Rt Hon David Miliband
Good morning from a rather steamy New York, where it is 7am. I’m delighted to welcome you all to the fifth in the series of Chatham House Conversations about “The Future of Liberal Democracies”. As many of you will know, this series is the creation of Chatham House, with Jeremy Hunt, the successor but two or three, to my time as Foreign Secretary, and it’s intended to bring some of the world’s most distinguished and interesting thinkers to the Chatham House community to discuss what I see as probably the central issue of our time, which is how the debate, argument, contest, between accountable systems of government and autocratic systems of government takes shape over the next decade.
I’m really thrilled to be able to be in conversation today with someone I’ve known for about 25 years. Kevin Rudd and I first met in the 1990s when both our parties were in opposition. He subsequently became very distinguished Prime Minister of Australia between 2007 and 2010, he was Foreign Secretary, Foreign Minister, 2010 to 2012, became Prime Minister again in 2013. Since 2015, he’s been institutionally based in New York, at the Asia Society, first of all, as the President of the Asia Society Institute, and since 2021, the President and CEO of the Asia Society itself. He is, however, speaking to us from north of Brisbane, in Australia, where he’s been since the pandemic started. Kevin, it is absolutely brilliant to see you. Thank you so much for doing us the honour of being part of this conversation.
The Hon Kevin Rudd AC
Thank you very much, David, and greetings to all of our friends at Chatham House, and greetings from Oz, where it’s a respectable 9pm in the evening.
Rt Hon David Miliband
It’s a respectable 9pm in the evening and you’ve been out for dinner, so we’re looking forward to a great conversation. I’ve got a strong coffee here to keep me going, and I don’t know whether you’ve got a nice Australian red wine nearby to…
The Hon Kevin Rudd AC
Yeah.
Rt Hon David Miliband
…keep you…
The Hon Kevin Rudd AC
I’ve got a strong coffee to help me recover from what I had to drink at dinner.
Rt Hon David Miliband
Kevin, you have had a really unique political, diplomatic, intellectual career that puts you in a remarkably important position, I think, to help explain the current global situation, because you started as a Diplomat, you became fluent in Mandarin, you were studying China long before many others, you had great success in democratic politics. And what we’re going to do in the course of this hour is have a conversation between us, and then at about 25 to one, London time, so in about half an hour, open up to question-and-answer session from the audience. I would encourage people to put Q&A into the Q&A. The chat function is disabled, so no heckling from the backbenches of the Chatham House community, but please put your questions in, and about 25 to one, in about half an hour, I’ll ask those questions. I also need to say that this is an on-the-record session, and it will be available on the Chatham House website and elsewhere afterwards.
For our half an hour or so of conversation, Kevin, we’re going to talk – we’re going to start talking about China. We’ll come to the democratic recession in the West and The Future of Liberal Democracies is the title of this series, but I think, given your unique vantage point, we should start in China. We’ll then talk about democratic politics in Western countries, Western in a political sense, not in a geographic sense, and then talk about how these two trends, these sets of trends, intersect, before we turn over to the question-and-answer session.
And I want to start with your insight and your understanding of how the Chinese leadership is thinking at the moment. In The Economist last week, there was a quotation from a senior US Administration Official, saying the following, “China is less interested in coexistence and more interested in dominance.” You and I have followed the American debate for some time and we know there’s been significant shift in the last few years towards this kind of stance that’s, I think, encapsulated in that quotation. And so, my first question to you is do you think it is right to see the current Chinese leadership as less interested in coexistence and more interested in dominance?
The Hon Kevin Rudd AC
Well, I think, David, it depends, in large part, on our timeframe. For example, right now, the Chinese in many parts of the world would continue to be interested in coexistence, and that’s for a range of economic and geopolitical and technological reasons. But I think it’s reasonable to conclude, from statements of the Chinese leadership themselves and their actions on the ground, that the medium-term objective would be to become the dominant power in East Asia and the West Pacific. I think that much is clear, and certainly, I think that would be the common perception throughout Northeast Asia, Southeast Asia, probably South Asia, and certainly in Australasia.
The open question is does China wish, therefore, to become the dominant power globally? Which, of course, affects all of our friends in Europe. I think the answer to that is twofold. They would wish to become the dominant power economically, to the extent that gives them purchase over the future, shape and rules of the international system, to the extent that that is capable of militating against classical Western critiques of their view of politics and human rights. But I think it is very much an open question of whether they would wish to become a dominant military power beyond, let’s call it the East Asian hemisphere. And there are some reasons for that. They’ve looked at the decline and fall of empires and imperial overreach, they’ve made intensive studies, as good Marxist-Leninists often do, of what happened to the Americans in terms of the Middle East, what’s happened to the Americans in terms of Vietnam, what’s happened to the British Empire, what’s happened with previous empires. And I think there was a deep reservation in the Chinese mind about, let’s call it military domination. Economic domination, yes, rules of the system, yes, but I think there’s a big reservation about the latter.
Rt Hon David Miliband
I think the way to follow that – that’s really helpful, I think, because it gets to the crux of this offensive versus defensive question, and one thing that I’ve been struck in your writing is how you remind Western readers, in particular, but a global audience, of the primacy of questions of domination for the Chinese Communist Party in the thinking of the Chinese Communist Party leadership. It may seem obvious, but a lot of the writing skates over that issue, and I think it would be great for this audience to hear you talk a bit about this irreducible core to Chinese thinking in sustaining the dominance of the Chinese Communist Party. You’ve spoken, or you’ve written, about concentric circles that build out from a core interest in sustaining the dominance of the Chinese Communist Party, towards domestic policy, regional policy, global policy, and I wonder if you could sketch out that thesis, or that argument, for us, because it seems to me to be important to this question of coexistence and dominance. It brings out where – what is instrumental and what is ideological.
The Hon Kevin Rudd AC
So, the correct analysis of Xi Jinping, David, is that he’s profoundly ideological, and within that, he’s profoundly Marxist-Leninist, and he is both Marxist and Leninist. As we know, these propositions mean something different. He’s Marxist in the sense that he would wish, in my judgment, to move the centre of gravity of Chinese domestic politics further to the left and that he would wish to move the centre of gravity of the Chinese political economy further to the left. He’s Leninist in the sense that he sees a – an all-powerful party, vanguard party, as being fundamental to the ability to execute that mission and simultaneously, execute the nationalist mission for China, which is about national wealth and power, preventing China from ever being threatened by external powers again, the post-Opium War narrative, but also an ability to protect China’s prestige in the world. So, there is both, as it were, a Marxist take into the – to sustain the analogy, the superstructure of Chinese politics, but very much a Leninist take in terms of the absolute centrality of the party.
I think the further point to make about Xi Jinping’s view of the party is this. Whatever view we in the collective West may have had when Deng Xiaoping put on his Stetson at the Houston rodeo way back when, and that this was an incremental move, through economic liberalisation, to long-term political liberalisation, Xi Jinping has put a huge full stop at the end of that sentence and said no, and that in his view, this will be a return to a decisively and unapologetically authoritarian order at home.
I suppose the final point coming out of that is it does raise questions, therefore, about the party’s long-term legitimacy on the home front. The Deng Xiaoping contract after the implosion of the Cultural Revolution was very much, “The only way we, the party, can regain domestic legitimacy is by pulling people out of poverty, bringing them into the middle class, raising their living standards and giving them the good life.” And by and large, Deng was remarkably successful at that. Now, given that he had no other leaders to call, China was poor and powerless internationally, and China was moribund, given its political past in having killed a whole bunch of people in the Cultural Revolution, the Great Leap Forward, and in other various interruptions in Chinese domestic politics.
Xi Jinping, however, has a different approach to legitimacy. Again, the Marxist-Leninist element of the equation legitimacy becomes superimposed, again as almost an ideological imprint on legitimacy. I’m not sure how that’s going to wash in the long-term, but that’s the intention. The prosperity agenda, if you like, continues, but with some, as it were, casualties being taken, as let’s say, the private sector in China, because of Xi Jinping’s move to the left on domestic politics and economics, begins to wobble a little. And then finally, I think the new dimension, and the resurgent dimension, is Chinese nationalism, and in the – on the legitimacy stakes, if there’s going to be a wobble on prosperity and if ideology doesn’t bite, then nationalism actually becomes more important. So, that becomes a new and live factor, I believe, in Chinese behaviour abroad, given that nationalism becomes a critical legitimacy tool at home.
Rt Hon David Miliband
Hmmm hmm. I mean, the previous generation of Chinese leaders, led by Deng Xiaoping, learnt the lesson from the Mao era that a system concentrated on one person had a very significant point of failure built into the heart of it and they tried to build up systems of accountability and rotation and collective leadership. It seems clear that Xi Jinping has moved against that, and I wonder if you could reflect a little on the extent to which this is a brittle system, or a durable system, and perhaps, in that context, reflect on how the last year has gone, because – or year and a half. Because I think that – I don’t want to put words in your mouth, but others were writing, at the beginning of the COVID crisis, that there was a degree of panic in the upper reaches of the Chinese Communist Party about what it represented and what – and the dangers that were posed. Since then, there’s been a consolidation, and the travails in some Western countries over COVID have played into the nationalist mind CCP narrative in China. So, could you talk to that issue of brittleness and fear of single-person domination and how it sits with single-party domination?
The Hon Kevin Rudd AC
Hmmm. Certainly, the Xi Jinping’s script, as you’ve indicated in your question, has increasingly returned to a one-man rule. I was reading just the other day, remarks by Deng Xiaoping way back in 1982, where he said, “Bottom line is the party cannot do everything,” and this was a reflection on the totalising impact of the Chinese Communist Party during the Mao period, and all the excesses which should have resulted in. So, what did Deng then seek to do? A greater differentiation between the institution, the party and institution of the professional apparatus of the Chinese state, and so, if you like, the rise of the expert class, the technocratic class. Secondly, a differentiation between the Chinese, as it were, political class, whether it’s party or state, on the one hand, and the entrepreneurial class, and thirdly, almost the beginnings of a small c constitutionalism within China, as they began a small s separation of powers in one level or another. And if you trace it through the 70s, and particularly the 80s, and then into the 90s and the noughties, with some ebbs and flows, that was, kind of, the thrust of it. Particularly, you may remember Premier Zhu Rongji, who was the counterpart of Jiang Zemin when he was General Secretary of the party, and Deng, Guofeng, the four characters, the “separation of party and state.” And then they had, you know, Jianming [inaudible – 16:53] “separation of politics from enterprise,” and these were standard phrases.
So, when Xi Jinping arrives, his response to all of that, if he was an Australian Poet, would be along the lines of, “Well, bugger that, because I’ve looked at how the Soviet playbook turned out and what that spells with a combination of glasnost and perestroika, and for all the years associated reforms that we saw in the Gorbachev period, is ultimately, the Communist Party is sliding out the door backwards.” And so you see a massive reassertion of a) the centrality of the party, b) the centrality of the supreme leader within the party, and c) the primacy of politics over economics. And if I was to give you three thematics over the last five years, that’s, kind of, it.
So how brittle is that going to turn out to be? I think the core vulnerability for the future, David, is not necessarily the effectiveness of the Chinese surveillance state, because it’s phenomenally effective, not just Xinjiang but for Han Chinese, social credit scores, surveillance systems, reporting systems, etc., the contraction of private space within the Chinese, as it were, way of life compared with just five or ten years ago.
I think the – I mean, the ability for an authoritarian state to deploy the new technologies of surveillance, as you know from your own studies and observations, is formidable, and if you look at previous generations of authoritarians on either the right or the left, most of them would have given their hind teeth for anything approximating what you can now achieve through facial recognition cubed, you know? But I think the vulnerability is this, it’s the economy. The brittleness lies in if you’ve got a reassertion and a resurgence of politics and ideology, and what I’d paraphrased before as a movement to the left on pure politics and the political economy. Ultimately, the private sector in China is not that much different from a private sector anybody else – anywhere else. They want to earn a quid, a dollar, or a renminbi, they want to maximise profits, they want to minimise regulations as they can, they don’t want politics in their hair, and they want to have enough confidence to continue to invest. Whereas if you look at Alibaba and Didi and the recent phenomena that we see, the real brittleness potentially lies in the compromise to a 35-year long success story in Deng Xiaoping’s market-based economic reforms and the liberation of private sector, and that spills through to prosperity.
Rt Hon David Miliband
Okay, thank you very much for that. Look, let’s pivot a bit into the Western world, and our own problems, which I think you’re in a very interesting position to look at through the prism of Australia, which has been subject to recent attack from the Australians – from the Chinese, allegedly in protest at the Australian proposal in the World Health Assembly to have an investigation into the origins of COVID. But you’ve also seen democratic politics under challenge and assault from within the – you’ve been a fierce critic of the impact of Fox News in Aus – in America and you’ve flagged the dangers of the Murdoch domination of the press in Australia. As a Former Australian Prime Minister, as an Australian citizen, when you think about the future of liberal democracies, how do you see the balance between challenge from abroad, notably, from a very large neighbour, from the Chinese system, from pressure from without, and how – versus fallibility within, weakness of institutions within?
The Hon Kevin Rudd AC
Well, as you know, David, these are axiomatically linked, and, as you know, if you put this question to Joe Biden right now, he would say that they’re deeply linked, as well. Hence why his domestic agenda is his external agenda, which is unless you have a strong and robust and functioning American polity and economy and society which is cohering, then the fundamentals of American national strength are undermined and therefore, its capacity to project any strengthening of the world is undermined.
So, I think for those of us who come from, let’s call it the liberal democratic world, and I probably prefer that term than the West, given its colonial overtones, is that the liberal democratic world, we have a lot of domestic surgery to do. One of the intriguing things for me, as a China scholar, as I’ve been most of my life, is when I read the contemporary Chinese critique of the liberal democratic world, and liberal democratic – and the Chinese critique of those of us in the UK, Australia, United States, etc., but also the European democracies, as well, is that we are hopelessly divided, we cannot take hard decisions, we cannot get things done, anything as basic as large infrastructure projects in the United States or wherever. When it comes to massive challenges like COVID, then, our predisposition to preference the individual over the collective will essentially, undermine our ability to contain something as existential as the virus, etc.
And essentially, this gives rise to a Chinese phrase, which is [in Chinese], which is the rise of the East and the fall of the West, and that is now a standard phrase in most Chinese Communist Party pronouncements. And so, we, coming from liberal democratic world, look at that and say, “Well, that’s just hubristic,” but then you go to actually unpack it and actually understand, as good Marxist-Leninists that they are, captured by dialectal materialism and historical materialism, and the analytics which underpin that, which is, you know, action and reaction, thesis and synthesis, cause and effect, within our own societies, within our own cultures, within our own economies and political systems, and there’s some cogency to the authoritarian critique about dysfunctionality.
So, that’s my way of saying we cannot write off the external critique from the authoritarians, and unless we reinvigorate, rebuild, re-energise, our democracies from the ground up, cause politics once again, David, to be regarded as a venerable and esteemed profession, rather than the residue of failed Used Car Salesmen, wherever they may come from, and unless we have about us a sense of let’s call it, not just the common good, but the absolute robustness of our universal values, if we doubt on any of these questions and continue to slide. And let me tell you what the Chinese do, and I know them best, Orbán I don’t know, and Putin I don’t know. I’ve met both of them, but I just don’t their systems.
But in terms of China, which I know best, our Chinese friends are forensic in their ability to identify weakness. And when they look at the collective, I use the term now West, they do see this panoply of weaknesses, often with an inability to recognise their own, but their analytics about ours sometimes are not hugely far off the mark. So, I think it is a question of, simultaneously, for us, in the collective West, the democratic – liberal democratic world, of Physician heal thyself, and then get on with the business of surgery, in order to be able to project the robustness of the propositions for which we stand, into the rest of the global order.
Rt Hon David Miliband
I want to take you to the question of where that surgery needs to take place, is it in the economy, is it in politics, is it in cultural and wide – related issues, or is it in all of them? You know that Professor Larry Diamond of Stanford University has written about democratic recession, as something called the Varieties of Democracy project at the University of Gothenburg, which talks about a “third wave of autocratisation,” and the Economist Intelligence Unit says that 70% of the world’s countries had reductions in political freedom last year.
The Hon Kevin Rudd AC
Hmmm, yeah.
Rt Hon David Miliband
And, in that same study, only 12% of the world’s population, I think, live in what they’d classify as full democratic systems. So, there is – there’s – and there’s been significant change in the last 25 years, because the 90s were a period that looked like the onward march of liberal democracy. Today, we’re seeing the opposite. I’d be interested in where you think this surgery needs to take place. Is it about political systems and the way democracy is safeguarded, is it about campaign’s finance, is it about the role of the media, is it about the regulation of social media, or do you see, more, a hollowing out of the middle class that is replicated with a hollowing out of the middle of politics? Is it an economic route to this malaise, or is it more the systems of politics, or is it both?
The Hon Kevin Rudd AC
There’s about two or three answers to this. One is when we look to the question of the functioning of democracies, we do look for models and templates, and when the American democracy, if you like, which became in our minds’ imagination, a combination of Athens and Rome, went through the Trump experience, this actually had a profound effect on what I would describe as the collective democratic world’s confidence in its own project.
Now, if this massive democracy, the United States, could generate such a travesty at multiple levels, not least of which was an assault on democracy itself on the 6th of January, not least of which was an assault on, let’s call it, you know, fact-based evidence as a basis for public policy debate. So, I think that’s the first point, and if you like, the automatic stabilisers of the democratic system kicked in. Trump was out by 7 million votes, whatever his supporters may say, and Biden is in, but let me tell you, that’s had some residual damage.
The second point is what I’d describe as the socioeconomic point you referred to. You and I have just talked about the future of liberal democracy. I think, as Maynard Keynes would have desci – discovered by the time he wrote The General Theory in 36, if democracy is to be sustainable, though he himself was a Liberal, a British Liberal, not a Conservative, not a member of the Labour Party, the truth is there is an abiding wisdom in the fact that social democracy is probably the best form of long-term insurance for sustaining the democratic project overall. Why? Because it provides not just political equities, but economic equities, and therefore, as a consequence, social equities and the future of the system, and after 40 years of Thatchernomics and Reaganomics, and the hollowing out of the middle class, and frankly, less social mobility, rather than more, then, frankly, this democratic project of ours started to look very brittle indeed, whichever part of the democratic world we were talking about.
So, I think there is, therefore, a critical component of the answer to the question, which is the reinvention of social democracy, by which I mean a greater equality of opportunity and some greater equality of outcome, because we’d reached the end of, let’s call it the pendulum, in terms of where democracies’ tolerance levels could go to with such extraordinary levels of inequality, at both the opportunity and the outcome end.
The final point in the jigsaw I think, is this, and you touched on it, what’s the lifeblood of our democracy? It’s a free media, and a free media must have a bout of both freedom and responsibility, and the responsibility, in my judgment, is a minimal – at minimum, a differentiation between fact-based news reporting and editorial opinion, whereas what we’ve seen, led by the supreme cancer of the Murdoch cancer on democracy, in my own country, I think in your country, certainly in United States, ‘cause I’ve lived and worked there, as you have, for some years now, is that this has had a huge effect on the way in which democracies can, of themselves, exist, and instead of having a common fact-based platform for discussion and debate about options for our nation’s future, instead, the Murdoch business and ideological model is to turn us into Balkanised, warring, tribal enclaves, based on rancid opinion, rather than anything vaguely approximating scientifically-established fact. I think it’s those three big propositions, as you had the leader of the democratic world, the nature of equality and inequality through the social democratic project or not, and frankly, reinjecting through the media a new basis for a new democratic discourse, these are changes which must happen, otherwise we fracture.
Rt Hon David Miliband
Well, there’s a huge amount to dig into there, which I would like to, but I promised to take some questions and questions are beginning to come in, which is good. I would encourage you all who are watching to – or listening, to put your questions in. I’m going to ask one more question to Kevin Rudd, and then I’m going to turn to Jeremy Hunt to ask the first question, and Kevin, my last question to you for the moment is going to be about the UK and how it fits into this global system. I’m very struck that when I was Foreign Sec, the idea of a quad was the UK, France, Germany and the US. The idea of a quad today is Australia, Japan, India and the US, and Australia is sitting in this rather important international forum, and the UK is sitting outside the EU, albeit that Brexit is not yet a completed project, it’s a negotiation that’s going to take some time. And I think it would be a good for a British audience, or for those of our – those of this audience that are British, to hear how you see the UK fitting into this global system, or what you see as the options for the UK to, kind of, this global system. When you’ve answered that, I’ll turn to Jeremy Hunt for his question and then go to the questions that are being submitted by the audience.
The Hon Kevin Rudd AC
Well, I’m obviously Australian and I can’t speak for the Brits. I was deeply saddened by what happened in terms of British members of the European Union. My argument has always been, for 20 years, Europe was stronger with Britain in it, and Britain was stronger by being in Europe, QED, and both those propositions, I think, have now been removed. But that’s the past, how do we deal with the future? I think if our organising principle in this, David, is how do we sustain the vitality of the global liberal democratic or social democratic project, how would we define it?
Frankly, having a fully globally-engaged Britain is critical. Britain’s still a big economy in the world. Number one, whatever nonsense is still going on between yourselves and the Europeans should stop forthwith, and that the new compact for the future needs to be simply part of the furniture, done, dusted, so that, you know, the politics of the separation are put to one side, NATO is sustained, and a new compact between Westminster, Whitehall and Brussels becomes simply a day-to-day reality. I think, over time, that is occurring anyway, but there is an urgency about this.
Secondly, in terms of Britain and the European Union’s and NATO’s engagement, as it were, beyond Europe, many of us were surprised, but encouraged, by recent conclusions, both by the G7 and by the NATO Summit, about NATO’s, shall we say, pan-global view, including the Asia Pacific, including the Indo-Pacific, as well. And so, I think because, for example, cybersecurity is indivisible by geography, and questions of space and satellites and the rest of it, it’s not a question of geography. If you’ve got anti-satellite warfare systems operating against, shall we say, the democratic world satellites, whoever is running the ASAT capabilities doesn’t matter where the geography comes from.
And then finally, I think there is this broader question of the universality of our values. Britain is still a permanent member of the United Nations Security Council, and unless you have a robust posture there, prosecuting what is now, I think, the frontline debate with China and Russia on one side of the argument, and frankly, with the United States, Britain and France on the other side of the argument, about whether rights are universal or whether they are bound by culture. This is, frankly, now, you know, the frontline of the global discourse about the future of the international system. So, if Britain is strong in Europe and the bridges are rebuilt, strong through, let’s call it, the NATO engagement with the rest of the Indo-Pacific region, but also strong on the universality of values, then, the British voice actually matters. If you retreat into yourselves, and in five years’ time, you’re having a bloody stupid debate with Ireland about soft and hard borders just south of Newry, for God’s sake, and that’ll be – turn you into a bunch of provincial recluses. And so – and none of us who have friends in the United Kingdom, and as you know me well enough to know, I’m quite deeply Anglophile, none of us want that, and we want Britain fully externally engaged.
Rt Hon David Miliband
Good. Okay, look, that’s great stuff, really, very, very interesting. Jeremy, you’re the conductor of this orchestra of seminars and conversations. Why don’t you chime in to this conversation?
Rt Hon Jeremy Hunt
Thank you, David, and Kevin, thank you for an absolutely fascinating analysis. I just want to focus and drill down a bit more on what we should do now, faced with this very changing situation in China, and you said one thing that was incredibly perceptive, which is that “Physician, heal thyself, sort out the problems in our own democracies,” which has to be the starting point. It’s quite a long-term project, that, I mean, these issues are very profound. Could I ask you about another couple of things where we could do things more immediately?
First of all, do you think that, outside America, European countries, Asian democracies, have done as much as they might to take advantage of the change of President in the United States? I mean, in literally every speech about foreign affairs, Biden talks about that – his belief in alliances and wanting to work together with America’s traditional allies, and yet, just looking at the European stage, there doesn’t seem to be any great rush to work together with the United States very closely, and we, sort of, got back to, you know, arguments over Nord Stream 2 and all that. So, question one, what do we do to rebuild that Western alliance, and could we do better?
And question two, I just want to ask you about technology, because we all want to trade with China and can see the benefits of free and open trade, providing it’s reciprocal. On technology, what do you say to people who say there is a real danger of having technological dependence on China when it comes to key new technologies, like quantum physics, artificial intelligence and so on, and should we be creating a kind of walled garden to make sure that we don’t have that technological dependence?
The Hon Kevin Rudd AC
Well, thank you, Jeremy, very much, for those questions. Maybe to deal with the technology question first, I’ll deal with them in reverse order. On technology, I always start with the question of what does Xi Jinping want? Because I always think the beginning of wisdom in our business, which is international relations, you’ve been Foreign Secretary, David’s been Foreign Secretary, I was Foreign Minister, as well, it’s to understand the world view of the person with whom you’re engaging and what their priorities are. When I look at Xi Jinping’s world view, not just on foreign policy, but in response to his experience of the trade war with the United States, particularly in 2018/2019, Xi Jinping’s response was, “To navigate the future, I will embark upon a policy of national economic self-reliance.” And what I have seen, this is myself now, as I looked at Xi Jinping’s reflections on that over the last year or two, is one set of policies after another coming out which reflect that as a deep organising principle.
Often, the Americans, when they approach the question of decoupling, should the United States decouple from China, and this is, of course, a subset of the wider question of are we going to end up in a Cold War with China, ‘cause one – if you’ve got coupled economies, you cannot end up in a classical Cold War. If you’ve got decoupled economy, certainly conceivably you can, given our precedence vis-à-vis the Soviet Union and the United States. But in the Americans’ case, they’ve even thought that they are the sole, as it were, decisionmaker on this question, “We’ll decide whether we decouple from the Chinese or not,” and the big debate in the current administration, what happens on tariffs, what happens on technology sanctions, what happens on the rest? But guess what? Xi Jinping, if you looked at the most recent decisions vis-à-vis Alibaba, the decisions on Didi’s listing on the New York Stock Exchange, and a range of other measures, has begun to indicate that China is embracing itself a partial policy, at least, of decoupling from United States. Doesn’t want to be dependent on the listing arrangements in New York, doesn’t want Chinese data shared with American or global firms, etc.
So, the reason I say that in response to your question, Jeremy, is that – and if you’re talking – if we’re talking through this to British business, for example, and technology, and technology companies in Europe, understand where China is coming from, and that is it has now embarked, itself, on a policy of, I believe, absolutely razor-sharp focused national self-reliance in each of the categories of high technology, starting with semiconductors, through artificial intelligence and through the other domains, as well.
On your first question – and now I’ve had a memory loss, what was the first question?
Rt Hon David Miliband
Are we taking advantage of Biden’s international…?
The Hon Kevin Rudd AC
Oh, yeah, what I was going to say on – I mean, we’re a picky lot in the collective West, you’ve got to admit. You know, we all couldn’t handle Trump, whether we’re from the centre left or, in my case, centre right. In your case, you think, my God, you know, what is this thing? And so, the Americans, through blood, sweat and tears, in the electoral process, and the agony and the ecstasy, generate Joe Biden and the reaction from many people in the collective West is, meh, you know, which is, “Well, that’s alright, you know, but what else have you got to offer?” For God’s sake, you know, I think the liberal democratic world needs to seriously grow up. What’s the key missing element here?
And I’ve written this recently in a piece, David, for foreign policy. Asked for a reflection on first six months of Biden, just, you know, a quick 300-word summary, and I said many things positive, but my one critique is this, and it dovetails to what the rest of us can now do. “The missing element of US global strategy under the Biden administration is trade in the economy. So long as the Americans remain absent from a free trade agenda in the Indo-Pacific region and absent from a free trade agenda transatlantic, absent for two agendas which were once called the Trans-Pacific Partnership and the transatlantic equivalent, TTIP, then frankly, they become marginal to the ultimate geoeconomic and geopolitical game because China’s ultimate bid is this, simply by cause and force of the size of the Chinese economic juggernaut, then, we will, ultimately, through our critical mass, become an irresistible centre of gravity for the rest of the world.
So, what can the allies do if you were serious in engaging the Yanks at this – with this, on the moment, whether you’re European allies or Asian allies, is, “Look, you Americans think we’re just engaging you because we’ve got egregious national economic self-interest at stake. Take that for granted, okay, like you guys.” But secondly, opening the doors to what I would describe as a pan-Pacific and pan-European – sorry, pan-Pacific and pan-Atlantic NAFTA, or whatever the NAFTA successor is called, and I can never remember the acronym, that thing, then let me tell you, our Chinese friends would prick their ears up and notice, just as they did when Obama launched the Trans-Pacific Partnership. This fundamentally flummoxed our Chinese friends, and they couldn’t believe their luck when Trump killed it on his first day, and now we have Xi Jinping lined up to become a Trans-Pacific Partnership member and the Americans languishing in the cesspit of protectionism within the United States Congress. That, I think, is the terrain for engagement, Jeremy, and that’s the decisive one, I think.
Rt Hon David Miliband
Thanks, Jeremy. Let me just go to some questions from the audience, Kevin, and we’ll try and rattle through them. Madeline Moon has got a very topical question. “You have not addressed the issue of Chinese disinformation and cyberattacks on critical infrastructure organisations such as Microsoft. Are the liberal democracies able to address” – oops, “are the liberal democracies able to address this and fight back against a state with a determination to remove the rules-based system as it exists at present?”
The Hon Kevin Rudd AC
Well, cyberwar has been underway for a decade and a half now, and it goes back, David, to, you know, probably before you and I were in office, and certainly in our periods in office, it was an active and a real concern, and cyberattacks from authoritarian states around the world were a, I wouldn’t say a daily reality, but in the case of Australia, a regular reality. What’s the answer? The answer is massive investment in cyber defence, and massive investment in global regulatory frameworks, which expose those who are launching attacks to international sanction. I think that’s the only way forward, with the emphasis on the former, over the latter, but both when – both are necessary responses.
Rt Hon David Miliband
Okay, thanks. Two questions come in about demography. I’ll summarise one. “By 2050, half of Beijing’s population will be over 60. No other capital on the planet will be anything like as old. Overall, how would you assess the impact on an aging society on its vitality?” And then there was a related question, “Is the decline in the Chinese population,” I think they mean – Carol Paton means the working population, “is the decline in the Chinese population and increasingly aging population likely to affect China’s” – oops, it does move in the middle of reading it out, “likely to affect China’s ability to dominate economically and politically?”
The Hon Kevin Rudd AC
These are both fascinating questions, because again, they go to timelines. If you look at the demographic curve with China through ‘til 2049, which as you probably know, is the second of – goalpost of Xi Jinping’s China Dream, we’ve just passed the first goalpost, centenary of the birth of the Chinese Communist Party on 1 July 1921. 1 October 1949 is the 100th anniversary of the foundation of the People’s Republic of China. And so, as you know, the aphorism and the debate is does China become old before it becomes rich? And this causes our Chinese friends, literally in the policy world, to turn prematurely grey, if you’ll pardon the mixed metaphors, because they actually see this, and as you know, the lib – the rapid liberalisations and a one-child policy over the last five years have actually added up to next to nothing in terms of real and sustainable increases in the natural birth rate.
So, I think therefore, I do not see China’s demography problem as being overcome by domestic means, policy means. Secondly, if they made, for example, childcare and education more universally affordable on a high level, it would have some impact, but not decisive. Thirdly, therefore, it may well be that if, for example, the United States was to cons – to sustain a very large global migration programme, particularly from Latin America, given all the complications of domestic American politics, by the time you get to mid-century, you could end up with a NAFTA zone, which is about 600 million people, China having come down to about 1.1/1.2 billion people, but with the average age of the North American population considerably younger than that in China. The challenging zone, therefore, is for us to navigate the next 30 years peacefully between now and then.
Rt Hon David Miliband
Well, this is – that’s a very good lead in, Kevin, to the question I want to go to. The – and I’m going to combine a question that’s in the chat here with one of my own. Hoken Heckstrom – Hedstrom, I beg your pardon, asks about, “Do you interpret Xi’s controversial speech at the CP’s centenary,” the first of the moments that you referred to, you know, the 2021 foundation of the Chinese Communist Party, “directed against foreign nations challenging China or against the domestic audience?”
I want to relate that to something that you’ve been writing about. You recently sent round a speech that you made at Tsinghua University, making a renewed case for what you call “managed strategic competition,” quote unquote, between the US and China, and you argue for managed strategic competition because you fear, or you believe, that the risk of war is serious enough to be taken as a sufficient danger that an alternative concept needs to be inserted that allows room for competition alongside room for co-operation. And I would – I think it would be very beneficial, albeit sobering, for this audience to hear why you consider the risk of war to be sufficiently great, or grave, and how managed strategic competition, as a concept, is important in ensuring that that doesn’t happen.
The Hon Kevin Rudd AC
Well, in – on the question, for example, of nationalism in China, the truth is nationalism has changed and is changing the nature of the body politic in the country. If it becomes increasingly a – an essential pillar of domestic political legitimacy for the Chinese Communist Party, then it makes China increasingly, as it were, robust in the way in which it’s likely to respond to what it perceives to be external provocation, and that is a trendline going like that, so that’s factor number one. And when I say that Xi Jinping is moving Chinese nationalism to the right, just as the centre of gravity for Chinese politics, and as I’ve written elsewhere, and for the political economies, moving somewhat to the left, then there are things that arise from that which, as I said, make the normal conduct of international relations more difficult than they were before.
Secondly, there’s the nature of military weaponry. You know as well as I do, through a robotic warfare and the application of algorithmic approaches to the deployment of weapon systems and communications time, that the human, as it were, intervention factor becomes less and less. So therefore, we’ve got incidents at sea and incidents in the air, then the ability for something to trigger and give us a 21st Century Sarajevo event, which then ricochets, literally, and escalates, and then turbocharged by domestic nationalisms, then you’ve got a real problem.
So, I think it’s these two sets of factors, plus thirdly, a much more assertive Chinese body politic through Xi Jinping, anyway, and America in the last year or two having embarked upon a defined course in reverse gear, whereby the Americans have concluded that unless they confront this challenge, that it is the end of America as a global power. Put those three factors together, that’s enough to cause some of us to lose sleep at night.
Therefore, you can either have unmanaged strategic competition a la Trump, which is get on the rollercoaster ride at Coney Island and just see what happens, and you might stay on the tracks, and you’ll have some hairpin turns, or you might come screaming off altogether, or you have managed strategic competition with guardrails constructed around it. And without a – spending too much time on that here, guardrails around the strategic redlines of each side, so that there is a reasonable and effective level of transparency between Washington and Beijing on the four or five things that really matter, from Taiwan through to cyberattacks.
Secondly, full-blown competition in every other dimension of the relationship, non-lethal security policy, foreign policy full-bred, trade, investment, technology, human rights, ideology and the rest, whilst still also carving out space for a collaborative relationship where global public goods are still sufficiently important to both Washington, Beijing and the rest of us, like on climate change, to warrant a collaborative arrangement.
So that’s the basis of my argument, which I’ve put both the Chinese and the American side. Whether it obtains any traction or not remains to be seen, but I think both sides are, David, in the process of trying to identity an alternative strategic narrative or organising principle or framework, given that classical engagement, as we discussed earlier in our discussion today, has gone out the door backwards.
Rt Hon David Miliband
And maybe this is the right place to finish up, ‘cause we’ve got three or four – two or three minutes to go. Did you see the – President Xi’s speech as a belligerent speech two or three weeks ago, at the beginning of July, or did you see it as a positioning for a range, or a hedging against various scenarios that he’s anticipating, going forward?
The Hon Kevin Rudd AC
To marry my answer to that with something which you incorporated in a previous question which I failed to answer, which is, was the 1 July speech directed primarily to foreign audience or a domestic one? If it’s the Communist Party we’re talking about, the audience is, first and foremost, always domestic, and that a large slice of what we see China doing in the world is a natural extension of what it is doing domestically, in its own, as it were, internal political debate, but also its broader legitimacy debate with the Chinese people.
So, when I look at the text of the speech, yes, there’s new language in it, but essentially, it’s the assertion of two propositions. One, we went from being a weak country to a strong country and a powerful country because of the Communist Party, and two, you, the Chinese people, are entirely entitled to feel nationalistically proud about that. And subset of argument two is, and if any of those Johnny Foreigners come around and seek to poke us in the nose, then they’d better watch out.
These were two overwhelmingly domestic messages, albeit in the latter one, it automatically, as it were, falls over into an international message at the same time, but it reinforces the argument I’ve been making throughout our discussion today, David, which is nationalism as a tool for domestic political legitimacy on the part of the Chinese Communist Party is a huge factor domestically, but it is also, because of its existence, therefore, now an essential factor externally, as well, in turbocharging the increased assertiveness of Chinese foreign security policy around the world.
Rt Hon David Miliband
Kevin, it’s been a real treat to listen to you today. I’ve known you as an extraordinarily worldly and thoughtful person and you’ve demonstrated that in full measure today, with a really fascinating set of insights, both into our own problems and into the challenges that are posed by a newly-confident China, who is such a dominant player on the global stage. There are many questions I didn’t get a chance to answer, so let me apologise to those who posed them, but the hour has gone very fast. Huge thanks to you. Big thanks to Jeremy Hunt and to Robin Niblett of Chatham House for putting this together, and am I right in saying, Kevin, that if people want to see your current collected works, they should go to the Asia Society website? Is that the best resource base for them to follow up on the various ideas and thoughts that you’ve…
The Hon Kevin Rudd AC
Yeah.
Rt Hon David Miliband
…put onto the stage here?
The Hon Kevin Rudd AC
I think so. I’m really reluctant to talk about my own collected works, but – it’s usually ended up badly for anyone who assembles collected works. But put it this way, to anyone in the Chatham House audience who’s having trouble with insomnia, a glass of Johnnie Walker Black Label, plus go to wwwkevinrudd.com, and you’ll see the stuff I’ve been writing on these questions for some time, or asiasociety.com in the United States, they’ll be had in both those places. So – but I’d strongly recommend only with a bottle of Scotch late in the evening, send you off into la-la land very quickly. Thanks, David, and to all our…
Rt Hon David Miliband
Thank you.
The Hon Kevin Rudd AC
…friends at Chatham House.
Rt Hon David Miliband
Thanks, everyone.
The Hon Kevin Rudd AC
Bye.
