 Welcome to the second session of this special Lowey Institute Digital Conference. The Indo-Pacific operating system, power, order and rules for the 21st century. My name is Ben Scott. I direct the Institute's rules-based order project, and I am the convener of this conference. Thank you to Kurt Campbell and Michael Fully Love for that rich discussion of Washington's vision of regional order. If you've just joined us, you'll be able to replay their discussion on the conference platform. Next, we'll switch focus to China. Lowey non-resident fellow, Nadej Rolan, will soon talk to us about China's vision for a new world order. But of course, this conference is not just about the United States and China. More Indo-Pacific countries are setting out their own visions for the region. They're not always the same. Following Nadej Rolan's address, our first panel will examine these competing visions. Kurt Campbell just told us that for the US, trying to defend the status quo would be a fool's errand, because Asia is moving forward. So what sort of update does the Indo-Pacific operating system need? Our second panel is titled with a question. New rules? We'll ask the panelists what new institutions, rules and norms the Indo-Pacific needs. Tomorrow we turn to security issues. How do new formations like the Quad and Orcas support regional order? Can they complement existing regional institutions? Following an address by the Australian Minister for Defence, these questions will be tackled by a panel on a hard power and regional order. Greg Moriarty, Secretary of the Department of Defence, will join that panel. We'll be taking your pulse throughout the conference with some polls, the results of which you'll see on your screens. We'll post the first one now. Click on the poll notification in the top right-hand side of your screen to participate. As you can see, this poll asks you whether you think Indo-Pacific countries will ultimately have to choose between the US and China. Could you please take a moment to respond to that now? We also encourage you to post your questions throughout the conference and we'll ask as many of them as we can to our speakers. You can do so also by clicking on the right-hand side of your screen. And now it's an honour to introduce Nadej Rolan. Nadej is Senior Fellow for Political Security Affairs at the National Bureau of Asian Research in Washington and a non-resident fellow at the Lowe Institute. She previously worked as a China analyst for the French government for two decades. She is the author of the book, China's Eurasian Century, Political and Strategic Implications of the Belt and Road Initiative, as well as numerous journal articles and reports. Nadej is in high demand for her sharp insights and analysis. And we're very pleased to have Nadej join us today from Washington DC. She will be addressing us on China's vision for a new world order. So without further ado, a very warm welcome to you, Nadej Rolan. Thank you Ben so much. The honour is mine. I'm extremely grateful for the Lowe Institute's invitation to speak today as part of this conference on order, power and rules for the 21st century in the Indo-Pacific region. And to share some thoughts about what this might look like from Beijing's perspective. After 70 years of liberal order and three decades of American unipolarity, it may be difficult to imagine that the international system as we know it, based on a common set of rules supported by liberal norms and values, underpinning the work of multilateral institutions, could eventually give way to something radically different. Many of us have been observing the emergence of China for the past decades, but in the last few years, things seem to have accelerated at a dramatically faster pace than before. Right under our eyes, China is transforming its latent potential into actual power. Discussions about how China's continuing economic upward trajectory and expanding involvement in global affairs would impact the international system are not abstract or mainly confined to academic circles anymore. Governments around the world are now also trying to come to terms with the concrete implications of those tremendous changes for the global power structure and to find ways to accommodate them or to push back against them. Either way, no effective response can be thought through without an accurate understanding of what is at stake. Episodically, the Chinese leadership is gracing us with some remarkable clarity about its ambitions, aspirations and purpose. In one of those moments at the end of 2017, Xi Jinping observed that the world is in a state of profound changes unseen in a century. He has since repeated this phrase often in his speeches. It doesn't require a degree in psychology or in political science to understand that the Chinese leader is anticipating a power transition that will see China replacing the US and becoming number one, just like a century ago when the United States emerged as the dominant power while Britain receded. But what different does it make if the leader of the world is based in Shanghai rather than in the White House? Let's consider this for a minute. In the aftermath of the Second World War, the US had accumulated considerable power. And what did it choose to do with it? It no longer felt able to sit back within its own borders. Instead, it felt compelled to reshape the world in ways that would be safer for itself, more secure for its national interests and consistent with its own values. As China's material power has grown considerably, it's now facing similar questions, even though obviously circumstances are very different. China is not emerging out of some apparent breakdown of the international system, resulting of a world conflict. It is emerging into a world that is still dominated by others. For decades, following Deng Xiaoping's great insight, Beijing accepted a subordinate position within the existing order that these days are over. In fact, we in the West may have only recently began to realize that partly because Xi Jinping is more straightforward about China's objectives than his predecessors. But Beijing has been seriously mulling over the next chapter for over a decade since at least the 2008 global financial crisis. And the Chinese leadership is now eager to use its newfound power to reshape parts of the world order to make it safer for itself, more conducive to its national interests and non-threatening to or even supportive of the principles on which its domestic system is based. And so, here we are, present at the creation of something entirely different. Now, arguably, Beijing faces a number of constraints as it begins its journey to reshape the world. First and foremost, as I've just mentioned, China is rising within a system that already exists. It does not have the luxury of working on a blank canvas, just like the US did in 1945. Second, even though China feels threatened by some aspects of the existing system, it also has benefited from it to a large extent. And so destroying it completely wouldn't make sense, even if China had the power to do so. There are elements of it that Beijing is content with, such as the Westphalian concept of absolute sovereignty, for example, or an open trading system from which it can continue to profit. Therefore, Beijing's main task consists of claiming and creating some viable space within this existing system, mostly by pushing back against its most threatening and less desirable features. To this end, China has become much more proactive on the international stage, including within international institutions, and the Chinese leaders have openly indicated their willingness to take the lead in shaping the future of global governance. What are the main features of the existing international system that China is seeking to alter? They fall into three main categories. First, China wants to become the dominant economic power. It's not content to be the world's factory anymore, a position that is the result of its incorporation into the global economy for the past 40 years, while being consigned to the bottom of the value chain. China wants to become a high tech powerhouse and wants to vault to the top of the fourth industrial revolution. Second, Beijing wants an overhaul of its security environment in three main ways. One, it considers the US alliance system as a deliberate attempt to encircle and contain China's strategic space. Chinese officials now regularly publicly denounce the US alliances in Asia as destabilizing, irresponsible, and as Cold War relics. In addition to those declaratory statements, China is actively working to undermine the credibility of the US security guarantees in the region by building up its own conventional and nuclear capabilities. It's also attempting to drive a wedge between the US and its regional allies and to keep those allies divided as much as possible. In addition, China would like to see a change in the distribution of military power, the US military superiority, its ability to project power anywhere on the globe, and to develop and operate the most sophisticated weapons system pose a significant challenge to China's security. Therefore, Beijing is actively working on improving its own ability to fight and win wars against its most powerful opponent. And finally, Beijing does not accept the territorial status quo. It wants to assert and enforce its territorial claims off its eastern coast, in the east and south China seas, and over Taiwan. Third and perhaps most consequential for the future of the world order, China wants to set the normative foundations of the existing system. The CCP feels threatened by the ideas and principles embodied in the current order, which are at odds with its own ideology and political foundation. The CCP is attempting to undermine the validity of the quote unquote so called universal values, such as human rights and the protection of individual freedoms by rejecting them as nothing but western or even American values that are not applicable or viable anywhere other than in western countries. Beijing considers that these values are imposed on others only as a result of the US domination, sometimes by force through the instigation of regime change or color revolutions that lead to instability and chaos. And so Beijing is actively trying to undermine the idea of universality by claiming that every single nation is entitled to choose its own path, including authoritarianism and repression of dissent should it feel so inclined without fearing external opobium or pressure. The idea is getting much more traction with many regimes around the world than we in advanced industrial democracies sometimes realize. So that's for the list of Beijing's main rejections. But what does a China led world order look like in the end. Well, it's, it's a work in progress. And it's not totally clear to me whether Beijing's political elites have yet a fully articulated vision of the end game either. For the following description, I'm weaving together some of the CCP's official pronouncements with discussions within academic circles whose main task is precisely to help the Chinese decision makers delineate what this vision could look like. Beijing says it wants an Asia for Asians free of US presence and of other external Western powers. It calls for the creation of a community with a shared future where trade and financial flows physical connectivity and knowledge production and exchanges are all centered around China. Leading to the eventual creation of a subsystem in which China is the biggest most powerful nation towering over others. In this brave new world, the East is risen. The West has declined. China has emerged and the West has shriveled. The US has become a distant and isolated floating island, whereas China's influence is soaring along the Belt and Road corridors, spanning over the Eurasian continent, radiating from the Chinese mainland, outwards to Southeast Asia, Central Asia, South Asia, the South Pacific to the shores of the Middle East and of the African Atlantic coast. A massive chunk of the world that Beijing thinks will become the engine of future global economy growth even after China has seized to play this role because it won't grow as rapidly. A massive chunk of the world connected by land and sea, voting alongside Beijing in the UN, whose markets are dominated by Chinese companies, whose best and brightest minds are trained in Chinese universities, where the prospects for the development of democratic institutions has been weakened, the legitimacy and power of universal human rights has been eroded. In which China is able to dictate outcomes, impose its will and constrain the options of other countries, while at the same time being looked up to as the success story, the model to follow, the wave of the future. In other words, China is not just looking at the building of a sphere of influence limited to Eastern Eurasia, it is not seeing itself as merely a regional power of the likes of Iran or Russia. Despite regular official statements scouting the idea, Beijing wants to become a hegemon of its own right, setting the rules, being looked up to, and the place where it can get satisfaction is the global south. This is the blank canvas China can use to fulfill its vision of a new, synocentric world order. Thank you for your attention. Nadej, thank you so much for that very detailed and thoughtful exposition. I especially like the way you are able to distinguish between the different elements of the existing order that China objects to, to different degrees and to provide some detail on that, but also to go beyond and to give us a sense of what Beijing really wants for the future, even if as you say Beijing itself is not completely sure of what that is. And I understand I think as you put it once that involves really delving into industrial quantities of official documentation. It's incredibly difficult work which requires incredible expertise. So thank you very much for that. You've really set us up for a very interesting discussion now. We'll we'll wait for some of those questions from the audience to come in. But I'm of course going to indulge my privilege and ask you a few of my own to begin with to start off with. We talked about China really wanting Asia for Asians and that involving the US not being around anymore. I want to know what that means for Australia, of course, we are we are kind of part of that and maybe kind of not part of that. Our Defense Minister recently said that China views Australia as a tributary state already. And my question is, is that right? I think you're right, Australia and perhaps New Zealand are a little bit in the middle or at the crossroads of both the Western and the Asian world. I remember a few years ago, the Australian MFA published a report about the Asian century and really putting Australia at the heart of this Asian century. So pulling Australia's future really in the in the trail of China's rise. The announcement of AUKUS tells us a different story now. I think it's it's not so much the things that are thought through in Canberra right now. That comment for from Mr. Dappen is very interesting. So I have two reactions to that. I think it's Jim Mattis, the former Defense Department head in the US who said something similar. When asked the question about what China wants in terms of a new world order, he said something like the main dynasty appears to be their model. And they want to demand other nations to become vessel states. So it's interesting that this is something that people tend to see now. And the second reaction is, I wonder if someone on on your Ministry of Defense staff read my report on China's vision for world order, where I describe basically the internal discussions in China related to the creation of this vision, and where I trace back a lot of discussions around this idea of Tianxia and the, and the tributary system of, of, of yesterday, yesterday years, and how it echoes with possibly the vision for the future. Obviously, it's not going to be a full reincarnation of the tributary system of the imperial days. But there, there are things about specifically about this hierarchy, this hierarchical system that is is very clear in those discussions, you know, a few years ago. I think it's young Jiechi who said something about, you know, Southeast Asia and ASEAN, and saying these are small countries and China is a big country and, and that's it, right. So it's deeply ingrained that that hierarchical order. So tribut or vessel under in the shadow of China's power. Well, I'm very confident that I know for a fact, in fact, that many people in Australian Ministries have are familiar with your work and have read it. I'm not sure if that's the exact reason, but quite possibly. Can I just could we zoom back a bit now and go back to the way that China views the existing order. One thing I've noticed recently is in the rhetorical competition between the US and China at the moment. China tends to is talking explicitly about the rules based order, but usually in inverted commas as the so called rules based order. It's a Western concept and contrasting that with its own support for the United Nations and international law, which is, which is the real international order. Now there's some truth to that. I mean, China is demonstrably a supporter of UN organizations. There are hard facts such as its contribution to peacekeeping operations. So my question then is, is how much truth is there to that how much is their true, how much truth is there to China's assertion that it is in fact the upholder and defender of the United Nations and international law. I think you always need to take Beijing seriously when when it says something it is serious about what it says you know it's very calibrated. And so, there is an element of obfuscation, but it's not necessarily the case in all the time. And I think when when China says that it, it, it likes the international system UN system it is it is right. Then the missing part is, but there are things that it dislikes. So basically this the universal values component of it, the human rights component of it. But it still feels that the system itself its bureaucracy, the way it's organized is can be useful for China as a way to exert this influence. So it really is an architecture, but it depends on what you, what kind of principles and rules you put in those rules based order, right. And the most obvious application of this is really in in Beijing's efforts to to erode the human rights concept, universal human rights concept inside of the UN, and trying to replace it with its own version of what it thinks is human rights which is development So we're starting to see this emerging internet sovereignty is also another concept that China is trying to push throughout the UN system. But it's a, I think it's a, it's a way also to really help China. Yes getting some some influence again with the help of the developing world you know the voting principles inside of the UN can can can bring those countries to actively support China's positions on the global stage. So that's that's a very useful instrument in that case. Is China in fact going beyond that I mean, beyond establishing a system which in which it's safe to one where it's actually trying to export its system of government to to to establish its own norms, domestically inside other countries. It's a very, it's a very hotly debated question right now, you know, people tend to think that China is mostly defensive, which is really the starting point I believe you know trying to make sure that the party's survival is protected and not pushing against some of these values and principles that are at odds with its own, with its own system of beliefs and ideology. But I think at some point it's like, it's like defense and active defense, it's like, you know, you're fully defensive or if you want to defend yourself you need to get into the offensive. So the question about exporting China's model or or or or China's system. This is a tricky one, because obviously China doesn't doesn't aim at transforming the political system of other countries in a way that is similar to its own system. It doesn't necessarily want, you know, the Solomon Islands. Let's think about this example right now. That comes to mind and install a CCP regime there, right. So it's, it's not a replication of what the Soviet Union used to do in other words. However, there are elements that that China is exporting its elements of its own system and model that China is exporting and it that it is presenting to the rest of the world as a viable option, both for greater prosperity and greater stability and security. And this is not a democratic liberal expression or promotion like what the US and Western countries have done. It is based on this idea that you can have prosperity and stability with authoritarian system and a control of your your civil society and your economy and and everything else. So it's it's complicated. It's not as clear cut as some want to make it to look like, but it's also not completely, you know, benign for for for the future of this regional or global system. I'll, I'll ask two together and you can choose from them or blend them as you see fit. First is from Michael who asks about Vietnam. He says, Vietnam has been resistant to China for millennia, whereas Western countries have only just joined the party. What role do you believe Vietnam and other directly impacted Southeast Asian countries will play in the future of the region and the conflict with China in the current environment as an ally of both the US and Australia. And the second question is from Christian who asking about the Belt and Road is part of China's international Belt and Road strategy to grow its influence into the territories of developing countries through foreign aid and business venture investments. And then essentially holding those countries to ransom through these debts or investments, i.e. debt trap diplomacy. I'm going to choose the Belt and Road because this is as you know, a topic that I've worked much on in the past few years. And I'm going to try to be very brief because I see that we don't have much time but the end the short answer is yet. Yes, but I think that trap diplomacy is a straw man. It's, it isn't really important to see how Beijing is expanding its influence through the Belt and Road initiative. The debt trap diplomacy is a straw man and it's easily debunked you know there's there's not so many examples of this happening it's been very widely studied and examined. However, there are other things that are very worrying things that are happening in the deployment of Belt and Road in various countries that affect transparency corruption, environmental protection, labor rights, civil rights. So, debt trap diplomacy is is big, but it's not that important and consequential because it's limited to baby maybe a couple of countries, which doesn't make it minor but yes, there's all this these other things that are happening on a consistent basis, the lack of accountability. And we need to work more on helping countries that are in the recipient receiving end of Belt and Road investment to realize and analyze and examine the implications of the lack of good governance in in Belton with projects. Because the I think the long term consequences and implications for their sovereignty and their health is is is going to be are going to be much more important than this, you know, swap for assets for debt idea. Great. Thank you, Nadej. I mean, thank you. First of all, especially that's one of the best answers. I think really hits the nail on the head on the Belt and Road issue that I've heard for a very long time. So thank you. But thank you more broadly for that deeply informed lecture and discussion. We'll take a short break now, but please leave your browser open and join us again in 15 minutes for our first panel entitled competing visions.