Dialogue – Talking to Kevin Rudd

CCTV

11 July 2015

YANG RUI: Hello and welcome to Dialogue, I’m Yang Rui in Beijing. Everyone is talking about whether the US can coexist peacefully with China, the rising power. The evolution of this most important bilateral relationship in the 21^st century actually depends upon a reduction in trust deficit and how to build consensus about the burgeoning commonwealth in the Pacific Ocean. Mr Kevin Rudd, former Australian Prime Minister, says he is cautiously optimistic about the new type of major power relationship. He says in the following interview that those who have predicted that the end-game of the Chinese Communist Party leadership actually based their arguments on their faith, not on facts. Before we begin the interview, hosted by the Peace Institute at Tsinghua University in Beijing, let’s take a quick look at his profile.

(VIDEO PLAYS) YANG: Welcome to Dialogue Sir. KEVIN RUDD: It’s good to be here. Good to be back in Beijing. YANG: The seventh round of the Strategic and Economic Dialogue between Washington and Beijing is wrapping up and many people are aware that up to 300 deals have been reached between the two sides, fuelling speculation that no open confrontations or conflicts ever will take place between the two powers either in South China Sea or Diaoyu Islands as many have noticed before if you follow the headlines, the front pages, very closely. So what do you make of the very fruitful outcome between the two powers?RUDD: Well the truth is that the US-China relationship is a relationship of many parts. Some of those parts are negative, most of those parts are positive. It depends on which day of the week and which newspaper is reporting it whether the positive or the negative is emphasized. The truth is there are objective real problems between China and the US, they have different strategic views on a range of questions – [CHINESE] as well as of course Taiwan, possibly on the Korean peninsula (less so). Other questions as well, perhaps cyber. But on the common interests, bilateral, regional and global, there is a very long list. And I presume what occurred in the Strategic and Economic Dialogue was them working methodically through that list of common projects. At the end, I believe the relationship needs a common strategic concept which is able to embrace strategic disagreement and strategic constructive engagement at the same time. YANG: Do you think both sides should aspire to exercise a kind of G2 notion which was first put forward by Dr Brezezinski and Dr Henry Kissinger a few years ago that immediately caused an uproar in the European Union and neighbouring countries like Japan and ASEAN because even the United States was following this very nervously. Today, do you think it’s high time for leadership from both sides to give a second thought to the G2. Russia may not be very happy, Japan may not be very happy, neither would Europeans about this. However, don’t you think we are in the same boat – not necessarily on the same page, like you said in the South China Sea, the Diaoyu Islands or the Korean Peninsula? RUDD: Well I think you’re right to describe what was put forward as an American proposal from some years ago. Which, I seem to recall, not only created excitement elsewhere in the world but our friends in China probably rejected it as well at that time. Then you roll the clock on a little bit and we have [CHINESE] which is a new type of great power relationship between effectively the US and China, although the Chinese definition of ‘great power’ was extended to others as well. Of course, that has now received something of a negative response in the United States. YANG: Why do you think there was a negative response from Washington? Because they don’t treat China as an equal? RUDD: I think the reason was that the concept became politicized domestically within the United States very quickly. To be fair to President Obama and his team, they were I believe relatively relaxed about the concept as a business-like concept which could be used effectively to cooperate on a whole range of different areas. Certainly, I myself had written in support of a new type of great power relationship as a useful concept for the future. But President Obama came under attack by many Republicans saying that this was a sign of weakness towards China and a form of unilateral concession to China’s aspiration for great power status. So it became politicized and knowing something about how politics works in Western democracies, these things just can’t be pushed to one side. So therefore, for the future I think we should be less concerned about ‘G-something’, what we need to be more concerned about is ‘G-nothing’. ‘G0’ is our real problem in the future and, therefore, what we need to evolve between the countries in the world who are prepared to accept international and global responsibilities is a common platform for action and China and the US have to be in that. YANG: China will assume Presidency of the next G20 Summit in Hangzhou. At the same time with the exclusion of Russia from the G8 following the annexation of Crimea and the escalations in Eastern Ukraine, there is an appeal from our European friends that it is time for China to be considered to fill in the vacuum left behind by Russia, although G7 has largely become an outdated version for the rich club. Therefore, what do you think of the importance of G20? RUDD: Well it is interesting that as I’ve listened to the debate in Beijing the last several days from the international representatives. Many people in the world are looking to China for leadership in the revitalization of the G20. But the point is this, when we came together to look at the best form of global institutional architecture for the 2st century. We did so in the midst of the Global Financial Crisis. The G20 was very effective at dealing with the Financial Crisis. In fact, no one really challenges that. I think it prevented the world going from global recession to global depression and with profound political consequences resulting if we’d allowed that to happen. On the central task of restoring global economic growth in a balanced way and managing global public debt, it has been partially successful but only partially. And its other agenda in terms of reforming financial institutions to prevent a systemic crisis in the future has been reasonably successful. But I’ve got to say it’s now seven years since we created this institution and I think it needs to be revitalized. My argument would be that it would be useful to continue to focus on its core economic objectives of revitalizing sustainable global growth. At the same time, informally, some of the difficult to resolve global problems should be brought to the table as well – like climate change and even some soft security questions as well. YANG: Given the obvious dual political rivalry between the United States, the existing superpower, and, the economic superpower, China, don’t you think there will be jitters and worries on the side of Washington if China makes it no secret that we want to assume Presidency or we want to assume leadership of G20 because that will encourage China to gain the spotlight of the centre-stage and the United States is not ready yet? There’s a Chinese proverb or saying – RUDD: You have many of them, thousands. YANG: [CHINESE] – ‘we do more instead of provoking the US by asking for global leadership’. That’ll be very provocative for the United States because they are not ready yet to accept the new type of power relationship. So the essence of this is not conflict but the hawks and the top policymakers in Washington DC don’t want to accept this as one of the pre-conditions to assume, to share, the leadership. So what do you think of this Chinese saying – we do more, like setting up the AIIB, the BRICS Development Bank and the [INAUDIBLE], instead of fighting for Presidency of the World Bank because that will amount to a declaration of “war” so to speak? RUDD: Let me say a few things about the point you make. As Prime Minister and as an American ally, I fully supported China becoming the host country for the G20 next year. The other contender was Japan. But for me it was very important that this, the largest economy in the world by one measure – purchasing parity pricing – and in the next decade by another – market exchange rates – took over the Chairmanship for this important year. Secondly, I’m not aware that our friends in the United States actively oppose that occurring. I know from my previous work with the Americans in the G20 in the period of 2008, ’09, ’10, ’11, ’12 – what I do know is that within that gathering the Chinese, the Americans, the Australians, the Germans we work very closely together on common global economic problems. It’s a very interesting set of operational arrangements.What I’d like to see is that more constructive approach extend to other areas as well if we can do that. For example, if we are unable to agree on good implementation arrangements at the Conference of the Parties in Paris this December then we should consider using G20 deliberations to think clearly about how we can give effect to the declarations that will occur in Paris. Remember this, my good friend Yang Rui, the world always struggles for legitimate institutions. The UN has perfect legitimacy but because it is so big it often struggles to get things done. At the same time, the G20 does not have the same legitimacy as the UN, that’s true. But it does represent 80 or 90% of the global economy, it does represent a huge amount of global trade, it represents the bulk of global greenhouse gas emissions, it represents the bulk of the world’s military. All in one room, and we could fit them all in here, all twenty of them. So therefore, I would argue that because you have developed countries and developing countries, you have countries which come from the Muslim world for the first time (Saudi Arabia, Turkey as well as of course Indonesia), countries from Asia and not just the old European white man’s club which it used to be in the old days of the G7. But this is a reasonable institution to try to get things done. The perfect institution is the UN but we are a long way from perfection. YANG: But here is a chronic issue of the trust deficit between Washington and Beijing. Our bilateral relationship is very much like a rollercoaster, with ‘mil-to-mil’ ties serving as the barometer. The first to be hurt, the last to be repaired in most cases. Although positive outcomes have been delivered by the seventh round of the Economic and Strategic Dialogue between the two sides in D.C. this time around, the US is waiting to see because they are not sure about what they call ‘transparency’ or ‘strategic intent’ on China’s military build-up. So let’s look at the South China Sea. Australia has been an onlooker but it has been very closely involved. As the policy chief of the Asia Society, what can you do to minimize the negative impact of the mistrust between the two sides? RUDD: I think the best thing that can be said and done about complex legal questions and security questions and territorial claims in the South China Sea, is to put it in a larger framework. And you’ve used the term before, ‘strategic trust’. Strategic trust doesn’t just happen – you can’t declare strategic trust. It comes from a lot of [CHINESE] and not so much [CHINESE] – it comes from what you do and not so much what you say. So it really is what I’d describe as one step at a time finding a cooperative security project, agreeing on it together between the US and China. Which you can: like on counterterrorism; like on rules of the road on cyber, that’s difficult; like on how do you deal with the North Korean nuclear weapons program, that’s difficult. But if you can step-by-step build strategic trust that way I think that helps bilaterally. And broadly why I argue for the development of an Asia-Pacific community is that it provides an opportunity for a regional institution in our part of the world, not just focussed on US-China, but one in which we all have a stake for there to be an evolving sense common security as well. YANG: Increasingly, I’m afraid, people from both sides of the Pacific Ocean are unsure if not sceptical about whether they can reduce the mistrust because (a) there is the deep-rooted and structural geopolitical competition, (b) we cannot talk on the same level of spirituality and values and the United States is proud of its exceptionalism which Dr Henry Kissinger describes as religious if you look at the crusades following 9/11 against the Muslims. But Bush Jnr denied immediately that it was a crusade following an alleged slip of the tongue. But since we don’t share the same values, therefore, it is very difficult if not virtually impossible for China to achieve a high degree of consensus with all the major global issues because we are simply not on the same page. We could be put into the same boat, if you like, strategically… RUDD: I don’t really agree with that view, that these values systems are totally incompatible. Let me give you an example. I think both values systems place a priority on, for example, cooperation. They also place a priority on things such as sustainability, if you look deep within Daoist traditions and Buddhist traditions of environmental sustainability these also have resonances in Western civilisation and culture as well. So the idea that – YANG: It’s not necessarily about electoral democracy or competitive democracy. RUDD: No there’s a whole series of issues – YANG: It’s not necessarily about the issue of a ballot box. But we can talk about the sustainability of environmental protection – RUDD: Well you have forms of governance in this country whereby when the Central Committee of the Communist Party gets together it elects a General Secretary. When you get the National People’s Conference together they elect their executive. You may not have a ballot box out there but you have a political process. Now that political process in my experience is one that is under constant evolution in your system, including in the Communist Party itself. YANG: Based on meritocracy by the way. Because what we call the ‘consult-ocracy’. RUDD: Well in recent decades, based on meritocracy. I’ll give you a few examples through history of where it wasn’t. But that’s for the historians to discuss. Western political systems – it’s a combination of the independence of the legal system, it’s a combination of electoral democracy and it’s a concept of parliamentary or congressional or presidential government. And let me tell you that has strengths, that has deep weaknesses as well but it is the way we have evolved in the last hundred years and for us it’s a relatively recent innovation and one which I value. But also, living in Asia, I understand that people have different political perspectives, different cultural traditions. So yes there are differences on that, but when I think about people’s common aspiration for prosperity for their family, care for their kids, looking after their parents when they get old; when I think of the attitudes of these apparently radically different civilizations to the importance of preserving the environment; and when I think of these two civilizations – China and, let’s call it, the US – deeply concerned by questions of order, I find that surprising things in common between the two of them. And so when you talk to the Americans about, “We need an international order,” the Americans are, shall I say, as hardline on those questions as China. You want a rules-based system. You may disagree about the nature of the system in certain areas, but if America and China look at an international rules-based order and the alternative is ISIS-ISIL terrorism trying to destroy order wherever they go, suddenly I find America and China on exactly the same page. YANG: I suggest our American friends spend time reading ‘Political Order in the Chinese Society’ by Professor Samuel Huntington. Because China along with other emerging markets, after all, is a developing country so political order is first and foremost, so important given the bitter memories about the past chaos. You put your finger upon the very important question about our nightmares. So let’s come back to examine an article by one of the China experts in the United States, David Shambaugh, concerning the so-called ‘endgame’ of the Chinese reform and opening up. He immediately captured headlines and caused debates in China and the United States. You disagreed with him right?RUDD: Yes, directly. YANG: Could you elaborate a little bit? RUDD: Number one, I think on the question of ‘Chinese collapsism’ which has been in and out of favour in American academic and political circles for the last 50 years. I don’t see any evidence of it. When I first became a student of Chinese in 1976, when I first became a member of the Australian Foreign Service in 1981, I’ve seen so many reports over the years about the impending collapse of the Chinese system that I’ve grown to treat them all with a grain of salt. What I’ve seen time and time again, whether it’s political collapse or, frankly, economic collapse, I remember in the ‘80s there were people predicting that if China begins its program of market based economic reform how on earth can they reconcile this with a political system anchored in the Communist Party? Well, here we are in 2015 and you’re still doing it and you’ve become the largest economy in the world, or are about to become, so based on the empirical evidence to date I think the Shambaugh argument is deeply flawed.Secondly, why I disagree with it is that it’s not helpful. It doesn’t provide a rational basis in the United States for engaging China. YANG: But David Lampton, yet another China hand, echoes much of the same concern as David Shambaugh saying what’s happening in China is the beginning of a protracted demise of the “Chinese empire”. So what do you think are the similarities between these two scholars/ RUDD: The very notion of a prediction that the Chinese economy is going to collapse is like an article of faith as opposed to an evidence-based argument. I do not see the evidence. Look, I know China has a lot of problems – I’ve been in and out of this country more than 100 times over the last 30 years. I’ve seen of things. But let me tell you, when I go around the place I do not see evidence of impending or even medium-term or long-term collapse. What I see is a process of unfolding gradual change consistent with more theories of development. YANG: These concerns of either David Lampton or David Shambaugh are actually based on the observation that since the 18^th National Congress of the CCP Central Committee, the Chinese leadership talks more about rejecting Western values, individual values. We should show more confidence about our institutions and our theories [CHINESE]. Therefore, the United States along with our European friends get tired. They say, “Years of engaging China have failed.” They’ve failed to deliver a China that they like. They think it’s a vicious cycle that China has led them to disappointment over and over and time and time again. So what do you think of China’s development roadmap? RUDD: Why I always take a longer term view of all this is because I’ve been around for the longer term. I think in all of our attempts to analyse intellectually in given states around the world, there is a danger that we wish to see perfect replication of previous patterns. Let me give you an example. The classic Western analysis says after X period of economic liberalization that classical Western political liberalization occurs, you evolve a democracy and that should happen within a fixed timeframe. YANG: That’s what Francis Fukuyama said in his book. RUDD: Well it’s not just Fukuyama, it’s a whole bunch of scholars. Look, there’s an evidence base for that in some parts of Europe and some parts of what we call the ‘Collective West’ and it is a relatively recent phenomenon, relatively recent in the span of history. Then you have another pattern which is the collapsist pattern, those who looked at the old Soviet Union and said, “There you go, a communist party can’t produce a sustainable economy – gone.” Mind you no one in the West predicted the collapse of the Soviet Union but we’ll just put that to one side. But it just went. I would suggest that there are definite driving forces for change driven out of economic development but the way that’s manifest in different cultures around the world is different. So therefore, I think the pattern for future evolution in China will be quite unique and I would be the last one to predict what the shape of Chinese politics will be in 2050. I can’t predict that. But I also have a view which is that you guys will probably sort it out. YANG: Therefore, you talk about the rules-based world. President Obama said recently, “If we don’t write the rules, China will and that will be a nightmare for the United States.” Do you think this smacks of geopolitical rivalry instead of rational thinking? Because we understand that from WTO to TPP, the United States wants to be viewed as the leader shaping the rules-based world instead of China. We understand this. But his remarks smack of a geopolitical rivalry. This won’t be good. This sounds very much like the Cold War mentality to do agree? RUDD: I think we need to put those sort of remarks into their context. I certainly don’t think it was helpful diplomatically but the bottom-line is what was the President addressing? He wasn’t addressing Beijing, he wasn’t addressing the rest of the world, he was addressing the United States Congress trying to get a trade bill through. YANG: He’s talking to the domestic audience? RUDD: Well he’s not even talking to the domestic audience, he’s talking to the Congress. YANG: And to the Republicans who have controlled the Congress since the mid-term elections. RUDD: Well yeah. And, look, I’ve now lived in America for 18 months and it’s got a unique political culture itself. Every Western country is different by the way and certainly our political institutions in Australia are different to the American ones. I think what the President was trying to do there was muster the votes for the Trans-Pacific Partnership which he did with not one vote to spare – 60-38. YANG: Thank you very much, I do appreciate this wonderful conversation about the future we should share with the United States, Australia and all other economies in the Asia-Pacific region. Thank you very much Sir. RUDD: Good to be on the program.