U.S., China Deeply Realist on Security Policy

Bloomberg Business

17/04/15

 INTERVIEWER: Mr Rudd, the title of this book includes the phrase, ‘Constructive Realism for a Common Purpose with China’. Help me understand what does ‘constructive realism’ mean between the US and China? KEVIN RUDD: Well the first thing I know about our Chinese and American friends is, when it comes to things like security policy, both of these countries are deeply realist. That is, they understand where the bottom-lines are on national security questions from both their perspectives. So my argument is, be realist about the things that you as two countries disagree on but make sure you have a protocol through which to manage those disagreements so as not to torpedo the whole relationship in one hit. The second point… INTERVIEWER: Hold on Mr Rudd, let me jump in about that, we you say ‘be realist’, apply that to actually dumping sand in the middle of the South China Sea to create an island. What is the actual realism that you practice there, what does that mean? KEVIN RUDD: Well realism means that, on territorial disputes (and you’ve just mentioned one), that these exist and that the US and China have fundamentally different positions as do many countries within the region. The question you have to ask though is in the management of that particular territorial dispute, do you allow it to fundamentally hold the entire US-China relationship? My argument in this report is: no, you manage it. Because on the constructive side of the relationship (hence, constructive realism) there’s a bunch of stuff for these two countries to do – bilaterally, regionally, globally – together, which frankly if you do them well you can build levels of strategic trust over time. It’s not easy but I think it is a credible framework. It also translates okay to the Chinese side of the argument as well. INTERVIEWER: Mr Rudd, we’ve had a parade of people come onto this show and tell us that the US botched the roll-out of China’s Asian Infrastructure and Investment Bank. What is your prescription, what is the realist way to approach that? KEVIN RUDD: Well being an Australian now resident in New York I’m not going to preach to the United States government. I think a whole bunch of foreigners coming to this country and doing that is not helpful. But my argument about the AIIB, the Asian Infrastructure and Investment Bank, is frankly we should all just sort of calm down a bit. This does not portend the collapse of Western civilisation as we know it – the bottom-line is that it’s one player among many in the infrastructure and investment business right across Asia, where there is something like a $3-4trillion investment deficit. So, frankly, there is plenty for all to go around. INTERVIEWER: Mr Prime Minister, the Economist has an article out as we speak on your Australia, calling it the ‘Unlucky Country’. As you know all of Australia is being completely buffeted by these iron ore price collapses – BHP, Rio Tinto in the headlines. I want you to explain to our global audience what Australia is going to do to stop the decline in iron ore prices. KEVIN RUDD: The bottom-line is for 150 years we’ve been, in part (only in part), a commodity exporting country. If we go back through economic history there are ups, there are downs and right now we are going through a structural down. We understand that. But if you go through the 60s, the 70s, the 80s we’ve been down this road before. So therefore, to go to the second part of your question about long-term restructuring, in our case it is the continual broadening of the base of the Australian economy across manufacturers and services. One of our largest exports today is our export of Australian education services. We have, apart from the United States, for example, the single largest presence of Chinese students at Australian universities of any country in the world. So we are not just a one-trick pony; we’ve got a bunch of stuff that we do and that process of restructuring continues to be underway.