Dealing with China Under Xi Jinping: Kevin Rudd / President and CEO, Asia Society

Hello and welcome to DEEPER LOOK from New York.

I'm Del Irani, it's great to have your company.

Later this year, China's national Communist Party is likely to create history

by re-electing the current Chinese President Xi Jinping for a third term, at their National Congress.

While this is not yet certain, there's a very strong likelihood that it could happen.

And, if it does, President Xi Jinping - who has been occupying the top post since 2012 -

will become the first Chinese leader to hold onto power for more than two consecutive terms.

So, what kind of changes will a prolonged Xi Jinping leadership bring to China's diplomatic and security policies?

And, how should the United States and Western countries deal with China in order to maintain stability in the international community?

Well, joining me once again to talk more about this is the Honorable Kevin Rudd.

Mr. Rudd served as the Prime Minister of Australia from 2007 to 2010.

And again in 2013.

A global authority on China, he's now the global president and chief executive of the Asia Society in New York, and he joins us once again.

Kevin Rudd, welcome back to the program.

- Great to have you with us again.
- Good to be with you.

So, Mr. Rudd, can you put in perspective for us,

just how important or significant is the Chinese Communist Party Congress that will take place later this year?

I think for all of us in the Indo-Pacific region, and probably globally,

this will probably be the single most important national political event for all of us, for the next 30 years.

And I don't say that lightly.

I've been a student of Chinese domestic politics for the last 40 years,

since I was a junior woodchuck at the Australian National University.

But this will determine whether Xi Jinping ends up being leader for life.

And because Xi Jinping has changed the face of Chinese domestic politics, taking it to the left,

changed the face of Chinese economic policy, taking it also to the left,

and made China more nationalist, taking nationalism to the right,

with a more assertive foreign security policy.

This will therefore determine whether these policy settings which have become clear under his leadership will continue and

intensify over the next 15 years, or, whether they will be corrected.

How is President Xi viewed by the Chinese Communist Party, by the Chinese people?

Well, I haven't been to China for two years because of COVID.

So, it's hard to reach an analytical conclusion from the outside.

But I think it's fair to say that he's become a highly controversial and divisive figure within Chinese domestic politics,

and the Chinese Communist Party.

I say that advisedly because Chinese people, Chinese entrepreneurial leaders,

Chinese political leaders, rarely express dissent from the leader.

But there have been many mistakes on the domestic economic policy front.

Economic growth has slowed to a snail's pace, because the private sector no longer has the same levels of business confidence they had before.

You have the Zero COVID policies and lock downs right across the country now,

which has resulted in a huge public backlash.

And beyond that, again, because he's taken the party in a more Leninist direction in Chinese politics,

there's much of a restraint, much more restraint and constraint on people's ability to have different points of view.

If you're an academic, if you're a member of a think tank, if you're a member of a non-government organization,

only 5-10 years ago, you had reasonable levels of freedom to engage in political discourse.

Not absolute- because the Communist Party still ran the country.

Those have been tightened up enormously.

Put all those things together, each of these creates pockets of resistance.

Could they come together to prevent him from being reappointed for a third term?

Unlikely.

It would take a further big catalytic event in my judgment for that to be the case.

But it may result in others being appointed to the leadership institutions around him by the next Congress,

in order to create, shall we say, an internal check on the exercise of his power in the future.

Xi Jinping has now been in power for nearly 10 years—

What do you think his vision of China is? I mean, how does he see China on the global world stage?

If I was describing Xi Jinping's world view: number one, he wants to remain in power.

But he also wants the Communist Party to remain in power for the very long term, not as a transition to a democracy.

Number two, he wants to achieve national unity.

Hence, Taiwan.

And this is a core goal.

Number three, continue to grow the economy, to keep living standards going up.

Four, environmental sustainability.

Because Chinese people are like people anywhere in the world.

They don't like dirty water, they don't like unclean air.

Five, a modernized military capable to use Xi Jinping's terms,

of "fighting and winning wars in order to achieve China's national ambitions—"

very important, we're clear about that.

Six, benign neighboring states.

There are 14 of them.

China has more neighboring states than any other country in the world, apart from Russia, which also has 14.

Seven, push the United States away from China's maritime periphery to the east,

so that it enables it to take Taiwan, and also to deal with outstanding territorial disputes with Japan and East China Sea.

And Southeast Asia in the South China Sea.

And then, eight, move across Eurasia through the Belt and Road Initiative to make that into a zone of economic opportunity for China,

but also foreign policy compliance.

And finally, begin the process of redrafting the rules of the international system.

The UN, the Bretton Woods Institutions like the World Bank, and the IMF, other institutions perhaps like the G20.

And perhaps the BRI becoming a new institution in its own right,

in a way which maximizes Chinese interests and values.

In the way in which China saw the United States doing when it became the dominant power after the Second World War.

You mentioned Taiwan a couple of times, and I really want to get to that issue.

Do you think China would ever go so far as to take this territory by force?

And if it did, what would be the regional and global ramifications of something like that?

- Well, in answer to your first question, yes.
- Really?

Because it's part of Chinese Communist Party dogma.

- Okay.
- And we make a mistake, if we don't think China is serious about it.

The constraint which prevents it from doing that, is ultimately one of a combination of US, Taiwanese, and regional military deterrence.

That is, that it would be too risky militarily to achieve.

And so, the finding - the point at which Chinese military commanders would say to Xi Jinping in the Central Military Commission,

"okay, comrade, I think we can now do it,"

that's the day, which Xi Jinping is working towards.

If it happened, what would be the consequences?

The first, I think, consequence of course, would be for the people of Taiwan.

This would not be a simple military exercise.

It will be a bloody war, of an enormous degree of magnitude.

It would be the single biggest conflagration we'd seen in the Asia-Pacific since the Second World War.

And there's no one who does the military planning on this, who comfortably describes it as likely to be a limited war.

That is, because the assets are all interconnected.

It's likely to rapidly proliferate towards the continental territory of China,

as well as US territory in the West Pacific like Guam.

The other thing is the economic impact, it would implode the global economy,

financial sanctions would ensue,

and this would be 10 times the order of magnitude of anything we've seen with the disruptions with Russia.

Really. I want to talk about the new Solomon Island Security Pact between China and the Solomon Islands.

It's gotten a lot of controversy, a lot of global attention.

Can you just I guess, put in perspective for us, how significant is this deal?

What does it mean?

It is significant, because since the Second World War,

the agreement between the United States and its treaty allies and partners Australia and New Zealand in the Southwest Pacific,

and the emerging island states of the region of which there are now 13.

Polynesia, Micronesia, Melanesia, all different, vast space.

Is that this would be one broader, as it were, strategic community.

And so, with this signature of a security agreement, with the People's Republic of China for the first time,

it changes that dynamic for the first time since 45.

Secondly, you might say, well, what's the utility?

Well, in terms of long-term defense planning, let's just say we had a conflagration in East Asia over Taiwan.

This is, the Solomons is located adjacent to the major sea routes between Australia and Japan and the Republic of Korea and Taiwan,

providing exports of Australian energy raw materials, and of course, other goods as well.

Furthermore, it sits astride the principal trade routes between Australia and the United States.

And so, the challenge for the incoming government of Australia,

which has only just been elected under a new Foreign Minister, Penny Wong,

who is already in the South Pacific together with the Chinese Foreign Minister on different tours.

It will be a significant challenge for the incoming government.

In your book, "The Avoidable War," you address the issue that it feels like the US-China relationship is starting to kind of hurtle out of control.

What steps or measures can the West, or the democratic world, I should say, take to avoid conflicts and avoid confrontation with China?

Well, this is a challenge for all of us, not just the United States, but its partners, friends and allies around the world.

And of course, China itself.

The reason I wrote the book, "The Avoidable War," is because as someone who has observed this for most of my adult life,

for the first time, I've actually become really worried that we are starting to hurtle in a particular direction.

It's like having in a television studio, such as this,

a whole bunch of exposed cables and wires on the ground with no insulation, it's all been ripped off.

And as you know, if you take out a welding machine, and, lots of sparks flying around, anything could happen.

- Absolutely.
- That's a bit like what we have at the moment.

It worries me.

So, what I outline in the book is accepting that reality, and accepting the fact that you have strategic competition between these two countries.

You can either have unmanaged strategic competition with no rules of the road, no guardrails.

Or, you can have what I describe as "de minima" strategic guardrails and rules of the road, which I outline in the book,

around strategic redlines, around strategic competition, and around areas to where they must collaborate, like on climate.

So as a former Australian Prime Minister, what would your advice be to other countries in the region?

What can all these countries do collectively to help kind of keep peace,

and I guess, avoid, you know, keep peace and stability in the region?

I think working with both Beijing and Washington to say to both of them,

"This is our wider region, we need you to have a stable relationship with predictable rules of the road."

That's important.

Secondly, I'm not naive,

I know that China is increasing radically, its own strategic and military and economic reach.

But also, to use the period ahead to ensure that the United States, its friends, partners and allies remain competitive.

And that we will continue to rebuild our own deterrent capabilities and our own economic strengths, etc.

So, there is both a recommendation to both superpowers to establish what I describe as minimum rules of the road to stabilize the relationship,

and simultaneously to recognize that the United States and other partners in the region have a period ahead

where deterrent capabilities on the military side have to be enhanced so that those military planners in the Central Military Commission in Beijing,

ultimately scratch their head and go into Chairman Xi Jinping and say, "Comrade, I'm not sure that this is achievable."

Thank you so much for joining us on the program once again.

Good to be with you.

President Xi Jinping's China is displaying a superpower's ambition.

But how exactly countries should deal with China will be one of the world's biggest geopolitical challenges...

Our best of chance of success, is if global leaders learn to coexist with China.

Because the alternative is conflict or confrontation—

and, no one wins in a war.

I'm Del Irani, thanks for your company.

I'll see you next time on DEEPER LOOK from New York!