Politics and security in an emerging Asia – Can China grow peacefully?
Address by The Hon Tanya Plibersek MP, Shadow Minister for Foreign Affairs and International Development, to the Alliance21 conference, Canberra, Wednesday 18 June 2014
I was given a lot of latitude with my topic: ‘Politics and security in an emerging Asia’.
It is a region that is vast and it is undergoing profound changes. I could talk about the recent election in India, a significant turning point for the world’s largest democracy. I could talk about the election that’s coming up in Indonesia, one of our most important and nearest neighbours.
But having just returned from China, I want to concentrate instead on what’s probably the single biggest issue affecting the region: the rise of China.
I made my first visit to China last week. Although China is now our biggest trading partner, and it is forty years since we gave diplomatic recognition to the People’s Republic of China, there are still some large gaps in our understanding of each other.
One gap is the question of what China’s rise means for Australia and for our region.
There’s universal agreement that the rise of China is a key feature of the strategic environment of Asia, and of the world.
But there continues to be a lot of handwringing about what China’s rise means.
Some pundits and scholars predict conflict is inevitable.
Others say China’s integration into the global economy prevents that.
Others still say that the US needs to agree now to share power with China – deliberately conceding some power to China to avoid conflict.
Of course I’m not going to settle all these complex questions today.
But they are questions that need to think about, to consider and to work on, because they’re crucial to Australia’s security and prosperity.
Put in its simplest and starkest way, the question being asked is, can China grow peacefully?
China’s economic miracle
There are many signs of China’s increasing economic importance for Australia and the world.
China’s economy has grown rapidly since Den Xiaoping’s reforms began in 1978. Since that time, more people have been lifted out of poverty than at any other place or any other time in history. That is an extraordinary achievement.
The value of one day’s trade between China and Australia today is greater than the value of one year’s trade between China and Australia forty years ago.
China is Australia's largest trading partner, with total trade in goods and services of $151 billion in 2013. It is our largest export destination; it is our largest source of imports.
Viewed globally, China has already grown from under one 20th of the global economy at the start of this century to an eighth now – measuring its economy at market exchange rates. Over the same period, the US economy has fallen from just under a third of the global economy to a fifth. That still makes the American economy twice as large as China’s, but it gives you an indication of how quickly the economic lines are converging.
On another measure of economic size, Purchasing Power Parity, China has already overtaken the US.
So there’s no arguing that China is a rising economic power – although there is some argument about the extent to which the size of the economy is a useful guide to power in its broadest sense.
China’s economic growth brings the challenge of rising expectations: rising expectations from the people of China for a social safety net, for better health and education, for jobs, and for a better quality of life more generally, including a cleaner environment.
China has a new generation of young people who are well-travelled and who have studied overseas. They are more engaged with the world; they are less suspicious of it. Last year there were 235,000 international students from China in the United States, and 90,000 in Australia. I hope that most of them return home with a good impression of our nations. I’m sure that many of them return home with lifelong friendships and business partnerships. They certainly return home with broader expectations of their lives in China.
The question that goes along with these increased expectations is, does China’s economic growth create expectations among its leaders that they will have a greater say in regional and global affairs, what form does that greater influence take, and how far can it be accommodated?
Welcome China’s rise?
The benefits of a growing Chinese economy are unquestionable for Australia. Our economies are complementary rather than competitive. China’s demand for our resources has been a strong underpinning of our economic growth in recent decades.
And there are new opportunities for trade in services and agricultural products, particularly with a growing Chinese middle class.
Yet in spite of the undoubted economic benefits of China’s rise, some historians and scholars warn that we should be wary. They point out that when a rising power challenges a dominant power, conflict may result.
The crucial point of course is that this doesn’t have to happen, and it doesn’t always happen. Conflict is not inevitable. We all have a responsibility to avert conflict.
The precedents of the past that are used to support the argument of the risk of conflict occurred in different times, in different places. Western history may not be the best guide to what’s happening in Asia today. In so many ways, what we are facing is unprecedented.
One reason is our understanding of the sheer horror of full scale war in the nuclear age.
Another reason is the high degree of economic interdependence that I mentioned earlier. China’s and America’s prosperity, indeed the prosperity of the globe, rests on the relationship between China and the United States.
But even if the chance of full-scale conflict in our region is low, we can never assume it to be zero. The Australian government’s first responsibility is to protect its citizens and that means being ready for worst case scenarios, even as we work to avoid them.
And there’s always the possibility of something less than full-scale conflict. There have been far fewer wars in recent decades, but they have not stopped altogether. Of course we should also strive to avoid more limited conflict. Nobody ever knows where more limited conflicts will lead. We should invest in preventing a regional arms race – it’s an expense that no one needs.
In a speech last month, Singapore Prime Minister Lee Hsien Loong outlined two scenarios for the future strategic landscape in Asia.
One scenario was a peaceful and integrated Asia, with a more powerful China acting as a status quo power that adheres to international law and norms. While China and the US would compete for influence, they would accommodate each other on many issues.
Prime Minister Lee’s other scenario was not as optimistic. His other scenario was a riven and fractious Asia: US‑China relations fraught with tensions, pushed by a zero-sum view of the world and a lack of mutual trust.
Which scenario comes to pass would depend on US-China relations, and the path of nationalism in both countries, he contended.
Prime Minister Lee said: ‘On both sides, there are those who doubt and distrust the other’s intentions. It will require great restraint and wisdom to overcome this distrust and reach a workable and peaceful accommodation.’
How to avoid conflict
So what can we do to avoid Prime Minister Lee’s pessimistic scenario?
Paul Keating argued in a speech in Beijing last November that great powers need to work together to create a new Asian order – an order that reflects and accommodates the new distribution of power, while at the same time preserving the features that have underwritten stability in recent decades.
Mr Keating said: ‘China’s most important responsibility now is to explain more clearly and in more detail how it sees the new Asian order working, what role it sees itself taking, what roles it envisages for others, and how core norms and principles will be upheld’.
American sentiment and behaviour will be just as important as China’s, and there are times when the US could make more of its opportunities to promote engagement with China.
In the Financial Times last month, commentator Edward Luce argued that, ‘America’s ability to address these vast challenges is stymied by domestic paralysis’. He said the US holds more cards than any other country in shaping the new world order, but the new order needs to accommodate a relatively stronger China, and it’s not clear that America recognises this challenge.
The Trans-Pacific Partnership (TPP) being negotiated between the US and many other countries in the region may be an opportunity that is missed. The TPP is the key economic element of President Obama’s ‘pivot to Asia’. It could be a catalyst for binding countries together more tightly – reducing trade barriers among most of Asia’s major economies and reinforcing rules on free and open trade.
But support for the TPP among both Democrats and Republicans is weak, and China is seeking its own trade agreement with its neighbours in the region. It is excluded from the TPP and it thinks it can make its own deal as a better deal.
Congress has also failed to agree on changing the rules of the International Monetary Fund to give more say to Asian countries. Scholar Fareed Zakaria says China, Indonesia and Singapore see this as a sign that the West will never let them share real power in global institutions.
The US Senate has refused to ratify the UN Convention on the Law of the Sea, which defines the rights and responsibilities of nations in their use of the world's oceans. Opponents of ratification argue that it cedes sovereign power. The administration says that it’s abiding by the rules anyway, so ratification is not important.
But when we’re asking other nations to abide by a rules-based international framework, it is important that we show that we value and support that framework ourselves.
A multilateral rules-based system in which all countries observe international law gives us the best hope of reducing conflict. But countries have to feel they have buy-in to those systems. They have to feel that they’ve had some say in how the rules have been developed and how they are applied. And existing powers need to reach an accommodation with rising powers about those rules-based frameworks.
China and the US acting together
Professor Hugh White has argued the US and China need to rethink their relationship.
He says the US needs to share power with China to avoid conflict between them.
I’m not sure whether there needs to be an explicit agreement. But I do agree that both countries need to be very clear about their own interests and they have to be clear in looking for ways of accommodating each other’s interests. The best outcome would be for them to work together, over time, to find common ground on how to meet each other’s interests in the region.
Former American diplomat Nicholas Burns suggested to this forum two years ago that political and military leaders from both countries spend too little time with each other. He argued that they need to keep making efforts at achieving greater contact, which will lead to better understanding.
He said America and China need to work harder to find ways to cooperate in regional initiatives.
He suggested that dialogue be expanded to include other countries in the region, including Australia.
He said the US, Australia and others should identify concrete projects that would build cooperation and trust. And they should create pan-Asian institutions and make better use of existing ones to bind governments together in common purpose.
You can see from those comments two years ago that there are many positive steps that can be taken.
Conflict is certainly not inevitable. The actions of key players will determine the outcomes – especially leaders in China and the United States, but also the people of China and the United States.
Will they act and behave in ways that contribute to win-win solutions to the challenges, or to a zero-sum approach? That is, will they take a view that a gain for one country must be at the cost of the other country, or will they see that the strength of one country can be to the benefit of both?
There are voices in the US and China who focus on state power, especially its military dimension, and who consider that one nation’s gain must be another’s loss.
But there are also many more optimistic voices, who argue that states can make choices that create a better world, that through cooperation, we can overcome the constraints of the zero-sum approach and achieve better outcomes all round.
That has always been the guiding principle of Labor’s foreign policy, and it should be the guiding principle in our relations with China.
There are encouraging signs that China is beginning to see merit in cooperation and engagement. There has been progress.
It was terrific during my trip to China that the issue of climate change was raised by our Chinese counterparts, including by the Chinese climate change negotiator Xie Zhenhua of the National Development and Reform Commission.
Our Chinese interlocutors told us that the trial emissions trading schemes running in several large cities will be extended in coming years to a national emissions trading scheme.
They talked about reducing the carbon intensity of their economy; they said they would reach ‘peak carbon’ soon, and they talked about about increasing the share of renewable energy in China’s energy mix.
They acknowledged their responsibilities as a global citizen, contributing almost a third of the world’s carbon emissions.
One reason China is taking air pollution so seriously is the effect it is having on the quality of life of ordinary Chinese people. The air in their cities is unbreathable on some days.
That is an example of where the domestic demands of a population with growing expectations are affecting the country’s leadership.
It was interesting to speak to Xie Zhenhua because he’s been the climate change negotiator for nine years, and this is a very, very different position to the Chinese position at the time of the Copenhagen agreement. There are people who say that if this was the Chinese position at that time there would have been a very different outcome from that conference.
But it’s not just in this area where we are seeing increased cooperation.
China’s cooperation on disaster relief is another opportunity to improve communication and understanding, particularly between our armed forces.
China’s participation in the search for Malaysian Airlines MH 370 was impressive and welcome.
And it’s noteworthy that China has been invited to participate in this year’s RIMPAC, a large naval exercise. It’s quite a step forward to see our navies cooperating in this way.
Although we are not one of the principal actors in this tussle between a great power and an emerging power, our close relations with both the US and China means we can and should contribute. We can and should help shape a positive outcome in North Asia.
We have a unique relationship with China. We are a western country, a democracy and an ally of the United States, but we don’t have colonial baggage, and we have independent interests.
China takes Australia seriously, in part because of our importance as a supplier of vital resources such as coal and iron ore, and also for our potential as a supplier of agricultural products and services.
We’re also well regarded by other nations in North Asia and South East Asia.
From opposition, the Australian Labor Party controversially adopted the policy of recognising the PRC in 1955. And Gough Whitlam moved to establish diplomatic relations with the PRC within three weeks of a Labor government being elected in December 1972.
In my visit to China last week this was remembered with great affection.
Australian prime ministers have worked hard since then to build on that good relationship.
Prime Minister Bob Hawke presided over the start of the resources export boom to China, established mechanisms to facilitate trade, and his government drove the creation of the Asia Pacific Economic Cooperation forum. Prime Minister Paul Keating expanded APEC to a leaders’ forum.
Prime Minister John Howard hosted the first official visit to Australia by a Chinese head of state, President Hu Jintao.
Close engagement continued under Prime Minister Kevin Rudd, who made three visits to China and hosted two senior visits to Australia – including one from the current president, Xi Jinping.
Prime Minister Julia Gillard struck a strategic partnership with China that established annual talks between the two countries’ prime ministers, treasurers, foreign ministers and trade ministers that are shared with few other countries.
We have worked hard under both Labor and Liberal governments to build a close relationship with China to complement our historic and continuing relationship with our closest ally, the United States. Although the United States and China don’t need Australia as an intermediary, we might sometimes be of assistance in filling the awkward silences.
Last week, Chinese officials urged us to promote people-to-people exchanges at senior levels, to increase exchanges by young political leaders, and to make more use of side meetings when we meet at multilateral fora.
We need to find ways of using our creative middle power diplomacy. We’ve always excelled at that.
Gareth Evans is in the audience today, and his role in resolving the Cambodia conflict in the 1980s is a marvellous example.
At the establishment of the United Nations, Doc Evatt argued for small and middle sized countries to be given one vote: for a democratic approach to the United Nations that gave fair representation to small and middle sized countries.
Recall John Howard’s role leading international peacekeepers in East Timor in 1999, and Kevin Rudd’s role in making the G20 the pre-eminent body for tackling the global financial crisis.
These are examples of a small country, with a relatively small population, having a big impact in our world.
And as we have in the past, we can play a large role in future. In different ways, we have close relationships with the greatest existing and emerging powers of the 21st century, and we should use our closeness with each of them to encourage better understanding between them.
Conclusion – constructive win-win approaches
Whatever we do, we need to apply maximum effort to thinking about and finding ways of achieving win-win solutions to the opportunities and the challenges that are posed by the rise of China.
It’s unlikely that there’ll be a point – for many decades at least – where we can say for sure that we asked the right questions and we made the right answers.
But the future is not-predetermined. We help create the future through our actions and decisions – and through our assumptions.
To have people behave as friends, it is important that we treat them as friends.
If we keep working to find constructive, win-win answers, we maximise the prospects for Australia’s and for the region’s prosperity and security.
China can of course grow peacefully and Australia and our region will benefit if it does.
I’d like to end with a quote from Confucius, who was asked by one of his disciples, Zizhang, for advice about proper conduct. Confucius replied:
‘Speak with loyalty and good faith, act with dedication and deference, and even among the barbarians your conduct will be irreproachable. If you speak without loyalty and good faith, if you act without dedication or deference, your conduct will be unacceptable, even in your own village.
‘Wherever you stand, you should have this precept always in front of your eyes; have it carved upon the yoke of your chariot, and only then will you be able to move ahead.’
Zizhang did write down the precept – although not on the yoke of his chariot, but on a sash. And I’d like to think that each of us could consider and remember that precept as well – to speak with loyalty and good faith – and that our leaders in Asia, in Australia and the United States will bear in mind this advice and will act, as Prime Minister Lee suggested, with ‘restraint and wisdom to [build] … a workable and peaceful accommodation’.