 Ladies and gentlemen, distinguished guests, it's my great pleasure to welcome you to the ANU China in the World and Crawford Leadership Forum. My name is Ben Hillman and I'm the director of the Australian Center on China in the World. Our center aims to promote deeper understanding of China and the Chinese world by drawing on the best traditions across the humanities and the social sciences. Our center was established in 2010 following then Prime Minister Kevin Rudd's George E. Morrison lecture on Australia and China in the world. During the lecture, Prime Minister Rudd advocated for a place where scholars, thinkers and policy specialists can engage in an across-the-board approach that brings history, culture, literature, philosophy and cultural studies perspectives into active engagement with those working on public policy, the environment, social change, economics, trade, foreign policy, defence policy and strategic analysis. ANU's Australian Center on China in the World or CIW as it's popularly known is that place. It is therefore most appropriate and indeed an honour to welcome back the honourable Dr. Kevin Rudd to launch this forum by presenting the JG Crawford oration. The inaugural China in the World Forum, which is this year being delivered in partnership with the ANU Crawford Leadership Forum, goes to the heart of our center's mission. Assembled here tonight and during panel discussions tomorrow is a distinguished group of parliamentarians, policymakers, business leaders and academics who are at the forefront of debates on China and Australia's relationship with China. We're also very pleased to welcome senior government and business representatives from New Zealand to join in our discussions. At our forum tomorrow, which will be held in the CIW building on the ANU campus, please note, not here, ANU experts will lead the panel discussions, joining them to debate the latest developments in China and China's role in the region, our distinguished specialists from around the world and across Australia. Our goal is to provide a platform for a national conversation about China and the Australia-China relationship. We hope that this forum will become an annual event for the policy community to exchange ideas, thoughts and opinions. Our immediate priority, however, is to make this evening's event and tomorrow's forum a rich and rewarding experience for everyone. We are certain you'll find it stimulating and enjoyable. Before we continue with our proceedings tonight, I'd like to invite Mr. Paul House to welcome everyone to the indigenous Australian lands on which we meet. Mandangu, Waragawari Ben. Thank you very much. Good evening, everyone. You and do Paul Giroa House. My name is Paul Giroa House. I was born here at the centre of my ancestral country at the Old Canberra Hospital. God bless it. Anyone born in the Old Canberra Hospital? Only two people. It's great to meet some Old Canberra Hospital alumni. Murubangubala, Wenganagu, Yambuwan, Bangonaranara. First to know the nature of things. So Yinjimara Bala, Dr. Matilda Williams' house. My respects to my mother, Dr. Matilda Williams' house. I'll speak a little bit more in a minute about Mum and her contribution here on country. So Yilingalongbu, Gibabungal, Wulgabur, Megebu, Deranilbung main, ladies and gentlemen, young men, young women, distinguished guests. The Honourable Dr. Cale, the Honourable Dr. Kevin Rudd, Vice-Chancellor, Professor Brian Schmidt, distinguished guests. Ngari Ngimali Nyambri, Gumau Walgulu Wulabalawa Nunawa, Ngari Gawaradri Mujigang, Yanangbu Jayandu. My respects to Ngambri Gumau Walgulu Wulabalawa, Ngari Gawaradri Elders Past and Present, Ngari Ngimari Bua Mujigangu Nuranbanjigul, Nini Yiridhu. My respects to all people and elders from all parts of the country. Ngambri and Nunuwal, Ngari Ngawaradri Niniwaga Nuranbangodara, Ngambri and Nunuwal people, welcome you all to country. Yinjia Mada Bala Boye Nyiang Nuranbango Bagarigang Murmel, my respects to China, Chinese people, language, lore, and country. Nadu Wulgabugi Balabambo Gubo Balaghe Bangubo, Gugengulila Dumbalena Murwai Marumbo. We listen to our elders, our old people, our ancestors. They show us the straight, the correct, the right path. Tulegang Murru, good path here on country. Gugengulila Bilanggalinao Wala Malinao, Yiyama Malinao. They nurturist, they guide us, they protect us, our old people on country. Mambawara Naminya Gu, Wuragabinya Wuradarago, Weningala Gubalagu, looking to see, listening to hear, and learning to understand. Yinjia Mada, Yinjia Maligil, Yinjia Marabu, Yinjia Mali. Respect, respecting, respectful. It's a philosophy, it's a powerful word on country. It means many good things, all these good nutrients. It means to go slow, be patient, be polite, be gentle, take responsibility. All those good things. Yinjia Mada Bala, Guji Gang, Gagumara Wala, Nungayalara, Nulani Ma'in. Respect is in the people and the government. Embracing voice, treaty, and truth-telling. Yinjia Mada Bala, Magagiribiringa Bougongu Duranda. Respect is in the journey of the Bougong moths in the mountains. They also taste very good. Yinjia Mada Bala Berida, Binabinabira, Wurrawanurambango. Respect is in the rivers and the breeze, quietly moving through country. Yinjia Mada Bala, Wulawangadabu, Muranmadandabu. Bama yu Murududurangambira. Respect is in the grinding stones and the carved trees made long ago on country. Welcome the countries are always made in the spirit of peace and a desire for harmony for all people of modern Australia and the region. And our main aim is local custodians is to establish an atmosphere of mutual respect through the acknowledgement of our ancestors and the recognition of our rights that clear our special place in the pre and post history of the region. And we warmly welcome everyone now living, working, studying, visiting our ancestral country. We've cared for Mother Earth since the dawn of time. An evidence of our statehood, our ownership, our sovereignty can be seen everywhere throughout the land. Our signature is in the land, not just our DNA. And taking care of country is important to us all. The name Canberra is derived from the name of our ancestral group and people in Yamburi and was gazetted on the 22nd of January, 1834 under the New South Wales Colonial Government. Yinjia Mada, Yinjia Mada Nia Nia Gidama Maranya. Respect shapes us and lifts up the people. We want to see our children grow up in a society that acknowledges, respects and honours First Nation people in this country. We believe we're entitled to our greatest share in the wealth and prosperity as well. There's so much work to do in this country in terms of First Nation sovereignty, First Nation self-determination, First Nation economic self-determination, democratic participation, social equity, so much work that we can't do it by ourselves as First Nation people. We need the support and help of everyone in this country to do that. The law of the land talks about Yinjia Mada, main galangmu, main yandu galangmu, Yinjia Mada Gidong Ninyuga, giving respect and honour to all people, then people will respect you. Yinjia Mada, Marindu Gubu, Gidu Gubu, Yandu Gubu, respect is taking responsibility for the now, the past, the present and the future. Mara galadal walan mayan mayan galangmu, hold fast to each other, empower the people, walang gunmala mara mara gurei, be brave, make change. Dira yawana murawara nawan birra, get up, stand up and show up. Mara mangalangmu, noya goya malang, it's wonderful, it's fabulous to be here. Just before I finish, I want to play a song on the Yidaki, the Yiriki. I was up, the share, Nainmura Burumbarbira, the share, our story, some of our story and connection, the country with all of us in this great country of ours. Before I go though, I just wanted to acknowledge Professor Brian Schmidt and the A&U. My mother, Dr. Matilda Williams House, was the first Indigenous Australian to be awarded an honorary doctorate from the A&U in 2017. And I wanted to acknowledge Dr. Kevin Rudd as well. In 2008, Dr. Rudd gave an apology to the people, first nation people in this country and to all people. It was a powerful act of reconciliation. It was a powerful act of humanity for our people to see that happen. And the day after the national apology, the government gifted my mother the opportunity to provide the first ever welcome the country for the 42nd opening of federal parliament and the subsequent 43rd opening of federal parliament and then the 44th. And we were recently gifted that opportunity to open the 47th opening of federal parliament which was a wonderful occasion for us all as well. In 2006, my mother was awarded the Canberra Citizen of the Year award as well for her contribution around social work and helping our people, all people in this country. So with that, I'd like to say Guayambana Gauraburi, welcome Mandangua Wuragawuri. Thank you very much. Just before I play this welcome song, I'd just like to acknowledge this Yiddiqui, this didgeridoo. I actually used this Yiddiqui in 2008, Kevin, in Mural Hall when we opened federal parliament in 2008. Thank you so much, Paul. It's a privilege and honour to have you welcome us here tonight. I'd now like to welcome A&U Chancellor, the Honourable Julie Bishop. The Chancellor was regrettably unable to attend in person tonight but has a few words to share with the audience via video. Immediately after the video, A&U's Vice Chancellor, Professor Brian Schmidt, will say a few words of welcome and introduce our other distinguished speakers. Quick reminder to everyone, please, we're live streaming tonight so we'd be grateful if you could keep movement and noise to a minimum. Thank you. Good evening from Perth and thank you for attending the 2022 JG Crawford Aeration brought to you with the generous support of our sponsors, Mervac. I can't join you this year as I'll be in the United States at the McCain Institute at Arizona State University where I was honoured to be the Henry Kissinger Fellow in 2021. This year's A&U Crawford Leadership Forum differs from the previous eight iterations. We've partnered with the A&U Centre on China in the World to present a inaugural A&U China in the World Forum. The 2022 program will serve as a platform for timely debate about economic, social and political developments in China, its role in our region and its impact on Australia's foreign policy. A&U was established in 1946 to create a research intensive and educational institution to meet the needs of post-war Australia. Today, the Australian National University is still the first and only National University, and by the way, also the only university in the world with a Nobel Laureate as Vice-Chancellor. We're very proud of our Professor Brian Schmidt. Tonight you will hear from one of my former colleagues and good friend, the Honourable Dr Kevin Rudd, who will deliver the JG Crawford Aeration. This aeration was first established to recognise Sir John Crawford's outstanding contributions to A&U as Chancellor, Vice-Chancellor and Director of the Research School of Pacific Studies, one of A&U's four original founding research schools. Sir John exercised remarkable influence nationally and internationally. He was a key player in reorienting Australian economic policy and has long been regarded as one of the most influential Australians of the 20th century. He left an incredible legacy, and so it is very fitting that as a former Prime Minister of Australia, Kevin will deliver tonight's address. We have some of the best and brightest minds coming together for this year's forum. I hope you all enjoy the rich discussions as we further our understanding of developments in China and their consequences for Australia and the wider region. Brian, over to you. So it's great to see everyone and great to have Julie engaged with this forum. Even if she gets unable to be here, I know she was a little less than impressed with me when I told her the date and she knew she was gonna be overseas. This, the Crawford Leadership Forum was the brainchild of our previous Chancellor, Gareth Evans, and it's great to have it live on, especially in this particularly potent form, I think this year. For Paul, it is great to have your welcome to country and I, too, pay my respects to Elders Passon, President of the Nambri Nenowal people and to all First Nations people on Estritional Lands. We are meeting on this evening through the live stream. So I am delighted to welcome you all to the 2022 ANU China in the World and ANU Crawford Leadership Forum for what undoubtedly will be an absolutely interesting event in a very, very interesting time. For tonight's oration, we are fortunate to be joined by our annual alumnus, former Prime Minister of Australia, Dr. Kevin Rudd. And it's great to have you back in Canberra here, Kevin, and really appreciate you being prepared to come back to Australia for this event. But I think in this unique time, it is really worthwhile getting everyone here together and to really think about the future because the future is ours to make in many respects and ours to go with in other respects. It's also great that we have a number of people from government, Jan Adams for the Department of Foreign Affairs and Trade, Steve Kennedy from Treasury, David Olson from the Australian China Business Council, Hugh Mackay from BHP and Eman Ashonisi, the Deputy High Commissioner from New Zealand who is over here with a good group of people from New Zealand. It is incredibly timely to be hosting these discussions with our Prime Minister just having met Xi Jinping and the Chinese coming and beginning to open up after three years of COVID. In the Prime Minister's own words, we should see this meeting as constructive and we will cooperate where we can, disagree where we must and engage in our national interest. It does set the tone, I think, for the next few days. As Julie said, ANU was founded in 1946 to be a national resource, to conduct research and provide expertise to Australia and our region and in the words of the day to help Australia find essentially its voice on the world stage. And today we continue to have a responsibility to contribute to and shape public debate on issues of importance to the nation. And so that is something we have done for the last 75 years and we will continue to do into the future. For many decades, we in Australia have had a front-row seat watching the rising prosperity of China in both our region and the world. We've also had the opportunity to educate students and foster strong relationships through our alumni and that means we can go through and talk to government, to universities, business and research institutions and we can do that no matter almost under any circumstance that presents itself these days. China has changed the world in ways we're still trying to understand and come to terms with and that's why tonight's presentation is such an important contribution to our discussions. I am now going to hand over to Susan Lloyd Hurwitz, the CEO and managing director of Mirvak and the newly appointed president of chief executive women. Mirvak are our valued partners in the ANU Crawford Leadership Forum and tonight's aeration and so I'd like to thank Mirvak and the entire team for their support. It's really valuable and especially the support of tonight's event and the coming days. So Susan, welcome and thank you. Well, thank you Brian and good evening everybody. I'd also like to begin by acknowledging the traditional custodians of the land in which we're here. The none of all unnumbered people I pay my respects to Elders, Past and President Paul. Thank you so much for that welcome to country. Mirvak is an urban asset creator and curator and as such we're very conscious of the impact that we have on country and we very much view the sacred link that the First Nations people have with this country as a gift to all Australians. When I am personally and Mirvak is collectively a vocal and financial supporter of constitutional recognition for First Nations people. It's a real honor for Mirvak to be here tonight and supporting this aeration. And we're very proud to support an event that encourages discussions on topics that have the potential to impact and influence business, government and academia here in Australia. As Julie was saying, Sir John Crawford is one of Australia's most renowned economists and was a senior public servant and a key architect of Australia's post-war development. And he did recognize international affairs and Australia's need to be part of that story and having the need to have good relationships in our region and our neighbors to underscore and ensure the economic and political stability of our region. And I think we would all agree that having good relationships is now more essential than ever as we enter into a much more challenging macro environment from an economic point of view with rising inflation, widening inequality, increased nationalism and geopolitical tension. And then of course there is the infinitely more pressing challenge of climate change and a challenge that's already on our doorstep and having pronounced impacts on our communities. But to overcome those challenges there's no other way but to work together towards those shared ambitions and to that respect I am encouraged by the steps our current government has taken to strengthening our relationships with our Asia Pacific neighbors. So tonight's duration continues that legacy of building cooperation within the Asia Pacific region and therefore very fitting that tonight we have the honorable Dr. Kevin Rudd to speak with us. Now I don't really need to introduce Dr. Rudd, do I? But for the record he was Australia's 26th Prime Minister to have a long career in international relations particularly those with China. He's an ANU graduate for a Bachelor of Arts degree measuring in Asian studies, worked as a diplomat in Stockholm and Beijing and has made a very significant contribution to shaping Australia's foreign policy over the years. Currently Dr. Rudd is the global president and CEO of the Asia Society in New York which seeks to forge closer ties between Asia and the West through arts education policy and business. And since 2015 he's been the president of the Asia Society Policy Institute, a think and do tank. I like that idea of thinking and doing both essential, designed to bring forth policy ideas that incorporate the best thinking from analysts across the US and Asia and to assist governments and businesses with challenges within Asia and between Asia, the US and the West. So please join me in welcoming the honorable Dr. Kevin Rudd to the stage. Thanks very much for the warmth of the welcome. And I too acknowledge the first Australians on whose lands we meet and whose cultures we celebrate as the oldest continuing cultures in human history. To our Vice Chancellor, thank you so much for having me back, Brian. Even though I didn't complete my PhD here at the ANU, I went offshore to the mob at Oxford instead. To all of my former parliamentary colleagues who are here as well. I see Senator Brandus, where are you? George, good to see you. Dan Adams from the Secretary of the Department of Foreign Affairs, Stephen Kennedy, Secretary of the Treasury, both of whom have had to survive working for me in the past. So I'm sorry about that. I'm glad you've recovered. To our visiting friends from the United States, I've just seen some of them, including Bonnie Glazer, my good friend and colleague, from the German Marshall Fund in Washington, DC. Dr. Bates Gill, who is now the Executive Director of the Center for China Analysis at the Asia Society in New York. Richard Mord, who's the former Deputy Secretary of the Department of Foreign Affairs and now our Asia Society Distinguished Senior Fellow here in Australia. And to Susan, Lloyd Hurwitz from MIRVAC for sponsoring this lecture this evening. Distinguished guests, ladies and gentlemen, one and all. It's good to be back here in Canberra. I'm proud of my association with the ANU. I'm proud that as Prime Minister, they also fleeced me for $113 million to help build, in fact, to build the Australian Center on China and the World to build the National Security College and to build a very large extension to the John Crawford School itself. So it is a small contribution to the importance of public policy in the nation's capital and the relationship between the academy on the one hand and public policy makers within the bureaucracy within our federal parliament on the other. Long may that tradition continue having been launched by Prime Minister Chifley in the immediate aftermath of the Second World War. The title I have chosen for this Crawford lecture is Xi Jinping, The Return of Ideological Man and Implications for US-China Relations and Australia-China Relations. The reason I have chosen to begin with an analysis of Xi Jinping's ideological worldview is that this worldview fundamentally shapes Xi's approach to domestic politics, to economics and the future direction of China's foreign security policy. It has become unfashionable within China analytical circles over recent decades to pay close attention to the internal ideological debates of the Chinese Communist Party. I fully understand the reason for that. In large part it's because Deng Xiaoping himself in launching the period of reform and opening told the Communist Party to cease and desist from continued theoretical debate. Bu Zheng Lun and that basically shut it down for quite a long period of time. This of course followed that tumultuous period in Chinese politics including the Cultural Revolution. And at the conclusion of that debate, Chinese politics and economics lay in total disarray. Indeed the legitimacy of the party itself had virtually cracked as people's livelihoods were cast aside in the name of Mao's purest pursuit of a Marxist-Leninist utopia. In domestic politics there had since been an unprecedented level of political experimentation during the 1980s to leading up to the catastrophic events of Tiananmen in 1989. And while Deng decisively ruled out any political usurpation of the central role of the Leninist party through the brutal measures he took in 1989 is designated successors Zhang Zemin and Hu Jintao undertook a long-term series of so-called political reforms Zhengde tichu gege. These included experiments in local level democracy, straw ballots within the Communist Party for the election of its own leadership as well as a proposal in 2002 to allow private entrepreneurs to join the ranks of the Chinese Communist Party. Within the economy we are all familiar with the period of reform and opening. When bit by bit market forces were slowly introduced into the allocation of resources across the Chinese economy in stark contrast to the decades of stifling central planning that had preceded it. Furthermore, the unleashing of market forces at home saw the rapid rise of the private sector at the expense of the state-owned sector. This was reinforced by a new direction in Chinese foreign policy under Deng that plays China's domestic economic development at the absolute center of China's international relations. In short, Deng Xiaoping made foreign policy the servant of China's economic policy. He made it the servant of China's reform program, both at home and China's growing economic globalization abroad. China took a deliberate decision at the time to work within the framework of the US-led international economic system. And after it succeeded in securing membership of the World Trade Organization in 2002, China triggered the next 15 years of spectacular economic growth when its access to both US, European, and other markets became complete. It was during this decade and a half-long period that China in effect became the world's factory. As a result, Chinese foreign and security policy throughout this period adhered to Deng Xiaoping's doctrine of hide your strength, bide your time, never take the lead. This was subsequently referred to as Deng's diplomatic guidance notes. These were referred to repeatedly by both Jiang Zemin and Hu Jintao and discouraging China's international policy elites from becoming prematurely assertive. My overall argument is that it was the ideological resolutions of the party way back in 1981 and 1982 which established the political framework within which the subsequent policy revolutions unfolded across domestic politics, the political economy, as well as foreign and security policy. It created the China with which we all became familiar over nearly four decades. The rise of Xi Jinping represents a deep departure from these long entrenched ideological norms. In domestic politics, this process began soon after Xi was appointed as general secretary in November of 2012. As of July of 2013, she delivered an extraordinary speech to a national conference of ideological and propaganda work which outlined the absolute centrality of Marxist-Leninist ideology for China's future. She recounted a considerable length, his view that the collapse of the Communist Party of the Soviet Union and the subsequent dismemberment of the Soviet Union itself began with ideological rot. Xi's diagnosis of Soviet collapse gave rise to his instruction to the party's central apparatus from the very beginning of his tenure to embark upon a program of restoring ideological and political rigor to everything that the party did. At a practical level, she sought to reassert the central role of the party across the entire fabric of public administration, displacing the role of economic technocrats in the State Council with new party-led leading groups, which increasingly usurped the traditional policy roles held by non-party bureaucrats. It also saw the reassertion of the role of the party in the military, the academy, and what passed for China's emerging civil society. The reassertion of the absolute central role of the Leninist Party has been the hallmark, therefore, of Xi's role. And Xi's role, since the very get-go of Xi's reign. In many respects, it's summarized by Xi's rehabilitation of an old Mao Zedong axiom, that it doesn't matter whether it is North, South, East, or West, or whether we are speaking of public administration, the military, commerce, the academy, or society, the party rules over all, unquote. On economic policy direction, this move to reassert the centrality of the party was to come later. In fact, in the earliest stages of Xi Jinping's administration, there had been an effort to sustain the market-based reform program initiated under Deng, Zhang, and Hu. This was reflected in the decision document of the third plenum of the 18th Central Committee, held in 2013. However, by 2017, a much more fundamental reappraisal of the role of the market and the economy had begun as of the 19th Party Congress work report of that year, which Xi Jinping delivered, his first work report. Therefore, its language was parsed carefully, both by those who crafted the speech and interpreted carefully by those who observed the speech. It assumed its own biblical status in the subsequent five years following that Congress. The fundamental significance of the 2017 Congress report was the ideological surgery it performed on Deng's original 1982 decision on the ideological priority to be attached to the unfettered development of the factors of production. And Deng's continued relegation of the relations of production, that is class, or class inequality. In the 2017 Congress report, Xi, in effect, overturned Deng's longstanding ideological orthodoxy on the economy. Instead, Xi declared that the party's, quote, central contradiction for the new era, unquote, was one which now required action to correct, quote, the imbalances in development, unquote, that had occurred as a result of Deng's unfettered reform program agenda from the past. At a basic level, this ideologically authorized political and policy intervention in the economy to deal with obvious imbalances such as environmental sustainability. At another level, it authorized policy efforts to improve social and economic equality, not just the final elimination of poverty, which Xi Jinping had determined to be his number one priority for the centenary of the party's founding in 2021, but also the wider redistribution of wealth across the economy as a whole under his new ideological rubric of, quote, common prosperity, unquote, gong dong fu yu. However, at a more fundamental level again, Xi's Congress report in 2017 authorized more widespread political empowerment of party ideologues to intervene in China's overall economic policy settings and therefore to challenge the unfettered role of a free market, the unfettered role of a private sector, as well as the unfettered accumulation of wealth by private individuals. All these ideological redefinitions occurred as of late 2017. However, the political environment within which this new more Marxist ideological direction for the Chinese domestic economy was to be implemented was complicated almost immediately by President Trump's decision to launch the US-China trade war as of January 2018. This trade war would rage for the next two years, at least until an interim agreement was finally signed in the White House in January of 2020, although each of the protection of measures imposed back then remain in force to this day. The impact of Trump's trade war in 2018, coming almost immediately on top of the party's ideological decision in 2017 to turn back the clock on Dung's market reform program of the previous 35 years was to cause Xi Jinping to double down in his support of a more protectionist, mercantilist and state-driven approach to China's future economic management. It was from about this time, for example, that Xi Jinping began to embrace new doctrines of economic self-sufficiency, silly gungsheng, new forms and a more gargantuan scale of state industrial policy. And what would soon become known as China's new ideological orthodoxy of so-called the dual circulation economy. This term, the dual circulation economy in particular, was ideological code language for an approach to the economy whereby China in the future should no longer be dependent on the international market for the importation of any of its essential needs. But at the same time, through the maximization of its own exports, Beijing's parallel objective was to cause much of the global economy to become increasingly dependent on China's market itself, thereby enhancing China's international political, economic and diplomatic leverage. Taking these various threads together, my overall argument, therefore, is that a combination of self-initiated ideological change reinforced by Xi Jinping's political response to China's changing international circumstances produced an even more potent cocktail of economic policy retreat from domestic and international market principles, which in turn further legitimize the return of the state to the absolute center of Chinese economic policy settings. Parallel to these changes in ideological direction in China's domestic politics and economics, Xi Jinping also signaled as early as 2014 for the changes in the formal direction of China's foreign and national security policy. This was the party's foreign affairs work conference of November that year, where Xi Jinping declined to restate the longstanding orthodoxy of Deng's diplomatic guidance notes. That is, hide your strength, bide your time, never take the lead. In place of this guidance, Xi, at around this time, informed the party that their new guidance was to, quote, strive for achievement, fanfare away. This was ideological code language for China now actively changing the international status quo rather than working with it. While the full text of the foreign affairs work conference remarks from that year have never been fully revealed, the limited excerpts which were provided through the People's Daily, nonetheless underscore the sharp nature of the change in China's foreign security policy direction that had now been embraced under Xi Jinping's leadership. In these remarks, he spoke directly of the need for a new type of great power relations, a new type of international relations. And on top of that, much more ominously, quote, an unfolding struggle for the future of the global order, unquote, Guojizhidu Zhizheng. These statements all preceded the decision by China's national security policy establishment to commence a program of island reclamation in the South China Sea during 2014 and 2015. It also heralded more assertive in certain places confrontational foreign and security policy posture in China's dealings with its neighbors, whether it was Japan, the Republic of Korea, or with Southeast Asia over conflicting territorial claims in the South China Sea and with India. It was also from about this time we began to see new forms of Chinese wolf warrior diplomacy in capitals around the world. As China sought to leverage national governments to adopt a more compliant approach to China's foreign policy requirements. In summary, therefore, what we've observed over the last decade is a new ideological direction for Chinese public policy overall. I've described this fundamental ideological change in three parts. First, she's decision to move Chinese politics back towards the Leninist left. Second, his decision to move the center of gravity of Chinese economic policy more towards the Marxist left. And third, to incrementally move towards a more assertive Chinese foreign security policy posture and moving it more to the nationalist right. These three fundamental ideological changes which we have seen unfold over the first 10 years of Xi Jinping's administration have now been reinforced by the new language of Xi's work report to the 20th party Congress delivered in October, 2022. Last month. I've written on this elsewhere, but in some reform, what we see in the 2022 report is a further entrenchment of Xi's Marxist-Leninist ideological settings. For example, the term struggle itself is used on an inordinate number of occasions. The reassertion of a more Marxist approach to the economy can be found not only in the born again role of the Chinese party state and state-owned enterprise sector, most particularly in the area of technology innovation, but also in a deepening of the income redistribution agenda through the pre-existing common prosperity agenda, as well as new and as yet unspecified provisions on the regulation of wealth accumulation. Most importantly on China's international agenda, the 20th party Congress report no longer refers to peace and development being the overall trend of our times. Consistent with the Deng Xiaoping ideological framework outlined above, this phrase, peace and development, being the overall trend of our times, had been a standard feature of all previous party Congress reports going back to the 12th party Congress in 1982. Its code language was clear. The party had assessed that there were no major wars on the horizon that could potentially involve China, therefore enabling the party to concentrate fully on the central task of economic development. Importantly, for our purposes here, that phrase, peace and development, are the overwhelming trend of our times, has disappeared from the 20th party Congress report of last month. Instead, we see warnings to the Chinese system about China's increasingly serious and grave strategic environment on the need to prepare for, quote, the dangers of peacetime, unquote, as well as to make preparations for, quote, the gathering storm, unquote. Furthermore, the PLA is specifically enjoined to, quote, prepare for war, unquote, as well as parallel injunctions to make further preparations for its combat forces, resources, and operational readiness. In other words, Xi Jinping has put his country on a new national security footing. Not an imminent invasion of Taiwan, the language on Taiwan actually is relatively moderate, but we would be blind not to recognize the change in sentiment and tone and content of this new national security footing for the medium to long term. In overall terms, what Xi has done in the 20th party Congress report is to double down on the ideological directions conveyed to the party and the country on domestic politics, on the economy, and on its foreign security policy settings. That had been outlined from 2012-13 and in the case of the economy from 2017 on. The biggest qualitative change, however, in Xi's ideological language in the 2022 work report lies in his formal assessment of China's deteriorating external environment and the preparations that now must be made in order to meet the dangers he believes China now faces in the decade ahead. So what does all this mean to the future of US-China relations? I argue that the underlying structure of US-China relations is shaped by three factors. First, the current state of the balance of physical power between Washington and Beijing. Second, Xi Jinping's new strategy of assertiveness since 2012. And third, the US decision to respond to China's changing strategic capabilities and intentions through a new and increasingly bipartisan doctrine of quote, strategic competition, unquote. On the first of these factors, the balance of military power across the Taiwan Straits, that balance has been moving in China's favor for some time. The reality, however, is that neither China nor the United States, including within that equation, Taiwan's own national defense forces, at present has an overwhelming preponderance of force that would remove the strategic risk of failure in the event of a general war. As for the balance of economic power, China, according to purchasing parity pricing, has long been the world's largest economy, measured by GDP at current exchange rates. However, it remains the world's second largest economy. Whether or not China can close that gap in the decade ahead will depend very much on Beijing's future growth rates, given the major headwinds that the country now faces. These include the significant ideological adjustments to China's traditional growth model that I have referred to already. As for technological power, there are different arguments about the 10 principle categories of strategic technologies which China itself identified in its Made in China 2025 strategy, launched originally in 2015. But in terms of core technologies, it is generally argued that China is closing fast, although the gap in the most advanced categories of semiconductors, that is three to six nanometers, still remains somewhere between three and five years when measured against the United States and its closest allies. On Xi's newly assertive strategy towards the United States, the ideological underpinnings for this approach I've already outlined in my earlier remarks. Xi calculates that he can now leverage Chinese power more in changing the international status quo in a direction more accommodating of Chinese national interests and values. He also calculates that the U.S. and the West is in stark decline, summed up in his ideological aphorism on the rise of the East and the decline of the West. Dongsheng Xi Jia. On American strategic response in the form of strategic competition, the Biden administration has been adding to the framework first laid down in 2017. We've seen this in Secretary of State Blinken's China strategy launched in May, 2022. We've seen it in the National Security Advisor, Jake Sullivan's National Security Strategy released in September, 2022. And we also see it with the National Defense Strategy of October, 2022. But beyond these strategic framework documents, we have seen material changes in American substantive action towards China across the board. This has included a tightening of Chinese foreign direct investment regime in the United States through a series of amendments to CIFIUS, the new CHIPS Act to subsidize the American semiconductor industry. And most significantly of all, the 7 October imposition of comprehensive American export bans on semiconductor sales to China in order to, in my judgment, contain China's future technological advance. In other words, notwithstanding the rolling distractions of the Russian invasion of Ukraine, the United States has succeeded so far in rolling out a comprehensive set of policies and operational procedures to put flesh on the bones of the doctrine of strategic competition. More is to come. Plainly, both sides, China and the United States are now engaged in a strategic competition as to which country emerges the preeminent regional and global power by mid-century. Therefore, whether we like it or not, we are now in the midst of this competitive race. We now live, therefore, in deeply dangerous times. Within this framework of strategic competition, it's therefore important to examine the question of whether this competition can be managed or unmanaged. Prior to the Xi Biden summit of November 2022, we have had effectively five years of unmanaged strategic competition. By that, I mean there have been no effective rules of the road, no strategic guardrails, and a bilateral relationship increasingly in freefall without any bilateral mechanisms in place to effectively manage destabilizing incidents along the way. We saw this most spectacularly in terms of China's live-fire drills following Speaker Pelosi's visit to Taiwan in September. The problem with unmanaged strategic competition is that it's dangerous. There is a real and living danger that it can result in war by accident, namely accidental incident, escalation, crisis, conflict and war. We've seen this script many times over in the uglier chapters of the history of international relations. It's for these reasons that for the last 18 months, both in the United States and in China, I have argued for an alternative strategic framework called managed strategic competition. It's a realist argument, not an idealist argument. The argument is based on the premise that neither side, at least at this stage, is prepared to roll the dice in support of a war by design against one another over the question of Taiwan. And that logic once again is anchored in the reality that both sides currently regard such an undertaking as too risky. In other words, they might lose. Based on this, the challenge right now is to reduce the risk of war by accident for the short to medium term. There are three elements to this concept of managed strategic competition. First, agreeing on principles and procedures for navigating each other's strategic red lines. Over Taiwan, the East China Sea, the South China Sea, the Korean Peninsula, cyber and space. That, if inadvertently crossed, would likely result in military escalation. This would mean constructing strategic guardrails around each, or if you like, basic rules of the road. Second, mutually identifying the areas of non-lethal, non-security policy, non-lethal national security policy competition, foreign policy, economic policy, technology, for example, semiconductors, and ideology, where full blown will be at non-lethal strategic competition as accepted as the new norm. And third, deploying sufficient political and diplomatic capital to define still those areas where continued strategic cooperation, for example, on climate change, global financial stability, global macroeconomic management, nuclear non-proliferation and global public health is both recognized and encouraged and embraced. All three parts of this overall concept of managed strategic competition would of course need to be embraced within a joint political framework. I argue that the importance of the overall outcome of the Biden's siege in Ping, Sumit and Bali at the margins of the G20 last week demonstrate that both Beijing and Washington appear to have taken their first tentative steps towards some form of managed strategic competition. Both sides have now spoken of the need to stabilize the relationship. On the American side, American officials have repeatedly referred to the need for a form of managed competition, the identification of red lines and the construction of strategic guardrails around the relationship. The importance of Bali, however, is to identify some of the changes in the language used by Xi Jinping. Xi for the first time is referred to the need to put in place, quote, new protections, fanghu, around the relationship in order to prevent crisis and conflict. He's also spoken for the first time of the need to put in place a security safety net, an Anchen Wang, underneath the relationship for the same purpose. Equally importantly, Xi Jinping has authorized that strategic communications should now be conducted between both sides toward this end. And in operationalizing this approach, Secretary of State Blinken is now scheduled to visit Beijing early in the new year. Most importantly, the new language used by the two leaders in their respective readouts from the Bali Summit authorizes their most senior officials to begin constructing the precise forms of strategic guardrails they will need for the future to manage the most contentious security policy challenges in the relationship. It remains to be seen whether this approach succeeds. But the bottom line out of Bali signifies that both sides have decided, at least for the short to medium term, to put a flaw under the relationship, to stop the free fall and to begin to construct some basic protections around the concept of strategic stability. This is good. However, it will be foolish to conclude, at least from the Chinese perspective, that Xi Jinping has therefore shelved his aspiration to retake Taiwan. Nothing could be further from the truth. In fact, the language on Taiwan and the official read from some time in the late 2020s and the early 2030s, when Xi of course himself still aims to be in power. We therefore need to be very clear eyed about the distinction between short to medium term stabilization arrangements on the one hand and medium to long term preparations for potential conflict. The only way to avert medium to long term conflict is for there to be an effective US allied and Taiwanese deterrence militarily, technologically, financially, economically, and of course in foreign policy and political terms as well. Deterrence which would then cause Chinese military and financial and economic leaders to advise caution against still a continuing great risk. So finally, where does all this leave the future of Australia-China relations? As can be seen from the above, this is not an independent subject in its own right. There are multiple variables at play well beyond, in many cases, our capacity to control them. The future of Australia-China relations is very much affected by Xi Jinping's changing ideological direction. The Australia-China relationship is also deeply impacted by the changing dynamics of the US-China relationship in itself, which directly affects not only Australia, but also many other countries more geographically proximate to China than Australia. US treaty allies, Japan, Korea, the Philippines, and Thailand come quickly to mind. Just as the US-China relationship impacts 140 countries elsewhere in the world for whom China has already become their largest trading partner. Furthermore, the Australia-China relationship is impacted by the increasingly bipartisan US doctrine of strategic competition that has emerged over the last five years. This in turn will be shaped by future developments in US domestic politics, including the outcomes of the 2024, 2028, and 2032 presidential elections. And whether these produce more isolationist Republican candidates for the presidency than has been traditionally the case in pre-Trump Republican America. There is often a tendency in our country, Australia, to see the Australia-China relationship in isolation. We just can't do that. This is analytically flawed. We are not Robinson Crusoe on this, either. Most countries are experiencing similar challenges and similar pulls, and most are subject to the range of variables I've just described above. However, that does not say that Australia does not have our own independent political agency in shaping our own national future. We do. But in executing this agency, we must be deeply mindful of the constraints which exist in the operating environment in which we live, work, and have our national being. What the Albanese government has sought to do is to take the temperature down in the Australia-China relationship. This has been matched by a similar change in the rhetorical tone, temperature, and posture towards Australia in Beijing. Both sides have decided to put the megaphone away. This is a healthy step in restoring some level of stability and even normality to the diplomatic discourse between Beijing and Canberra. This has been made possible by the resumption of ministerial engagement between the two sides, particularly between the foreign and defence ministers, which put to an end a three-year freeze in ministerial contact. Furthermore, Prime Minister Albanese's meeting with President Xi and Bali. From that, we now have resumed head of government-level contact between the two sides after a six-year hiatus. Nowhere in the half-century-long history of the Australia-China bilateral relationship has there been such a political freeze on contact between the two sides. This was unhealthy for all concerned. The achievement of Prime Minister Albanese and Foreign Minister Wang in the first six months of their term in office has been to stabilise this relationship along these lines. And given where we've been in the past, this is no small feat. However, the work ahead for the new government and their counterparts in Beijing is formidable. China's trade sanctions against Australia remain in place. And as I've argued elsewhere, it would be an important symbol and signal from the Chinese side to use the celebration of the 50th anniversary of the establishment of diplomatic relations on the 3rd of December this year for China to draw a line under the past by removing these sanctions. They would pave the way for resumption of normal diplomatic discourse across all of these substantive questions which currently confront the bilateral relationship. These include China's increasingly assertive behaviour in Southeast Asia and the Southwest Pacific. It includes China's posture towards our strategic partners in Japan and India. It includes China's own aspirations to join the Trans-Pacific Partnership. It includes our common concerns for effective global action on climate change. It also includes the continued incarceration on political grounds, in my argument, of a number of Australian nationals, including the Australian journalist, Cheng Lei. Indeed, the early release of Cheng Lei as part of our 50th anniversary celebrations would cast a significantly positive light on the overall relationship for the years ahead. The good thing is that we now have a restoration of a political relationship capable of addressing each of these substantive challenges. We should not underestimate the difficulty involved in each of them. In navigating them, as I have long advocated in my dealings with the Morrison government, including early one-on-one conversations with Prime Minister Morrison himself, I think any Australian government should bear in mind five basic principles in governing the shape of the Australia-China relationship. First, our unapologetic commitment to universal human rights, anchored international law, and in the Universal Declaration of 1948, for which both China and Australia are ratification states. Second, our unapologetic support for the U.S. military alliance, though not as a form of automatic compliance with every element of U.S. foreign policy. Third, maximizing economic engagement between the two countries to our mutual advantage, including the resumption of normal tourism and student flows. Fourth, maximum collaboration with China through global institutions such as the G20, APEC, and the UN on climate change, global economic stability, nuclear non-proliferation, and future pandemic management. And fifth, when we in Australia do need to part company with China, do so in partnership with friends and allies. It's always safer to hunt in packs. To conclude, the next five years will very much shape and arguably determine the long-term stability and strategic direction of the Indo-Pacific region. It will determine whether the U.S. and China can stabilize their relationship in the medium term through various forms of managed strategic competition. It will determine the success or otherwise of U.S. efforts to deter China from taking medium to long-term action, military action against Taiwan. And it will determine whether or not China can reinvent its own domestic growth model, given the slowing in Chinese growth, which has occurred over the last several years, driven by a combination of ideological, demographic, pandemic management, and global economic decoupling-related factors. But the future shape of regional and global stability and security will also be shaped by the policies adopted by third countries, including Australia, and our respective engagements with both China and the United States, given that their strategic policy towards each other will deeply impact all our futures. If we fail to navigate the next five years carefully, there is a grave risk that by the late 20s and early 30s, we could well find ourselves on the cusp of armed conflict. It is easy to use the term armed conflict, but when we begin to imagine the scope of a possible war between China and the United States over Taiwan, the strategic, economic, and human cost of such a conflagration is likely to be of an order of magnitude not seen since the Second World War. It is one of the reasons why all three countries, China, the United States, and Australia, must apply every effort for all our futures, that there is indeed a peaceful, prosperous, and sustainable future for us all. The alternative is to quite catastrophic to contemplate. Thank you. APPLAUSE Thanks very much. That's for such a thought-provoking speech. We have a few minutes for Q&A. Not enough time to open up to the floor, so I will use my privilege as MC to ask a couple of questions before the book signing in about 10 minutes' time. The question on the mind of many China watchers including mine is the extent to which Xi Jinping believes the rhetoric he espouses, and even if he does, is there nevertheless still wiggle room for policy adjustment? Is she not a politician capable of manoeuvring and course correction? After all, as one of our esteemed foreign panellists reminded me today, even Mao could turn somersaults opening up relations with the USA in the midst of the Cultural Revolution. It's an excellent question. What I've noted in my study of Xi Jinping's ideological framework over the last four or five years is that the changes in the ideological formulation that he's used, whether it's on domestic politics, whether it's on the domestic economy or on foreign security policy, by and large have all predated and foreshadowed changes which subsequently we could see unfold in the real world. In other words, you can say that this is entirely coincidental, or you conclude that is at least partly a case of causation. So therefore belief or ideological belief is not simply flirting around there in the middle galaxies of St. Thomas Aquinas putting angels on the end of a pinhead. It is a set of precepts from a Marxist-Leninist worldview which informs the broad parameters of strategic policy direction. If I could put it in these terms, and I'll try and do this visually, if this was Deng Xiaoping's definition of reform and opening within a foreign policy which sought to work within the existing international rules-based system, this is Xi Jinping's ideological parameters that he's laid down since 2017. Some of this overlaps, but not as much overlaps as is different. And within that, there is of course scope for policy, shall I say, innovation. Tactical, but I doubt that it's strategic. If you want an example of tactical flexibility, look at the fact that we have just witnessed in Bali, and bilaterally not just with Australia but with a number of other countries including those in Europe, look at the most recent visit by Chancellor Schultz from Germany to Beijing a couple of weeks ago, where the temperature is being brought down across the board. But my argument would be, looking at the evidence, is that this is seen as a tactical shift within the continuity of an overall strategic direction. And that overall strategic direction was laid down in foreign policy terms at the foreign policy work conference of 2014, which concluded, using Marxist-Leninist ideological terms, that we are now strategically in a period of struggle for the future of the international order, guo ji zhi du zhi zhan. These are not terms used for fun. These are not just selected to sound good in an after-dinner speech in Beijing. These are carefully crafted within a formal speech, and then carefully crafted again in terms of that which appears in the people's daily. So tactical flexibility, yes, strategic direction, I'm much more doubtful. You've mentioned the economy as China's Achilles' heel. You've also mentioned the Leninist shift or the status shift in policy and governance. If Xi Jinping is so constrained by ideology that he runs China's economy into the ground, should those who see China as a threat sleep better at night? Well, the $6,000 question as we all sat down to look at the 20th Party Congress report in October was given the data has now been in for two or three years on a slowing Chinese economy through a multiplicity of factors, both ideological, both demographic, as well as pandemic-related, but would he therefore use the 20th Party Congress ideological report to signal a shift back towards the center, a more even balance between market and the state? I think anyone who has carefully looked at the ideological formulations of the document and the language used around certain key banner phrases, chijiyu, or koha, the overall weighting on a more Marxist interpretation of the economy and a greater role for the state in the direction of the economy through central planning is quite clearly apparent. So there was an opportunity as of last month to course correct and what we've deduced is he didn't do so. However, as my Chinese friends, with him I've had many debates on this on Zoom, although not in the flesh, are quick to say, Kevin, you need to wait for the Central Economic Work Conference report of December and look carefully at where in fact the real world of economic policy translates to. To which my response is yes, I'm looking forward to that document, but I'd be very surprised if it moves outside the parameters which have been set ideologically in both the 19th and the 20th Party Congress reports which have taken the center of gravity decisively towards the left. The further caveat though is this, you're right on the economy of things became disastrous and you began to achieve not 6% growth but 2% to 3% growth and then bumping along at zero, then we should not rule out the possibility that a significant course correction should occur at this time. In terms of therefore, should the rest of the world who are concerned about China's rise sleep easily in their beds? Well, I think it's far too early to predict where this will land. All I can do as a China analyst is look at the data as it presents itself, look at the ideology as it presents itself, look at the changes in economic behavior which has ever occurred and even listening to those who defend the system saying yes, there has been a change in the balance between the market and the state, that's what they say internally but alone what's said externally and when I look at the pace of activity in terms of attempted capital flight out of the country this change had better happen soon. One final question, you mentioned policies or the significance of policies by third countries. How can Australian and New Zealand policymakers prepare themselves to operate within a frame in which ideology is now more central? I think we need to as two countries, including our friends who are here visiting from the United States be focused on what I think are two underpinning core structural realities and then you work within the grain of that and you seek to move it to the extent that you can. The first of those structural realities is what I've described before is for the next five years I think what Xi Jinping and President Biden have indicated is an attempt to take the overall temperature down and attempt to stabilize the relationship, to put a floor under the relationship. So third countries, be they allies of the United States, friends of China or a combination of the above, need to find the opportunity to impress upon both Beijing and Washington that this form of managed strategic competition is good for us all and furthermore should be long term, not short term. On the second underlying structural reality which is again taking Xi Jinping and his word about long term preparations over Taiwan, by which I mean anytime from late 20s to the 2030s, early 2030s, then I think there is a combined interest for friends, partners and allies of the United States to turn their mind carefully to the proper construction of an effective medium to long term deterrence. That is not just necessarily militarily exclusively, it is also financial and economic and that's where Europe is central. Would Europe for example, indicate in advance that it was going to join future US led financial sanctions or trade sanctions should there be a military invasion of Taiwan or action against Taiwan by China, allow Ukraine and Russia or not. And a question of political resolve in the good old USA itself, that is will those forces in the United States currently in the Ascended, arguing for a robust policy towards China over Taiwan be able to be self sustaining into the future as well or will they be derailed by the new isolationism of part of the Republican enterprise. So these I think are the various elements which constitute longer term deterrence or the absence thereof. Thank you very much. Would you please join me in thanking Dr. Rudd for a fabulous oration. It's set the scene for some robust debate at our forum tomorrow, which I'm very much looking forward to. Dr. Rudd has to leave 7.30 sharp. I'm sure many of you in the audience already have a copy of his book, but for those of you who don't, there will be a opportunity to buy one and to get a signature in the book. And you need to do that in the next few minutes if you're interested please. Can I, or not, can I actually?