Australia and China – Different Views

The Hon Bob Carr, former NSW premier and author and Dr Alan Dupont, founder and CEO of Cognoscenti are both close watchers of Australian-Chinese relations. Yet they differ on how Australians should view China. For Carr, the fact that a Lowy Institute poll, on 20 June 2018, showed that 82 per cent of Australians saw China as “more of an economic partner” than a “military threat” suggests that old apprehensions about Chinas as an antagonistic neighbour are a thing of the past. Carr’s view of China is a very positive one where it comes to trade also. For Dupont, the idea that China will become the richest global nation this century is tempered by an alternative scenario – that “China may stagnate rather than prosper” which is a view gaining momentum. “If correct,” says Dupont, “this would require a substantial rethink of our assumptions about China’s future, and the implications for policy and business risk management would be profound.” In a wide ranging discussion at the Sydney Institute on Wednesday 6 February 2019, Alan Dupont and Bob Carr evaluated the possibilities.

AUSTRALIA AND CHINA – DIFFERENT VIEWS

BOB CARR & ALAN DUPONT with GERARD HENDERSON

Gerard Henderson: I’m going to start off with asking a question to Bob Carr. As you’re aware Australia’s relationship with China goes back nearly 50 years. But if you just go back about the last decade, the governments of Howard, Rudd, Gillard, Abbott, Turnbull and now Morrison, how do you assess Australia’s relationship with China during that period? Do you think it’s changed? And if it’s changed, has it changed for the better or for the worse?

Bob Carr: The way I’d address it, Gerard, is to say that the level of trust and comfort and collaboration in the relationship goes up and down. I’ll plunge in with an anecdote. I became foreign minister in 2012 and there was a level of mistrust in the relationship, that people were hissing about and fussing about. On my first visit to Beijing I was there meeting Yang Jiechi, then the foreign minister, now occupying a more important role in foreign policy, and he hit me with two complaints. One was -can you guess it Alan – it was 2012, Chinese grievances against Australia?

Alan Dupont: It could’ve been any number.

Bob Carr: Well it wasn’t. It focused on two. I only remember because I consulted my diary. Which shows how these things ebb and flow. It was Huawei, because the government had excluded Huawei from providing the equipment for the National Broadband Network. And it was the decision made in November 2011 to have US troops move in and out of Darwin for training and exercises. And I said my resolve, for better or for worse, was to be unruffled and say to my Chinese interlocutor, whom I knew was a very senior figure on his way up and had a somewhat stern demeanour, that, firstly, all countries make decisions about infrastructure with a view to their own resilience and security; and, secondly, we understand China’s foreign policy by reference to its history and that it should understand that Australia has a deep concern about its vulnerability – small population, vast continent – and  we have an inherent attraction to a security alliance with the United States.

I remained unruffled and I’ve got references from my diary which had me saying to officials that we were not going to be pressured by China to make a desperate rush to satisfy them if they postponed a commitment to any annual guaranteed meeting between our leadership and theirs. It was a DFAT objective to get that guarantee from the Chinese. Then so be it. But we were not going to fall over ourselves. And we’ve always got to be aware that the Chinese, like other actors, are capable of playing games to make us feel wrongfooted and to yield up more than we might otherwise do. So that’s just a case study.

The fact is, over the last 10 years, you’ve had ups and downs in the relationship. In 2009, there was a cluster of issues; in the first three months of Abbott problems as well. Then in 2017 there was ideological rhetoric coming from the Prime Minister and the foreign minister. It wasn’t the substance of what they were doing, the foreign interference laws, or banning foreign campaign donations, it was the shift in our positions, the way these things were pitched, the rhetoric that was used. We can make diplomacy work for us. Diplomacy was invented to enable us to bridge difficult situations.

During the last ten years, you could say it’s been more or less a success, managing this relationship, given the challenges in the relationship and the promise it contains. But our policies are based on principles, Australian values. So, Australia will always want to raise human rights with China, but we’ll always be on China’s side when it says it doesn’t want to return to protectionism. Consistency in policy is important. The Chinese want to know that we haven’t shifted our position on Hong Kong or the status of Taiwan. And Australian governments have been consistent on this.

On the other hand, we’ve also been consistent in confronting China with a diplomatic position that says international law, including but not limited to the UN Convention on the Law of the Sea, must apply in the South China Sea, which they don’t agree to. But while we insist on that, under both sides of politics – the wording I use today, the wording I used as minister is no different from that of Julie Bishop. But also, the Australian position is that we don’t run American style patrols in a 12 nautical mile radius around artificial Chinese structures. And Julie Bishop has been more eloquent on why we don’t do this than I could possibly be.

The third pillar of this relationship over ten years is a sense of Australian interest. What’s in Australia’s interest? I’ll give you one clear example. Abbott received a phone call from Barrack Obama. It is a big thing for an Australian Prime Minister to have the phone ring and you know who is on the other end of the line. President Obama was saying, “The Chinese are sponsoring a plan for an Asia infrastructure investment bank. We would like Australia to stay out of it.” Tony fumbled with it for two weeks, but then made the decision to go in. It was the right decision. It was in Australia’s interest. That put us at odds with the US.

I would roll the challenge we face today into one big question relevant to where we stand now: are we confident enough to adhere to a policy on China that may depart from that of the US? Are we capable of doing that?

I’ll just conclude with, what I think is a message of hope. In politics, as a premier, opposition leader, you’re sometimes struck when a party secretary comes to you and saying he/she wants to share interesting poll findings. You look at the poll data and think, “How do they get it so right? How does the public get to the core of it so acutely?” The Lowy poll released in the middle of 2018, showed 82 per cent of Australians say that China is more of an economic partner than a military threat. And that had gone up three points from 2017. And while 46 per cent said that it’s likely that China will become a military threat or challenger of Australia in the next 20 years, when the people commissioned to do the polls pressed them, they explained what they meant. They said what disturbed them about the threat of war was a prospect that America and China would get into a war and we’d be dragged in. So, we’re dealing with a pretty educated and nuanced public opinion which has sustained ten years of more or less successful, at least adequate, Australian policy making towards China.

Gerard Henderson: So, to you Alan: Howard to Morrison, what’s your assessment?

Alan Dupont: I share Bob’s views to this extent. There is more continuity than difference in Australian foreign policy or policy settings towards China going back 20 years. Sometimes you don’t feel that, reading the newspapers, but it’s largely a rhetorical difference. Overall, I think all governments have taken the view that China is a critical country for Australia. We want to have a positive, constructive relationship with China. It’s been an engine of growth for Australia. It’s been beneficial to pretty much everybody in this room. So, we all understand the importance of China to Australia and to the future of the region and perhaps globally now.

If you go back to Howard, the bilateral relationship with China then was much narrower. It was essentially about trade. It was a growing relationship and Howard took a very pragmatic approach, even though there were differences with China on geopolitical issues such as the Taiwan Strait. But overall the relationship was one of growth, and both countries benefitted. Rudd/Gillard inherited that but already the strains and the tensions that we’re seeing playing out today were becoming more evident.

They included influencing the politics of Australia and other democratic countries. This is the argument that’s been going on here in Australia today about influence operations by China. We started to see evidence of Chinese cyber theft and spying. We also have seen some pretty assertive actions by China in the region. Not just in the South China Sea but in other parts of the region too. Suddenly that was something that had to be taken into account by governments, and policy setting started to adapt and change. Rudd took a much tougher stance to China in the geopolitical domain. That reflected his own views about China, which were quite well developed, obviously, by the time he became Prime Minister. Rudd was Gillard’s foreign minister for part of her term, Bob was the second one. So, Rudd continued to run the line against China, which was, “Yes it’s important but we’re concerned about some of the things that are going on”.

Malcolm Turnbull came to the position with a relatively benign view of China, essentially a businessman’s view, that the relationship was overwhelmingly good, there weren’t too many problems. He was a bit suspicious of the national security view that was emerging about China as being potentially a problem. But Turnbull shifted during the course of his prime ministership. Some people argue he became captured by the national security community. Others felt that facts on the ground changed his views. So, we have seen a hardening of the Australian government’s – certainly including Morrison – views on China.

A couple of other things I’ll throw into the mix. The perception in Canberra is that unfortunately the government of Xi Jinping has become increasingly authoritarian, oppressing its own citizens, persecuting its minorities, and abusing human rights. There are a whole cluster of issues that have been a cause of concern because values do matter, as Bob mentioned before. It’s not only about interests. Of course, we deal with countries as they are. Everybody gets that. But you also make judgements about countries and how you relate to them as you do with people, based on values. Unfortunately, I think our values and China’s are diverging after converging for a period during the mid-noughties, when the Chinese leadership seemed to be liberalising. Xi has reversed that. He’s become chairman of everything and chairman for life.

My final point is this. I see the China challenge as being increasingly difficult and complex for Australia. Not just Australia but for whole region. But we have particular difficulties with China, because we are so engaged with them across so many areas of life – governance, trade, students, tourism, you name it. China looms large in all of our lives. Overcoming these challenges is going to be the biggest test, not just of foreign policy but of government policy for the foreseeable future.

Gerard Henderson: Thanks Alan. Now, we set this up today. It took a bit of work. We had to find two people willing to come on and talk about it at the same time. So I’d like to ask Bob Carr this. There are a lot of very prominent Australians who hold different positions on China which have really developed in quite recent times. Bob Carr, how you respond to your critics, and you know who they are, and then I’d like to ask Alan how he responds to his critics, and he knows who they are. So let’s start off with Bob Carr.

Bob Carr: Well, let’s be clear who they’re not. It’s not Scott Morrison. It’s not Julie Bishop, in the last 12 months before she left the job. I’d be very hard pressed to pick anything that I disagree with. On the South China Sea, nothing separates me from what Bishop has enunciated. And Scott Morrison has used terms recently about the relationship that I might hesitate to use because they’re so emphatically positive, they’re unqualified. This supports my thesis that there’s a sort of Plimsoll Line of pragmatism, after periods of rhetorical enthusiasm, directed at China. It is a pragmatism that will get us back to a certain position that takes account of Australian national interest and values, and consistent Australian policies.

My disagreement would be with people in the field beyond Alan Dupont. First with people who say we should not have policy on China that’s not run past Washington. And there are people in the establishment, the national security establishment in Canberra, who enunciate that view. One of them, Andrew Shearer wrote a column saying America’s now saying that Australia can’t be trusted in Asia; a great ally, but in the sand of the Middle East more than in Asia. Shearer claims in Washington this is very disturbing to them. I don’t think it should be remotely disturbing that an American ally, which does so much for the alliance, namely Australia, is saying hang on we’ve got our own view and we may not be always with you in the CIA State Department camp, the Pentagon camp. For example, when Abbott decided to join the Asia infrastructure investment bank. There are people in Canberra who thought that was beyond the pale. We should only have, they think, we should only have a China policy that’s stamped with approval in Washington.

The other thing that makes me really angry is people who’ve generated absurd panic about Chinese students in Australia and about the Chinese diaspora. We ought to be honoured that kids from Chinese families at Sydney University took an interest in free political competition, organised a ticket on local student issues, did deals with the Liberals, the Greens, the Labor Club and, in a multi-party atmosphere, have taken over the lead role in management of the Sydney University Union. If I were a party hard liner in the Chinese consulate in Sydney, I’d be quietly disturbed that Chinese students were getting a taste of multi-party competition.

I’ve seen absurd stuff said about Chinese students in Australia. That they’re promoting Chinese Communist Party orthodoxy. That they’re intimidating lecturers. We actually did a survey: 130,000 Chinese students in Australia, there were only four incidents. And when you look to those incidents, there wasn’t a single case that involved a lecturer forced to apologise or a Chinese student saying anything untoward or intimidating.

A second example, and I’ll just sketch it briefly. I refer to some of things said about the Chinese diaspora in Australia. Take it from me, as someone who led his party in state politics for 17 years, I know the ethnic communities of NSW. Few of them would less interested in their homeland politics or the foreign policy concerns than the Chinese. The Armenians maintain their case and the Turks the opposing case. With the Greeks and the Turks over Cyprus, they all go and see their local members of parliament. As will Arabs and as will Jews. This is our multicultural society. But, to my knowledge, not a single member of the federal parliament has faced a delegation from his or her Chinese community saying, “We want to put the Chinese case on the South China Sea”. There have been shocking things said, stereotypes flung at them and their loyalty has been impinged in a way that hasn’t happened with other ethnic communities.

So, they’re the three concerns I have Gerard. The view that we’re only capable of having a policy on China if it’s ticked off by Washington. Second, the stigmatisation of Chinese students in Australia. It is an honour for us to have them and they will go back, many of them, and make a difference in China based on things they’ve learnt and observed here. And three, I’m really angry about the casting of aspersions over the loyalty of Chinese Australians because the evidentiary base for them promoting a Chinese Communist Party line in Australian public life is so threadbare.

Gerard Henderson: Before I go to Alan, would you concede that there are some Australians in academic life who think that Australian foreign policies should be run past Beijing?

Bob Carr: I have to be honest, I haven’t encountered them. I’ve got as good a nose for fellow travellers as you. Looks like we’ve both come out of a, sort of, anti-communist labour movement tradition, mine somewhat different from yours. But I haven’t encountered them. I don’t see any equivalent of the old Soviet loyalties. Most of the academics who work in this space have had a pretty nuanced, sophisticated view if they’re talking about China policy. You couldn’t say, for example, that Hugh White could hold that view, his view is quite different.

Gerard Henderson: Now Alan, what do you say to your critics on the comments you make about the Australia-China relationship?

Alan Dupont: One of the beauties, Gerard, as you know in writing a newspaper column, is that you get to know who your critics are, and what they say about you in quite explicit terms. So I can tell you how people characterise me.

I suppose the first criticism that is levelled at me is that I’m hawkish on China. That I’ve got the classic national security view. I can understand why people might say that but I supposed in my defence I might say it’s always dangerous to put people into boxes and especially on a country like China where there is scope to have a wide variety of views. I would say that if I look at myself and my position, it has changed quite dramatically, almost 180 degrees from the positions I took on China probably 10-15 years ago, where I was broadly supportive, and very positive about the relationship. This was reflected in the fact that I was often invited back to Beijing to talk to prime ministry officials and so on. Now, I don’t get invited back. The perception is that I’ve become a Cold War Warrior.

Basically, my response to that is that my opinions have changed because facts on the ground have changed, because Chinese behaviour has changed. And not in ways that I’m particularly happy about. I had drunk the Kool Aid a bit, probably ten years ago, thinking that China would be a responsible stakeholder in the international system. That it would perhaps behave differently from other large powers. China wouldn’t commit the same mistakes that other powers had, whether you’re talking about the United States or Russia and so on. In fact, I was probably a little bit naïve in expecting that. China has done exactly what other great powers have done which is to seek to exert its influence. There’s nothing wrong with that. Building up their military. Nothing wrong with that. What I do have a problem with, and why my views have changed, and why I would push back against this characterisation that I am an unthinking hawk on China, is that there many things now about the Chinese political system that I find difficult to reconcile with the China I saw even ten years ago and the China I would like this see in the future. I would like to see a China more like Taiwan and less like the way it has become. And I don’t think that will happen. So that’s one criticism levelled at me and that’s partly my response.

Secondly, I think, and certainly in the business community, and I think Bob’s probably experienced this too, it’s almost like two different silos talking across each other on China. Because the business community overwhelmingly would be invested in doing well from the China trade. I understand it because I actually run a business myself, I get that. But they tend not to take, in my view, an integrated view of Chinese policy strategy and how they operate. And you could level that accusation sometimes against the national security people. Perhaps they don’t see the broader interests. They don’t fully understand how dependant we’ve become on China for our wellbeing and prosperity, whether it’s students, whether it’s trade, whatever. But I think there is a sensible mid position on this where you look, this is about having constructive relations with China, you look to see the things that you can build on but you also need to draw some lines around what’s not acceptable and I see one of the challenges for us in the future is to actually work out in our own minds collectively what is acceptable and what is not acceptable. And then having made that determination, what we as a middle ranking power can do about it. So, there’s just a few things to think about.

The final point on China is that it is such an opaque society to understand. I spent a lot of my life following China, 40 years. I’ve been there a lot. I don’t class myself as a China expert but I have read a lot about Chinese history and an understanding of their strategic cultures. My point is this. What I try to do is understand why China is doing what it’s doing. Not through an Australia prism or a Western prism but to see it from a Chinese perspective. And then argue back to them that some of the things they’re doing are quite counterproductive for China’s own interest. For example, the South China Sea.

I’ve said to a lot of my Chinese friends, this is not Cold War thinking. It’s just so counterproductive to do what you have done in the South China Sea by taking and militarising disputed islands, despite the rulings of the International Court of Arbitration, which explicitly stated that China did not have any basis in international law for those claims. All that kind of activity does is put up a lot of red flags in people’s minds about, if they’re going to do that in the South China Sea, what else are they going to do? Are we going to live in a China world that’s just right is might? I don’t think I want to live in that world. So therefore what are we going to do about it. It’s something I think about a lot and that’s what I try to bring to my commentary and writing on China.

Gerard Henderson: We’ll have one further quick point and then we’ll go to questions and discussion. Bob Carr, you mentioned Hugh White. I don’t want to be unfair but I think it’s reasonable to say that Hugh White has suggested that Australia’s direction should be towards China and away from the United States as we move into future decades. I think that’s a fair assessment. To both of you, what about this argument that – I’m not saying that anyone actually says it like this but it’s presented that way – Australia has to choose between China and the US. Do you think there’s any validity in that view at all, and if so, which way would you be inclined to choose? Just briefly from both of you.

Bob Carr: Well it depends on the issue. We should join the Asia Infrastructure Investment Bank despite America pleading with us not to. It’s in our interests to get in there. We got in there and we started rewriting the rules. We showed leadership. It was smart of Abbott to do that. I’m neutral on Huawei. I’m far from taking a position of indignation on behalf of the exclusion of this iconic Chinese company. I just haven’t seen the security material. I don’t get those briefings anymore. So I’m neutral. So I’m not saying that we were wrong to follow the American urgings on Huawei. It depends on the issues.

Let’s focus on China and the South China Sea. America did say, before 2010, it would shift two thirds of its Navy to the Asia Pacific. You’d be barking mad if you worked in the ministry of foreign affairs in Beijing and didn’t read that as this is America talking seriously; it is going to get stuck into our sea lanes of communication and our port access.

After that, China started doing things in the South China Sea to secure a position and to do it fast. I think they’ve realised the validity of your criticism Alan by the way. There’s a shift in Chinese foreign policies since their major domestic summit. In the middle of last year, all foreign policy actors in China realised that they had pushed too hard, that they’d lost friends in Europe because of other aspects of their behaviour. But offsetting that, China is a very responsible stakeholder in central Asia.

The Shanghai cooperation organisation, which gets no attention, has levitated Central Asia out of Russia-China feuds over “stan states” and their competing interests in stan states. That’s been a major gain for public good. No one can say that China has been an obstacle in North-East Asia in the difficulties with North Korea. They’ve been prepared to take some risks and America has been very grateful for some of the Chinese positioning. So, Gerard, it depends on the issue. I just want us to be mature enough to take these stands. As I said at the outset, not to be intimidated by huffing and puffing from the Chinese, trying to make us anxious, and get Australian businesspeople worked up. In my diary as a foreign minister, I quote James Packer and Kerry Stokes getting awfully agitated because they thought we were drifting badly under Gillard on China policy. We should be coolheaded about that. I have differences with the Chinese. But it depends on the issues.

Gerard Henderson: A final comment Alan.

Alan Dupont: Hugh White won’t mind me saying this as I’ve said it to him directly and written about it. I do not agree with the simplistic notion that we have to make some kind of binary choice between China and the United States. It’s a bit like asking a businessman if you want to choose between your two major clients. You are pretty stupid to put yourself in that position so a smart country like Australia doesn’t want to be in a position of having to choose between the two most important countries in the world for us.

What you want to do is have a nuanced policy which enables you to benefit from your relationship with both, not to the exclusion of the other country. That’s my fundamental position and I think most Australian governments have done that fairly successfully. I don’t know anybody, to be frank, who now makes that argument that we need to make this choice. But it would be a catastrophic failure of our foreign policy if we put ourselves in a position where we had to choose between the US and China. That’s not to say that on certain issues, as Bob has pointed out, we are going to have preferences that may be seen as favouring one country over another. For example, we have opposed Donald Trump on trade protectionism, which is not in our interests as a trading nation. We oppose some positions China takes too.. That’s what a foreign policy is for, how you manage differences in a smart way in the interests of Australia.

My final point is this. I’ve never believed that our policies should be shaped by another country. That’s the whole point of having a national policy. Whether it’s the United States or China, we need to seek an  independent Australian voice and position. Every other country in the region is in the same position. This is not a peculiarly Australian problem. Everybody’s going through the same adjustment. We’ve never had to confront in our modern history a powerful China at the same time as a powerful United States. This is new for us. But it’s not new for our Asian neighbours who have had to deal with a powerful China historically. We’ve never had to do it until now, so that’s why it’s a challenge for us. But we should be able to overcome that and come up with a solution that will work for Australia.