Kevin Rudd: Understanding How China Sees the World

tonight's conversation will focus on how china and or the chinese leadership sees and understands the world and what we can learn from that and of course there's no one better suited to discuss this uh than kevin ratz or kevin we're thrilled that you're with us here tonight it's been a long time last time we were here was in 2018. wow it was just 18 wasn't i thought it was 19. i i dare say the world has changed quite a bit since then so it's good to have you back for an update um on how things are so before before you get into it just it's really good to be back in zurich um i always feel as if i'm sort of coming home here somewhere the uh it's uh just it's a friendly town and it's a beautiful town uh and i enjoy this city a lot and the work that the asia society is doing we've been around as an institution for 65 years and um and we now have centers around the world because we discover this growing global appetite to try and understand what the hell's going on um and particularly with china so nico you're leading a great centre here to our friends from credit suisse thank you and you'll get 10 of the sales of the book [Music] one thing i'd love to i'd love to start with is that you've been an observer of geopolitics for a long time and i kind of assume that there's not a lot of things that surprise you anymore but there's been quite a lot of things happening in in recent months and years that took me by surprise i think took a lot of us by surprise so i'd love to hear two stars like what surprised you recently what was something that really took you by surprise that you did not expect happening the um i could say having just come out of the australian political environment that my party finally won an election that was uh congratulations thank you so um i've spent five weeks on the hustings kissing babies and uh and here's a message for klaus schwab by the way i reckon i shook five thousand hands in australia in the election i didn't get covered yet everyone who went to uh davos has got covered the um uh serious answer to your question is not ukraine uh because i've become something of a student of of vladimir putin since 2014. i've only met him a few times but it did not surprise me what has really surprised me and it's geopolitics i suppose it's geoeconomics is how china under xi jinping has actually quite profoundly changed the growth model within china itself and made it more statist less friendly to the private sector and as a result causing a rapid slowdown on china's economic growth and as someone who's looked at the chinese economy for 40 years this surprises me because uh it's something i didn't think that china would do and the thing which may still surprise me is whether they correct it or whether they sustain the direction in which they've now taken which is uh in a less growth-friendly direction excellent well i think that's something that we would have to invite you back in a few months or years to figure out whether whether it's happened so we wanted to focus tonight's conversation on understanding how china sees the world because i think that's something that we often maybe kind of overlook but i want to start with a somewhat fundamental question um given that there's an ever bigger divergence between china and the quote-unquote west what's really the point of investing time and energy into understanding china's worldview so obviously we have to concern ourselves with china um you know there's a competition going on but does it really make sense to invest time into understanding how the chinese leadership thinks instead of investing time into building out our own capacities our own capabilities it seems that's what china does so what is the merit of trying to understand deeply the way you do how china thinks that's a good and provocative question nika which is kevin have you been wasting the last 40 years of your life yes that was the question you had an answer the i think it's a bit like this i think we're all required to walk and chew gum the beginning of wisdom in politics beginning of wisdom and international politics being of wisdom in business is to understand how the other person thinks why they think they're that way and what their priorities are rather than commit the cardinal error which many of our american friends still commit which is to mirror image everything that is to think that those you're dealing with will automatically reason in the same way in which you reason so if you want to um for me to answer the question why bother seeking to understand the standing committee of the politburo the chinese communist party china's political economy xi jinping's world view it's because we need to constantly challenge ourselves as to how does the world look through the beijing politburo lens and it does not necessarily accord with what we would assume about ourselves in a similar position i think that's why we need to spend time and the second part of your question was at the same time it's not just uh an idle academic reflection because these are profound real world changes now and we've just been through a couple of hundred years where the anglosphere first the brits um long may she reign 70 years today um and um and then the americans sometime probably in the have effectively been the um the central powers underpinning the international system um probably since the napoleonic wars really i think that's a fair summary and this is a profound consequence what's unfolding beneath our feet if china does become the largest economy in the world and we can come back to that question soon given the challenges to the growth model which we've just discussed if it does still become the largest economy in the world it'll be the first time since george iii was on the throne of england that a non-western non-english-speaking non-democratic uh country will be the largest economy in the world and that's of profound significance so therefore understanding that and its consequences in terms of how we therefore acquire our own national capabilities in responding to that uh is i think of first order importance for everybody whatever your form of professional life may be excellent then i suggest we do exactly that tonight and try to understand how chinese leadership sees the world last week asia society and you um back in the us hosted u.s secretary of state tony blanken who sort of gave gave his sort of defining speech um on the u.s china policy and there's a line in the speech that i wanted to quote and then ask you about it and the line is like this and i quote beijing's vision would move us away from the universal values that have sustained so much of the world's progress over the past 75 years let's put a pin into what universal values exactly are and what tony blinken means when he says that here's something that always trips me up is that he refers to beijing's vision and it seems to me that over the last years many people have written about uh china becoming more powerful eventually overtaking the us kind of ruling the world and while that all may be true and maybe happening i have yet to hear i think sort of a convincing formulation of what beijing's grander vision for the world that they're supposed to be ruling soon is so beyond you know preservation of power and securing influence is there a larger vision that the chinese leadership under xi jinping has for the world as they would like to run it yeah um because i'm old-fashioned and australian i don't like seeing people stand up so there are five seats down the front here so those are those those are actually i need to be blocked off for the cameras oh i'm sorry you got to stay where you are i was going to try and find you somewhere to sit so so please don't worry about me just find somewhere to sit because um this will go on for a while but i don't want people to be so i don't care if you shuffle around and all the rest of it i've just been kissing babies for five weeks nothing surprises me so let's go to this question of what is the world view and i think that's probably the best term uh what is china's worldview under xi jinping i think there is an underpinning reason that niko white's important to understand this because china now for has just celebrated the 100th anniversary of the establishment of the chinese communist party it's been the ruling party in china since 1949. it is a marxist lender's party which in the year 2022 takes marxist lenin's ideology deadly seriously so therefore understanding concepts of worldview the chinese term is the worldview is really important because it is the organizing principle within which reality is viewed it may seem arcane for those of us in a post-communist as it were west but in my attempt to understand the worldview i've had to re-read the [Music] the ideological underpinnings of xi jinping's view of the world and on that score there has been no leader since mao who has written so much on marxism leninism than xi jinping there are multiple texts out there which define his attachment to the ideology and the fact that his analysis is that the collapse of the communist party the soviet union was because they went soft on ideology and therefore the chinese communist party should not face the same fate and it must therefore begin with an ideological rebuilding of the party so i think it's important we understand that um so take that as the premise how do i summarize the the actual world view and give me three or four minutes to do it and then i'll promise to shut up in the book please buy a copy there are i describe it as 10 concentric circles of interest and these are really important i think for us all to understand and i'll give 10 seconds on each one keep the leninist party in power at all costs and keep me xi jinping as head of the party at all costs not as a transition point to some future slow evolution in the direction of a singaporean-style democracy that i that idea which may have once existed is no longer applicable number two national unity that's how we uh maintain our legitimacy as a party that means what we do in xinjiang what we do in tibet and what we're now doing in hong kong and what we propose to do with taiwan number three grow the economy interesting now living standards up achieve political legitimacy sustained basis with the chinese people by continuing to have higher levels of disposable income but also greater national economic power through which to fund other critical national uh capabilities most particularly those of the military four do so now in an environmentally sustainable fashion because the chinese people don't like dirty air dirty water and dirty soil because they don't want to eat contaminated food products and die prematurely it's a new factor in the hierarchy of needs five modernize the chinese military in xi jinping's terms to turn it into a modern world-class military capable of fighting and winning wars unquote six china's fourteen neighbouring states jobian gordia the greatest number of neighbouring states of any country in the world apart from russia which also has 14 and have those relationships benign at a minimum and optimally compliant from beijing's point of view in order to have a reasonable cordial sanitaire around the country then seven uh on your maritime periphery uh that is uh facing uh to the east and in over time push the united states back in order to accommodate your eventual reunification with taiwan and that means doing what you can to undermine american alliance structures in asia with japan the republic of korea and australia in particular but also thailand and the and the philippines eight there's only three to go um on the continental periphery moving west not east use the belton road initiative to convert eurasia into a zone of economic opportunity for beijing but also a zone of greater economic development period and a series of economies which become themselves increasingly dependent on china extending across eurasia into south asia into the middle east eventually to eastern europe 16 plus one then to western europe nine uh in the rest of the developing world africa latin america the rest of asia to become the indispensable economic partner of all a to expand your markets further b to develop those countries through their infrastructure and then c have them as reliable votes for china or international organizations where the votes of all those countries matter un bretton woods institutions elsewhere and then finally on the international system itself begin to change the nature of the international system in its institutional arrangements and values assumptions in a manner more compatible with china's worldview and you see that already here in the human rights council in geneva where china systematically both in geneva and new york seeks with the support of russia and others to begin to strip out the human rights provisions of various u.n resolutions and to replace them with state sovereignty rather than the rights of the individual and that being a harbinger of a change to institutional arrangements more generally so i wish i could say all that in one sentence but i can't but if you think of it as a series of concentric circles um starting with party power that is a view that i reflect in what i've written but no chinese interlocutor when i put this to them has disagreed with me though it will not be written as such in as clinical terms as i've just written in any chinese source thank you very much this was fantastic and comprehensive it's going to ask you a lot of questions about these 10 concentric circles i can skip down quite a bit here in my notes and and just move on um that's fantastic um so you've laid out this wonderful suit summary of what the current worldview is and what these 10 concentric circles are i want to go before we talk about some of the circles um a bit more i want to ask about things that have changed so this is the status quo that we're seeing right now they're observing right now that it seems fairly stable but have there been notable shifts in this in recent years what is what are some of the things that have changed and were different than how you've been describing them before you mentioned economic policy of course or there's been a notable shift there are other areas where you see the chinese worldview evolving the worldview i've just described is the xi jinping world view so i've seen that emerge since really 2013. and for my sins i in the think tank that i run in new york i have to read all this stuff and and remember the chinese system while opaque to the rest of the world the communist party with 95 million members has to talk to itself as well and the method of discourse internally within the party is often conducted ideologically and so um what i've just reflected has gleaned from the uh principles which are evident in china's internal literature but not classified literature with one or two exceptions um what's changed since he took office the big one is what we've just touched on and the surprising one for me is item three which is the model for economic development there's a is an interesting um question which arises from that if you have had a successful economic model for 40 years based essentially on this [Music] labor-intensive manufacturing for export plus increasing opportunities for the chinese private sector against a retreating state-owned sector plus a decreased role for state planning plus greater economic integration with the rest of the world with both trade and investment flows and integration with global supply chains both inwards and outwards and if that's produced for you double-digit growth for 40 years then why would you change it not a bad question um even though i've just asked it myself the um the uh would you care to answer it yeah i'm gonna do my next one because i've tried to figure this out which is why i do that now the economist will answer the question you get to a point in the economic development cycle where you actually have to flip and you have to move from labor-intensive manufacturing for export for example because unit labor costs go up and as a consequence models have to change so they did this on paper in what's called the decision that dredding of 2013 um and this was one year into xi jinping's rule but they identified a new economic growth model but which was along these lines which is uh number one uh greater productivity growth number two an explosion in the chinese services sector beyond manufacturing number three on top of that even greater space for the private sector based on the principles of competitive neutrality to occupy more of the space occupied by the chinese state-owned sector for less reliance on the infrastructure build in the country to generate growth which has been another large part of the model phase one and and five maximize your integration further with the global economy in other words it was still within a market frame not a status frame it was a next stage of let's call market economics given the structure of the chinese economy so we all looked at that and we said this is sensible it's reformist it will make china by by the end of the 2020s the largest economy in the world um so why did they change politics because remember i said before it's a marxist leninist party if you apply a model like that over a long enough period of time you create a whole bunch of new elites in the country who are independent of party control the entrepreneurial class typified by jack ma the head of alibaba larger than life jack i know him well [Music] ahead of what was one of the largest companies in the world until the chinese communist party killed the stock price xi jinping looked at this long and hard and said these guys are ultimately a challenge to the absolute control of the chinese communist party and as a consequence if i look carefully at the ideological unfolding of xi jinping's last five years in office since 2017 coming out of the 19th party congress you see this range of new measures which are much more restrictive towards the private sector party committees and private firms the so-called mixed economy model whereby you're a successful private firm sir uh you're running a um a saturn enterprise madam i think we should merge you which would of course make you unhappy and may make you happier or uh there's a non-performing state-owned enterprise over here a brilliant private firm there you can merge so that you can use your profitability to offset the losses of this state-owned bmw a new invigoration of industrial policy writ large a new in reinvigoration of planning writ large and on top of that again certainly in the last year or two what's called the common prosperity agenda gong for you if you speak chinese and what that is code language for is wealth redistribution from the entrepreneurial class to workers so all of that has been his ideological correction to bring about a more equal china in his ideological view but frankly to bring the entrepreneurial class under political control that i think is the essence of the agenda and if we reserve try to reframe what you just said in in terms of the concentric circles is making changes to the third circle if i remember correctly economic policy because it would serve achieving number one and two exactly because three ultimately conflicts with one yeah and so and whereas they sustained the ambiguity of that during xi jinping's first term 2013 to 2017 the quote to use the chinese communist term the contradictions the julia maldun within the ideological framework of the party became too acute in she's analysis and hence the adjustment back towards the party back towards the state back towards state and enterprises and less accommodating of the chinese private sector where all this rolls onto is the present by the way which is chinese growth numbers right now in the first six months of this year because the factors i've just described plus zero covered lockdown are now bumping along the ground at somewhere between zero and two percent now this is unprecedented in post-92 uh chinese economic history um but it's therefore creating a whole bunch of new tensions in central chinese politics as we speak but it is classically the clash between three and one i think there will be a lot more to to talk about here i want to move on to a slightly different topic which is how china exerts or tries to exert influence around the world to share its worldview and and promote it you mentioned a few things before you mentioned the human rights council in geneva where that's visible but to me it seems when i look at china's initiatives to sort of influence the world in recent years honestly most of them seem to have fallen flat so the belton road which a few years ago was sort of hailed as this all-encompassing concept i haven't heard from it recently it's still there i know but it's not something that seems to be advertised uh ever so strongly from from beijing um we've read so much about chinese tech companies you know sort of taking over uh from apple and google and microsoft and honestly many of them have been have been quite hampered by the restrictions that have been placed in them mostly by the us government um there is it seems to me very little chinese soft power to speak of um in europe there was the the 17 plus one um a framework where china tries to get the eastern european countries um on its side and that seems to have failed so wouldn't we have to conclude that did all these chinese attempts to influence the world in its way and to make the worlds of come closer to china have actually failed as we say in the classics yes and no let me give you the no first and that is what's china's global strategy in a nutshell in achieving uh many of the mission statements that we ran through before in the 10-part worldview or at least the international dimensions of the 10-part view are through china becoming the indispensable economic partner of us all china is now i think switzerland's third largest trading partner it's australia's largest trading partner i mean about 35 percent of australian exports go to china china i think is the largest trading partner of any significant economy in asia became germany's largest trading partner last year um so the chinese grand strategy if i could put it in a nutshell is to achieve 1 through 10 above without ever firing a shot anywhere but by becoming the indispensable economic partner of us all so that ultimately our national economic well-beings and by extension our corporate individual well-beings are dependent on our access to the chinese market access to the chinese financial services market in the case of switzerland the united states and some of the europeans et cetera because that ultimately produces what is almost said explicitly in the chinese internal literature using in xi jinping's term the gravitational pull quote unquote of the chinese economy to leverage foreign policy compliance from the rest of the world and if you look at it up until about 2017 this was going not too badly um uh china was not being there there was no until that stage not much by way of um warrior diplomacy there was a reasonably effective strategy around the world and then with the 16 plus one as well as china with the bri in infrastructure projects across many of these europeans etc was seen as increasing the indus indispensable economic power both in trade markets but also in capital markets as it began to become a much larger player so i think what's gone wrong from the beijing perspective is classic overreach that is and this i think is xi jinping's core failure is that he from the internal critique within the chinese system has gone too far too fast too hard too early that is uh rather than just waiting for these processes to take their natural course over time in the tradition of dang xiaoping which is always to kick the can down the road and to allow these things to evolve organically having taken core decisions which is to open the chinese economy grow it and then just see what the hell happened after that wasn't a bad strategy when you think back on it to one which says oh you're giving us some trouble you're criticizing our human rights performances in xinjiang well let me tell you what we're going to do to you and so when i see the range of bilateral coercive measures against the norwegians over the nobel prize against the swedes over the swedish national has been incarcerated in in in china the european union over the sanctions placed on the members of the european parliament who objected to chinese human rights practices in xinjiang through to the australians um the uh massive tariff impositions against probably a third of australian exports to china uh probably a 20 30 billion loss in australian exports so against against the republic of korea over korea's decision to deploy thaad system such theater uh missile anti-ballistic missile defense systems targeted against north korea not against china but the chinese objected to it for their own strategic reasons then kia and other korean car sales plummeted in china by huge numbers and so these patterns of coercive chinese economic diplomacy and then direct warfare diplomacy which is chinese ambassadors taking to the airwaves around the world and attacking various countries for doing x y z a b and c this i think has been a reflection of the new line under xi jinping and i would agree with you it has not advanced china's interests so therefore when i say yes and no yes the strategy about being the indispensable economic partner of everybody continues uh no because there's been political overreach uh by the uh regime at the same time and particularly in the last several years at the very beginning when i asked you know why should we even spend time to understand the chinese worldview um you you made a very compelling case and you also said it's not just purely intellectual exercise this stuff matters so i i want to talk a bit about that as well we've we've talked a bit about what the chinese worldview is now let's talk about what we make out of these insights how can we how can a country like switzerland but also other european countries other countries in general in the world create effective china policies based on that understanding and i always feel it's good to sort of look at good examples so when we look around the world and if you have to separate different countries for their recent approaches to china who's top of the class so who's an example that you would point is like this is a country that's done very very well in engaging china in an effective from the country's point of view uh way which country is doing really really well vis-a-vis china right now well let me use some criteria first because rather than me just being subjective uh let me try and give you an objective set of criteria in terms of who's done well and who's done less well um the um what are the criteria in my perspective of an effective uh china strategy given all the constraints that we've just referred to number one in your dealings with china never take a backward step on adherence to universal human rights as defined in the universal declaration of human rights of 1948 in other words this is not an abstract thing it's not just what the americans think or what pops up out of a republican focus group somewhere in boise idaho um it's the un universal declaration 1948 to which china is a signatory and a ratification state something it's not moved away from the post-49 and china in fact subsequently became a signatory state though not yet a ratification state to the international covenant of civil and political rights so the key thing on the human rights question is anchoring the position we take with china on human rights in international law and these are the two covenants which china has signed up to not some abstraction in the back of our collective western minds if you know what i mean and as a quick point on the charter itself that is sorry the universal declaration drafted in 48 by eleanor roosevelt but on her committee senior indian and chinese officials at the time reflecting other world views and other democratic and semi-democratic worldviews at the time this is not just a western invention the 48 convention it would never pass today for god's sake you know the fact that we got it through in 48 it's a minor miracle but it's there it's in the fabric of international law second principle is not applicable to switzerland which is neutral but for those of us who are allies the united states um never take a backwards step in saying we're allies the united states you know for all the american predisposition for episodic craziness um look at trump how did that happen okay the um uh that was a walk on the wild side for all of us the um the uh uh the for those of us who are as european and asian allies united states it's not just in our dna it's not just a question of identity but it's also part of the stability of the post-45 global order um and so when the chinese have said to me and i've been prime minister why the hell kevin are you still an ally of the united states cold war's over uh et cetera i said well it may of interest to you comrade that the reason we're allies the united states was that the americans defended us against the japanese in 1941 had nothing to do with you in fact we were allies in the second world war against japan um so but it is now so much part of the australian dna because of this combined wartime experience that won't change principle number three is maximize your economic engagement with china to mutual economic advantage this is these are principles for how you engage china today principle number four uh maximize our collaboration with china and the institutions of global governance g20 un un framework convention on climate change other institutions the world bank etc because china is so big and can be so constructive in the way in which they are engaged in these institutions we should be maximizing that and number five if you're going to pick a fight with china um and you're not a superpower uh the axiom i would apply is an inelegant one but it would be like this hunt in packs don't be a lone wolf because lone wolves will get boom so um if you're going to having a disagreement with china as for example the conservative government of australia did most recently on calling unilaterally for a uh independent investigation the origins of covert and wuhan in 2019 2020 something i fully support but pragmatic diplomacy suggests you'd wait a week get on the telephone and you'd ring up another 20 or 30 democracies around the world and say why don't we make this a joint day march together rather than just saying well i'm the australian government i'm just going to go out there and say this myself and so that's 20 billion worth of tariff punishment later so uh now against those five principles who do i pick japan interesting uh japan has uh managed the complexity of its own historic relationship with china applied those principles pretty robustly the economic relationship is still strong they still collaborate in institutional arrangements japan doesn't take a backward step on human rights and and certainly not on its alliance with the united states and and for example whether it's with the quad where australia japan india and the united states are together or other institutions is constantly as it were building collaborative partnerships with others in common positions to take in relation to china so i think the japanese have shown a lot of wisdom in how they've managed a complex relationship i want to move to audience questions pretty soon so just a quick reminder if you have a question you can submit it yes thank you very much um oh yeah there we go um through that qr code on slido and then uh they show up here on that screen but before we go this or you you said your answer was japan which which makes a lot of sense to me it's not australia it's also no european country and it's not the eu and i do want to talk about the eu because it seems to me from the chinese side a lot of the strategy on towards europe have hinged on kind of separating the eu and the us and sort of treating them separately and sort of arguing towards the eu that the us's gold swords china were not necessarily the eu's uh goals of china from the european side on the other hand there was this um quite insightful paper i think it came out in 2019 from the eu commission that famously treated china at the same time as a partner as a competitor and as a systemic rival and i remember thinking at the time that this was an incredibly clever bit of diplomacy to say you know there's this country um and we don't want to decide whether they're a partner or competitor or systemic rival so we just declared them to be all free at the same time um so i thought this is this is excellent that i would have at the time pointed to the strategy as a really good example and it seems it's gone horribly horribly wrong um so you know there's um there's there's all these things that that didn't work out the the comprehensive agreement on investment between the eu and china is on eyes they're uh they're sanctions from from both sides against each other so we can sort of switch sides now and look from the european perspective towards china why did this approach fail or did it fail at all i think you're being a bit too hard on the europeans i'm sorry and i'm not a european so the um i'm just uh uh an australian of uh english convict heritage so we're just we're just a bunch of failed criminals down there the um uh the uh so um i thought the european strategy of 2019 wasn't bad because it actually tried to straddle the same complex reality that i was describing before in my five principles um and given where brussels had been before on these questions which is somewhere between marshmallow and dofu in terms of its strategic um center of gravity like nowhere really i thought this was a a much more robust framework than what brussels had had before remember the historical european position has been as follows i don't mean switzerland here i'm in brussels when i say european um is china equals big economic market tick china equals security problem only for the americans in asia and pacific tick three china equals a human rights problem for us let's have a seminar and uh and that i think was my distillation of where the euros were before 2019. so i actually see the european document of 2019 that's actually a systemic um improvement of where uh the real european reflection on china's current xi jinping reality now lay now obviously since then um look at the operationalization of that it's because of their third pillar on human rights uh over xinjiang and china's reaction to that and that the pillar number one on the economy which is the free trade agreement uh between brussels and beijing was torpedo because the chinese objected to the position taken by various members of the european parliament the chinese were shocked the europeans did this because the chinese view of europe still is that it really is a bowl of strategic marshmallow so therefore this is quite a surprising development nato um not the european union but you know the common memberships are large um adopting now uh a framework which explicitly embraces the the china challenge as part of its uh rolling summit level ministerial level and frankly operational command level engagements why not just because the chinese are now actively strategically collaborating with the russians which they are but also um china in terms of its own uh even as naval operations when you've got chinese naval exercises in the baltic what the chinese doing in the baltic for god's sake um mediterranean not often but together with the russians but thirdly cyber knows no geography and so when you've got cyber attacks either against credit suisse or against a european institution or against the commission in brussels or against anywhere else geography in this cyber world ultimately collapses and so that's why i think you see nato now fully embraced so i'm less critical of you europeans or the those two institutions um then perhaps um than perhaps you are i want to get some audience questions now um and there's the one question that that pops up here on the top which means is the one that most people want answered is one that i actually know that you've been asked quite a few times already but it makes sense because it's an important one and and it goes like this um have the russian difficulties in ukraine possibly delayed or even prevented beijing's plans on attempting to retake taiwan as the strategic calculus from beijing on taiwan changed as a result of russia's not sure if he can yet say failed invasion of ukraine but because of russia's difficulties in successfully invading ukraine yeah i'm glad you added the caveat because we've got to be very cautious about reaching early conclusions on ukraine donbass is a mess and those of us who follow it closely both in what happened in [Music] donetsk and luhansk in 2014 as well as crimea and now what has happened uh what is happening in the battlefield now putin's strategy is clear which is take down bass link it with the land corridor through to crimea um freeze the conflict um applying the model which was used with georgia back in 2006-7 over ascetia and then roll the clock on another 10 years and see what we do then um and would that be sufficient to minima declaration of victory back in moscow given the nature of the moscow uh state control media possibly so um so i think we need to suspend judgment i mean i think plan a for putin's been a comprehensive defeat which is to crush kiev within a week and take the country but plan b um is still i think um deeply in play and while i'm not a ukraine expert at all certainly not a russia expert i'm i'm very cautious about what will happen on the ground there and remember the chinese and russian view is that is this everyone's outraged about ukraine now they regard european political opinion as fickle and that and the chinese use this term and europe next year will suffer from strategic amnesia about ukraine and will be back to back to business as usual so we need to be very cautious about reaching judgments about where this will finally land but full markets the ukrainians and president zielinski you know this extraordinary act of national resilience in the face of this onslaught so um answer to your question then having given the caveat is no it doesn't change chinese timetabling on taiwan at all that may seem counterintuitive but my judgment is and the analytical community that i deal with in the united states on these questions is that xi jinping's preferred timetable for taiwan is more likely to be late 20s and early 30s and it has been that way for quite some time a they want to have a much more decisive balance of military power against the americans and the taiwanese which they don't yet have they have an advantage now but not a decisive advantage and b they want to move in that direction against that timetable when they are both financially and economically more resilient bigger more resilient more dominant in the world than they are now and so i don't think either of those calculus change because of um of putin's difficulties in the field in ukraine in fact the chinese would say to the russians you should have been better prepared and that's what we're in the process of doing if i can ask a follow-up question so there's there's the military dimension but there seems to be also the dimension of the unified so far unified response from much of of of the global community and and certainly the west to the russian invasion is that giving the strategists in beijing pause is that something they would have expected because that's likely what they would have to expect um if they decided to invade taiwan yeah i think they're they're real the chinese are deeply realist and so their wargaming would have been in relation to taiwan whenever it happens it would have been along these lines there will be a replication of the sorts of sanctions and financial and economic that were imposed on china after tiananmen between 89 and 92 and then they conclude and then by the time we got to 1992 the west forgot about tiananmen and that was that that's very much the soft learning in the the deep learning if you like and chinese observation of western political behaviour i think it would be fair to say that both the russians and the chinese were surprised by the level of european political unity but they'll be looking now at where all the fractures are emerging look at the most recent election in the lender in germany and [Music] and the critique that olaf schultz has come under in terms of the provision of military equipment to the ukrainians and the chinese and the russian position will be these fault lines will re-emerge but i think in the first phase you're right nico who is quite surprised they were quite surprised by the level of european unity but let's be realistic about this had kiev fallen in the first three days i'm not sure there would have been a whole lot of unity after that so i think it's because of what zielenski and the ukrainians were able to pull off in the field that made the material difference in europe as well let me move on to an entirely different topic um but one that i think hasn't come up yet tonight and this is interesting so um china has had for obviously very long time a one-child policy they've lifted this but the demographic projections for china are not good and it's commonly believed that that may create economic problems down the road quite soon because there's just not the population to sustain the growth that the country has seen and that the country needs how does that factor in to the thinkings we've you've talked about within an ideological shift you talked about common prosperity a more equal distribution of wealth but certainly this demographic time bomb if we can call it that must be on the minds of chinese economic policy makers how would they how are they responding to that and how do you think will they want to respond to that in the future yeah this is a really important question nico because it goes to china's long-term economic strength power and resilience what are the three drivers of long-term economic growth they are population workforce participation and productivity in australia we call them the three p's so population uh is been aging for a long period of time but we'll probably peak around about 2026 um at around not far above 1.4 billion uh india will soon take over if not around about now the the demographers are not fully agreed on this uh two which is a fascinating question in terms of where india under modi now goes and that's a separate bucket of complexity but the number two is um workforce participation chinese workforce peaked in 2014 in size some say well you increase the workforce by throwing open the age limitations for retirement and i think the chinese will do that but a lot of people above retirement age in china are working already in the informal workforce so i'm not sure and the analysts who look at this very carefully are not sure this will alter the dial a whole lot then of course parents provide all this child care as well in the chinese system third productivity growth it's been bumping along the ground at um uh about one percent now in the xi jinping period uh whereas prior to that productivity growth was basically ticking up around about three percent uh for most of the first decade of this century so what have you got in aggregate declining productivity growth declining workforce participation and declining population growth with an aging population this creates a problem um as the chinese have often said internally we don't want to become old before we become really rich um and that's kind of a lesson for life isn't it but anyway the um uh so therefore this looms large so what are the counter policies uh of course they've got rid of the one child policy uh and then they basically said now you can have as many kids as you like really interesting observation though is at two levels one of economics and one of sociology on the economics folks are saying in china it's still too expensive to have more than one kid cost of child care is huge and with the one child policy guess what um it gets hard to ensure that um you're going to have adequate family based child care available to you and secondly to put it in delicately chinese women are conducting a sex strike um because it's such a misogynist set of arrangements there and so um and so the natural birth rate is right about 1.63 am i correct and uh it's quite low and and and so therefore in a society where look for example how many chinese corporations do you know how many women had those corporations look at the chinese politburo how many women members are there in the politburo i'll tell you there are two out of 25 how many women members are there of the standing community the politburo zero um how many women in this are the central committee made up of 220 members 25 maybe so there is a deep misogyny in the current prevailing political culture against these objective measures applied to the workplace modern educated chinese women are kind of fed up and you see similar patterns of course in japan and the republic of korea it's just come much earlier in china in terms of the stage of economic development so therefore we have a population problem women making their own life choices uh and then there's for those who are in um uh uh are in uh family life right now having more than one kid is just not easy unless you are part of a narrow elite there was a report recently by the way to the party all 95 million members which is we expect party members to have three kids each well that's going to be interesting to enforce you know i wouldn't put it past them but it's pretty interesting to enforce that as a piece of party discipline another and another question that um i think a lot of people would like to see answer not just in this room but but much more generally and i'm the the questions is more subtly phrased and i'm paraphrasing here a little bit like what's your best prediction how and when will the pandemic end in china i could make a lot of money on that if i knew the uh the um well a as you know nico we don't know the answer that globally and b if i could answer redefine the question slightly by putting it in terms of when will china's current policy of zero tolerance end in dealing with the current variants which are alive in china let's call it omicron plus my baseline prediction is that nothing will change of any consequence between now and the 20th party congress in november at all because we're in a no risk environment the leader xi jinping is decreed china has a successful zero covered strategy the leader can never be wrong therefore i should have had that when i was prime minister i'd still be there the uh the leader can never be wrong and as a consequence of that long live the leader um so it won't change until xi jinping is reappointed um based on my assumption that he's a 75 probability of being reappointed in november then you will have no public declaration ever that that the policy has changed it will then quote cease to be operationalized in my view and how will that occur without creating a public brouhaha they will cease testing no testing no data therefore no virus and how will they justify stopping the testing it's just one of those things that just drifts away um i i'm just i'm putting my mind into the position of a mid to high level chinese cadre saying oh my god what are we going to do after november this is my best prediction about where it will drift to of course the liability in the chinese system because their domestic vaccine is largely ineffective despite having been provided with mrna vaccines for ideological reasons the leader can never be wrong we're not using them old people are still ineffectively when i say old people people as old as me are not properly vaccinated so the conundrum is if there are further breakouts and we still see mortality rates among over 65s even in the absence of testing then there is a potential problem for them on that score so what i can't wargame in my mind is what will happen between now and then with mrna vaccine regimes for older uh chinese in order to put older people in a more secure position as they are in the rest of the world at the moment where vaccine vaccinations have occurred and boosters have been administered in other words it lessens the impact of the the virus on you let me ask you a quick follow-up question on on kovitz because it's something i've wondered about myself why is it that china hasn't been able to effectively vaccinate its older population setting aside for for a moment the um the effectiveness of the of the vaccines but all seems like there's just the vaccination rate among older chinese people it's just very very low compared to other countries and compared to the country's own overall vaccination rate it seems like if as a bureaucracy you're able to mass test everybody all the time and to lock entire cities down you should be able to enforce vaccination why has that not worked uh it's an excellent question i think the answer to it is let's look at hong kong vaccination rates among old people in hong kong are also very low so there's a something of a cultural factor here as well which is yes they could enforce it but do you really want a lot of social media footage of grandma wang being held to the floor and being jabbed probably not even the communist party regard that as a bad piece of news but doesn't the communist party control social media could they not just censor all of that well it's a quantitative challenge with social media it's like stuff is bubbling up every day and right across china protesting about the impact of the lockdown and as soon as you take it down which people that the chinese communist party does it just pops up again so it's like playing permanent whack-a-mole you know that's an american game but i whack-a-mole so yeah boom boom so that's kind of how it's going at the moment so and even if it's just screen shot for the 10 seconds that it's there that itself gets around so but what's the cultural factor at play here older people in the chinese speaking world are generally distrustful of governments and certainly governments sticking stuff into your arm in uh chinese society now this is a gross generalization from me i'm obviously caucasian i'm not chinese but um when i have asked the same question you've asked it goes to why isn't this happening so they just don't trust the system even in hong kong they don't trust the system and even though in hong kong there are a variety of vaccines on offer as opposed to china where you get the chinese equivalent of sputnik and before you take off into space with it i presume so uh so i think for those reasons uh you've got this deep uh reluctance i think it would change if they brought in the mrna vaccines there's enough literature you know in the in in social media and on the internet and all and retired chinese read the internet all the time from chinese speaking communities in the united states saying we haven't died yet and we got vaccinated you know so so i think that's part of the fact i want to ask one last question from from the audience and that questions about switzerland we are of course in switzerland we haven't really spoken about switzerland in in that whole context yet so as you know that's right as you know switzerland likes to say that we have a special relationship with china we were the first country to diplomatically recognize the prc we're still the only country in continental did you do that in 49 did you yeah oh good i thought uh it was quick sometimes we're quick um we were also quick to sign a free trade agreement with china in in 2013 i think it was silent in 2014 came into existence so i think switzerland with some reason for a long time has argued that it was while obviously much smaller economically much less significant country than china that there was this kind of special relationship there was this argument that um china's would see switzerland away kind of as a testing ground for things that it could then do economically with the rest of europe can you qualify this judgment from a chinese point of view do you have any insight into how china sees switzerland or sees countries like switzerland yeah i think [Music] i think um well firstly on switzerland's own circumstances um as we said in an earlier gathering today i'm recently familiar with the origins of swiss neutrality um you know i'm a student of history and i understand how all this emerged as i confessed um in an earlier gathering today i've just finished reading a biography of zwingli um so um so you did some crazy things here in zurich so so but we all did back then so uh so uh so the origins of you know the confederates coming together within the confederation previously independent states and eventually the evolution of this concept of swiss neutrality and i get its origins and and the the challenges that you faced um in world war ii uh when it was on again off again in hitler's mind about whether to move in here so you know it's a you have a complex security policy history and foreign policy history but i have some familiarity with it and it's for those reasons of course you have so many international institutions here including the un so all that's to the good um when china in the pre-xi jinping period was a country we all engaged around the world without huge question marks then we would all have claimed to have had special relationships a number of times i've heard the chinese say the great thing about australia you've got a special relationship with you guys and um i seem to say that to everyone yeah yes right you know liechtenstein's special relationship um except the yanks they've never had a special relationship with the americans that's always been a problem either capital p or small p problem um so i don't think we should be too uh flattered by our special relationship status with the chinese i think we're we're all in the chinese vernacular la pango or friends um i think uh i think when i listen to chinese domestically about their views of europe they think first and foremost of germany because their regard germany is remarkably successful given what happened in the second world war the rebuilding of german manufacturing uh germany now being obviously since the british shot themselves in the foot by withdrawing from the european union uh boy that was one of the dumbest things i've ever seen the um from a british national interest point of view i mean britain was always more powerful by being in europe and europe was always more powerful by having britain in it so you line up both your feet and you blow blow a hole in both feet well thank you boris so but given what britain has done i mean germany is now the dominant power in europe that's just the reality european politicians will never say that i'm a visiting australian i can say that um and that secondly where brussels goes uh the view in berlin is overwhelmingly important not just for the european central bank but of course the commission itself so there is a huge preoccupation in um uh in uh beijing with berlin that's just the truth of it um [Music] and uh therefore the german view of how to engage china in the future will be scrutinized intimately by the chinese system hence why to go back to one of your earlier questions nico the chinese would have been not so much shocked by european solidarity over ukraine but seriously shocked by olaf schultz a social democrat undertaking 180 degree shift on german security policy following the russia invasion of ukraine on german defense outlays provision of military equipment and the rest that i think is surprising in the the chinese mind for switzerland part of the um due respect to geneva and do you respect the italian speaking parts the german-speaking lands in switzerland they have a wider view that this country is also extraordinarily and robustly successful um [Music] you've you've managed to rate retain global agricultural exports you still manufacture manufacturers and you're obviously a financial services sector um uh of of of global consequence major global consequence the chinese have a deep respect for that when they they look at this country but on the final part of your question really is that by implication what are the future for all of us in this new china we are dealing with xi jinping has changed china that's my core argument to this group the china of 2014 is vastly different from the china of 2022. the china of 2014 was quite similar to the china of 2004 and the china of 1994. china under dung jiang and who really from 1978 to 2014-17 was an evolving continuity there is now a discontinuity for the reasons of xi jinping's world view taking politics in china further to the left taking the centre of gravity of economic policy in china further to the left and taking chinese nationalism to the right with a much more assertive foreign security policy so for whether it's the government in burn or the business community here in zurich for all of us canberra or sydney and political and economic communities in the democracies of the world in asia and europe today everyone's wrestling with exactly this same conundrum what are the future of our special relationships and my only council in looking at the future is the five principles i outlined earlier on which i think are the better guides for framing a balanced china strategy given the new complexity around human rights relationship with the united states different in switzerland's case maximum economic engagement with china maximum collaboration global institutions but whether they seeking to change the global institutions pushing back hard because that conflicts with human rights principle number one and five hunt in packs and so uh i think hunting in packs is a great place to end this conversation um so kingdom thank you very very much for having been here and for all your insight we could continue of course a long time uh but we're gonna leave it here thank you again very much for having been here [Applause]

Channel: Asia Society

Views: 508,196

Keywords: asia society switzerland, program, current affairs, china, worldview, xi jinping, kevin rudd, nico luchsinger

Id: szAChpVvQuk

Length: 71min 4sec (4264 seconds)

Published: Fri Jun 03 2022

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[u/SignificantGiraffe5]

Chinese love that he speaks mandarin.

[u/M18hellcat2022]

I would not waste more than 1 hours to listen this so called Chinese’s old friends which truely is ccp’s old friend’s talk. In west countries there are still people have a unrealistic dream about china. I think it is the same groups of people had same dream about hilter German before wwii. And current ccp china will break their dream the same as hilter German did. If you want to know china, staying away from ccp government and go deep in real china or live there a couple of years. Then talk. Instead of never really live there but talk for hours.

[u/Strontium_frog]

You had your chance Kevin, now piss off.

[u/madcuntmcgee]

Enough of this liberall bullshit. Oh let's try to understand them

Fuck that. They've shown their true colours. It's pretty obvious where they stand.