Understanding China begins with understanding how Xi Jinping sees the world. His approach to politics, economics and national security is reshaping China’s relationship with the United States, with consequences for us all.
I joined Rory Stewart and Alastair Campbell on The Rest Is Politics: Leading, to discuss Xi’s worldview, the pressures on China’s economy, the competition for leadership in artificial intelligence, and the risks surrounding Taiwan. We also debated the future of America’s alliances and the work of diplomacy in an increasingly difficult international environment.
AC: I last saw you, Kevin, at a conference in Hong Kong where I overheard you talking what sounded to me like fluent Mandarin.
KR: I’d just been drinking a lot.
AC: I went over to a young Chinese guy afterwards and said, “How good is his Chinese?” And he said, “Well, if you close your eyes, you’d think he was.”
You’ve written several books, but the two that are most relevant to this are The Avoidable War, about the possibility of conflict between the US and China, and your extraordinary book on Xi Jinping, analysing in incredible detail practically everything he’s ever said. He doesn’t communicate in the way that Trump does, but when he communicates, it’s worth analysing. We’ve got a lot to get through.
KR: Thank you. Thanks for having me on the programme.
Understanding Xi Jinping
RS: Let’s begin with Xi Jinping. How would you explain what is different about this Chinese leader compared to his predecessors, going back to Deng Xiaoping in the late 1970s and early 1980s?
KR: Unlike his three most recent predecessors, Deng Xiaoping, Jiang Zemin and Hu Jintao, taking us back over the last 35 years with a few other ring-ins on the side, he is cut from a different cloth. He is the son of a former Politburo member, Xi Zhongxun, and is therefore what is called in the Chinese political class a taizidang, a princeling. That is, he comes from CCP, Chinese Communist Party royalty. So that’s the first thing. The second is that, in his political formation, there’s never been a doubt about the absolute centrality of the party to China’s future.
This was the subject of some debate under his three predecessors, which would emerge from time to time under the euphemism of a debate on the Chinese political system and its reform. Those debates have been cancelled and rendered verboten since about 2014. So the party, as he is reputed to have said in a gathering not too long ago, is in our veins, and so it’s very much a Leninist view. I think the other thing for us all to bear in mind is he’s terrified by the collapse of the CPSU, Communist Party of the Soviet Union, and the subsequent implosion of the then Soviet Union into a series of smaller parts.
And for him, and in his worldview, that would be the corollary for China if this Leninist party ceased having absolute power and control in holding the Chinese national entity together.
AC: If he’s Leninist in his view of politics and Marxist in his view of the economy, and yet has this very nationalist, from a Western perspective quite right-wing approach to foreign policy, is that a fair judgement?
KR: I’ve been studying Chinese, for God’s sake, 50 years this year, since, as a junior woodchuck, I went off to the Australian National University to try to wrap my head around this language. I realised that trying to understand his ideological worldview, given that ideology is a key organising principle still in contemporary Chinese politics, you had to go back and read the stuff, and so I came up with three sets of conclusions based on the time I did up in Oxford at the tender age of 59, trying to do a DPhil with a whole bunch of fellow students who used to call me grandpa.
And it was this: he deliberately changed the centre of gravity in Chinese politics to the Leninist left, he moved the centre of gravity of Chinese economics deliberately to the Marxist left, and he moved the centre of gravity on Chinese foreign policy and security policy to the nationalist right. When you deal with Oxford dons on this subject, and frankly academics anyway, they say: “It doesn’t work. You can’t go left and right simultaneously.” I said, “Sorry, guys, I’m just an old-fashioned Australian empiricist. I just follow the evidence where it takes me.” These three things have happened simultaneously, and there’s a connectivity between them.
He doesn’t want to lose control of the economy to the private sector, which then fuels his problems about politics and, therefore, the Leninist party’s control, particularly if the private sector becomes more powerful than the state. On the nationalist side, that becomes a new form of legitimacy domestically in the eyes of the country at large. China has now stood up and become not just wealthy but powerful in the world, and the time has come therefore to assert that. So the pomp and circumstance of the recent visit to Washington, all these things roll together.
So they are, I think, the three essential organising principles of the change we’ve seen unfold for the last decade or so.
RS: Nationalism was presumably a very strong phenomenon in China long before Xi Jinping. A sense of injured pride, of China’s natural greatness and stature in the world, and a narrative that it lost that sometime in the 18th century and is simply regaining its natural position seem very central to Chinese cultural and political thought long before him.
KR: Chinese imperial or dynastic history over the last 2,000 to 2,500 years has had this recurring theme. Though the term nation, even this Chinese term guojia, didn’t exist in that period of time. But the historical narrative is kind of interesting. The good emperors and the great dynasties are those which united the empire and held it together, and the bad emperors and the bad dynasties are those who let it disappear into 1,000 contending parts. And so it’s not just the predations of you Brits when you arrived in the Opium Wars, you know, demanding that China open its treaty ports for the very noble trade of selling lots of opium.
Hang your head in shame, both of you.
KR: Well, you know, we’re just British criminals in Australia. We have nothing to bring to this conversation. Anyway, to let you guys off the hook for a bit, this narrative long predates the implosions that occurred in modern Chinese history, from the Opium Wars in the 1840s through to China’s final reunification, if you like, under the communists in 1949. So yeah, there’s this big historical narrative about two things: protecting the borders of the place from external barbarians, of which there have been multiple attacks in Chinese history. The Qing dynasty were barbarians; the Yuan dynasty were Mongols.
There’s been a stack of them over the centuries and over the millennia. And you guys and the French were the most recent interlopers in the 19th century. So the central imperial narrative is: we must have the Son of Heaven, the Emperor, or whoever succeeds the Son of Heaven, holding the empire together in order to protect us from the predation of those on the outside, and a further narrative which says, if there is weakness at home, there will be predations from abroad.
The limits of political and economic reform
AC: You mentioned his fear of the CCP becoming like the Communist Party of the Soviet Union. Did any of his three predecessors see themselves as a Gorbachev-type figure? Did he think they were trying to make changes that would threaten his vision of China?
KR: In the 1980s, when I first went to work in Beijing, my job in Embassy Land was domestic Chinese politics. Deng Xiaoping authorised a number of debates about the future reform of the political system. Of course, all that came to a crashing halt in ‘89 in Tiananmen when the student protesters, I would argue, got ahead of the wheels of history and they were brutally repressed by a Leninist state.
AC: Do you mean by that they should have bided their time?
KR: How can you ask kids to bide their time when they see an opportunity to hold high the banner of individual freedom? Very hard. But was there a trajectory prior to that, coming off the back of early-stage economic reform, opening up to the market and greater discussion about political futures for the country, at least in the academy? What if that had rolled out for another decade or so? One of the imponderables of alternative history is where would that have landed? Under Jiang Zemin, there was not really a significant conversation about these things, but I do note that by the time we get to about 1999, we’d seen the conclusion of an internal debate about whether there should be some peaceful transition of the party towards what was often described in the party as the normal, shall we say, Nordic social democratic model over time, but with Singaporean political characteristics.
AC: You think the debate went that far?
KR: I’m old enough to have been in and around those discussions in the 90s, in and out of various think tanks organised and authorised by the International Department of the Communist Party, etc. Hu Jintao had one final attempt in the last 10 years before Xi Jinping came. He was general secretary from 2002 to 2012, and in that decade, what you see is his attempt to take the debate into practical land by authorising contested elections for local authorities in China at the county level and at the village level. So, were these rivulets of possible change there?
Yes. Did any of them reach maturity? Not really. Was Xi Jinping, the other part of the question, genuinely concerned about this? One of his earliest pronouncements on this was in about July of 2013, in what’s called Document Number Nine. I love the way the Chinese call these things. Document Number Nine. I should have done this when I was Prime Minister. Let’s just name our documents in a sort of authoritative sort of way to guarantee that nobody would read them if it was in Australian. But it said there shall be no further debate on constitutionalism or these types of political reform.
That was an internal document, which was then fully leaked.
RS: One of the things I guess that an old China hand might have said in the 1980s is that Xi Jinping was pretty inevitable, and that people got overly excited by the idea of liberal democracy emerging. And I can imagine somebody saying to you, “Listen, Deng Xiaoping was hardly a democrat, and Tiananmen represents pretty much where they were going, and that nobody should be that astonished to discover that we end up with a Marxist-Leninist nationalist running China, because that was a pretty strong part of what was going on, and the West was deluding itself if it thought that China’s economic expansion was going to lead to the growth of a liberal democracy.”
KR: I think what surprised many of us in the analytical world was not so much the construction of a fence around the political project, because that was clear from about 2013. What surprised some of us was the extent to which a parallel fence was constructed around the economic reform project by 2017. But of course, Xi Jinping, being a great orthodox Marxist-Leninist, had done his dialectical materialism, and he worked out the interrelationship between the economic base and the social superstructure, and where those things led to over time. So he was not just going to deal with the superficialities of a discussion about political pluralism.
He wanted to ensure that the economic base was back under the control of the party, so that would not generate a critical mass of folks who, experiencing freedom in the marketplace, the free flow of information and the international marketplace, would then indirectly infect the debate about what happened above, namely in politics.
Corruption and control
AC: His crackdown on corruption is one of the things for which he’s fairly well known. Right now, with his opposite number in the United States seeming to unleash unbridled corruption, you’re almost tempted to think: at least Xi Jinping doesn’t like corruption too much. What should we think of that in terms of what it says about him and what he’s trying to do as leader?
KR: For those of us who have looked carefully at the anti-corruption campaign, which he launched within a year of taking office, it is now China’s single longest ongoing political campaign in the history of the Communist Party. It’s been rolling now for the better part of 12 and a half years. Five million cadres formally disciplined by the party. Five million. So you’re getting up to 5 per cent of the total party membership who have either been purged, fined, demoted, jailed, in some cases worse. It’s been about two things. One is on the governance of the party.
He figured out ultimately there is a legitimacy question. One, can you grow the economy and make sure that people’s living standards are rising? Two, are you holding the country together? Really, a conversation on the nationalist agenda around a strong country. But three, has the party itself still got credibility in the eyes of the people, or has it become a franchise for just earning a lot of cash? Most analysts of the party, whether they are supportive of Xi Jinping or not would say that corruption in the previous 30 to 35 years evolved from retail to wholesale to industrial scale corruption.
It was big, particularly in the military. So Xi Jinping would not be oblivious to this when he took over, and therefore, in restoring or seeking to restore that element of legitimacy to the show, he launched a campaign. Many thought it would be just once over lightly. It didn’t turn out that way. It’s been serious. It’s got teeth. What’s the term they use in Chinese? Exposing the bare blade of discipline onto the party itself.
KR: It’s a cleaning-up thing, but the second part of the agenda is that it’s a control mechanism. So if I think Rory, you and Alastair are mucking up, or you’ve got it in your eyeballs that you could be a problem in three years’ time, I’m sure all of you have got sins, mortal or venial, somewhere that a good dose of the anti-corruption police will root out, thereby keeping you off balance and, frankly, sticking you into jail if I need to. And there’s that element as well.
China’s territorial and global ambitions
RS: When we talk about nationalism, European nationalism, Nazi nationalism, Russian nationalism, we often are thinking about big imperial expansion, Russian tanks rolling through Poland. What is the territorial ambition of Chinese nationalism beyond Taiwan?
KR: You can break it down into about four or five boxes. Taiwan, you’ve just mentioned: unfinished business from 1949. In the maritime domains, it’s the South China Sea and the East China Sea, both of which contain islets, or in the case of the East China Sea islands, contested by many of the neighbours, including Japan, as well as offshore islands and maritime areas with Korea. This rarely gets a mention, but it’s with Korea, it’s with Japan, it’s with the Philippines, it’s with Vietnam and other Southeast Asians as well. They would be the top two or three.
Then, of course, you have the Sino-Indian border. I’ve just come from Delhi to here, so this is still the central concern in the India-China relationship. Whatever happens in the India-US relationship, the concern is what will happen with these massive disputed zones in Ladakh and down at the other end of the border as well. Then there’s a really interesting one at the end, which is the one and a half million square kilometres, which the Russians took from the Chinese between about 1858 and into the early 20th century, in the dying days of the Qing Dynasty.
RS: And what sort of global power would a Chinese nationalist want to be? Would they be launching the kind of interventions the US launched in Iraq and Afghanistan, would they be trying to have their fleets sitting in the Gulf? Would they be trying to topple regimes in Venezuela? I mean, what kind of regime would they want to be? Would they want to be a superpower on the US model?
KR: I remember years ago when I was first talking to a newly elected Prime Minister Modi about these questions. Very perceptive man, Mr Modi. He asked this question: Does Xi Jinping want to be a regional leader or a global leader? So, in terms of the answer to it, obviously the Chinese Communist Party haven’t posted to me a copy of their long-term plans. I’m waiting for the unauthorised edition, or hopefully the authorised edition. But I see it a bit like this. Number one is resolving the territorial questions we mentioned before. Depending on which side of those debates you stand, is it revisionist or otherwise?
Second, in East Asia, by which we mean everything from the Korean Peninsula through Southeast Asia and presumably west to around India, there is a long-term study in the modern Chinese academic literature of how does China learn effectively from the Monroe Doctrine in Latin America. That is to be obviously the primus inter pares in Greater Asia or Greater East Asia and the West Pacific, and that does not necessarily mean taking armed military intervention as your course of action, but it does carry with it a set of assumptions, which is that regional states in that hemisphere, the East Asian hemisphere, would conduct themselves in a manner which was not offensive to Chinese core interests and Chinese core values.
And there’s a historical precedent for this in the history of the tributary states during the Ming and Qing dynasties over about 500 years. China, by and large, didn’t set out to invade the tributary states, but they did take military action when people, in their view, mucked up. Ask the Vietnamese about the history of that over 1,000 years. And the third part of the answer to your question, Rory, is beyond East Asia, the West Pacific and that hemisphere. What about the rest of the world? I think China would see its future as being the anchoring geopolitical power around a future international order, just as the United States has been the anchoring geopolitical power around this post-1945 order in one form or another, sometimes at large and sometimes more narrowly.
And again, it doesn’t mean taking unilateral action militarily beyond the theatre, but it would expect to be treated with considerable respect and for it increasingly to shape the rules of the system. I think if you saw it in those sort of concentric circles, I think that’s the way it’s seen.
AC: You’ve literally read, thought about and analysed every word that Xi Jinping has said in public.
KR: And therefore you don’t necessarily know, by the way, what he actually thinks.
KR: For sure, all this stuff comes out in his name.
KR: In the book that I wrote on Xi Jinping, I ask: are these his words? Do they actually reflect everything he thinks when he sits down at night, has a cup of cocoa, puts on his socks and goes to bed? I don’t know.
AC: No, you don’t know, but you’ve probably gone into it in greater depth than a lot of analysts have.
KR: To save you all the trouble. And the pain and torment, actually.
AC: It’s the only book I’ve ever read where the introduction says: unless you’re a complete nerd, I wouldn’t read the whole thing. Go to chapters four, five, 13 and 17 and you’ll get it all from there. I did the whole thing.
KR: Wow, you get time off purgatory for that.
AC: It’s a dense piece of work, I’ll give you that.
KR: It’s a hard read. I say that up the front. Oxford University Press said, “You cannot write that in the introduction of a book.” And I said, “Well, I mean it.” If you want to understand its argument, it’s in three or four chapters. The rest is for academic nerds, but that’s to establish the case.
How Beijing sees the United States
AC: Based on all that, what do you think Xi Jinping thinks about the United States and Donald Trump’s presidency?
KR: I think Xi Jinping, in his heart of hearts and his mind of minds, is an ideologist, and therefore looks at the United States structurally through the lens of historical materialism and the rise and fall of nations and movements over time, as well as dialectical materialism: contending forces in the here and now, forces of action and reaction. And these methodologies are actually taken seriously within the party’s analytical system. Their conclusion is that the United States is declining. Their conclusion is that China is rising. Their conclusion is the United States is internally fragmenting.
Their conclusion is that China remains internally cohesive. Their conclusion is the United States is fragmenting with its allies, strategic partners, and friends around the world, whereas China is consolidating its position with the global South in particular. So, in the sweep of history, they see the winds of history as blowing in their sails, and on President Trump himself, they see him as the leader of this tottering entity. Now, I actually think all that’s flawed, but if you ask me what I think comes through their literature, they are predisposed towards reaching, in my view, premature conclusions about Uncle Sam.
The strengths and weaknesses of China’s economy
AC: Interesting. Just on the economy, Rory often points out the relative comparisons between the size of the Chinese economy when Tony Blair became prime minister, and how even Italy had a bigger economy not that long ago. While you’ve been following this, China’s economy has grown and grown. But you also have a view that it’s possibly unsustainable and that there are inherent weaknesses. What are those weaknesses, and how worried is he about them?
KR: You’re right. I mean, when I first went to China in the early Mesolithic period as a young diplomat, China’s economy was the same size as the Australian economy. There you go, in the 80s, and now it’s second only to the United States, and depending on the measure, you know GDP at market exchange rates or purchasing power parity, it’s either 70 per cent the size of the United States or 125 per cent the size of the United States. I think we can all conclude it’s big, but you know the model has problems.
Part of Xi Jinping’s efforts to move that centre of gravity of economic policy settings towards the Marxist left has obviously created a whole range of additional growth problems for the economy. Private sector is less incentivised. Planning has reasserted itself. State-owned enterprises have reasserted themselves. Income redistribution is now much more at the centre of the equation. Think of the domestic drivers of growth: private domestic consumption, private fixed capital investment and private residential construction. Normally, in an economy at that stage of development, these would be powering ahead. Think of the US economy in the late 19th and early 20th centuries, when it ceased to be utterly export dependent and was driving on the basis of its own domestic growth.
The net effect of all the above is that these sectors are bumping along the bottom at the moment in China and have been for quite a number of years in the post-COVID period. What’s working for them is two things: net exports, hence the problems in Europe, as China’s enormously subsidised oversupply in its manufacturing product is now sold in the world. Look at German manufacturing: 12,000 jobs going a month. Look at Volkswagen. Look at the rest. Look at the emerging reactions in the European Union and what caused the Americans to act in the way in which they did seven or eight years ago in 2018.
The other thing that’s working for the Chinese is Xi’s techno-industrial strategy, where he’s seen massive levels of state investment driven by the party centre to become the dominant technology power. Ten to 15 years ago they were nowhere to be seen, but now, with the exception of semiconductor chips, perhaps jet engines, and one or two other things, they are now comparable in many respects to the United States. So that’s his second success story. But is it yet generating a massive slab of extra growth in the economy? No. That includes the AI stack.
It’s not yet producing the productivity yield. So, is it big? Yes. But the double-digit growth finished not long after he became general secretary. It’s been single-digit growth, and domestically, probably not growing much more than one or 2 per cent before you roll in the $1.2 trillion they earn each year from net exports.
Competition beneath the Trump Xi accommodation
RS: US opinion on China seems to have lurched very dramatically from the 1980s and 1990s, when a lot of the leading commentators were all in on China and optimistic, to a moment where they all seemed to wake up, flip to the other side and become increasingly cross with China in different ways.
KR: Only a Brit could say “cross”. I love that: increasingly cross with China.
RS: You can see versions of this happening with Obama, with Trump one, and continuing with Biden. One of the things that interests me about Trump two is that he now seems to be an outlier in the other direction. I’m very struck by the fact that in his recent encounters with Xi Jinping, he sounds like less of a China hawk than much of the consensus in the Democratic and Republican establishment. If you were Pottinger or the congressmen running the Chinese Communist Party committees, you’d be looking at Trump and saying, “Whoa, what just happened there?”
KR: Structurally, the way I can best answer the question you’ve posed is the strategic competition rolls on. It doesn’t matter whether you’ve been in Beijing, where I was just last week, or in Washington, where I was the week before. The dynamics of the competitive race in the military, in cyber, in space, in the economy, in trade, in investment, in technology, in artificial intelligence, in foreign policy, in ideology, roll on and are ever more acute. Because what is at stake here? Who prevails and who becomes the fulcrum of the emerging or continuing international order?
However, I think President Trump has concluded, in terms of his own interests, that a stability pact for the period ahead is no bad thing. I think President Xi Jinping has concluded the same for similar interests. In China’s case, what is at stake for them through a stability pact with President Trump? What they’re seeking to avoid is another unilateral tariff war, which would help crush this remaining growth engine they’ve got, particularly if the Europeans followed in hot pursuit. And secondly, from President Trump’s perspective, he wants a stability pact to get back to a normal supply of critical minerals and rare earths, which currently the Chinese are holding a chokehold on.
The way I see it is, it’s a tactical accommodation in both directions, a stability mechanism to accommodate that. But when I interrogate what’s going on and the full breadth of the relationship, it’s still a competitive fight.
Taiwan and the regional security order
RS: Just one more on that, because a lot of the narrative around US involvement in the South China Sea and Taiwan doesn’t sound very much like the world of Trump. It sounds like the post-1945 order. In fact, Trump is often making comments about this. He often says that he finds it a bit weird that the United States is concentrating on something that’s 9,000 miles from the United States and 70 miles from China, right? Which his predecessors would not have thought of as weird. He also hasn’t set himself up as a champion of democracies around the world.
The sort of arguments China hawks used to make are that we need to stand up for Taiwan because it has become a democracy, and we need to stand against this authoritarian state. Again, that doesn’t naturally sit with Trump’s views. And if you look at Russia-Ukraine, he seems to believe in spheres of influence. He seems to be a bit doubtful whether America wants to be the global policeman. He’s not really into democratic sovereignty. So, all of that would make one think this is somebody who’s less likely to get in behind Taiwan than his predecessors.
KR: I think in the back of President Trump’s mind, there will be two considerations beyond those you’ve just listed concerning, let’s call it his scepticism. One is this: TSMC, the Taiwan Semiconductor Manufacturing Company, currently provides 90 per cent of the world’s most advanced semiconductors. If it went down the gurgle as a consequence of a Chinese takeover, that would, in President Trump’s calculus, and in the calculus of the US body politic and the economy, represent a catastrophic problem and possibly trigger a recession, if not worse. That is whatever China’s assurances may be that supply would continue.
Because, let me tell you, the action would not be peaceful if they decided to take Taiwan by force. The Taiwanese would fight, and God knows what would happen to the TSMC facilities in the way through. The second is this: I think there is a view that if Taiwan was to fall to military force as a consequence of a Chinese invasion, it would end up being the end of Pax Americana in the wider region. For these reasons, Japan would look at this and say, “Really? Either no American action or a failed one.
Our security guarantee from the United States is now paper thin. We’ll proceed with turning nuclear.” And Prime Minister Takaichi, in her own quiet and inimitable way, has sanctioned quietly the beginnings of a public debate in Japan about acquiring nuclear weapons. If Japan went nuclear, there’s no way on God’s earth that the Republic of Korea would allow that to happen in the absence of them going nuclear. If those two went nuclear, the question arises as to what China and North Korea would do as an attempt to pre-empt. What Southeast Asia would do is an open question.
What Australia would do is an open question, and what India would do is an open question.
RS: India doesn’t need to go nuclear.
KR: No, I’ve worked that one out. I’ve just been there as well. But the point is, there is a fundamental set of strategic verities which are then imploded simultaneously once this change occurs, as a product of the perceptions of regional states.
RS: Is that not, in a sense, simply a version of what we’re already seeing playing out with the United States’ inability to defend Ukraine against Russia? Already, Germany is talking about nuclear weapons. Sweden’s talking about nuclear weapons. We’ve essentially concluded that the Pax Americana no longer operates in the NATO heartland. So it seems perfectly conceivable that Trump could do the same with the Pax Americana Pacific. I mean, it may feel like this is one exception.
KR: Given I’m neither a Russian specialist nor a Ukraine specialist, I’m always cautious about commenting on things I don’t know much about. But yes, I observe Russian strategic behaviour and American responses to it, and particularly most recently. But the United States, remember, including this president, sees its future as a great power fundamentally anchored in the Asia Pacific, because America is a Pacific power, it has territories in the Pacific. It has a state in the middle of the Pacific. It has territories in the West Pacific. It is also the region which will generate the vast bulk of economic growth for the next quarter of a century across the world.
For those reasons, even in let’s say, this complex Trumpian worldview that you’ve described before, what drives the president is how does America remain number one? And whatever his agnosticism towards the transatlantic may be, and towards the Europeans may be, with the Indo-Pacific, it’s quite a different kettle of fish in terms of America’s manifest destiny before we add in the TSMC factors and the role and consequences if Japan and Korea went in their own national directions.
AC: I think we were surprised that so relatively little of substance came out of the recent summit between Trump and Xi Jinping. But one thing that really struck me that Xi said to Trump in these terms: Taiwan is a very dangerous issue that could bring collision and conflict. And Trump’s reply to that essentially was about how far away from China America is. Was I reading too much into that and thinking that was Trump showing a bit of weakness, and it was Xi Jinping indicating strength?
KR: I think, Alastair, you’ve correctly identified the changing trajectory of Xi Jinping’s commentary on Taiwan. There are certain verities around the sort of normal Chinese posture on Taiwan, and then there is an accentuation and an acceleration, if you like, of the language. And I think we’re seeing a fair bit of that from Xi Jinping and others within the Chinese system. And essentially, the bottom line is this: Don’t mess with us. What I am most concerned about, in the real world, is where all this tracks in 2027 and 2028, when we have a potential tripwire event in terms of the Taiwanese presidential elections of January of 2028, and the possibility of the current pro-independence governing party being re-elected under Lai Ching-te.
On the Trump side of the equation, what the American system says is nothing fundamentally has changed in the US position. In terms of the private conversations between President Trump and President Xi Jinping, none of us know. We can only actually report on those which occurred in front of officials. But what I see, even when these summits have been occurring, is that the standard operational procedures of American Indo-Pacific Command under Admiral Paparo, and the units available to him, continue in the South China Sea and in support of the East China Sea.
Regular and large-scale exercises involve regional partners, for example those recently conducted in the Philippines. So there are two realities here. One’s the declaratory level, where you’re right to point out the changing nature of his language, and at the operational level, where those of us who observe the meat and potatoes of this don’t see much change.
RS: Let me push back on that a little bit, because part of the argument for the disentanglement from Europe was the tilt towards Asia Pacific, and part of the reason why Ukraine was told that it couldn’t have Patriot missiles was those missiles were required in Asia Pacific. The US then proceeded to blow them in a very major way in the Gulf. Who knows, 50, 70 per cent of the stock. Things have been taken out of South Korea in order to help in the Gulf. This doesn’t exactly feel like an administration that has made the strategic decision that you’re attributing to them, which is that this is continuity: Obama, Trump one, Biden, Asia Pacific tilt.
This feels to me like an administration that is very, very undecided about what it’s really trying to do. Is it prioritising China as opposed to doing things which certainly in the Gulf don’t seem to add up to that at all?
KR: I’ll come to the Gulf in one second. All I can report to you is that, whatever declaratory language President Trump uses, operationally, in terms of the tempo and intensity of normal levels of military activity, we don’t sense any significant change. That is in our part of the world around Taiwan contingencies, Taiwan-related signalling and broader deterrence activities in the wider East Asia–West Pacific theatre. You’re absolutely right, Rory, about what just happened in Iran. I do not know from my own discussions with American commanders how much hair has been pulled out of people’s heads as a result of having to redeploy kit and equipment, and frankly keep assets operating well beyond normal deployment ratios.
I don’t have granular information on that. The Chinese have a saying about their relationship with the United States, which I always find disturbingly amusing, which is: every now and then, in our strategic contest with the United States, we think that the Americans have got our measure and they finally got the script and they’re finally heading in a particular direction. Don’t worry, our old friend comes along to help us out, and you say, “Who’s the old friend?” They say, “The Middle East, of course,” and America’s fatal attraction going back over the last three quarters of a century, with the cocktail of Afghanistan, Iraq, and now Iran.
The race for artificial intelligence
AC: Who’s winning the AI battle long term, the US or China? You live in the US, you study China. What’s your sense of that?
KR: This is the granddaddy of them all right now. If you go across the AI stack, China is ahead on energy, which is necessary for compute. The United States is ahead on compute because of superior chips, probably by about a five-year factor in terms of the quality and the nanometres attached to the most advanced chips out of Nvidia and TSMC, and others in the US chip ecosystem. The Chinese haven’t cracked that code yet, despite multiple efforts to do so. On frontier models, the Americans are barely ahead by five or six months because the Chinese are compensating for their lack of rapid and efficient compute with simply scale.
They just build bigger and bigger data centres with more and more energy used, and they can therefore test their LLMs accordingly. It’s just more expensive. And then on diffusion, the other part of the AI stack, the Chinese are vastly ahead of the United States, probably by a factor of two to one. That is the portion of the real economy and real firms now deploying for productivity purposes frontier models or variations of them within their business operations. Xi Jinping’s view is, we will prevail against the United States across the stack and diffusion that is used in the real economy will deliver us an unprecedented productivity yield and advantage against the United States because we can use the levers of the central state to not just encourage but to leverage the economy to deploy these capabilities rapidly and comprehensively.
So, who’s going to be ahead? I spend a fair bit of time in Silicon Valley and Seattle. These guys are sharp, bright, competitive, and producing stuff which none of us thought possible six months ago, let alone, you know, five or six years ago. So, never count the Americans out on this stuff. But the Chinese have the great advantage of scale, in terms of the size of their domestic market.
The future of America’s alliances
RS: Are you aware of how much the narrative has changed in Europe in relation to the United States? The kind of assumptions that Xi Jinping might have had that the US is going to begin shedding its European allies may turn out to be much closer to the truth than you want to acknowledge. When Alastair and I do public events now, it is almost consistent: if you ask people whether the US or China is a greater threat to national security, 90 per cent of hands will go up for the US, not China.
Greenland, Ukraine, the International Criminal Court and the continual violent humiliation of Western leaders. You know, Carney being portrayed, being whacked with a hockey stick, begging for life on the ice. This stuff, I don’t think, will be forgiven. I think a bet that you can resurrect a Western alliance behind a tilt to Asia Pacific is for the birds.
KR: I think you’re wrong. Let me answer as best I can. The first is this: yes, the memo and the telegram have reached Australia, and we do understand the volume of reaction because public opinion responses in Australia are not dissimilar to what you’ve just described. I mean, we’re not some sui generis mob down under who don’t tune in. You simply have to look at the most recent global opinion poll research produced by Pew to understand where America now stands in global public opinion across the democracies and across the global South, objectively within its own comparators and against the Chinese.
In Australia, for example, Xi Jinping is now twice as popular as Donald Trump.
AC: In Australia?
KR: In Australia, according to the published research. So yes, this memo has reached us.
RS: I wasn’t talking about Australia. I was talking about the particular China community in the United States.
KR: Sorry, I thought you meant “you” meaning me, and I happen to be Australian.
RS: I meant “you” meaning Asia Society, China–US commentators.
KR: I often lead American delegations to Beijing because we are an American institution, the Asia Society. We’ve been there for 70 years. Secondly, why I think, though, notwithstanding the above, you may be wrong, is as follows: In the Indo-Pacific, there is no security policy alternative to the United States against the critical mass of Chinese military capabilities. The collective predisposition of US friends, partners and allies is to engage in whatever strategic balancing is necessary in order to secure their effective autonomy as actors within the region. So, does anybody like being beaten around the head?
Whether you are the South Korean president or the Indian prime minister or the Japanese or ourselves? No. But is there more of a predisposition to see this as the current evolution of American politics, and to look at the long term rather than the immediate term? There is more of a predisposition to do that in our part of the world. For the Europeans, I defer to all of you because that’s where we are at the moment in Europe. But I do ask the question again in terms of core security concerns on the part of let’s say frontier states with what I was about to call the Soviet Union, but is now the Russian Federation.
Think of the Baltics, the Nordics in the High North, and Poland, given its unique history and problematic geography both to its east and to its west, before you start heading further south to the good folks in Ukraine, with Zelensky doing a powerful job under impossible circumstances. Ultimately, can folks in the security policy calculus do without the United States against their core strategic objective? Probably not. Can they do more independently and nationally? Yes. Can they do more collaboratively among themselves? Yes. Are they doing that in the case of Ukraine? Yes. But as we’ve just seen through the most recent debate over Starlink, for example, that’s a piece of American commercial slash military infrastructure.
So it’s complex. Is there going to be lasting damage to everyone being hockey sticked, as Mark happened to experience recently? Of course, these things are not easily forgotten. But America at the moment, and I’ve lived there for now 10 years, is going through this cathartic, deep, ugly, multifaceted internal wrangling over what sort of country it wants to be in the world in the future. So we either wait for that process to conclude, and in the meantime engage in a whole range of other contingencies, such as effective security collaboration with each other, or do we junk that option forever and for the future: that is, the United States being a future reliable security partner?
I don’t know friends, partners, and allies who are willing to go down the path of Plan B yet.
AUKUS and working with Washington
AC: Where does AUKUS go in this?
KR: Well, that was three years of my life, working on AUKUS, both in its submarine and non-submarine dimensions. It’s been legislated through Congress, signed into law by President Biden and not repudiated by President Trump. So all of the implementation machinery around AUKUS and the submarine programme, as it affects Australia, the United Kingdom, and the US is now being fully implemented. I mean, I know that for a fact. Similarly, what’s called AUKUS Pillar Two, which is creating a more seamless defence science and technology and industry market between the three countries, is happening as well.
When President Trump said, when we were in DC last October, “Full speed ahead for AUKUS”, guess what? Because it’s a command-and-control system politically now under President Trump, it’s full speed ahead, and that’s what’s happening. You’re always going to have folks who are going to say, “There’s a problem here and a problem there.” I get that; that’s the nature of the beast. But do I think strategically there’s a problem with it at this stage? No.
AC: What was it like being ambassador in Trump’s America?
KR: It’s a character-building experience. President Trump is President Trump. I’d said some critical things about Trump in the past. He returned the compliment when I was there, sitting around a table with our Prime Minister Anthony Albanese at the end of last year.
Then, the cameras having gone off, he leaned across the table and said to Albo, as I call our prime minister, “Well, he looks like a nice guy to me,” pointing to me. Our prime minister said, “Well, he is. That’s why I sent him here. He also used to be our prime minister.” President Trump didn’t quite understand that point: “What are you doing here then?” But then he said, “Ah, that’s fine. Nice guy. All’s forgiven.”
This is a day in the life of working with President Trump. It’s intense fury followed by: let’s get on with the business. Is it complex? Yes. Is it normal if you are a career foreign service officer? No. You’d be reaching for the smelling salts every 30 seconds.
The only good thing about having been an Australian politician, which, as you know, is not for the faint-hearted and is a blood sport—
AC: Check out the killing fields.
KR: Yeah, check out the killing fields. It takes a bit more than that to put me off my game.
RS: Can I understand this a little bit more? You’re no longer the ambassador to the US. That was one of the most understated commentaries on Trump I’ve ever heard. You sounded like a serving prime minister and ambassador. Is it that your job at the Asia Society stops you from saying this man is a loathsome, shameful, corrupt individual who’s undermining global security? Why do you speak in this way?
KR: You’re running a podcast. I’m running a think tank, and a think tank seeks to work with governments around the world in moving the dial in directions which maximise strategic stability and security for us all. So your job—
RS: You’re also there to tell the truth, aren’t you? You’re also there to tell the truth about international alliances.
KR: That’s right. And are you beginning to say, my Tory friend, that what I’ve just said is untruthful?
RS: Well, I think it’s true, but I think to fully understand the global—
KR: What I just sought to describe before, Rory, was: you asked how allies view their future with or without the United States. What I’ve sought to do is reflect my best understanding, having had multiple conversations with serving ambassadors of Asian and European allies in DC and their chancelleries around the world, about what we do over the next couple of years. Hence why I answered in the way I did.
RS: But the answer is, you can be brutal about Xi Jinping but not about Trump because you’re trying to influence the US administration.
KR: I think I’ve been fairly clear about my public commentary concerning the president of the United States, hence why he took exception to it.
RS: Remind us. What do you think of President Trump?
KR: Nice try, my Tory friend. But I’m not going to go down that path, so you can get your headlines elsewhere.
RS: Why would this be a headline?
KR: I’ve seen a few ones outside the off stump over the years. I have an institution to run which seeks to work within the parameters laid down by both the Chinese Communist Party and the Chinese leadership, and within the United States administration. If you are doing that as an institution such as ours, the Asia Society, which has had to deal with similar complexities over the last 70 years, that’s what you do in order to produce a result. My job is quite different to yours. You’re running a podcast. I’m not.
RS: No, I’m just saying that the way you talk about Xi Jinping is quite different from the way you talk about Trump. It’s not even-handed, is it?
KR: Oh, it is entirely. If you were to go through the book that Alastair has read in order to familiarise himself with the sort of stuff I’ve been writing, you will not find a single polemical phrase about Xi Jinping the person anywhere, or more broadly in all my public commentary. In fact, the stuff I’ve said in the past about Trump has been infinitely sharper and harder and more direct. That’s my answer to your proposition.
AC: I enjoyed that.
KR: You bowl them up, mate. Listen, I’m going to bat them back.
Australian politics and Britain’s European future
AC: I could happily stay here and talk all afternoon, but I’ve got to go to a bloody medical appointment. Can I ask one final question, which has quite a lot in it? You can go yes or no, or you can explain. Will Pauline Hanson ever be prime minister of Australia? Do you think Britain will ever be back in the European Union in some form? And thirdly, because we haven’t really talked about Australia, will you come back at a future date where we can do Australian politics as well?
KR: On the first one, I don’t think so, because of the sheer dynamics of our electoral system, compulsory voting and compulsory preferential voting, or what you call it in the United States, compulsory ranked-choice voting. But she’s making a huge mark, and the challenge for the government back home is to deal not just with better messaging, but the reality of dealing with cost of living pressures for working families in a way which is material, which people feel, sense, and understand, because that’s why the rest of the right-wing populist message has worked in this country.
It’s worked with Alternative für Deutschland. It’s worked with Le Pen, as it’s worked with MAGA, as it’s also unfolding in part in Australia. And we’ll have a state election in Victoria to soon test that. Secondly, on the Brexit stuff, I mean, I’m on a unity ticket with you guys in the sense that this was the strangest thing that Britannic Majesty’s realm ever did. It never made sense and has not yielded the results which the Brexiters had hoped for. Will Britain come back into full union with Europe? I believe that’s where history and the economy are taking you, and I see that happening.
And frankly, if I was looking at the upcoming elections, which are due in three years’ time here in the UK, I’d see a binary in terms of a Britain strong in Europe and strong in the world and benefiting from the above, as opposed to an Anglo-Saxon keep with a slightly leaky moat around the outside. I mean, I think quite apart from the policy benefits for the United Kingdom, the political narrative in terms of the British government would be clear, concise, to the point, and become a binary. And there is a whole bunch of people out in Britain who have not benefited from the Brexit experience.
And the last question I’ve now forgotten:
AC: Whether you’ll come back and we’ll talk about Australia another day.
KR: Yeah, sure, happy to. To the extent that it’s of interest—
AC: We have a lot of listeners in Australia, and I’m fascinated by Australian politics, as you know.
KR: That’s a fatal attraction. We’re a modest democracy.
AC: My favourite book about Australia was The Fatal Shore.
KR: The Fatal Shore is, for those of us of convict extraction, a fatal read.