 Ladies and gentlemen, my name is Benjamin Penney. For those of you who don't know me, I'm director of the Australian Center on China and the World. It's a great pleasure to welcome you here tonight. This is, as you know, our annual lecture. And we have the great honor to have Professor Hugh White speaking to us this evening. And obviously, you all know who he is. I won't be introducing Hugh myself. I'm going to leave that to the Dean of the College of Asia and the Pacific here, Professor Michael Wesley. My role is simply to say welcome and to acknowledge that we're meeting on the traditional country of the Ngunnawal peoples and I pay respect to their elders past and present. I recognize and respect their cultural heritage, their beliefs and their relationship with the land. And I also particularly extend respect to all Aboriginal and Torres Strait Islander people here this evening. We will, I will ask Michael to come and introduce Hugh now. After the lecture, there will be time for questions and answers. So, Michael. And thank you. What a pleasure it is to welcome each and every one of you to the Australian Center on China and the World at the ANU. To me, seeing a very full lecture theatre tonight in I think what is ANU's most beautiful building is a sign that the China and the World Center is fulfilling part of the ANU mandate, which is always to speak to the big national and international questions and always to reach out past the campus and engage with Australian and international communities on these big questions. Can I also add my respects to the elders of the Ngunnawal people, past, present and future? We are gathered here tonight to listen to one of Australia's foremost minds talk about surely one of the biggest questions that faces this country. And in thinking about and setting the scene for that question, it's hard not to fall back on looking for analogies. Analogies can be dangerous, but they can also be controversial and perhaps illuminating. In thinking about the challenge posed to Australia by the rise of China, you think of various different ideas and ultimately for me, it's hard to go past the analogy of the rise of Japan and the challenge that that posed to imperial and then Republican China in the late 19th and early 20th centuries. Japan's rise confronted imperial and then Republican China on a range of levels and in a range of ways. Most profoundly, back then, the rise of Japan represented a sudden shift in the status quo. Japan for imperial and then Republican China became a harbinger of what the region's future looked like, which was deeply uncomfortable and ultimately tragic for China. It was culturally challenging, upending a couple of millennia of Chinese conceptions of hierarchies of culture and achievement. It was economically challenging and very quickly became military challenging as well. What was at stake was not only China's position in the world, but China's sense of itself. And all this from a country that China had come to depend on as a culturally close translator of Western concepts that were utterly alien to the Chinese mind, but which the Japanese had translated into more familiar Confucian Buddhist terminology. In many ways, the scale and variety of challenges posed to today's Australia by an increasingly powerful and confident China are very similar to those that confronted China by the rise of Japan 100 years ago. And as with all periods of challenge, this country's major challenge needs insightful interpreters and insightful cedars of debate. And who better to talk to us about a range of these things than Professor Hugh White, who will be speaking to us tonight. To me, Hugh embodies a range of incredibly important and incredibly rare qualities in academic researchers and commentators. Hugh's work always embodies the quality of clarity. It's a clarity of thought, a clarity of being willing to follow through on the implications of thought and logic, but also an incredible clarity of language. No one is able to convey complex concepts with such immediacy and importance as Hugh. Hugh's commitment is the second quality that makes him so important. A willingness to take on big questions and to face up to them and to deal with them seriatim. Thirdly, Hugh's courage. His ability to put issues out there, to raise uncomfortable questions and to put important communities of thought offside and suffer the consequences of having done so. Fourthly, Hugh's generosity. The fact that despite being attacked at hominem by a number of commentators whose names I won't mention, Hugh never replies in kind, Hugh is always interested in the ideas rather than the personalities. Hugh, I can say, is an incredibly generous member of the ANU and broader strategic studies community. It is very hard to find an occasion on which you've asked Hugh a favor and he hasn't stepped up. He has delivered us here in this country a different style of engagement and debate. He has genuinely put Australian ideas about the future of the region on the agenda of the major centers of debate internationally. And he brings all of this, he brings to all of this, I think a unique background in terms of where he's come from and the skills he's developed along the way. Hugh started off life with a deep training in the subject of moral philosophy. Firstly, at the University of Melbourne and then at the University of Oxford. He then has had to put it mildly an unconventional career, beginning as a journalist with Fairfax media, moving on to become an intelligence analyst with the Office of National Assessments, then becoming a political staffer first with the Minister of Defense and then with the Prime Minister and then joining the ranks of our defense bureaucracy and rising to its very most senior levels. He then pulled off an incredible feat which was to encourage the Defense Department to fund a think tank which would then systematically criticise what the Defense Department was doing. He became the founding director of the Australian Strategic Policy Institute. And then to the great benefit of the ANU we were able to coax him across into the green fields once again of academia to become the director of our Strategic and Defense Studies Centre and then of course Professor of Strategic Studies within the Strategic and Defense Studies Centre here at the ANU. Ladies and gentlemen, can I please ask you to join me in welcoming our 2017 China in the World Lecturer, Professor Hugh White. Well, it's conventional to say thank you very much for that very generous introduction but that went beyond above and beyond in generosity. Thank you very much. It's a great pleasure to be here, distinguished guests, members of the CIW Board, Nancy who made all this work and come together and all of you including lots of old friends. Nice to see you all and thank you very much for coming out. And thanks for Ben Penny for his introduction, for his invitation to deliver this year's CIW Lecture, particularly because the invitation's a little unusual. These lectures in the past all been delivered by exceptionally distinguished sinologists, people like Jeremy Barme and Wang Gang Wu. These are fabled names and I'm not a sinologist. So if you've been misled by the advertising you can leave now. My work for this is on Australia and its place in the world and in Asia. And of course partly for that reason in recent years I spent a fair bit of time thinking about what China means for Australia. And so of course I've had to try and learn something about China and I've been enormously lucky that many friends and colleagues in the sinological community including of course many friends and colleagues here at CIW have been so generous in helping me do that. Some of them are here tonight, nice to see you. Despite their best efforts I should say I'm still very conscious of how little I know about China still. But there is I hope a reasonable excuse for me nonetheless accepting Ben's kind invitation. Because China is now so important to Australia that to understand what it means for us it's no longer enough just to look at China itself. We have to look at the wider international system in which we sit to see what China means for that system. And we have to look at ourselves who we are, what we stand for, how we make our way in the world to understand the choices and challenges that China today poses for us. And that's what I'm gonna try and do in a fairly limited way this evening. And I guess I don't need to spend much time persuading you that the subject is topical. Countless issues and every week animate a debate in Australia about how we should manage our relations with China. You'll recall them all. But I wanna contribute to that debate tonight by challenging the way we frame it. We're having a debate but it's not yet I think getting to the issues. I want to argue that the terms of that debate do not yet encompass the nature and scale of the issues and choices we face as we face the power of China. And that's why the title of my talk refers a little pretentiously perhaps to the future of Australia. I hope to persuade you that that's a fair description of what's at stake. I hope to persuade you in other words that this issue is even bigger than you think it is. Our national debate on China today focuses on whether and if so how we should adjust a range of current policies mostly on specific issues to the challenges that are posed and the opportunities are offered by China's economic growth. And of course that's pretty important. Policies on things like extradition, foreign investment, political donations, media ownership, language education, you name it, there's a whole lot of stuff out there and it is pretty important. These are all important issues. But to imagine that they exhaust the range of questions that we face is to assume that China's rise makes no more than a marginal difference to our overall international setting. And that we can manage our international relations with only marginal adjustments to our policies and practices in response. And that's wrong. China's rise is among the two or three biggest shifts in Australia's international setting in our history. It's comparable to and quite possibly bigger than the slow collapse of the British Empire and the decolonisation of Asia after the Second World War. It's China's rise is already fundamentally changing the international order globally and especially in Asia. It's already challenging us fundamentally to rethink our place in Asia. And that is in turn requires us to re-examine who we are ourselves. So I want to suggest to you that this evening that we still haven't begun to understand what China's rise means, how completely it changes the world, the region we live in, our place in it and how much we will be changed by it. Our debates about China have hardly begun. This is primarily a story about national power. And so I need to start by saying something about that. Here's a definition. National power is a capacity or one state to shape its international settings, to suit its interests, especially by influencing the conduct of other states. It can be manifest and exercised in many different ways and can be affected by many factors. But history strongly suggests that its primary ultimate source is economic scale, GDP. It is as simple as that. If you don't think it is, think back to Britain's wealth and power in the 19th century and ask what made Britain the strongest country in the world in the 19th century. Or think back to America's wealth and power in the 20th century and ask what made America the strongest country in the world in the 20th century. They were both in those centuries, the world's biggest economy. It's a correlation, not a causation, but the correlation is pretty telling. I think the correlation between wealth and power, between preponderant wealth and preponderant power is very plain. And when a country becomes very powerful, as Britain and America were, they have the capacity to shape not just their environment, their immediate environment, but the whole system in which they work. And that's just what Britain and America had done over the last couple of centuries in their time at the top of the global pyramid. And that created an entire era, we might call it an era of Anglo-Saxon primacy. China's rise brings that era to an end. Because China will be the world's richest and most powerful country in the 20th century. I'm gonna say that again. China will be the world's richest and most powerful country in the 20th century. It's remarkable, actually, but that statement still apparently has the power to shock and that so many of us are still sure it isn't true. It's a big subject. So I'm not gonna try and nail it down completely, but I've gotta say something about it because it's central to the story. Of course, it's not absolutely certain that China will be the wealthiest and strongest, most powerful country in the 21st century because nothing in human affairs is. But the reasons that are often given as to why it might not be look to me pretty flimsy. The foundations and trajectory of China's power are much more robust than most of us are willing to admit. Of course, China's growth has slowed, and I expect it will slow further. That's what the economic historians would lead us to expect. But the source of China's power today does not lie in its current growth rate, but on the scale and nature of the economy it's built up over the last three and a half decades. The foundation of China's power today is locked into the scale of its workforce and the nature of the economy as it has developed since 1979. That's not gonna disappear. Even if China's economy flatlines in the years ahead, it will still be bigger than America's in PPP terms, and it's very unlikely to flatline. Indeed, for all its problems and the clear risk of short-term crises, China is likely to keep growing faster than America on average over coming decades and to overtake it not just in PPP, but in MER terms. Demographic problems won't stop that happening. China's demographics are pretty dire, but its workforce will shrink, but its workforce will remain by miles, by a huge margin, by far the biggest workforce in the world, much bigger than America's, only India as a competitor. And we shouldn't bet on the middle income trap. Even if it gets stuck there, China's economy will still be the biggest in the world. And it quite possibly won't. China's economy is more sophisticated than many people think with a real capacity for innovation and entrepreneurship. The sort of things that get countries out of the middle income trap are already being seen. Perhaps most importantly, we'd be unwise to bet that China's rise to power will be swamped by political turmoil. The CCP faces many challenges, but I think the evidence is very unconvincing that it's about to go under. And even if it did, the long-term economic consequences and the long-term consequences for China's power are far from clear. History quite plainly suggests that even big revolutions do not permanently swamp or collapse major economies. After a period of chaos, often quite short, they bounce back. It would take a different kind of crisis. So crisis is in deep as long as China's collapse in the 19th century to permanently reverse the gains of the last 35 years. Don't bet on that happening. So we would be wise to get used to the idea that what I said before is true. China will be the world's wealthiest and strongest power in the 20th century. PWC's most recent estimate is that by 2030, which is only 30 years away, Chinese GDP will be 113% of America's in market exchange rate terms. 165%, half as big again in PPP terms. In 1990, just a generation ago, it was 6% of America's. It's the biggest and fastest shift in the global distribution of wealth and power the world has ever seen. And for Australia, it's worth noting the numbers are just as stark. In 1990, our GDP was 88% of China's in MER terms. And by 2030, the estimate is 7%. It's in the generation. That's just a fraction, a big fraction, but a fraction of my working lifetime. That doesn't mean that China will rule the world. It does mean it will be the most powerful state in the world, but it will be the most powerful state in the world with many powerful states, including, of course, America, which is not going away. America is gonna remain an extremely formidable country. And that means that China will not be able to dominate regions of the world far from its borders. It won't have the same kind of global power that Britain in its heyday or America in its heyday had. But it will be by far the strongest state in the Western Pacific. And it will be very well placed to become the dominant power here. That's the new reality we have to face. And so far, we're not facing it. We're in denial about it. That's not surprising in some ways that we're in denial about it, because it is so new. Since Europeans were settled here in 1788, our region has been dominated successively by Britain and America. We've relied on them to keep us safe and to shape Asia to suit our interests. We've felt able to rely on them in that way because of our shared Anglo-Saxon heritage, language, history, values, all of that. And we've always believed that our security and prosperity here on the edge of Asia depended absolutely on their regional primacy. And all our wars have been fought to help preserve that. But none of the challenges they've faced over those centuries have been as formidable as the one posed by China today. Because since 1788, no other country has been as powerful as China is today, relative to those, nor is important to Australia in so many dimensions of our national life. That includes, most obviously, its importance to us economically. That is something we're not in denial about. We do understand that China is not just our biggest trading partner today, but our, in most importance, also future economic opportunities in the decades to come. And we know that its economic scale and dynamism is vital for our future prosperity. But we still don't understand what that means for our relations with China and our place in Asia more generally. To understand that, we have to understand the era of Anglo-Saxon preponderance in Asia is over and to accept that for us, this changes everything. Our reluctance to accept that is embodied in a form of words, one might even say mantra, which over the past few years has come to dominate official statements about what China's rise means for Australia. We don't have to choose between America and China, is there a frame? Mr. Turnbull, rather, said it just the other day, just two weeks ago when Premier Lee was here. And every political leader of either political party has said it since John Howard stepped down. What does it mean, though? We don't have to choose between America and China. What does that mean? Well, first it expresses a true and welcome fact about the past. We haven't had to choose between America and China in the past. We're almost three decades after 1972. Australia didn't have to choose between them because they were not strategic rivals. That meant that John Howard could assure Beijing that while Australia's alliance with America was non-negotiable, nothing we would do as a US ally would be directed against China. That understanding was what allowed Australia to build that cozy niche. Which has done so much for us. Relying on China to make us rich and America to keep us safe. And it worked well as long as America's attention was elsewhere and China was biting its time and hiding its power. Its days were numbered once China began overtly challenging US leadership in Asia around 2008 and it stopped working dead when Barack Obama came to Canberra to announce his pivot in November 2011. That was Obama's response to China's challenge by launching it in Canberra. He made it absolutely clear that he expected Australian support to resist China's ambitions. That made Howard's understanding upon which Australia's positioning between America and China had always depended no longer tenable. We had to start making choices. And since then, the mantra has been simply untrue. We are choosing between America and China all the time. As we try to assure America that we're supporting them against China, as America expects, and we try to assure China that we're not, as China expects. And so for example, we've joined Washington in announcing China's conduct in South China Sea, but avoided China's displeasure by not actually doing anything about it. We agreed to host Marines in Darwin to please America, but to please the Chinese we're denied it had anything to do with China. We joined the A-I-B, but avoided an explicit endorsement of One Belt, One Road, et cetera. The list goes on. The reality is that every decision we make about our support for America is judged by how it will be read in Beijing and vice versa. This balancing act is the most potent factor in the formulation of Australian foreign policy today. Now some might call this delegate balancing act a commendable example of agile diplomacy. You could also call it a pattern of systematic duplicity, which is fooling no one but ourselves. Now I'm a long student of power politics so I'm not, I understand the role of duplicity in diplomacy and it's not necessarily always a mistake. It has its place when it's used to support a clear and credible strategy, but not as a substitute for one, which I think is where we are today. And of course, ultimately it's futile because whether we have to choose between America and China has very little to do with us. It depends on them, on how intense their rivalry becomes and on what they choose to demand of us. The more intense their rivalry grows, the more each will demand of us and the starker the choices will become. It is perfectly possible at some time, perhaps quite soon, their rivalry will reach the point that one of them confronts us with a choice which would upset our balancing act and force us to fundamentally alienate one side or the other. We don't have to choose, is no more than a statement of blind faith that this will not happen. What's more, it's a statement of faith that nothing really is going to change. To make any sense at all, we have to see it as based on the hope that we can go back to the way things were in John Howard's day. When America's power and leadership in Asia seemed unchallengable and China seemed happy to accept it forever. If that was true, we wouldn't have to choose. But how likely is it, really? Well, over the past few years, as rivalry between America and China has intensified and those choices have become tougher, some people, even in government, have started to see that we don't have to choose it wearing a bit thin and to wonder whether we do not in fact have some choices to make, after all. Not surprisingly, the overwhelming majority of them think that we should choose America. But their views are not all the same. We need to divide them between the optimists and the pessimists. The optimists believe that China's challenge to U.S. leadership in Asia and the rules-based order can be easily counted by a show of U.S. strength and resolve backed by strong support from America's allies and friends in Asia. They think, in other words, that Beijing is trying it on and will back off quickly if it meets determined resistance. If that's true, Australia should get off the fence and start supporting America much more robustly as it pushes back against China. But is it true? The idea that China was just trying it on was the foundation of President Obama's pivot to Asia. The pivot assumed that China would quickly back off in the face of largely symbolic gestures like the marine deployment to Darwin. But China's proved that wrong by countering the pivot and its gestures were a series of much more forceful moves, especially in the East and South China Sea. Those gestures show that China is willing to risk a confrontation with America. And indeed, as events have unfolded, it's become clear that it's America rather than China that some willing to risk a confrontation. That was the message that was sent, for example, by President Obama's refusal to authorize full strength red with navigation operations in the South China Sea. So far, China's been winning. But the optimists are still optimistic. They hope that the pivot under whatever new label it might be given in Washington can still be made to work all it needs is a stronger dose. America needs to push back harder than Obama was willing to do, accepting short-term damage to the US-China relationship for the long-term gain of beating back China's challenge. And some of the optimists hope that this is exactly what Mr. Trump will do. And they argue that US allies like Australia shouldn't encourage him to do that by being willing to support America and confront China with an even stronger show of solidarity. Hence, for example, a revoices in government and in the opposition who think we should be undertaking and urging America to undertake full strength freedom of navigation operations in the South China Sea to confront China's moves there directly. Again, this would be a good policy if it works. Preserving US primacy would be immensely beneficial for Australia and it would be worth even a serious disruption of our relations with China if it leads to a permanent preservation of the status quo. But that will only happen if China does indeed back off in the face of that kind of stronger pressure. Many people simply assume it will. But it's not quite clear why. It's not quite clear why it should be true that China is any less determined to change the Asian order and expand its influence than America is to preserve the old order under its leadership. Indeed, there are good reasons to believe that the balance of resolve favours China. To see why that's so, we have to reflect a little bit more deeply on the nature of their rivalry. The headline issues, South China Sea, East China Sea, North Korea, even Taiwan are just symptoms of this rivalry. Its cause lies much deeper in the fundamental incompatibility of their primary strategic objectives in Asia. America seeks to remain the region's primary power and China seeks to replace it. It's as simple as that. This is the most consequential strategic contest globally since the end of the Cold War and the most consequential in Asia since Nixon went to China in 1972. So we're back in the world of power politics. Power politics is what happens when great powers compete in this way over leadership in an international system. The stakes in such contests are very high because states see their place in the system as central to their security, their prosperity and their identity. And in this sort of contest compromise is possible, but rare. Facilities was wrong to say that war in these circumstances is inevitable, but it's certainly a big risk because armed force and the willingness to use it are the key factor in the way power political contests play out. History suggests that the boundaries of each powers, great powers, influence in an international system are determined ultimately by the issues over which each great power is demonstrably willing to go to war with other great powers. So the contest for leadership in Asia will be determined by the issues which America and China can each persuade the other they are willing to go to war with one another over. Now this all sounds, I know, a little Wagnerian and rather remote from the image we have or the image we like to have of the modern rational rules-based post-Galboa age we live in. But that's what's happening in the South China Sea today. That's what we're seeing. Each side by its military deployments is testing how far the other is willing to risk a confrontation that might turn into an escalating armed clash. Neither side wants a war, of course, but each has been pretty confident the other would back off first to avoid a clash, leaving them the winner without a war. And that, of course, creates a very dangerous situation with a high chance that they both find themselves sliding into a war that neither wants or intends. It's happened often enough before. That's what happened in 1914. Now we will be very unwise to underestimate China's resolve in this contest. China is determined to achieve or restore its leadership of the Asian order. And that shouldn't surprise us. It is, after all, seeking to do no more than Britain and America sought to do when their power was at their peak. And in China's case, its ambition is turbocharged by some pretty deep emotions. Consciousness of China's extraordinary long history and long history of power, of its recent humiliations, of its current and recent achievements, and a cautious, but I think very deep-seated confidence in its future prospects, we'd be very unwise to underestimate the influence of those sorts of emotions on China's view of its future potentialities. We might regret this, but we shouldn't underestimate it. And we'd also, unwise to underestimate the likelihood that China assesses America's resolve as weaker than their own. They're not reckless in Beijing, but looking at America as it is today, it's record of strategic failure over the past decade and a half, the feebleness of the pivot, the peculiarities of American politics, and the apparent trends in its policies. It will be surprising if Beijing did not believe that America was less committed than they are to the leadership of Asia. And 50 missiles on Syria won't change their mind. They don't want war with America, but they probably think they can achieve their aims in Asia without one, because they think America will back off. And all that means the optimists are probably wrong. Supporting America to push back harder against China is unlikely to get us where we want to go. It's more likely to get us into a war with China. And that brings us to the pessimists. They are the people who can see that Beijing might not back down. So the preserving US leadership in Asia might require a war with China. And they think that might be an acceptable price to pay. We need to think carefully about whether they might be right. And we need to recognise that this view is not as uncommon as you might think. Which depends whether they're right or not. Depends on what kind of war we think that would be. Many seem to assume that a war with China will be short contained and successful, something like a sort of a desert storm at sea. So it's very important to register just how unlikely that is. This is not the place to explore the evolving military maritime balance in the Western Pacific, though it is one of my favourite subjects. So just let me say that we can't count on a quick low-cost winds against China in the Western Pacific anymore. Any localised clash would probably produce a costly stalemate for both sides, with both sides facing irresistible pressures to escalate. As they did so, this could easily become the biggest regional conflict since 1945. Easily become the biggest regional conflict since 1945. And it's hard to imagine what would count as a victory in such a war for either side. How do you win a war against China? How do you win a war against the United States? Moreover, it would be a war between nuclear powers. And we don't know much about them. We have become strangely insouciant about the risk of nuclear war between major powers since the end of the Cold War. And that is a big mistake. No one knows where the nuclear threshold might lie in the US-China war. So no one can be sure that it would not be crossed. The danger that any clash between America and China could escalate to a nuclear exchange might not be high. We don't know. But it doesn't have to be. It's very, very serious, even if it's quite low and it might not be. So what about Australia? Would we and should we join America in a war with China to preserve US primacy in Asia? It seems like a melodramatic question. But I think it's one of the things that gets to the heart of the issue. And it's certainly not hypothetical. And yet at one level, Australian governments have already answered it. Despite their devotion to we don't have to choose and their reluctance to risk relations with Beijing by starting to openly with the United States rhetorically and the diplomatic maneuvering, governments from both sides in Australia have steadily moved towards the defence policy that assumes that Australia would and should send forces to support America in a war with China. Moreover, they have begun increasingly to design our own forces to do just that. That's what the 2016 White Paper in particular is all about. So would we really do that? Many people say that we would have no choice. Many people say we would have no choice. They say we are so dependent on America for our defence and so deeply entangled with our systems and operations that we simply could not contemplate saying no when the White House called, even if the person calling was Donald Trump. I've got to say, I think that is entirely wrong. Tirely wrong. Of course we have a choice. Of course we have a choice. And it will be a very difficult one because on one side would weigh the undoubted damage to our alliance with America if we're refused. And that would be a terrible thing. But on the other would weigh not just the damage to our relations with China, which would also be terrible. But much more importantly, the real costs and consequences of the war itself. Especially as we could not assume that America would win it. So this choice for war against China would not just be a matter of diplomatic positioning like the choice we made to support George Bush's invasion of Iraq in 2003. Given the likely nature of the war, it will be a choice of immense significance to every aspect of our national life. One of the most momentous choices an Australian government had ever faced. And I think it's rather shocking that so many of those who make or analyse Australian strategic policy today take it so lightly. For what it's worth, I think we would very likely say no to a US request. The risk that we'd face such an organising choice is perhaps, however, a little lower than the pessimists imagine. But perhaps not for the reason the pessimists imagine. I think it's because it seems to me increasingly likely, in the light of what I've just been saying, that America would not in fact be willing to fight a war with China in any but the most extreme circumstances. Certainly America has huge interests in Asia and has been the leading power there for a century. It would be a huge and wrenching step to pull back from all that. But China today is the most formidable strategic rival America has ever faced in Asia. Arguably the most formidable strategic rival America has ever faced anywhere. So the idea that America will remain committed to preserving its leadership in Asia because it always has in the past has got to be said against the fact that the costs of doing that against an adversary as formidable as China are higher than they've ever been before. So we do have to wonder what, if anything, in Asia would America be willing to fight a war with China, perhaps a nuclear war over? Unless there is a much clearer answer than we have heard here the two. The era of strategic leadership in Asia will draw to a close. That may be what's happening already. The historians may look back and say that that process is already well underway. Of course, there's a third option. It's not just war or withdrawal. America could do a deal with China by agreeing to share leadership in Asia. I've written about this before. That would mean China playing a bigger role, perhaps a much bigger role in Asia than it has in the past, and America playing a smaller one. But it would still leave America as a significant player, able to balance China's power and place some limits around the way China uses it. And that would plainly be the least bad option for Australia and I would say for others in Asia. Perhaps also the least bad option for America. But it would be very hard to achieve and maintain. It would require statecraft at the highest order. And the time to do such a deal, the time to exercise that kind of statecraft, is slipping away. And it may be too late. Particularly it may be too late now that we face four, even eight years of Donald Trump in the White House. It's important to recognize that Trump is not in any way to cause America's problems with China and in Asia. But his failings make it much less likely that America can deal with him effectively. They seem rather to make it more likely that America will either thoughtlessly stumble into a war with China, or ignominiously retreat from the region, or both. And that all suggests that turning to America is not going to solve our China problem. Whatever happens, even if America does manage to stay engaged, China is going to loom much larger for us, exercising more power and asserting more influence than any Asian power has ever done before. And it is quite likely to take America's place as the region's primary power, at least in East Asia. So how then are we to respond to its growing capacity to interfere in our affairs and contain our sovereign independence? Part of the answer is to get closer to China. In the past few years, some influential voices, some of them are here tonight, have argued that we need to get real about China's growing power and start dealing with it much more proactively. They argue that if we can deepen and strengthen our relationship with China, we'll be able to better able to influence China's policies towards us and limit their impact on our independence and interests. And they accept, albeit reluctantly, that this might mean stepping back somewhat from our relationship with America. These views are surely right as far as they go. We must get closer and more engaged with China as China's power and influence grows. That means, amongst other things, that we must learn a lot more about how decisions are made in Beijing and how to shape them to our advantage and we should give higher and higher priority to shaping our policies to maximize our leverage over them. But we need to be coldly realistic about how far this will get us. Our history tells us plainly how hard it has been to do more than nudge the policies even of our closest allies in Washington and London and we'll never have the kind of entree and access in Beijing that we have enjoyed with them. No matter how well we do, our capacity to shield ourselves from Beijing's power by better diplomacy is going to be very limited. They will be able to shape our actions and decisions with carrots and sticks to a degree that no country has ever been able to do before except America and Britain and we would be right to fear that China will be less generous with the carrots and more ruthless with the sticks even than our old allies have been. Indeed, this is already true. We should not underestimate China's capacity already to shape our policies. This is something I think we do underestimate. It's sometimes argued that Beijing cannot pressure us by threatening our export markets because it depends so much on our exports to fuel its own economy. Well, that's true when it comes to current trade but that's not their best economic pressure point. Our real vulnerability is our hope and belief that future trade with China is the key to our economic prospects and China can play that very easily. Consider what happens if for Canberra, if the Chinese threaten to punish us for some policy misdemeanor or other by directing future investments and export opportunities in key sectors away from Australia. Future investments and export opportunities. That would cost China nothing today and it might not even do it but it would send the Australian share market going like that. Nor should we underestimate the political cost that Beijing can already impose on Australian government. The Chinese threat to suspend high-level meetings would freeze the blood of any Australian Prime Minister and induce all kinds of accommodations. It was, after all, just that kind of pressure that nudged John Howard to reach his understanding with Beijing and that was back in 1996 when China's wealth and power had hardly begun to take off. All of this is very disconcerting. We take great pride in our sovereign independence of policy and action and we hate the idea of it being curtailed by foreign power. This feeling is perhaps particularly strong in Australia because we have no experience of making our way in the world without the support and protection of a great and powerful friend. We feel that something must be going badly wrong in the world if we find ourselves subject to that kind of pressure from others. But in reality, that's the way the world always works for most countries most of the time, the ones who don't have great and powerful friends looking over their shoulders. That's what great states do. What do we do? 20 years ago I was a very junior member of a group of three that went to PNG to apply immense pressure on PNG to abandon its plan to deploy mercenaries to Bougainville. We all agreed now, I guess we'd all agree now that the plans were foolish and dangerous but there was no doubt that it was PNG's decision to make. We were interfering in PNG's internal affairs because we thought it wasn't our interests and it did. In the end we got our way. It was a classic exercise in national power and had diplomacy failed plenty of people in Canberra were willing to contemplate the use of force instead. So let's not be too unrealistic about the inviolability of sovereignty. Everybody does it. Might, in other words, might not equal right but it does determine how much you have to pay to maintain your view of what's right in the face of superior power and weaker countries must get used to calculating such things with a fair degree of precision. What then should we do given how likely it is that we will face such calculations more and more as we come face to face with China's power? What are we really willing to do and what price are we really willing to pay to resist China's bid for regional primacy and limit its influence over us? How far should we accept and accommodate it? How do we really feel about living in Asia dominated by China and what are we willing to do to avoid it? I hope I've gone some way to convince you that these are the questions we really need to be debating. Answering them is way beyond my scope tonight. Instead, I'll finish by mentioning a couple of issues about China about which we're going to have to learn a lot more and think a lot more if we're to answer those critical questions adequately. One of them is about what China wants. What kind of regional leadership will it try to exercise? Would it be more like America's relatively soft hegemony in the Western Hemisphere under the Monroe Doctrine or more like Stalin's harsh dominion over Eastern Europe or even Brezhnev's for that matter under the Brezhnev Doctrine? Our images of China's ambitions as a rising power are still very simplistic conversations about its ambitions as a rising power are not very illuminating. But we do need to learn a lot more about it if we're to make better informed choices about what they mean for us and how we should respond to them. The second set of issues concerns the model standing of China as an international actor today. This is an exceptionally difficult question but it is absolutely at the heart of our topic. I don't know what the answer is but we are taken the question seriously enough. A few years ago I heard a senior official say, senior Australian official say quite bluntly that Australia could not possibly contemplate China playing a bigger leadership role in Asia because its political system was fundamentally evil. A few of us might go that far but most of us agree that China's values are different from ours that for Australia to accept China playing a larger leadership role in Asia will be to compromise our values and that that is something we simply could not and should not do. Mrs Bishop spoke along these lines in Singapore recently. Our values are not transactional one of our leading columnists right last week. Well I don't think it's nearly that simple. We speak with great confidence about our values but they are hard to define. Well maybe we like it that way. We perhaps prefer to keep them vague because that spares us from examining them and the choices they drive us to too closely. It makes it easier to think that our moral and political choices are simple black and white ones between right and wrong. Right if we uphold our values and wrong if we compromise them. But that assumes that all our values are consistent with one another. That they all pull us in the same direction. And that is not so. We value democracy in rules based order but we also value peace. Those values weigh on opposite sides when we consider how to respond for example to China's assertiveness in the South China Sea. So the idea that we never compromise our values is simply wrong. We do it all the time when we weigh one value against another. So we will compromise some values as we deal with China. I can promise you that. The question is which ones and how much. We need to get beyond this crude sloganeering and think a lot more carefully about our values and how they affect our choices as we decide how to respond to China's power. And we also need to understand China's values better and how they really differ from ours. We are very keen to assert and emphasize those differences but their precise nature and significance deserves more attention. It is not to deny that there are differences and that those differences can be seen in aspects of Chinese policies and practices that we find harsh and unjust. But it is to note how little attention we pay to the other side of the ledger. China's government has after all achieved the largest increase in human material welfare in history by miles. In the span of just a generation it has transformed the lives of hundreds of millions of people vastly for the better in very concrete ways. Better food, better housing, better healthcare, better education. And these are things which we recognize in our society as having real moral weight. So we ought to recognize they have moral weight in China as well. Where do we place all that in our judgments of China's moral fitness to lead in Asia? How does it balance against the other stuff? Surely we can't simply ignore it. So if we are going to understand how to respond to China's power we are going to have to take the trouble to think much more deeply about China itself and to do more just to the complexity of what has been happening there the moral complexity of what has been happening there over the past few decades. And whatever happens we need to accept that whether we like it or not Australia is going to be profoundly changed by all of this just as we have changed by those earlier Titanic shifts in our international setting. How those changes occur what we become as a result of them depends on how well we recognize what is happening understand what's happening and manage it. So let me end there. My conclusion is simple enough we are going to live with a very powerful China. It will have more influence over Australia than any country apart from our great allies has ever had before. How we handle that will probably do more to determine our national trajectory and to define our national identity than any other choice we now confront. We have not yet begun seriously to address it. Instead we continue to rely on America to fix it for us. That is most unlikely to work. We need to sort this one out for ourselves and to do that we must know a lot more about China and think much more deeply about it. So we really need our sinologists and we really need them to see how important their work is to our future. And that of course is what CIW is all about. Thank you so much and major stereo performance provocative tightly argued and from my position let me fully endorse your final comments. We now have time for questions and answers. We have microphones on each side so we have a question here to begin with. It's Professor Wai. I have a third way of looking at Australia-China relations. I think John Harwood was right saying that you don't have to make a choice and Australia could actually make a choice by cooperating with China. Let me just say in Australia our infrastructure the roads are standard the human highway the best time is all patches. Our railways are traveling at 80 kilometers an hour. We need an airport in Sydney 40 years ago and we don't have high speed rail. Now China able to do all those ones by cooperating with Australia they have the full capability they have the money and they can do it double quick and double chip. So Australia this is the golden opportunity to cooperate with China and to bring Australia to the 21st century. Don't miss that opportunity. I I absolutely take your point but there's a dilemma isn't it because when Australians think do we want China to play that kind of role in our infrastructure? Do we want them to own our power distribution system? Do we want them to own our ports? Do we want them to play a leading role in our fantastic NBN? We're worried. We're worried about what that will mean. We're worried about how much influence China will get. We're worried about what it means for us to live in a world in which China is that powerful and that influential we're going to find it very hard to get these decisions right. These I agree very important very practical decisions you know how do you get your infrastructure who do we trade with all of that we're going to find it very what kind of investment do we welcome we're going to find it very hard to get that right until we've done below the questions about what goes to the firm and what doesn't and ask what kind of relationship are we going to have with this country and the reason we find that hard so hard to deal with is that we half understand we deny that in dealing with China we're dealing with a country which we've never dealt with before because the world's never seen a country like China before it's brand new I agree I just think we're not going to get there until we've got some of these other issues on the table and address them more effectively It's very interesting subject and not very easy to discuss about it I have a few remark or question you mentioned about how the Chinese economy have been pulling up to the benefit of hundreds of millions I don't agree with this because when you look in China now we have a very big cliff between the very rich people and the common people so I would like to hear a little bit more about this the second point I would like to bring here in general in the whole concept of the story is if China was a democratic country where we have people electing their government I would have much less problem with their domination in the East than what it is now and as you mentioned some of the people think it is still like an evil country because you cannot control how they are going and which way they are going OK, good point look of course there are huge inequalities in China some people have got very very rich and some people of course are still very very poor but I think the point I was trying to make and I think the significant point we have to judge how far a vast number of Chinese have seen their life improve the ones that have five cars and seven Rolex watches are in one category but the people whose parents, people of my age who can remember their small siblings dying during a great famine some of my age in China can remember the great famine and remember their siblings dying of starvation in front of them now that is the difference now they are wondering whether they can afford the second car that is a worrying about pollution, it is very worrying about traffic in Beijing but that is a wonderful thing now the point about democracy look, I am sympathetic to the idea that countries that are democracies tend to make better neighbours although I don't think we should take it too far and there are a couple of cheap shots I can make there but let me make a slightly higher quality shot and that is that what makes China very ambitious what makes China I think very determined to exercise a high degree of leadership in Asia is not that it is authoritarian or communist or even that it is Chinese it is that it is normal it is just doing what every other country does and I am not sure that a more democratic China would not be harder to deal with nationalism is not an artifact of the Chinese Communist Party any more than Australian nationalism which is a very real force is an artifact of John Howard's Liberal Party although he did a pretty good job I will sing it up this is something which goes very deep into cultures I tend to agree if I had my choice I would probably rather deal with a China that was democracy as long as that was going to work alright not too many erratic politicians in their system I don't think in the end we can presume that a democratic China would be a problem and the other thing is we can't choose the China we deal with we've got to deal with a China we've got and a China we've got is I think very likely to have a significantly more authoritarian system to come and that's the hand we dealt I think that in the relations with the country when democracy is not very important and I have to balance the potential of the power production and the nation it doesn't have any allies it doesn't want any allies and they don't have any influence on one of the cards they use and we've got about 800 of them and China's got a very big thank you yes yes yes yeah look really good question Rebecca and yes I agree I'd much rather deal with a country that had a justice system that worked a bit better but again we've got to deal with a hand we've got but look on that there's a lot in that I would just make two points the first is that I don't think China suffers much from not having a whole lot of overseas bases and a whole lot of allies for what it's trying to achieve if we're trying to match America in a capacity to project military power globally it would need lots of allies and need lots of bases but if what it's trying to do is to erode America's capacity to project power against China to assert a Chinese strategic primacy in its own backyard which is what I think China's trying to do and it doesn't need bases and it doesn't need allies bases and allies can be liabilities our liabilities as well as assets and I think China's right to think they're much better off without them the thing about China is it's not going to acquire the capacity to project power by sea in the face of highly capable adversaries like the United States or for that matter Japan or for that matter South Korea or even if we play our cards right Australia we don't completely screw up our submarine project but but it will and if that's what it wants to do then it's going to fail but it will already has a quite formidable capacity to undermine America's capacity to project power by sea and in the asymmetric contest between them that's a win for China if it was trying to contest compete with the United States for strategic primacy in the Caribbean it would be in big trouble but that's not what it's trying to do and I think the other point is I think control of sea in a military sense is very insignificant for commerce for economics I think you have to go back to before the Napoleonic wars to see major trading powers seriously trying to interdict the trade of another trading major trading power except in the context of a general war World War I, World War II sure apart from that major powers don't try to interdict the trade of other major powers because of globalization it's everybody's trade back in the 17th century there was such a thing as British trade and Spanish trade and French trade and you could have a gup at it and it made good strategic sense today you interdict a merchant ship heading for China the ship's owned by Greece the iron ore was owned by a company and probably headquartered in Britain the iron ore comes from Australia it's going to a Chinese steel mill and we're going to a cars built by a Korean owned company who's trades that so I don't think China needs to bulk out at seas in that sort of mercantile sense I think it does need to reduce America's capacity to project power by sea into the western Pacific and it's already gone a long way towards that that's the bit of military strategy I said I wasn't going to talk too much about thank you for giving a chance to get in thank you professor Mike because in your lecture you mentioned quite a few things about the sorry the hard powers between Australia and China but I think that in the software soft powers is quite limited quite limited in your lecture today so I'm just wondering will the soft powers of Australia matter matter to to construct another another sort of a strategic plan say for example like we all know that Australian soft power is much more strong than China so basically I guess that military power and China and Australia is not on the same level but in terms of soft powers they are also it's also different so I get my question is do you think that Australia treats itself as a sort of like middle power is a little bit underestimated its exact power in terms of both soft soft power and hard power underestimated its power did you say or overestimated underestimated it really good questions this is going to make me sound a bit like a sort of lapsed offence official but I've never been terribly sure about soft power I think soft power is the sort of power you talk about when you're not really serious when when things get tough I think soft power tends to be what counts the hard power tends to be what counts having said that I'm not sure I agree with you that Australia soft power is stronger than China's we have some strong we have some soft power capacities but I don't think I think China has too it's complex and underdeveloped but I think it's so too as for the question about whether Australia is really a middle power I I think Australians are both underestimate and overestimate our position in the global pecking order we we're very proud of the fact that we're a top 20 country I think is what our foreign minister keeps on saying we're ignoring the fact that on the PWC estimates of the world in 2050 Australia's Australia's position in the global GDP pecking order goes down by more places in the pecking order than any other country we are the biggest loser between now and 2050 and that's it's something I'm going to deal with more over we tend to put a good deal of weight on our military power as a factor in our middle power and that has been true for a long time for a long time it was possible for Australians to say I used to write this into minister's speeches that we're the largest military power south of China and east of India well we were we don't think about ourselves in those terms sometimes underestimated we have been we won't be if we continue to follow the defence policies we're following today Australia will no longer be able to claim that in a couple of years time we will not have the strategic weight the military weight of a middle power in the asian century just as a diplomatic point Australia has been a very effective middle power diplomatically because we've had a formidable capacity to do the two things that middle powers countries have to do to be effective middle powers diplomatically they have to come up with really smart ideas and they have to go out there and sell them like mad and relatively small countries can do that the list of things on which Australia has really shaped the international system to our advantage by sheer brain power and the energy and skill of our diplomats is extremely impressive but we haven't done it for quite a while and the reason we haven't done it quite a while is because it takes ideas it takes a lot of diplomatic effort and that means amongst other things you need a foreign services big enough to do it and it takes political courage from the ministers involved because you can't just leave it to the people at the embassies and so I think we're I think we're our middle power status at the moment is somewhat fragile but I feel like this is about the sort of challenge that works 8.0 like an iPhone get a little bit more of each feature I want to push you on whether you're not using the straight line extrapolation to David Chambo's new book China's Future Plains of Relief Picture where he talks about political problems corruption the centralisation of the most the most enormous extent the challenges that he thinks of talks about the economic challenges the lack of innovation he talks about the social challenges inequality and corruption he paints a picture of a country which may well have a very different next couple of decades what's your view on that? well not quite straight line look I know David's work well in fact I've been engaging in a sort of an email exchange with exactly those issues for the last three weeks so two points the first is that China has lots and lots of problems and ever since 1980 to my certain recollection people have been saying that China's problems are about to swamp them and somehow those clever people in the CCP always managed to just make enough adjustment to see it through they've done it here the two doesn't mean they'll keep doing it it will suffer problems and possibly bigger ones than ones we've seen so far but I think partly just as a point of prudence I think we'd be very unwise to base our policies towards China on the assumption that that's going to happen the assumption that the problems that China's faces are going to be big enough to really fundamentally change its trajectory of course it's never going to get to 10% again it'll be incredibly lucky to get to 6% to stay at 6% per annum real growth I mean but its chances of making 4% on average over the next couple of decades are probably pretty good and America's chances of making 4% are very low the second point is to say perhaps to put it slightly more bolder than I should but here I go it is irrelevant to its capacity to challenge the US-led order in Asia because it's already there it's already twice as big relative to the United States economically as the Soviet Union ever was at the height of the Cold War it's already bigger relative to the United States than any country has been since America itself adopted a leadership role around about 100 years ago this week actually isn't it anyway with its entry to the First World War so you know there's a point of sort of over sufficiency China doesn't need to keep growing in order to challenge the United States it doesn't need to keep going to be the strongest power in Asia it's already there and even if it flatlines I said this I think even if it flatlines tomorrow does a Japan for us the next couple of decades will still be far bigger than any other economy in the region and far bigger relative to the United States than any other country has been and it has huge asymmetrical advantages over the United States in Asia because the United States is a global power it attempts to establish it and maintain a global position and the Chinese are just focusing in their backyard so I think David is way too optimistic you know at the heart of that argument and it's not unique to David and I know him very well but at the heart of that argument is a kind of belief that somehow this couldn't be happening that somehow for 250 years to be wealthy and strong has meant to be one of us Western white even we need to be very careful about our assumptions about why China can't make this work when it's made so much work over the last 35 years I don't think it's worth the risk if I may abuse my privilege I think we're all concerned about island states of 23-24 million people in this argument I'm referring of course to Taiwan where does Taiwan fit in your prognosis for the region it's a very good question with a very gloomy answer wouldn't laugh Taiwan we the United States and its friends and allies have no capacity to defend Taiwan from China and we do the Taiwanese service by pretending that we have I think the undertakings the United States gives to Taiwan embodied in the TRA our illusory and it does a great service to the Taiwanese that is a tough proposition because one can't help but admire Taiwan's democracy and its commitment to preserving its political culture I myself find Taiwan a very attractive proposition but am I willing to go to war with China to protect it no to ask ourselves what does that mean which you win and what would winning look like and what would it mean for the people of Taiwan being absorbed into Taiwan into China would be a tough gig for the people of Taiwan but being a battlefield in a war between America and China would be much much much tougher that's why I mean our values are intention with one another of course we have values to support Taiwan's democracy but we also have values to avoid wars which we can't win and which would be absolutely devastating kind of easy to look back at 1938 and think that the right answer is yes you never appease I just don't think that's a very helpful analogy I'm not saying it was your analogy so yeah good question very hard Hugh you could be an academic in front of a similar audience in any of quite a few countries that are neighbouring China and you would probably be saying much the same thing now do you think Australia has to work out its relationship with China or does it have friends that it can be working with to work out its relationship that is a really good question and it allows me to say something that was in the text of the speech until I got a bit worried about length and cut it out so thank you one of the most distinctive and interesting things about Australia's predicament is that although as I've sketched you I don't think our traditional construct of great and powerful friends is going to do much for us I do think there is a very important story about our alignment with our neighbours because if you go around Asia to every country in our region with a very special exception of Japan and I'm not sure Japan is an exception but I just think it's a much more complicated case if we go around the region what you'll find in every single capital is that none of them want to live under China's shadow and they're all asking themselves how do they live with a powerful China they're approaching it with a different historical context than we are of course many don't have a lot more experience of living with China's power than we do but they all none of them want to live under China's shadow and they all know that the best way to avoid that is to preserve a strong US role in Asia but none of them want to see a fight between the US and China because all of them value their relationship with China enormously and don't want to have to choose and all of them deeply fear the implications for them and for the region as a whole of a more adversarial relationship between the US and China and especially have a conflict between them so they all want America to stay engaged in Asia to balance China but they all want America to stay engaged in Asia on the basis that China is willing to accept which means they all want the United States to stay engaged in Asia on the basis of a deal with China now as I said that is the third option it's perfectly possible but it's very hard to do and it will require truly methanichian style quality of of statecraft now I don't think Barack Obama was capable of that I don't think Hillary Clinton would have been I don't think Jeb Bush would have been I'm absolutely sure that Donald Trump isn't and that I mean this is really I don't like to see more gloomy about it but it's one of the many aspects of what one might call a Trump phenomenon there is an outcome here which is at least bad for us in fact much better for us and for the whole region and under other circumstances I have argued for some time I just said this is China's 8.0 that's what Australia should with partners in Asia be arguing for we should all be going to Washington and to Beijing and saying hey you guys do a deal sort it out balance one another don't try and dominate it's a perfectly valid model and it's got lots of historical analogies but I've always known it was hard to do and I just think it's got a lot harder since the 8th of November and that's just political system or its legal system that's one of the cards we've been dealt we just have to live with it but I think my conclusion is that it makes what was anyway a very difficult situation that much harder that doesn't mean though that working more closely with our neighbours in Asia is not a very big part of this story but we can't do it until we've worked out the answers to some of those questions I post at the end ourselves we really have to we have a problem we have to acknowledge we're going to be living in Asia in which China has a much bigger role in which America is playing a much smaller role we then have to start talking to these guys our neighbours about what we should do about that and I think that could be a very big part of our future but we won't get there until we've had this conversation with ourselves it's always a great fallacy that foreign ministers and prime ministers and so on should go overseas to make their speeches about foreign policy the most important speeches about foreign policy are the ones you make at home and we haven't had a serious speech on foreign policy from an Australian prime minister at home for a very long time here's that one thanks Hugh you assuming we accept your argument what is what do you recommend for Australia to do to prepare what are the investments we need to make for this world that you paint I think from what I've heard you say more in your questions than in the speech was more in the defence more in diplomatic and signology is that the recipe for the future well asian language training too of course mate just to be clear I do think we have a big this is a different subject all together but I do think there's a very we have a very big set of decisions we have to make as a country about the kind of military power we want to be in the asian century I think our defence policy today is entirely based on the idea that United States will remain the dominant power in Asia to get forever and as I said in the speech that we'd be supporting it come what may I think that's a completely unsatisfactory basis for that and we have to choose whether we're going to build a defence force which will give us the independent weight of a middle power in the asian century which will be a defence force which would look very different from the one we're building today and cost about twice as much now twice as much sounds like a lot actually that means it costs about as much as we spent in the 50s and 60s during the forward defence era the last time we tried to make our way in Asia when it was contested between great powers and we could make that choice if we wanted to it's not unthinkable it would just be a very big decision and maybe we decide it's not worth it that's the decision we need to make our regional diplomacy and there's a whole different story there just to take one example we managed to continue to develop our relationship with Indonesia on the basis that the most important thing in that relationship is people it's not the most important thing in that relationship is that Indonesia is going to be a great power and will be a huge player it's going to be a slightly weird great power one expects knowing and loving Indonesia's one does but it's going to be a great power and we're going to have to learn to deal with them so there's a huge investment there but I don't I think first and foremost what we need to do is make an investment in the quality of our own discussion of this issue and that is in the end if investments the right word an investment in the quality of political leadership because in the end the way in which societies recognise big changes in their environment understand what they mean for them understand what their opportunities and risks are and marshal the resolve to make changes including painful changes that's what political leadership is all about the economy is not looking so good so some layer can get some national radio and says we're going to be a banana republic and all of a sudden people sit up and say whoa okay perhaps we should start accepting some changes we weren't here the two prepared perhaps we should deregulate the banking system and fundamentally change our industrial relations system that's what we haven't done yet we need an Australian political leader to stand up and say what I said before China is going to be the richest and most powerful country in the world in the 21st century no Australian political leader has ever said that and yet it's a statement of the blinding obvious so until we have to say that actually talking about spending money on defence or increasing diplomacy or even building our language training capabilities is not going to cut it we have come to time thank you so much thank you when our former Prime Minister and the only one as far as I know who was linguistically capable and Chinese set up this centre some years ago Prime Minister Rudd gave us several desideratum desiderata about what we were meant to do one of them was and it is indeed so one of them which is imprinted in our written documents and at least on my mind was that we should raise the level of debate and discussion about China in Australia obviously a good thing to do and you have fulfilled that in spades tonight so thank you very much again