build new institutions from nothing but the power of their imagination, and the singularity of their purpose.

We are in need of such women and men once again today.

In an age when the imperative of seeing underlying commonalities, rather than focusing exclusively on insuperable polarities, is greater than ever before.

For the simple reason that if we have the eyes to see, and the ears to hear, the truth is the challenges we now confront as a society of nations together, are far greater than the challenges our individual nations confront in their dealings with each other.

Global, violent terrorism is a threat to all nations, including China and America together.

Global pandemic diseases are a threat to all nations, including China and America together.

Global greenhouse gas emissions capable of producing irreversible climate change are a threat to all nations, including China and America together.

That is why we need a chorus of voices that remind us of the age-old truth that the things that divide us, are much smaller in the global scheme of things, than the things that should now unite us.

And nowhere is this truer than in the future of US-China relations.

This last 12 months, I have been working away at the Belfer Center at the Harvard Kennedy School, on how we could possibly craft a common future for America and China.

And my remarks tonight are drawn in substantial part from the summary report of my endeavors which I am also releasing this evening here in New York.

My purpose is whether, despite the formidable differences between the two, we can construct a common strategic narrative for these two great countries

One that does not end, once again, in the sorry saga of conflict and war, as we have seen so often in the past, when rising great powers have encountered established great powers throughout history.

But instead a future where there is sufficient commonality of values, interests and purpose to preserve the peace, enhance prosperity, while also protecting the planet.

This is not easy.

It is hard.

But I do not believe the histories of nations, and their dealings with each other, are somehow written in the stars.

The future of US-China relations is not the subject of some determinist view of history.

It has been shaped, and will be shaped, for good or for ill, by the policy decisions of leaders, and the perceptions on which these policy decisions are based.

When China’s GDP, after decades of rapid economic growth, and despite recent slowing, eventually surpasses that of the United States over the next decade, it will be the first time since George III, that a non-Western, non-English-speaking, non-liberal democratic state will become the largest economy in the world.

This will reflect a profound shift in the center of global geo-economic gravity.

And with this shift in economic power there also comes inevitably a shift in political power.

Notwithstanding this gradual shift in the global distribution of economic power, over the course of the same decade the United States will nonetheless remain the dominant regional and global military power, and by a massive margin.

While China’s increasing defense spending will continue to close the gap, there is no serious prospect of it reaching military parity with the U.S. before mid-century, if at all.

China, like the rest of the world, will remain justifiably mindful of America’s overwhelming military power.

This is a core assumption in Chinese strategic thinking.

We are, therefore, seeing the emergence of an asymmetric world in which the fulcrums of economic and military power are no longer co-located, but, in fact, are beginning to diverge significantly.

Political power, through the agency of foreign policy, sits uncomfortably somewhere in between.

As a result, in the absence of sophisticated diplomacy, over the coming decade we are likely to see more differences emerge between Washington and Beijing, rather than fewer.

The consequences of this emerging strategic and economic asymmetry in the U.S.-China relationship will first manifest themselves in the Asia-Pacific region.

As Robert Kaplan has reminded us recently, geography does indeed matter.

It is in this region that the U.S. and China experience direct contact through their territorial proximity (Guam) and the deployment of their various national military, naval and air assets.

This is compounded by: the presence of both Chinese and U.S. allies (North Korea in China’s case; Japan, the ROK, the Philippines, Thailand and Australia in the case of the U.S.); an even broader set of non-alliance military partnerships, principally with the U.S.; and a vast array of contested territorial claims between regional states, including three American allies, and China.

Yet, at the same time, it is a region in which China is now a significantly more important trading partner than the U.S. for every country in Asia, including every single American military ally and strategic partner.

China is also becoming an increasingly important investment partner.

To avoid the longer-term bifurcation of the region into different camps, the challenge for Asia is to craft a common institutional future for an increasingly divergent region – a region in which pan-regional institutional structures can at present best be described as “thin.”

This shifting balance of economic power is also beginning to be seen globally, where China’s economic presence in Africa, Latin America and Europe also challenges the long-standing economic primacy of the United States.

China’s growing global economic and political role will also begin to reshape international norms, rules and institutions.

It will reverberate across geopolitics, global trade, investment, capital flows, reserve currency status, climate change, other environmental challenges and global people movements.

And it will also influence the great questions of war and peace in the decades ahead.

The central question for all of us is whether these changes in the regional and global distribution of power can occur peacefully, in a manner which preserves the stability and prosperity of Asia, while preserving the underlying values and institutional framework of the post-war order.

In answering these questions, we must ask ourselves the following:

  • Given that economic strength is the foundation of national power, is China’s economic rise sustainable over the decade ahead, or is it likely to falter?
  • If it is sustainable, will China deploy its newfound power differently under the leadership of Xi Jinping than under his predecessors?
  • Under Xi Jinping, what are China’s underlying strategic perceptions of future U.S. political, economic and military power, including Beijing’s conclusions about Washington’s “grand strategy” toward China?
  • What is the emerging American perception of Chinese strategy under Xi Jinping, including Washington’s responses to Beijing’s conclusions about U.S. strategy?
  • What is the level of risk of China, the United States and/or its allies ending up in armed conflict, either by accident or design, in the decade ahead?
  • How is China’s expanding political, foreign policy and economic influence likely to shape the future of the regional and global order, and will this be acceptable or inimical to U.S. interests?
  • Finally, is it possible to develop a common strategic narrative for both China and the United States that helps minimize the risk of conflict, and maximize the possibility of constructing a common order? If so, what are the outlines of this order?

These questions are obviously riddled with complexity.

But the task of those of us sufficiently presumptuous to advise policy makers is to try to reduce the complex to the simple, or at least render the impossible as least digestible.

Therefore, each of the answers below inevitably involves “on balance” judgments that will be the subject of criticism from either area specialists on the one hand, or analysts who concentrate on individual policy domains, from strategic studies and macroeconomics, to the sociology of religion, on the other.

My argument, however, is that policy makers today suffer not from a deficit of analysis, but rather a deficit of synthesis when trying to anticipate or respond to the mega-changes and challenges of our day.

The rise of China is a classic case in point.

Sustainability of Chinese Economic Model

On the sustainability of Chinese economic growth as the continuing basis of Chinese national power, on balance we should assume a Chinese growth rate in the medium to medium-high range (i.e. in excess of 6 percent) as probable for the period under review.

This takes into account both official and unofficial statistics on the recent slowing of the rate.

It also takes into account lower levels of global demand for Chinese exports, high levels of domestic debt, the beginning of a demographically driven shrinking in the labor force, continued high levels of domestic savings, at best modest levels of household consumption, an expanding private sector still constrained by state-owned monoliths, and a growing environmental crisis.

But it also takes into account the vast battery of Chinese policy responses to each of these and does not assume that these are by definition destined to fail.

Furthermore, if China’s growth rate begins to falter, China has sufficient fiscal and monetary policy capacity to intervene to ensure the growth rate remains above 6 percent, which is broadly the number policy makers deem to be necessary to maintain social stability.

For these reasons, and others concerning the structure of Chinese politics, I explicitly reject the “China collapse” thesis recently advanced by David Shambaugh.

It would also be imprudent in the extreme for America’s China policy to be based on an implicit (and sometimes explicit) policy assumption that China will either economically stagnate or politically implode because of underlying contradictions in its overall political economy.

This would amount to a triumph of hope over cold, hard analysis.

How different is Xi Jinping

If the Chinese Economic Model is sustainable, and Chinese aggregate national power likely to increase, then how will China act under the new leadership of Xi Jinping?

Three concepts define how Xi Jinping’s leadership differs from that of his predecessors:

  • his personal authority;
  • his deep sense of national mission;
  • and an even deeper sense of urgency.

Xi’s audacious leadership style sets him apart from the modern Chinese norm.

Both in personality and policy, he represents one part continuity and two parts change.

Xi is the most powerful Chinese leader since Deng (Deng Xiaoping 邓小平), and possibly since Mao (Mao Zedong 毛泽东).

Whereas his predecessors believed in, and by and large practiced, the principle of collective leadership, Xi Jinping is infinitely more primus than he isprimus inter pares.

As a Party blue blood, he also exudes a self-confidence that comes from someone utterly comfortable with the exercise of political power.

His core, animating vision centers on his concept of the “China Dream” (zhongguomeng 中国梦) which in turn has two objectives:

  • to achieve a “moderately well-off China” (xiaokang shehui 小康社会) by 2021 when the Party celebrates its centenary;
  • and “a rich and powerful” (fuqiang 富强) China by 2049 on the centenary of the People’s Republic.

Realizing the China Dream, according to Xi, requires a second phase of transformative economic reform.

He sees no contradiction in prosecuting deeper market reforms to achieve his national objectives, while implementing new restrictions on individual political freedom.

In fact, he sees this as the essence of “the China Model” (zhongguo moshi 中国模式) in contrast to the liberal democratic capitalism of the West which he describes as totally unsuited to China.

Xi Jinping’s sense of personal and national urgency is animated by a formidable, Confucian work ethic, which he also expects of his Party colleagues and policy advisors.

He is results-driven.

He is frustrated by the interminable processes of the Chinese bureaucracy, and its predisposition for formulaic responses to real policy challenges.

He is very much a man in a hurry.

For these several reasons, Xi, unlike his predecessor, has the personal authority and policy flexibility to be a potentially dynamic interlocutor with the United States, albeit always within the framework of his nationalist vision for China’s future, and his definitive conclusions concerning the continuing role of China’s one-party state.

Chinese Perceptions of the United States

If China has a formidable new leader, and one which the U.S. can strategically engage, it is critical to understand the underlining strategic perceptions that Chinese policy elites have towards the United States.

The current relationship between the United States and China has been characterized privately by one Chinese interlocutor as one condemned to a future of “Mutually Assured Misperception.”

There is considerable truth to this, as each side engages in various forms of mirror imaging of the other.

One senior Chinese interlocutor said during the preparation of my report:

The problem is the United States believes that China will simply adopt the same hegemonic thinking that the United States has done historically, as seen under the Monroe Doctrine and the multiple invasions of neighboring states in the Western Hemisphere that followed. Since the Second World War, there has barely been a day when the United States has not been engaged in a foreign war. As a result, the United States believes that China will behave in the same way. And this conclusion forms the basis of a series of recent policies towards China.

Americans offer their own variations on the same theme concerning Chinese mirror imaging.

Nonetheless, Chinese leaders have begun to form a worrying consensus on what they believe to be the core elements of U.S. strategy towards China, despite Washington’s protestations to the contrary.

These are reflected in the following five-point consensus circulated among the Chinese leadership during 2014, summarizing internal conclusions about U.S. strategic intentions:

  • To isolate China;
  • To contain China;
  • To diminish China;
  • To internally divide China; and
  • To sabotage China’s leadership.

While these conclusions sound strange to a Western audience, they nonetheless derive from a Chinese conclusion that the United States has not, and never will, accept the fundamental political legitimacy of the Chinese administration because it is not a liberal democracy.

They are also based on a deeply held, deeply “realist” Chinese conclusion that the U.S. will never willingly concede its status as the pre-eminent regional and global power, and will do everything within its power to retain that position.

In Beijing, this assumption permeates perceptions of nearly all aspects of U.S. policy:

  • from campaigns on human rights,
  • political activism in Hong Kong,
  • arms sales to Taiwan,
  • and America’s failure to condemn terrorist attacks by Xinjiang separatists,
  • to support for Falungong and the Dalai Lama.

What about American Strategic Perceptions of China

American strategic perceptions and responses to Xi Jinping’s China are in a period of transition, just as China itself is now in transition.

During times of transition, therefore, there is often a risk of radically underestimating or over-dramatizing the significance of the profound changes underway.

Rising China is no longer “business as usual” for America. But neither, for the decade ahead, is this new China becoming a major direct military threat to U.S. interests.

Instead, the U.S. sees China as actively competing for political, diplomatic and security policy space in Asia at America’s expense; to the extent that China is increasingly seen as pursuing a long-term policy aimed at pushing the United States out of Asia altogether with a view to establishing its own sphere of strategic influence across the region over time.

What are the Possibilities of Arm-conflict between the U.S. and China

So given the generally negative strategic perceptions that China has of the U.S., and the U.S. has of China, what are the prospects for any forms of armed conflicts between the two in the decade ahead?

Xi Jinping is a nationalist.

And China, both the U.S. and China’s neighbors have concluded, is displaying newfound assertiveness in pursuing its hard security interests in the region.

But there is, nonetheless, a very low risk of any form of direct conflict involving the armed forces of China and the U.S. over the next decade.

It is not in the national interests of either country for any such conflict to occur; and it would be disastrous for both, not to mention for the rest of the world.

Despite the deep difficulties in the relationship, no Cold War standoff between them yet exists, only a strategic chill.

In fact, there is a high level of economic inter-dependency in the relationship, which some international relations scholars think puts a fundamental brake on the possibility of any open hostilities.

Although it should be noted the U.S. is no longer as important to the Chinese economy as it once was.

However, armed conflict could feasibly arise through one of two scenarios:

  • Either an accidental collision between U.S. and Chinese aircraft or naval vessels followed by a badly managed crisis; or
  • Through a collision (accidental or deliberate) between Chinese military assets and those of a regional U.S. ally, most obviously Japan or the Philippines.

Nonetheless, Xi Jinping has no interest in triggering armed conflict with the U.S., a nightmare scenario that would fundamentally undermine China’s economic rise.

Furthermore, there are few, if any, credible military scenarios in the immediate period ahead in which China could militarily prevail in a direct conflict with the U.S.

This explains Xi’s determination to oversee the professionalization and modernization of the People’s Liberation Army (PLA) into a credible, war-fighting and war-winning machine.

Xi Jinping is an intelligent consumer of strategic literature and would have concluded that risking any premature military engagement with the U.S. would be foolish.

Traditional Chinese strategic thinking is unequivocal in its advice not to engage an enemy unless you are in a position of overwhelming strength.

Under Xi, the ultimate purpose of China’s military expansion and modernization is not to inflict defeat on the U.S., but to deter the U.S. Navy from intervening in China’s immediate periphery by creating sufficient doubt in the minds of American strategists as to their ability to prevail.

For these reasons, the likelihood of U.S.-China conflict in the medium to long term remains remote.

This is why Xi Jinping is more attracted to the idea of expanding China’s regional and global footprint by economic and political means.

This is where he will likely direct China’s diplomatic activism over the decade ahead.

Chinese political, economic and foreign policy influence in Asia will continue to grow significantly, while China will also become a more active participant in the reform of the global rules-based order.

As noted above, a core geopolitical fact emerging is that we are now seeing the rise of what Evan Feigenbaum has described as “two Asias”:

  • an “economic Asia” that is increasingly dominated by China;
  • and a “security Asia” that remains dominated by the United States.

China is now a bigger trading partner with every country in Asia than the United States.

The U.S. is either an ally or strategic partner of the bulk of maritime Asia.

By contrast, China’s only strategic “ally” is North Korea, which has become a greater strategic liability than an asset.

If strategic tensions drove the U.S. and China into adversarial postures, regional states would face increasingly irresistible pressure to make a zero sum strategic choice between the two.

China continues to build on its economic strength in the wider region through its recent institutional innovation.

While the BRICS Bank, or the New Development Bank (NDB), has a global mandate, the AIIB has an exclusively regional focus.

As for the Silk Road Fund, the bulk of its investment will focus on Southeast, South and Central Asia.

Concurrently, many regional states are strengthening their security ties with the U.S., compelled by their long-term strategic anxieties over an increasingly powerful China.

Strategic polarization across Asia is therefore likely to intensify in the future.

There are different approaches to regional architecture and mechanisms to deal with Asian security challenges.

The U.S. and the West are, at best, peripherally aware of China’s preferred institutional arrangements for the region as reflected in Xi Jinping’s “Asian Security Concept” (Yatai anquanguan 亚太安全观).

Delivered at the May 2014 Conference on Interaction and Confidence Building Measures in Asia (CICA), Xi outlined an integrated concept of “common security,” “comprehensive security,” and “cooperative security” for the entire region. Provocatively, however, Xi made plain that his “Asian Security Concept” did not include the United States:

When it comes to Asian Affairs, they should fundamentally be handled by the people of Asia; when it comes to the problems of Asia, these should be fundamentally managed by the people of Asia; when it comes to the security of the Asia, it should be upheld by the people of Asia. The people of Asia are capable and wise enough to strengthen cooperation among themselves, in order to achieve the peace and stability of Asia.

亚洲的事情,归根结底要靠亚洲人民办。亚洲的问题,归根结底要靠亚洲人民来处理。亚洲的安全,归根结底要靠亚洲人民来维护。亚洲人民有能力、有智慧通过加强合作,来实现亚洲和平稳定。

The time is ripe to consider alternative institutional approaches that integrate both China and the U.S. into a common regional arrangement, and with a mandate to tackle both security and economic challenges.

If competing structures are established, these will exacerbate regional division.

Furthermore, any explicit attempt to exclude the U.S. from the regional security architecture is more likely to strengthen existing U.S. military alliances, rather than weaken them.

Rather than playing an institutional tug-of-war, it would be far more constructive for the U.S. and China to join hands in building pan-regional institutional arrangements.

This will not solve all regional security challenges.

But it will help to manage, and reduce, them over time.

Confidence-building measures could cascade into a more transparent security culture and, in time, a more secure Asia.

But this can only happen if both powers decide to invest common capital into a common regional institution.

Otherwise, we really do find ourselves in the world of the “zero sum game.”

Constructive Realism for a Common Purpose: Toward a common strategic narrative for U.S.-China relations.

Before détente, during the latter period of the Cold War, a joint narrative between the U.S. and the Soviet Union was not possible.

Both sides were not only ideological enemies. They were declared military enemies.

They fought proxy wars.

And they were in a permanent state of readiness to go to war directly, and in extremis, to destroy one another in a nuclear exchange.

Over time, however, the U.S. and the Soviet Union did develop basic protocols to avoid crises and unintended confrontation.

By contrast, despite the difficulties, the U.S.-China relationship remains in decidedly positive territory. Since 1972, U.S.-China relations have remained more functional than those between the U.S. and the Soviet Union ever were, and have never escalated to a comparable level of hostility.

As noted above, both China and the United States have private and semi-public strategic narratives about each other.

But as yet they do not have a shared strategic narrative between each other.

Such a common strategic narrative for U.S.-China relations may be difficult, but it is certainly not impossible.

And given the stakes involved for the future, it is increasingly necessary.

A common strategic framework for U.S.-China relations would offer many advantages.

  • First, in Washington, it would help provide strategic direction to Government agencies competing for policy attention and space, as well as those multiple agencies engaged in aspects of the China relationship but not on a daily basis, thereby helping to provide policy coherence in engaging on an inter-agency basis, as well as with Chinese interlocutors;
  • Second, in Beijing it would go beyond that because of the more hierarchical nature of the political and bureaucratic decision-making process, providing direction to the system at large; and
  • Third, for both powers, a coherent strategic framework would also inject additional positive ingredients: a common determination to manage significant differences effectively in order to avoid unnecessary confrontation; a common commitment to collaborate in difficult policy areas with a view to resolving them; and a common sense of purpose to build political capital and strategic trust over time.

For these reasons, the ideational content of a common strategic framework for the relationship should be:

  • “realist” about those areas of the relationship which are not possible to resolve within the foreseeable future;
  • “constructive” about those areas that could be resolved with high-level political effort at the bilateral, regional and global levels;
  • and guided by a “common purpose” to build strategic trust, step by step, over time, not based on declaratory statements, but instead on common action in resolving common problems.

 Defining realism in the relationship

What are the realistic factors in the China-U.S. relationship?

A healthy exercise to be conducted between Beijing and Washington would be to clarify the contents of such a list, in order to first agree on exactlywhat they disagree on. This list is therefore purely indicative:

  • Taiwan, including future American arms sales;
  • Conflicting claims between China and Japan in the East China Sea;
  • Conflicting claims between China and other claimant states in the South China Sea;
  • The retention of U.S. alliances in Asia;
  • China’s military modernization and mutual surveillance of each other’s capabilities;
  • Acceptance of the legitimacy of the Chinese political system as a matter for the Chinese people to resolve; and
  • The management of bilateral, Non-Governmental Organization-based (NGO) and UN multilateral disagreements on human rights and basic freedoms, including Internet regulation.

However, these deep “realist” elements of the relationship should be matched by “constructive” engagement between the U.S. and China in difficult areas of their bilateral, regional and global relationship where true progress is possible.

Otherwise, there is a danger that unalloyed strategic “realism” will suffocate the relationship altogether.

Or worse.

Given the generally bleak assumptions about each other’s ultimate strategic intentions, there is the perennial risk of “hyper-realism” becoming a form of self-fulfilling prophecy, resulting in crisis, conflict or even war.

I argue that the constructive element of the relationship should be advanced at bilateral, regional, and global levels.

These are outlined in considerable details in the report I am releasing on U.S.-China relations under Xi Jinping.

Bilaterally, I propose five concrete measures, including the rapid conclusion of the US-China bilateral investment treaty.

Regionally, I also propose five measures, including a medium-term proposal to transform the EAS to APC.

Globally, I propose an even larger number of cooperative endeavors between China and the U.S., most particular, the intensification of their collaboration on climate change, also to include India, in the lead up to the Paris UNCCC in December.

Toward a common strategic purpose between China and the U.S.

Both the realist and constructive dimensions of this proposed framework for U.S.-China relations are designed to be dynamic, not static.

As political space begins to open up in the relationship over time, as a result of progress in any of the collaborative diplomatic and economic initiatives listed above, accrued political capital should be deployed to deal with new challenges arising from developments in the international community.

It should also be deployed to deal with some of the older, more “realist” problems endemic to the bilateral relationship that had hitherto been seen as too difficult to address. The key ingredient, however, is the gradual development of a stock of strategic trust based on what the U.S. and China are able to achieve cooperatively.

However, another common ambition might be the preservation of a functioning global order itself that is capable of effective global decision-making and dispute resolution.

China has a deep philosophical reservation, born of millennia of historical experience, of “chaos under heaven” (tianxia daluan 天下大乱).

Whereas historically this has applied to China’s domestic arrangements to preserve the unity and good government of the empire, China’s now unprecedented global engagement creates a new imperative for order in the international domain as well.

At one level, there is a debate in the international community today about the type of global order we would like for the future: minimalist, maximalist global governance, realist, liberal internationalist, so-called “variable geometry,” etc.

This seems to miss the point in the present international environment.

We may no longer have the luxury of a sumptuous global smorgasbord of options to choose from.

In truth, we now find ourselves confronted by multiple external challenges to an international order of any description.

The enemies of “order” are there for all those with eyes to see:

  • Violent, global jihadism seeking to destroy the very notion of secular states or any society of states;
  • New weapons of mass destruction in the form of cyber terrorism, cyber crime and state-based cyber attack against critical infrastructure;
  • A new generation of global pandemics;
  • Existential threats to the planet through irreversible climate change; and
  • Associated crises in food, water and basic energy supply.

These are attacks against “order” itself.

They should, as a matter of both reason and emotion, cause states to conclude that whatever differences they have between them, these are now smaller than the common threats we now face together as a society of states and our common need to defend the order itself.

Source: The Honorable Kevin M. Rudd

 

Foreign Policy – 7 May 2015

The U.S.-China relationship is marked by a quiet but destabilizing narrative. That’s why it’s so important that the two countries keep talking.

There is a predisposition in the public debate about the U.S.-China relationship, on both sides of the Pacific, to believe that the two countries are now locked into some sort of irreversible and increasingly fractious zero-sum game. China’s gain by definition means America’s loss — or so the thinking goes — just as a U.S. advance is seen as portending a consequential Chinese retreat.

The most recent manifestation of this phenomenon is the heated analysis over China’s inclusion in or exclusion from the 2016 Rim of the Pacific military exercise (RIMPAC), which involves units from 21 other Pacific countries and which the United States leads. The context for this debate is China’s land reclamation program in the South China Sea in support of its territorial claims, and whether China’s inclusion in RIMPAC would be seen as simply sanctioning such actions.

The truth is, the political machinery of the China-U.S. relationship — anchored in regular, working-level summitry between the two presidents and supported by the framework of the high-level meetings of the Strategic and Economic Dialogue and its subsidiary policy working groups — is functioning reasonably effectively.

Previously, both sides managed the relationship through a series of ad hoc side meetings at the margins of international forums — like the U.N. General Assembly, G20 summits, or Asia-Pacific Economic Cooperation (APEC) meetings — where the issues of the conference, or the particular political dramas of the day, tended to dominate. The crucial addition to this machinery, which Obama introduced within months of Xi assuming the presidency in 2013, is working-level summits, which cover both the most difficult and the more routine aspects of the relationship. This began with Sunnylands in June 2013, when the two leaders met for two days in a relatively casual setting. And it will continue in September, when Xi arrives in Washington, D.C., for a state visit that will also be a working summit.

Whoever becomes the next U.S. president, whatever their views on China may be, should ensure that they can sustain this machinery, through good seasons and bad. The central strategic significance of the U.S.-China relationship should not be held hostage to the topic du jour, or even the crisis of the day.

In great power relations, boring is usually good. We should never forget the Confucian curse of legend: “May you live in interesting times!”

Lest I be accused of having a Pollyannaish view of the difficulties facing the future of U.S.-China relations, there is a long list of disagreements capable of derailing the relationship. These include Taiwan in all its contemporary dimensions, including the future of U.S. arms sales to the self-governing island. They include the future management of territorial and other political disputes with Japan, one of America’s closest allies. And they include tensions over the North Korean nuclear weapons program and the possibility of a collision between Chinese and foreign naval and air assets causing an international incident or crisis. Then there is the smorgasbord of complexity concerning conflicting claims in the South China Sea, including Chinese land reclamation efforts, at a time of closer U.S. strategic engagement with most of the Southeast Asian claimant states.

We can recite the profound challenges to the relationship, which are legion, and throw our hands in the air, predicting gloom, doom, and general despair. Or we can do something about managing them, and even, God forbid, work toward resolving some of them.

Professional pessimism about the U.S.-China relationship, or indeed about China itself, may be intellectually satisfying. But it does little to advance the practical diplomacy necessary in managing a relationship so fundamental to the great issues of our time: how to preserve peace and maintain stability, thereby providing the foundations for long-term economic prosperity and environmental sustainability for all — but in a manner that is sufficiently mindful of U.S. and Chinese interests and values. This is far preferable than allowing strategic drift to set in — which may have a long-term trajectory of crisis, conflict, or even war.

And while doubting the strength and longevity of the ruling Chinese Communist Party (CCP) may be intellectually satisfying for some, a more cautious and evidence-based view is that the CCP is likely to endure for the long-term, not least because no alternatives are on offer. The Chinese economic model — and its underpinning political economy — is sustainable for the foreseeable future: Average annual growth will likely remain north of 6 percent for the next decade.

I therefore reject the latest fashion statement in American sinology — the economic collapse of China preceding its political implosion — as argued in early March by George Washington University’s David Shambaugh, an infinitely qualified sinologist with publications of the highest quality. But on this occasion, his conclusions defy the evidence and are just plain wrong. Furthermore, whatever reservations we may have about the Chinese political system, any policy predicated on an analytical assumption of Chinese collapse is dangerous: a triumph of aspiration and hope over analytical rigor and hard policy choices.

Many in China already believe that U.S. policy is, in fact, to weaken China from within and to constrain Beijing’s options abroad. Xi’s China has deep reservations about the long-term strategic intentions of the United States towards their country. Beijing does not believe the United States will happily surrender its current dominant position in the regional and global order and therefore concludes that Washington is actively pursuing a policy of containment to deny China international policy space. Chinese hardliners also conclude that this policy of containment abroad is matched by a parallel U.S. policy of undermining the legitimacy of the CCP at home.

This deeply realist conclusion in Beijing about U.S. policy is matched by Washington’s conclusions about China’s operational strategy in the region and the world. The United States concludes that China is actively pursuing a policy based on Xi’s statement that the people of Asia should manage Asian security. Washington also concludes that this, by definition, is designed to exclude the United States and that the objective of Chinese operational strategy is to push the United States out of the security architecture of the region, to be replaced with a Chinese sphere of influence across East Asia.

But, the prospect of armed conflict between China and the United States for the decade ahead remains remote. It is in neither country’s interests for this to occur. For China it would derail the core mission of realizing the transformation of its economy, for which it needs sustained strategic stability. Furthermore, Chinese strategic planners have concluded that U.S. military predominance, both regionally and globally, will continue for the foreseeable future.

But China will seek to expand its political and diplomatic influence across Asia, primarily through its formidable economic presence. There is already evidence of this through the dominance of Chinese trade, and soon investment flows, across the region — which the recently announced Chinese-led institutions, the Asian Infrastructure Investment Bank and the Silk Road Fund, will likely enhance. Beyond Asia, China will also become increasingly active in the future reform of the global order. There is no evidence that Beijing has any intentions of fully revising, let alone replacing, institutions like the United Nations, which have served China’s interests well. Instead, China is likely to seek a stronger voice in the various ongoing reform processes of the system, and within each of the institutions, under the overall Chinese rubric of “greater multipolarity” and a “more democratic order” — as opposed to what China sees as an order based on the continuing assumption of the singularity of unilateral American power.

Xi is significantly different from his predecessors. He wields more power individually than any Chinese leader since Mao Zedong. He has a clear political vision for the country: his “China Dream” has as its end point a “strong and powerful” Chinese state. He has ended former paramount leader Deng Xiaoping’s foreign policy orthodoxy over the past 35 years of “hide your strength, bide your time, never take the lead,” in favor of a more vigorous, activist, and assertive international policy to advance Chinese interests both in the region and beyond. He speaks of a “new type of great power relations,” a “new type of international relations,” and “great power diplomacy with Chinese characteristics.” Xi identifies a period of “extended strategic opportunity” for China’s rise, during which he wants to preserve the peace in order to focus on the completion of China’s economic transformation. He sees the strength of the Chinese economy in a growth-challenged world as China’s principal vehicle for extending its international influence.

Given these significant emerging divergences in Chinese and American views of the existing regional and global order, is a common strategic narrative between the two possible? Yes — within the framework of what I call constructive realism, common purpose. “Realism” refers to those fundamental policy disagreements between the United States and China — like arms sales to Taiwan — which cannot be resolved in the foreseeable future but which should be managed within a general protocol of not allowing any of these disagreements to destroy the relationship.

“Constructive” refers to the much longer list of policy areas — like the proposed bilateral investment treaty; expanded cooperation in strengthening the region’s thin security architecture to help manage regional tensions; and expanding the November 2014 agreement on climate change — where the two sides can make progress. These and other bilateral, regional, and global cooperation projects, build step-by-step political capital, diplomatic ballast, and strategic trust to help resolve some of the more intractable realist challenges.

As for “common purpose,” that entails building a stronger, sustainable international order that maximizes the provision of global public goods against the mounting number of global threats to the order itself — including global terrorism, cyberthreats, pandemics, and climate change.

A collective organizing principle, or common strategic narrative, for the overall relationship is now necessary. At present we don’t have one. What we have instead is a silent strategic narrative against each other. A common strategic narrative that is capable of embracing both fundamental disagreements and substantive cooperation within the same overall framework — rather than having the latter permanently hostage to the resolution of the former — is needed.

These, of course, are only recommendations. The utility of such an approach is a matter for the governments themselves. Which makes the ongoing utility of regular, working-level summitry all the more important for the long-term prospects of this relationship. After all, what happens between the United States and China affects the rest of the world as well.

Source: The Honorable Kevin M. Rudd

The psychology and anatomy of a new model of great power relations

1 November 2013

I should begin my remarks today in Beijing by stating my absolute condemnation for the terrorist event in Tiananmen Square earlier this week. Any terrorist attack is an attack on our common civilisation. Whatever its political motivations, terrorism is a form of mass murder. It deserves, therefore, condemnation from all peoples around the world.

I wish also to express my deep regret at the number of innocent people who lost their lives or who have been injured by this barbaric attack. Such a terrorist attack reminds us of what we have in common as civilised nations around the world.

The power of ideas in shaping our common future

Sometimes people simply emphasise the differences between us: between east and west, between developed and developing countries, between China and the US. I believe the things we have in common are far greater than the things that separate us. And the purpose of this Beijing forum, both at a level of scholarship and policy debate, is to advance the common project which we share – namely the harmony of civilisations.

The truth is, how we think about each other matters. Both in domestic politics and in international relations, mindsets matter. How I perceive the language, behaviour and motivations of other individuals, cultures and states affects my language and behaviour towards them. Therefore clearly analysing our respective mindsets is not just a useful scholarly task for the academy. It is also an active concern of modern international politics.

As a former Prime Minister, Foreign Minister and professional diplomat of Australia, I have long believed that ideas matter in how we choose to shape our common future. We do not live in a determinist world. We do not live in a world destined for competition, conflict and war.

The truth is we choose our futures. And the choices we make about our futures are shaped by a range of inter-related factors:

  1. The values we have, whether they are specific to a particular culture or universal
  2. The ideational framework we have for understanding the world
  3. The political mindset which derives from this framework
  4. The subjective perceptions we have of others
  5. The objective interests we have for ourselves which may conflict with those of others

The beginning of wisdom in international relations is to understand how our choices are made. And how the choices of others are made as well. Statesmanship lies in finding the common ground between these understandings. Because if common ground exists, it becomes a beachhead for managing areas of difference in a cooperative manner rather than one which privately assumes that competition and conflict are inevitable. This means that both our scholarship and our diplomacy must be active and acute.

The alternative is simply to allow what I have often called ‘strategic drift’ to occur. Strategic drift is usually the product of passive and inert diplomacy. Strategic drift is where both individuals and states wait to see how events unfold before then reacting to them.

I believe the responsibility of diplomats and statesmen is to understand the forces that are in fact shaping events but in addition to that, through constructive diplomacy, to then shape those events further for the common good. This is where both analysis and policy, or both scholarship and politics, must come together.

Scholars and politicians should not see themselves as occupying different universes. Given the complexity of the current global order, and the vast array of challenges facing it, these two traditions must be brought together more closely than ever before.

For far too long, international relations scholars have often tended to construct a binary, ideational world between so-called classical realists on the one hand and liberal internationalists on the other. Classical realists often attack liberal internationalists as being too detached from basic power politics. And too preoccupied with creating an idealist international order.

By contrast, liberal internationalists often dismiss classical realists as perpetuating the status quo and undermining the potential effectiveness of international institutions to effectively solve problems in the real world. International relations scholars are fully aware of the fact that many attempts in recent decades have been made to forge a consensus between neo realists and neo liberals.

But the truth is very simple, we all have some idea of what the world is really like. And at the same time we all have some idea of what we would like the world to become by building a better international order.

For these reasons I have long argued that both these academic traditions have much to contribute to the current and difficult task of diplomats, political leaders and statesmen around the world. And that once again is where the Beijing Forum has a potentially useful role to play. Not in going through the motions of being nice to each other. But in crafting both an ideational and a political way forward for the nations of the world – where we are all faced with the tensions arising between the pull of national politics on the one hand, and the new global politics we confront every day as we wrestle with the new challenges to security, the global economy, and not least the global environment.

We therefore find ourselves at a point where the classical nation state wants to retain its sovereignty on everything, while in its more honest moments reflecting that every time we must enter into a new international agreement (because the problems we face are both national and global) we’re also sharing our sovereignty with others.

Second, let me now turn to China-US relations in particular.

China-US relations

Where this becomes a truly sharp-edged dilemma is of course in crafting both the ideational foundation as well as the practical diplomatic road map for the future of China-US relations. And furthermore, whether President Xi Jinping’s concept of ’a new form of power relations’ provides an effective framework for achieving this objective in the future. That is why I recommended to the organisers of this year’s Beijing forum that this should be the core theme of this, the tenth forum.

Professor Wang Jisi has already provided an eloquent introduction to this subject in the papers that have been circulated. He has provided a first-class scholarly contribution. By contrast, my contribution will be crude and political.

My own exposition of a new model of great power relations is outlined in my article in the US publication, ‘Foreign Affairs’ in their April edition of this year. And in the spirit of contemporary Chinese politics, I am happy to have my contribution subject to both criticism and self-criticism. Just don’t be too harsh.

I’ve entitled this short paper today ‘The psychology and anatomy of a new model of great power relations’. I have deliberately done so because I believe in this most critical relationship, what we think about each other and what we then choose to do together are of equal importance.

Let me make five core points:

First, we have already made progress to the extent that both President Xi Jinping and President Obama, and their most senior officials, have both embraced the language of the need to build ‘a new model of great power relations’. This is no small thing. For some time, US-China relations has lacked any central organising concept. Strategic engagement. Strategic competition. China as a responsible global stakeholder. All these concepts have been circulating in the last two decades but none of them have been fully embraced by both sides. This has been a real problem and I believe has contributed to ‘strategic drift’ between Washington and Beijing in recent times.

Prior to the collapse of the Soviet Union, the central organising principal to China-US cooperation was anti-Soviet. And it had been that way for the previous 20 years. Therefore agreeing on a new conceptual framework, however broad, is a welcome development in itself. The fact that we are now talking about this in these positive terms is far better than the alternative.

Second, I now believe there is sufficient political will in both capitals to make this work. I would have not have said this with any confidence 12 months ago. Therefore this should provide sufficient support and encouragement to both scholars and policy analysts to work now on the conceptual framework for this brand new model of great power relations and what its policy contents might be.

It is very easy to come up with a new form of language or a new expression. It is much harder to populate the concept with real content. We are all familiar with the conceptual origins of ‘a new form of great power relationship’. We are all familiar with the historical examples of existing great powers and emerging great powers and the so-called ‘Thucydides trap’. However, while we understand what we are trying to avoid, we do not yet know what the alternative positive construct is for the US-China bilateral relationship for the future.

Both the American and Chinese sides will inevitably have different approaches to this. For example, the Americans will want China to fully enter the existing rules-based order as a great power, accept that these rules befit China, and therefore expect that China will never seek to change these rules in the future. Our friends in Beijing may have a different view of this. Our friends in Beijing may also want to ensure that the content of a new model ‘great power relations’ incorporates American acceptance of what China believes to be its core interests, including China’s position on contentious territorial issues on its maritime boundary.

We therefore know what both sides want to avoid – that is conflict. But we’re not quite sure what we want both sides to build. Knowing what we are against is one thing, knowing what we’re for is another. That is why the work at this conference is so important.

Third, in order to overcome the strategic trust deficit which exists between China and the US there are two possible approaches.

One can best be described as top-down. In other words, to reach a general statement of common strategic purpose between China and America which then drives every other element of the relationship in a particular direction.

Historically, for example, the Shanghai communiques of 1972 and 1978 were two such documents. In the future, there also may be a need for a new Shanghai communique to formally define the future, post-Cold War framework of the US-China relationship. But the time for that has not yet come because the conceptual agreement necessary for such a communique has not yet been reached.

The other strategic approach to dealing with the trust deficit is bottom-up. In other words, to identify areas of common, practical cooperation which, step by step, trust’s built. My argument is that both China and America need to be working on both these approaches at once – Top Down, and Bottom Up.

The relationship needs a new conceptual framework. But agreeing on the detail of one is impossible unless strategic trust is also built in practical ways. Furthermore, practical cooperative projects can only go so far in building strategic trust before they run into fundamental ideational or ideological obstacles. Therefore we must work from both directions at once.

Fourth, the scope of practical cooperation should cover strategic, economic, and environmental cooperation.

At the strategic level, China and the US could consider negotiations between themselves on the final ratification of the comprehensive test ban treaty. Simultaneously, they could work together on global nuclear non-proliferation questions including North Korea, Iran and other states.

China and the US could further enhance their global cooperation on counter terrorism. Within the Asia Pacific region, they should use the East Asia Summit to develop a new set of confidence and security setting measures to reduce the possibility of conflict by miscalculation.

At a very practical level, China, the US and other EAS States should take further their cooperation on counter natural disaster response mechanisms.

On economic cooperation, at the level of the G20, China and the US should work concretely on the new drivers of new global economic growth. This work is now urgent. This should include how to combine private investment capital, with sovereign wealth funds, together with global public institutions (eg the World Bank and the IMF and the regional development banks) to finance infrastructure needs across the world with a sustainable rate of return. Other drivers of economic growth should include similar funding investments for a global clean energy revolution. Also measures to radically increase global female participation in the workforce.

China and the US should also cooperate on bringing the current WTO Round to a rapid conclusion. A Beijing-Washington consensus on a comprehensive Doha text would virtually guarantee the conclusion of the round which would provide new momentum to global economic growth.

Regionally, the US should ensure that China can become a full participant of the proposed Trans-Pacific Partnership. The TPP should not become an anti-Chinese economic block. Bilaterally, Chinese and American investment flows should be liberalised more within both countries so that economic interdependencies grow and grow.

As for environmental cooperation, China’s policy on global cooperation on climate change has changed rapidly since the Copenhagen Conference in 2009. China’s domestic policy settings have changed significantly with a price on carbon being established. China and America should now discuss how they best provide the common political momentum to drive stalled climate change negotiations towards a successful conclusion. Also, as the world’s two largest carbon omitting countries, they now have a responsibility to do so.

Fifth, China and the US need an institutional mechanism both to drive and to review progress on the work program outlined above. That is why the early convening of a working level summit between President Obama and President Xi Jinping held in California in June was so important.

It must become the first in a series of working level summits. It is only with the direct personal political engagement of the two Presidents that this work program can have any prospect of success. It also means that both the Americans and the Chinese need a single ‘point person’ in both capitals to drive this long term agenda of strategic cooperation, as well as manage day to day political and foreign policy problems between China and the US when they inevitably arise.

If a mechanism such as this is successfully developed over time, it also has the great advantage of encouraging the development of a culture of strategic cooperation in partnership between the two sides.

Conclusion

I am optimistic about the possibility of success in developing both a new concept and a new reality of what President Xi Jinping has called a ‘new form of great power relations’. This is not an easy task. Given the enormous differences between China and the US as civilisations, cultures and as political systems, this will be very difficult work indeed. But with political will on both sides, it can be done. Which means that there will be some compromises necessary on all sides.

As I said in the beginning of my remarks today, ideas matter. Ideas combined with political will, will shape the choices we make for the future. Choices which result in conflict. Or choices which preserve the peace in what I have called before a new ‘Pax Pacifica’. Not a Pax Americana. Not a Pax Sinica. But a Pax Pacifica.

Source: The Honorable Kevin M. Rudd

THE CENTRAL QUESTION OF OUR TIME: The Impact of the Rise of China on the 21st Century Order 

16 December 2013 – International Institute of Strategic Studies

I am honoured to have been invited by the International Institute of Strategic Studies to deliver this year’s Alastair Buchan Lecture, named in honour of the Institute’s inaugural director.

I am also honoured to be the first Australian to deliver this lecture.

Of course, Arundel House here on London’s embankment is very close to my family’s old stamping ground: just up the road is the Old Bailey where my 18th Century forebear appeared before the beak; then just across the road to Newgate where for a time he was a guest of His Majesty’s Government; before then being embarked onto hulks on the River Thames; before finally making the distant colony of New South Wales on the Second Fleet in 1790.

So yes, John, like so many of my countrymen, my convict lineage is clear.

But with the passage of generations, it is probably unnecessary to take extra precautions later this evening with the silverware over dinner.

As with the Ashes, we Australians are always capable of recognising the errors of our ways, then finding the pathway to redemption.

Of course many more distinguished Australians over the decades have had a close association with this Institute.

Dr Robert O’Neill, an eminent military historian, who later rose to become Director of the Institute.

And in an earlier period, we cannot ever forget the contribution of Dr Hedley Bull, in honour of whose legacy I was delighted to open the new Hedley Bull Centre on International Relations at the Australian National University in Canberra.

Hedley also happened to be the doctoral supervisor of the current Director of the IISS, Dr John Chipman.

John told me recently that one of Hedley’s sterling qualities was to insist that his students did not simply produce elegantly footnoted descriptions of well-established positions, insisting this was no substitute for the basic need to ‘think, think and think’.

I believe at times like this, in the great flux and dramatic change that we now see across the face of contemporary international relations, that it is more important now, than at any time since the end of the Cold War, for both practitioners and theorists alike, to take Hedley Bull’s dictum seriously and to ‘think, think and think’ about the deep nature of the great changes unfolding around us, and what we should do about them.

I believe the single, great challenge of our age is the rise of China and its impact on the current international order.

There is a great danger that in our current state of flux, we are side-tracked by the endless series of ‘international events’, each of which legitimately commands our attention, while rarely standing back and thinking objectively about the mega changes unfolding before us; and then to think creatively about the strategic diplomacy to which these changes should give rise.

The purpose of my lecture tonight is to pose a number of fundamental questions which demand answers in the immediate period ahead; and to begin to provide the broadest possible outlines as to what those answers might contain.

• First, will China’s economic and political rise be sustainable over the next third of a century, as it has proven to be over the last third; is China likely to obtain economic parity with the United States, and over the longer term, conventional military power parity as well; and where do
these objectives lie within the competing priorities of Chinese Statecraft under newly-appointed President Xi Jinping;
• Second, does China have a strategic blueprint for the future political, economic and security architecture of the Asian hemisphere; if so, what is it?; if not, is it developing one; and how should we respond; and
• Third, are we beginning to see the emergence of a Chinese strategic blueprint for how China might seek to change the global rules-based order in the future, for which what happens in Asia may represent a template; and how in turn should the international community respond.

These I believe are the three sets of core questions which should now be central to the pre-occupation of planning staffs across the world.

The truth is, what we are observing now is the largest geo-economic, geo-political and possibly geo- strategic change in the global distribution of power since the rise of the United States during the last third of the 19th Century.

Put more starkly, when China in purchasing power parity terms surpasses the United States as the world largest economy during the next decade this will be the first time since George III that the world’s largest economy will be non-English speaking, non-Western and non-democratic.

And as all of us who are keen students of diplomatic history, strategic studies and international relations know, it is economic power in all of its dimensions that ultimately shapes strategic power and, therefore, political power.

Therefore, whatever changes to the current order may be being brought about as a result of the rise of China, and whether these changes are regarded as being benign, malign or neither, they are changes nonetheless which will require the same level of forensic analysis across the world, as has long been occurring in the think tanks of the Middle Kingdom itself.

And my central argument is that despite all the tempting distractions elsewhere around the international conference circuit, both the magnitude of the changes on the way, and the fact that they are beginning to reach crescendo as we speak, demand that we dedicate our collective resources to this central task of the Century.

I also argue that at this stage, there is sufficient confluence between Chinese and Western interests and values concerning the future of the international order that together, we can construct a common path through; and one which preserves the fundamentals of the post-war order while at the same time having a much greater range of voices at the international table.

This, however, will not happen by accident.

It will not happen by default.

Nor will it happen as a consequence of policy indolence, policy inertia, or simply strategic drift.

So mine tonight is primarily a call to action, not directed at our military planners, but rather directed at our policy planners, our think tanks and the academy to help shape our pathway through this unfolding period of potentially tumultuous transition.

If we do this together, through robust, realist exchange with our Chinese counterparts, then there are, I believe, real grounds for optimism for the future.

Chinese Power

China is a nation of anniversaries.

Next year will mark the 65th anniversary of the founding of the People’s Republic of China.

In 2021, China will celebrate the centenary of the founding of the Chinese Communist Party.

And of course 2049 will mark the centenary of People’s China.

The latter two anniversaries have become the focal point of what President Xi Jinping calls the ‘dual- centenary goals’.

By 2021, the goal is to ‘complete the building of a moderately prosperous society in all respects’.

Whereas for 2049, the goal is ‘to have built a modern socialist country that is strong, prosperous, democratic, culturally-advanced and harmonious’.

Both these goals are in turn anchored in what President Xi Jinping describes as his ‘dream’ for China’s future (Zhongguo Meng) – achieving the great renewal or renaissance (Fu Xing) of the Chinese Nation.

Westerners tend to dismiss such language, describing it as clunky in the extreme and ultimately meaningless. But given China is a rising power, and this is the language they choose to use to communicate with one another, we are required to do better than that and to deconstruct its content.

Removed of its linguistic peculiarities, what is meant here is very simple; the People’s Republic of China, by the centenary of its founding, intends to restore itself to the global position of pre-eminence that it once enjoyed in Imperial times.

This has now become the galvanising principle of Chinese statecraft, both at home and abroad.

As President Xi’s principal foreign policy adviser, State Councilor Yang Jiechi, wrote recently, ‘Comrade Xi Jinping’s comprehensive… description of the Chinese dream is a continuation and development of the important thinking of China’s peaceful development (Heping Fazjhan) in the new era’.

In the Chinese conceptual world, ‘peaceful development’ is seen as the means by which to effect the realisation of the Chinese dream.

This concept of ‘peaceful development’ is designed to assuage China’s neighbours and other international partners that China’s rise will only be obtained by peaceful means.

This formulation is in turn also designed to specifically contrast with the non-peaceful rise of Japan over the half century from 1895-1945.

This concept is not only to provide comfort to the international community that China will only prosecute what is described as a ‘win-win’ strategy; it is also designed to deal with China’s own strategic imperatives.

As State Councilor Yang writes elsewhere in his article entitled, ‘Innovation in China’s diplomatic theory and practice under new conditions’: ‘The Chinese dream requires a peaceful and stable international and neighbouring environment and China is therefore committed to realising its dream through peaceful development’.

In other words, China is communicating loudly and clearly, to both its military audience at home and the international community abroad, that its own development prospects would be derailed if it found itself, for example, in conflict with the United States.

I have dwelt on these Chinese terms at some length here so that the international community can understand the centrality of these concepts as organising principles for Chinese international and domestic behaviour for the decade ahead.

I said before that China is a nation of anniversaries. China is also a nation much given to political periodisation to emphasise the importance of what they have embarked upon now, across the full sweep of Chinese history.

Under Xi Jinping’s leadership, Chinese commentary describes the country as having entered the third period of its first centenary.

The first, the 30 years between 1949 and 1978, was dedicated to the practical tasks of the political establishment of the People’s Republic.

The second, from 1979 until 2012, is seen as the great period of domestic economic reform, and the internationalisation of the Chinese economy.

The third, now described as a ‘new era’, will be dominated by the transformation of China’s economic growth model, as agreed at the 2013 Party Plenum, which is deemed to be necessary for China to achieve its dual-centenary goals.

The previous growth model, based on high levels of state investment in State Owned Enterprises, combined with low wage, labour-intensive manufacturing for export, has served China well for three decades but rising wage levels now render it increasingly redundant.

The new growth model, by contrast, is based on private domestic consumption rather than public fixed capital investment, as the major driver of growth.

The commercialisation, according to market principles, of China’s SOE sector is to increase allocative efficiency within the economy, as well as providing greater space for private enterprise.

These are then combines with a third pillar of the new growth model, the explosion of the services sector in urban China – China’s cities now accounting for more than half of the country’s population.

Across Chinese political elites, there is also a palpable sense of ‘ten lost years of economic reform’ under the previous political duumvirate of Hu Jintao and Wen Jiabao.

As a result, President Xi Jinping is very much a man in a hurry.

Within this framework, I argue that Xi Jinping has five key priorities for the decade ahead that, by precedent, he is likely to occupy the Presidency.

First, Xi Jinping intends to rehabilitate the Communist Party as a viable, long-term governing force for China.

He is a party idealist who wants to clean up Party corruption and restore public confidence in the Party as a credible political institution – not just the deliverer of economic growth; nor simply the enforcer of public order.

Anyone who believes that Xi Jinping is China’s Gorbachev is wrong.

Similarly, anyone who believes there is some secret plan to incrementally democratise China (in the direction of elected, representative democracy) is also just plain wrong.

When Chinese leaders talk about democratic reform, they are essentially talking about administrative reform within the Party itself, or among the various departments of State, rather than anything more fundamental.

Xi Jinping and those around him believe that a reformed party cannot only survive but prosper for decades to come.

As to whether Xi can ultimately resist what is commonly seen as the irreversible historic tide of economic liberalisation on the one hand, leading to political liberalisation on the other, remains to be seen. His direction, nonetheless, is clear.

Second, Xi Jinping has embarked upon the most vigorous consolidation of his personal political power that we have seen since the rise of Deng Xiaoping 35 years ago.

Xi Jinping, within the space of 12 months, has become much, much more than ‘primus inter pares’.

Instead, through a combination of party rectification movements, the use of ‘criticism and self-criticism’ sessions, the incarceration of political opponents for corruption, and the concentration of economic, political and strategic decision-making powers within his office, Xi has emerged as the single most powerful Chinese political leader since Deng.

This concentration of power is designed to enable Xi to navigate some of the difficult political and policy shoals that lie ahead during the implementation of China’s new economic growth model.

Third, the central political priority for Xi Jinping, as noted above, is the implementation of the new growth model itself.

Xi is not a convert to economic neo-liberalism as a driving force of his personal political philosophy.

Rather, Xi has concluded that the further deep reform of the Chinese economy across manufacturing, the financial services sector and a new approach to competition policy, together with a greater global role for the Chinese currency, are essential if China is to become a wealthy and powerful (Fu Qiang) nation.

I believe Xi Jinping has made the calculated choice that it is worthwhile running the risk of creating economic and social forces less amenable to State direction over time, in order to secure the long term objective of realising his dream of a strong, powerful and wealthy China.

In this sense, Xi Jinping is not a neo-liberal. He is a Chinese nationalist. And he comes from a long line of Chinese nationalist reformers over the last 100 years.

Fourth, as noted above, for China to achieve its national economic objectives, it requires a further decade of strategic stability both in its immediate region and the wider world.

Conflict or war would simply derail the successful implementation of the new Chinese growth model.

Besides, Chinese military planners are sufficiently sophisticated to have concluded that any military engagement involving the United States at this stage would almost inevitably result in China losing.

And such a loss would have devastating political consequences for China’s leadership.

At the same time, China will continue the large scale modernisation of its military capabilities and doctrine against future strategic contingencies involving the United States and its allies, both within and beyond the so-called second island chain.

While it has yet to be formally written, it is often spoken in Beijing that by 2021 (the first of Xi Jinping’s anniversaries) China will have surpassed in PPP terms the United States as the world’s largest economy. This will be the cause not only of great Chinese national celebration. It will also be interpreted as the legitimation of long term Communist Party rule.

And while it has also yet to be written, it is occasionally spoken in Beijing that by the second national anniversary in 2049 it is hoped that China will have achieved conventional military parity with the United States.

Fifth, despite the economic imperative of maintaining strategic stability for the decade ahead, China nonetheless does not believe it has the domestic political flexibility in the years to come to compromise in any way on what it often articulates as its core territorial interests, namely:

• Secessionist tendencies in Tibet;
• Terrorist and secessionist activity in Xinjiang;
• Territorial disputes in the East China Sea, primarily with Japan but also with Korea;
• Any move away from the process of eventual reunification with Taiwan; and
• Outstanding territorial disputes in the South China Sea principally with Vietnam and the Philippines, but also with other Aseans.

Each of these theatres has it individual complexities. But there is a deep belief across the Chinese political system that no Chinese political leader would be able to sustain a backwards step on any of them.

Therefore, as we approach the decade ahead when Xi Jinping, barring political or natural disaster, will remain in office, it is important for all of us to think through carefully these core animating principals of Chinese politics and policy for the foreseeable future.

On the critical question that I posed above as to whether the juggernaut of Chinese growth will continue unabated, it is, of course, impossible to project with absolute certainty.

Nonetheless, we should be acutely conscience of how China has managed to come so far over the last 30 years, when so many in the Western analytical community had concluded that this would be impossible in the absence of fundamental political implosion or major systemic economic road blocks.

As of today, Chinese statecraft seems to have successfully negotiated China through all of the above, to the extent now that it is difficult to point to a single economic, strategic, political or other policy domain in which China has objectively already become a major power by global standards.

I’m acutely conscious of all that could go wrong for the Chinese leadership (from a second global economic meltdown, to domestic land, water and environmental crises, through to sustained alienation of the population from the political authority of the Chinese Communist Party).

Given recent history, however, it is both historically unempirical, and in policy planning terms totally imprudent, to agree with the so-called ‘China collapse’ theory.

This often strikes me as the product of wishful thinking by some, rather than a dispassionate analysis of the trend lines, and the capacity of Chinese statecraft to respond before crises reach their tipping points.

Beyond all these factors, however, it is simply bad policy to assume the probability of a worse-case scenario outcome for China’s long term economic and military growth.

Proper, sober long term policy planning requires us to assume the reverse.

The rise of China and the future of American power

At the centre of China’s analysis of its future national and international interests is the question of American power.

This impacts China directly, as well as its freedom for manoeuvre within the Asian hemisphere, and its influence in re-shaping the future global order.

In terms of international relations theory, China has a predominantly realist view of the world.

It is within this framework that they carefully calibrate the various indices of their own national power.

It is also the framework through which they calculate the power of others, most principally the United States.

China over the last half decade has become increasingly contemptuous of the future trajectory of American economic power.

China has concluded that American politics has become systemically dysfunctional and incapable, therefore, of allowing the executive arm of Government to take the hard decisions necessary to secure America’s economic and strategic future.

Prior to the Global Financial Crisis, China was deeply respectful of the capacity of Western, democratic, capitalist economies to continue to generate wealth and power.

Both the crisis and its aftermath, and its enduring legacies of high debt and low growth, have caused many in the Chinese leadership to conclude that the US economy is in structural decline – and no longer possessing the political capacity to arrest that decline through structural reform.

The same cannot be said of the US military, of which the Chinese remain deeply respectful.

Chinese military strategy in the first place is one of area denial in order to disrupt or prevent effective American military intervention in support of Taiwan.

In prosecuting this strategy over recent decades, China as a consequence has also acquired capabilities to project power beyond the so-called second island chain into the Pacific.

However, as noted above, Chinese military planners are acutely conscious that any conflict or war with the United States arising out of East China Sea, Taiwan Straits or South China Sea contingencies would run a grave risk of Chinese defeat.

Both for these and other reasons, China, at least for the decade ahead, wishes to maintain a stable strategic relationship with the United States.

However, Chinese diplomatic strategy over the same period is aimed at consolidating the perceived legitimacy of China’s stated ‘core interests’ in these various contested territorial domains.

It is within this realist, strategic framework that we should begin to analyse China’s call for ‘a new type of great power relationship’ with the United States – a call which has now become emblematic of Xi Jinping’s administration for the future of China-US relations.

At one level, this call, and America’s response to it to date, has been entirely laudable; mainly not to repeat the endless cycles of history that have caused emerging great powers to end up in conflict and/or war with established great powers.

It is certainly preferable to the alternative, particularly when the alternative has either been hot wars or cold wars.

At another level, however, both the Chinese and the Americans bring different perspectives to the table.

On the Chinese side, a careful examination of official texts reveals that one of the essential characteristics of China’s definition of ‘a new type of great power relationship’ is one which expects American acceptance of China’s ‘core interests’, including its claimed territory.

And it is on this precondition that other new forms of bilateral, regional and global cooperation may be possible.

From an American perspective, such pre-conditionality is rejected out of hand as incompatible with its long standing treaty-based security obligations.

Americans are also wary of the perceptual implications of their embrace of the Chinese ‘new type of great power relationship’ concept as being tantamount to a unilateral concession of moral, political and strategic
parity with Beijing.

By contrast, the Americans see the principal utility of a new type of relationship with the Chinese as a mechanism for building, step by step, new forms of bilateral, regional and global cooperation with Beijing, in order to reduce and ultimately overcome the strategic trust deficit between the two.

Furthermore, the Americans see this as an opportunity to cause the Chinese to become co-partners in the maintenance, evolution and improvement of the existing regional and global rules-based orders.

In this respect, American strategy is not dissimilar to Bob Zoellick’s ‘responsible global stakeholder’ strategy nearly a decade ago which argued that greater systemic engagement by the Chinese in upholding the integrity of the existing rules-based order would, in turn, cause the Chinese to conclude over time, that once they become the most powerful country in the world, either economically or militarily or both, it is in their own best national interests to maintain the order for the long term future.

In the meantime, the United States continues to prosecute the so-called hedge strategy in relation to China: to maintain an out-stretched hand of engagement towards China, encouraging the Chinese to maintain and improve the existing rules-based order both for their own and the collective interest for the future; while at the same time maintaining sufficient military preparedness over time to act if and when China steps decisively beyond the rules and norms of that order.

All this is by way of saying that both China and the United States bring considerably different expectations to the table as their bilateral summitry begins to unfold, starting in June this year, on how a ‘new type of great power relationship’ might be defined both conceptually and in practice.

China and the regional order

The truth is that overwhelming US military power combined with continued significant US economic power lies very much at the fulcrum of the stability of the post-war order.

And if China begins to replace the American fulcrum, the legitimate question from us all is what sort of alternative regional and global order would China seek to construct in its place.

The earliest contours of the emerging contest between American and Chinese power is, of course, the Asia Pacific region.

Our friends in Europe should be attentive to emerging trends in Asia as possible indicators of future global trends as well.

As Chinese Foreign Minister Wang Yi said recently: ‘If China and the United States can avoid conflict and confrontation in the Asia Pacific region, there is no reason we cannot exist in peace in other parts of the world’.

As Robert Kaplan reminded us in his recent book, The Revenge of Geography, in an age of globalisation, geography still matters.

And it is in the Asia Pacific region that American and Chinese strategic interests rub up against each other most directly.

The overriding characteristic of the Asia Pacific region is that it is a region of increasingly open, globalising 21st Century economies located in a strategic landscape of positively 19th Century security policy disagreement, disputes and nascent conflicts.

The list is familiar to us all: the Korean Peninsula, the East China Sea, Taiwan, the South China Sea, together with the overall fabric of US military alliances and forward military deployments.

Each is replete with its own local complexity, while at the same time equally replete with the capacity to generate incidents, crisis management and conflict through miscalculation.

Regrettably, none of these can be categorised as belonging to the stability of the status quo.

Each is dynamic, some exceedingly so.

And while not in news in recent times, we should never remove our attention from Taiwan where the prospects of a return to Government by the pro-independent DPP at the next Presidential elections cannot be discounted; just as China’s ‘patience’ for the peaceful conclusion of the reunification project cannot be permanently assumed.

US strategic policy towards the region, both in terms of its capabilities and intentions, has been relatively clear-cut since the war.

China, most recently reflected in President Xi Jinping’s address to a ‘Diplomatic Work Conference’ in Beijing, has outlined once again its ‘good neighbour’ policy towards the countries of the region.

Nonetheless, the fault lines within the region are becoming increasingly stark: in other words where China’s desire for ‘a new type of great power relationship’ with the Unites States and its parallel desire for friendly and mutually beneficial relations with its neighbours in Asia, runs up against its hard-line position on unresolved territorial disputes.

This I believe is where regional institutions in the Asia Pacific have a critical role to play in building the habits of security policy transparency and cooperation over time, in parallel with the processes of economic integration already well underway.

The Asean Regional Forum, an Australian Diplomatic initiative from the 1990’s, has succeeded in playing a modest role on this front.

More recently, the Asean Defence Ministers Plus 8 has advanced this progress.

But the region has yet to fully harness the capacity of the East Asian Summit, the only annual summit meeting of all the region’s principals, including the United States, China, Japan, Russia and India, with an open agenda to prosecute political, economic, security and other policy challenges as a region.

I have long argued that this expanded EAS, which as of 2010 has included both the US and Russia, should be developed vigorously in the future in order to evolve over time.

In 2008 I called for a vision of an Asia Pacific community.

That call was entirely mindful of the lessons learned in Europe after a particularly bloody century.

Under the aegis of the EAS for example, a full range of confidence and security building measures could be developed over time to take the edge off, and to better-manage the outstanding security policy issues of the region.

Such an institution would also provide a forum over time to deliberate and evaluate the strategic policies of the region’s great powers, including China and the United States.

And while the US play book is reasonably open to the region, there is a growing appetite across the region for China to expound what its long term vision for the Asian hemisphere might be, and the nature of the rules-based order that might govern it.

China and the global order

Just as US power has underpinned the regional order in the Asia Pacific since the Second World War, so too has it underpinned the global order.

It was the United States that effectively convened the San Francisco conference in 1945 which resulted in the founding of the United Nations – including the UN Security Council, its membership and voting arrangements for the determination of the great questions of peace and security facing the world.

Similarly with the Bretton Woods Conference in 1944 and the establishment of the IMF, the World Bank and the General Agreement on Tariffs and Trade – later the WTO.

And much more recently, the American decision to convene the G20 in Washington to deal with the ongoing challenges of global financial management.

Just as US pre-eminence in the shaping of these post-war institutions rankled both the Soviet Union, and later Russia, so too does it now rankle China as it considers its own role in shaping these global institutions into the future.

At one level, China values global, multilateral institutions as reflecting the growing multipolarity of an increasingly globalised world.

Just as it values the flip side of this coin as well: namely the gradual amelioration of American unipolarity over time.

While China does not formally belong to a particular UN grouping (such as the G77) it does through its combined regional and multilateral diplomacy seek to engage strong constituency support across the developing countries of Asia, Africa and Latin America.

China also has sought to offset the traditional power structures of the US, the West and the allied rest by driving an expanded role for the BRICS – that is Brazil, Russia, India, China and South Africa, within the overall fabric of the multilateral system.

Furthermore, there are growing signs of China taking a more active and at times leading role within particular UN institutions – whether on climate change, sustainable development, or more recently Chinese leadership of the International Finance Corporation (the IFC).

On the question of the future shape of a global rules-based order, China has yet to articulate a formal position.

However, from much of the published literature within China, it is reasonable to conclude that China is dissatisfied with many aspects of the current order while refraining from indicating which rules it would seek to change and for what purpose.

Nonetheless, in a telling remark in a recent article by State Councilor Yang Jiechi, Yang clearly states China’s desire to ‘move the international order in a more just and equitable direction’.

The challenge therefore, for the international community at large, is to pose this question very directly to our Chinese friends: if and when China becomes the world’s dominant power, how precisely would it seek to change the rules of the existing order – across the political, security, diplomatic, economic, environmental and social domains.

While these matters are actively discussed and debated within Chinese think tanks, for the rest of the world they are no longer theoretical concerns, but now very practical ones as well.

Conclusion

To paraphrase the classical Chinese curse: we indeed live in interesting times.

In Asia, at least, both regionally and globally, we find ourselves living through a period of unprecedented financial, economic and political flux.

We also find ourselves confronted by deeply entrenched global challenges which threaten us all; from climate change to cyber security to terrorism.

And we do so at a time when there is an emerging sense of crisis about the adequacy of our existing international institutions to deal effectively with these changes and challenges, particularly given the increasing incapacity of individual nation states to act unilaterally.

And all this occurring at a time when deep transformations are underway in the distribution of global economic and strategic power – from the United States, in the direction of China – and where unlike the power transition from the UK to the US a century ago, the US and China do not share the same extent of civilizational interests and values.

In other words, the challenges human kind faces are of an unprecedented complexity and are increasingly globalised in nature; our global institutions are faltering; and underlying strategic power realities are in their greatest state of flux in more than a century.

The central purpose of my address tonight, therefore, is to point to the fact that these are the central questions of our time:

• What future regional and global role does China now envision for itself and does the concept of ‘a new type of great power relationship’ with the United States represent a short-term tactical change or alternatively a long term strategic shift;
• What future order does Asia want for itself – Pax Americana, Pax Sinica or a broader concept of Pax Pacifica;
• What sort of global order do we all want for ourselves in the future – or what type of Pax Mundus might be possible; and
• Underpinning these core three questions above, what are our conclusions about the future trajectories of American power and its preparedness to deploy it in support of the current order.

Until the international community sharpens its analysis of these four core propositions, with cogent answers to each, and a cogent diplomatic strategy to give effect to these answers, there is a danger we are all likely to continue in the direction of overall strategic drift.

And the problem of strategic drift, in the absence of an understanding across us all, of our common, long term strategic direction, is that there is a real and present danger of unplanned implosions on the way through, in the complex world of diplomatic signalling and responses, grounded in fundamental understandings and misunderstandings of long term abilities and intentions.

If we in Australia have anything to offer on what I argue to be the central question of our age, it is this: in the 21st Century we find ourselves not only to be the West in the East; but also, at our best, the East in the West.

Seeking always to understand complex realities through different prisms.

My argument is that if we now harness our bilateral, regional and global diplomacies effectively around the core questions addressed in my remarks this evening, then there are legitimate grounds for optimism for navigating a stable and prosperous way through the great transformations that lie ahead – for us all.

Source: The Honorable Kevin M. Rudd

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Kevin Rudd speaks at the opening ceremony of the 2015 International Finance Forum on Nov. 7, 2015. (Photo: China News Service/ Han Haidan)

(ECNS) — The global economy might have been worse without the contributions of China, despite the world’s second largest economy suffering from a slowdown, said Kevin Rudd, former Australian Prime Minister and Chairman of the International Finance Forum.

Rudd made the comments at the opening ceremony of the 2015 International Finance Forum in Beijing on Saturday.

“We have to reach the conclusion that seven years after the global crisis, the world is still not fully recovered,” Rudd said. “Unstable geopolitical situations, continuing quantitative easing, weak commodity prices, etcetera, signal fundamental problems in the global economy.”

According to a report released by the World Bank in June, global economic growth prospects are expected to lower to 2.8 percent. China has also adjusted its growth prospect to between 6.5 to 7 percent annually.

“I welcome China’s rebalancing efforts,” Rudd said. “China needs to shift from an export-driven, investment-driven growth model to a service and innovation-oriented model.”

Although China’s restructuring efforts are weighing on its growth, Rudd said he is confident in China’s mid and long-term development.

The IFF is an independent organization initiated by over 20 countries in 2003, and a platform for global high-level dialogue and academic research in the financial field.

This year’s annual forum is attended by economists from around the world such as Han Seung-soo (former Prime Minister of South Korea and President of the 56th session of the General Assembly of the United Nations), and Yukio Hatoyama, former Prime Minister of Japan.

Source: 2015-11-07, ECNS Wire

http://www.sageworldwide.com/sage_speaker/kevin-rudd/

 

This week, President Xi Jinping of China visits the United States for his third meeting with U.S. President Barack Obama since Xi assumed the presidency in 2013. Having recently visited Beijing and met with senior Chinese officials there, Asia Society Policy Institute (ASPI) President Kevin Rudd joined ASPI’s AsiaConnectcall to share his insights on the agenda for the Obama-Xi summit, which Rudd said he believes “will be one of the more difficult summits between Chinese and American leaders in recent years.” Highlights from Rudd’s remarks appear below. The entire briefing can be heard using the audio player at the bottom of this post.

The priority issues for the summit:

Essentially the four big ones are these: the question of China’s territorial claims in the South China Sea and, relatedly, the East China Sea; secondly, vast disagreements on the nature of cyber security and cyber-attacks between the two countries; thirdly, China’s draft legislation concerning the future management of foreign NGO activity within China; and finally — and I think of great significance here in the United States and around the world as well — question marks about the future of the China economy and its global performance, and its impact therefore on global growth.

On China’s claims in the South China Sea:

The real question is, coming to this visit in Washington, how can this question be handled, how can it be managed? China says it’s drawn a pause to its activities in reclamation in the South China Sea, having achieved that which it seeks to achieve at this time. The United States position is effectively threefold. One, that it has an obligation to stand by the interests of its allies in the region, and here the most relevant ally is the Philippines. Two, that the United States does not support what it regards to be attempts to change territorial boundaries by means other than through the normal international legal discreet resolution mechanisms. And thirdly, a U.S. insistence that whatever occurs in the South China Sea, that freedom of navigation is not impeded in any way.

These positions at present between the U.S. on the one hand, the claimant states in the South China Sea on the other, and China in the third corner, are showing no real prospect of being breached in the immediate period ahead. What can be sought in the negotiations between Xi Jinping and President Obama is a way in which this can be managed in the period ahead so that it does not result in crises of activity, sharp points of potential conflict, either in the air or on the waters of the South China Sea, which could trigger conflict.

On cyber security:

The focus in this visit should be on the question of how can credible rules of the road can be agreed between China and the United States, and frankly, between these two countries and other cyber powers, so that this weapon of mass destruction scenario does not unfold further, and in fact we have the means by which these things should be regulated. This will be the second big and highly contentious debate bringing both U.S. government and U.S. corporate interests together in what will inevitably be a sharp exchange with their Chinese interlocutors.

On China’s draft law governing foreign NGOs:

The proposed legal changes within the Chinese draft law are significant; that which causes most concern on the part of international NGOs are those related to the new powers which will be granted to the Chinese Public Security Bureau for the monitoring of the activities of foreign NGOs within China. … Interestingly, in China itself, the new draft law has given rise to many concerns within the system. The National People’s Congress, where the law will be deliberated on, finally and formally, has called for submissions from both at home and abroad; many have been registered with the Chinese government. What this will turn out to be in terms of the final product, we don’t know. But this will be the subject of intense discussion between the United States and President Xi Jinping during his visit.

On the future growth and reform of China’s economy:

China arrives for this summit with the United States with question marks being raised around the world about the strength and solidity of its own economy for the future. My own view, for what it’s worth, is that Chinese growth, which [China] projected being at 7 percent for the current calendar year, is somewhere at present south of 6 percent, and for these reasons, you are likely to see further monetary policy easings within China as well as, in my judgment, some additional fiscal policy activity.

I’m advised by those who analyze the entrails of the Chinese economic performance that the four monetary policy easings we’ve seen so far have begun to result in some tick-up in private investment activity within the economy. But as we know from the classics, “one swallow doth not a summer make.”

 

Read the original article “Kevin Rudd: The Obama-Xi Summit Could Be ‘Difficult'” from Asia Society here.

 

http://www.sageworldwide.com/sage_speaker/kevin-rudd/

BEIJING, Sept. 19 (Xinhua) — As the world awaits Chinese President Xi Jinping’s first state visit to Washington, former Australian Prime Minister Kevin Rudd said current China-U.S. relations are positive and limited only by imagination.

“If anyone says there is a crisis between China and U.S., that is hushuobadao [Chinese equivalent for nonsense],” the Mandarin-speaking politician told Xinhua in an interview in Beijing.

“Are there problems? Yes. Will there will problems in the future? Probably. But no crisis,” said Rudd.

Noting differences between China and the U.S., in particular over the South China Sea and cyber security, Rudd said acknowledging them and trying to manage them are better for long-term relationship.

He likened China and the U.S. to a “big noisy family.”

“It’s like a siheyuan (quadrangle courtyards that once formed the nexus of traditional family life)… Sometimes you get into chaojia [fights], you have disagreements, you have no alternatives but to work it out, and I think you can,” he said, deftly mingling his English sentences with Chinese words.

China policy is an important issue for U.S. presidential candidates as many Americans are curious about the rising power on the other side of the Pacific. The discussion is likely to reach climax during President Xi’s visit later this month.

Rudd suggested that China and the U.S. need a “common strategic narrative”, to explain to the people on both sides what the two countries want for the future, and what their common dreams are.

“The virtue of strategic narrative is that it embraces things that are positive, and also recognizes things that are difficult and says these things can be handled together,” he said.

“It is easy in international relations to focus on what is going wrong — people love problems. It’s much harder to focus on what’s positive, what’s going right and what you can do better,” he added.

The economic interdependence between the world’s two largest economies have rendered China and the U.S. “inseparable,” Rudd said.

Together, the two countries represent about 40 percent of global GDP. They are also the world’s two largest greenhouse gas emitters.

“U.S. and China should have long-term economic development to create jobs for the world, and to have a sustainable natural environment for the next generations,” he said.

Commenting on the recent global market rout and slowing growth in China, Rudd stressed that although China’s economy has run into strong headwinds while transforming from old to new growth models, it still has strong fundamentals.

China’s economy grew by 7 percent in the first half of this year, which is among the highest in major economies. Premier Li Keqiang said last week that China’s economy is not headed for a “hard landing.”

“We need to take a deep breath and put everything into context. China is still contributing to global growth, while many economies are not.”

“In every country’s economic development, no one ever has a smooth ride,” he said.

Rudd also mentioned economic success, in addition to environmental preservation and peace keeping, as a key mission in the global community of common destiny.

Over the past few years, China and the U.S. have worked closely during the global financial crisis, to address climate change and to secure a nuclear deal with Iran.

In particular, China and the U.S. have common interests in maintaining peace, which means a common campaign against terrorism, Rudd added.

“Both China and U.S. deeply despise terrorism. We have a problem with extremist Islamist terrorism, whether it’s in Xinjiang, in Iraq, in North Africa, or whether it’s 9/11 or in Kunming. It’s the same thing,” he said.

Click here to read the original article “Interview: China-U.S. ties “limited only by imagination”: ex-Australian PM” from Xinhua.

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