 Welcome to the latest Long Distant Loewe event today on the Fractured Ties Between Australia and China. My name is Richard McGregor. Today's guests are all Australian journalists who have been based in China, two of whom who were recently advised to leave the country in rather dramatic circumstances. Bill Bertels of the ABC and Michael Smith of the Australian Financial Review are both now in Sydney and out of quarantine. Our third guest who came back from her posting without needing an escort to the airport, I might say, is Kirstie Needham, who we reported for the Sydney Morning Herald. She is now based in Sydney for Reuters. The aim of this event is not to go over again the departures of Bill and Mike, not just to focus on journalism in China, although that's the lens through which they all saw the country, but to look at China more broadly, Chinese politics, the economy, and also the bilateral relationship. I'll pose questions to all three of the panelists for about 40 minutes and then we'll go to your questions. Now some brief housekeeping on that point. At the bottom of your screen, you'll see a Q&A button where you can submit questions to the panelists. We'll put as many of those questions as we can later in the discussion. Please include the name of your organisation or any other affiliation when you send through your question. Now to the panelists. Welcome. Thanks to all of you three for joining us this afternoon. Bill, I'm going to start with you. You arrived in China in 2015. I think that was your second stint in the country. You've lived there previously from when to your posting for the ABC. Trace for us the arc of China's political development or development in the time you were there and how you could sense that in your work reporting for the ABC. Well, thank you, Richard. Thank you for this opportunity and good to see everybody here. It's a big question. But I would say that the China that I left just a few weeks ago was markedly more closed off, frankly, than the China that I came to five years ago. And certainly when I was living there previously in about 2010, 2011. I think it all goes back down to politics. You can talk about economic this or that. But the reality is I don't think it's a case anymore of China, they're getting tighter and tighter and they're really tightening things. I think it's well beyond that now. I really think we're probably in the most extreme ideological period. We've seen probably since the end of the Cultural Revolution in the mid 70s. That's how tight things have got now in China. And little things you'd notice in a day to day. In 2015, you'd catch the high speed train to Shanghai and everyone's uniforms were normal. Now, you will always see little Communist Party badges on all the party members on the trains, sometimes staff in hospitals. The party being front and center of everything is just so obvious. And what that really created for journalists is this top down conservatism or caution that permeated throughout society and just made it almost bloody impossible to interview anyone by the end of my stint. You could still interview people on the street if you're outside of Beijing. But even the most benign topics were just so difficult to cover by the end. So that's how I noticed it most tangibly affecting me as a journalist. Until, of course, you were escorted out of the country. Now, Michael, you reported maybe more than others on the economy. Now, that always used to be an area which was relatively open and thus quite illuminating for understanding China. Has that also changed since you were reporting from China? Yeah, absolutely. Richard, that tightening we've seen politically has extended to all facets of life in China, including the economy. So, I mean, I arrived in China in early 2018. And back then it still wasn't taboo to criticize the way the government was managing the economy, managing economic reform. It was quite easy to get an economist on the phone who would make some interesting comments. And look, this really changed in the last 12 months, 18 months. Suddenly, no one was criticizing China's economic direction anymore. It was very, very hard to find independent voices inside of China. You could, of course, ring an economist in Hong Kong and get a pretty frank opinion that might be changing too now. So, you know, we've seen this tightening in opinion making everywhere, but also with the economy. And look along with that, I mean, when I arrived in China, you know, President Xi was very much talking about opening up reform and opening up. That was the rhetoric. And there were a lot of big speeches around that. They launched the China International Import Expo in Shanghai, which is still going ahead this year. So, we saw all this rhetoric around the economies opening up, foreign investments welcome, foreigners are welcome. But of course, over the last year or so, we've seen everything tightening. It is going to be harder for companies getting into China now. There's more regulation, more red tape. So, you know, everything is closing up a bit. Kirsty, you were there for three years for the Sydney Morning Herald from 2017. You know, of course, it lived in China much earlier than that and written about that. In the past, China used to have a tightening cycle and a loosening cycle. That was the general view. What do you think? Are we overstating this? Is it really just we're in an ever tightening cycle politically? I think we are seeing a significant tightening now and, you know, significant disruption in 2020 with both COVID and the US-China trade war. So, you sort of need to factor that in. I remember in 2004, when I first went to work in China, it was a period of opening up of the state retreating from people's lives. So people no longer had to get their done way or their work in its permission to get married. People were travelling overseas and students were travelling overseas. And it was quite, you know, a period of China reaching out to the world as they headed towards the Beijing Olympics. You know, another big tightening cycle perhaps started in 2012 when Xi Jinping rose to power. He started that corruption crackdown, which, you know, it was also seen as a way of Beijing strengthening its control over the provinces and also Xi's political rivals. When I arrived in 2017, what really struck me was the tech boom. And I'm a former tech reporter. It reminded me of Silicon Valley in the dot-com boom. What was happening in Shenzhen, the rise of digital convenience and WeChat. And that seemed to be really transforming people's lives. You had high-speed rail and infrastructure building going on. But at the same time, there was a tightening. We saw in Xinjiang, in the far Western province, you know, very large numbers of the Uyghur ethnic minority were being sent into rare education. And quite a hard-line approach being taken by the central government there and on human rights. Yes, so we're going to come back to talking about the system and Xi Jinping in particular. Before we do that, let's go to the bilateral relationship. Now, the judgments that all of you have made there about the Haishan environment in China, I think, has been part of the judgment that Australian governments in recent years have made about China and is possibly one reason for the deteriorating relationships between the two countries. Bill, most of reporting on the bilateral relationship is done from Australia. What is your sense of how the issue unfolded from China, in China? I mean, clearly the decision to punish Australia at the moment on various trade commodities comes from the top. But I have the impression that that took some time. What is your sense of how the Chinese debate about Australia unfolded? Oh, Richard, I feel like it was kind of unexpected on the Chinese side. Going back to China in 2015, the FTA had just been signed, to be honest, let's be frank, 2015, 2016, it was really dull there. Everybody's eyes was on the Trump election that was coming up and I couldn't get stories up in 2016. No one was interested. It's not quite true, I could, but you know what I mean. And that it really kicked into overdrive at about 2017 or so. And a lot of the impetus did come from those reports, the reporting in Fairfax and the ABC, the Four Corners. And I really do think that kind of took the Chinese government by surprise because that sort of media pressure then led into far-interference laws and so forth. And there was a change in the Turnbull government's approach. I really don't think it was particularly well anticipated. And so what we used to hear when we're up in Beijing, you know, through the diplomats is that they're Chinese counterparts in the Ministry of Foreign Affairs or any ministry really that they met with. They'd always have this list of talking points when they're meeting an Australian official and they'd always complain about the Australian media's coverage. Even when things were sort of up and down, up and down, when they were relatively good, you'd hear that the Chinese side is sort of saying, oh, look, you know, things are not too bad, but the media in Australia is just so toxic, et cetera. So I sort of feel that there was this period, 2017, 2018, maybe, where the Chinese side was kind of feeling out the change in the positioning in Australia and wasn't quite sure what to make of it. And then more recently, I don't know when exactly you'd say it started, but more recently with the measures we've seen, I think a decision's been made in Beijing that the Aussies are a lost cause. They've sided with the Americans, our efforts to drive a wedge between the Australia-US relationship really has gone nowhere. And I sort of think it almost reflects like a decision, a judgment has been made in Beijing, whereas those initial years, there was still a lot more uncertainty, I felt on the Chinese side, about whether this was just Australia kind of being led by media discourse or whether it was significant sign of a government repositioning. I certainly think you're right that the Australian media reporting has been very influential in that respect. Mike, I want to go to you. I don't want to typecast you being the financial review to talk about the business community, but I'm going to ask you too. If you listen to Malcolm Turnbull in his book and in his public statements, he says the business community instinct, the Australian business community instinctively sides with China. That may be less so now, even though I sort of detect a nascent revolt amongst the business community at the moment. Do you agree with Turnbull on that issue that the business community has been highly critical of the government's approach? Yeah, well, I think they still are. And for the obvious reason, they have their own commercial interest to protect. They don't want to upset China. They want to keep selling products into China. So they're in a way, they're sort of always getting to side with China. But look, I think there has been a bit of a shift in sentiment. I think businesses are really rethinking their China strategies. There's a huge amount of concern now in the way that China's behaving and the fact that China seems willing to use economic coercion against some of our major exporters really has people sort of rethinking their strategies and their commitment to China. But on the flip side, I found particularly in Shanghai and the business community, there are a lot of deep criticism of the Morrison government and the way this has been handled. Of course, everyone acknowledges China's become a lot more difficult to deal with too. But look, there's a lot of criticism, particularly around the call for the coronavirus inquiry, which Maurice Payne sort of first flagged on insiders back in April. And that seemed to be a real tipping point in the downward trend we've seen in the relationship. And I think a lot of people in the business community are sort of saying, well, you know, morally may have been the right call to make, but did Australia have to be the one to do it? And now we're all being punny. So I think that's sort of what you hear from a lot of the business people in China. Kirstie, you touched on the business relationship in a very lengthy article you did a week or so ago for Reuters, but you also wrote about another point, which has become a theme of writing about Australia and China. And that is that Australia's intelligence community or national security hawks, if you like, are the ones driving this, and in fact pushing the politicians into a harder line. What's your assessment about that? I think that's certainly true. And I think we can trace it back to 2017. They would say, of course, that they were simply reacting to a change in China's behavior, that China's behavior in the South China Sea and the expansion of infrastructure building into the Pacific had caused them to focus on what China was doing. And I guess we also have to say that it's a prime minister and cabinet that make these decisions, but it's who has the ear of cabinet. And it certainly seems in some key decisions around Huawei and foreign interference and influence legislation. It is the intelligence agencies, but also people who've come from the intelligence agencies into key advisory roles in the prime minister's office, in the foreign minister's office. So that's been quite a shift. And we can see this from what Turnbull himself has said now that he has left the prime minister's role. He talks very clearly about that Huawei decision in 2018 that it was the Australian Signals Directorate and Mike Poges there that had said to him, there was no way to mitigate the technology risk of having a Chinese company Huawei involved in 5G and that's why that decision was made. And also with the reporting that we've done with Reuters, it's clear that some of those senior intelligence officials were also traveling to Britain and talking to the United States and looking at the 5G Alliance and sort of sharing those concerns with other partners. We also see with the foreign interference legislation that was brought in in 2017, again, Turnbull was very clear when he brought that legislation in that it was an ASIO report that had galvanized him to take action on this. And this is where Australia, I guess, had led the pack for the Five Eyes partners in looking at what they would call COVID interference or Chinese influence. Although they're very careful not to single out China but looking at the role of the Chinese embassy in holding influence over Chinese students on campuses, you know, interference in Chinese language media in Australia and question marks around political donations on both sides of politics. Certainly the split between the two countries is deep and wide. I used to make a list of all the sort of points of division, foreign interference, South China Sea, Taiwan, Huawei, jailed Australians. We're caught up in the US, China split, Xinjiang universities. We even had two of the country's most famous swimmers at each other's throat in public, Mac Horton and Sun Yang, which sort of cuts through to the public. But I think as Mike said, COVID, the inquiry was the tipping point. Bill, let me just ask you about that. Do you agree that was the tipping point and what's your sense of the future of the relationship? Do both sides have to settle down or have we reached a sort of new low and it's going to be very difficult to recover from here? Yeah, Richard, it was the straw that broke the camel's back. Although if that didn't happen, there would have been another straw at some point, I'm pretty sure. It was headed in that direction anyway. As for where it's going, I don't see it really changing direction anytime soon because both sides, I think have pretty much felt each other out and have made an assessment about it. And there seems to be a belief on the Australian side that the biggest exports, the most important ones, iron ore and coal, are not going to be targeted because it's very difficult for China to target them. There also seems to, I don't want to bring up like a Chinese saying, but the old like eat bitter, a true cooler, that sort of idea that we Chinese can eat bitter, but Western democracies can't because of electoral politics and stuff. It's almost like there's this view now in Australia that let's try and put up with some tough times in the wine industry, in the barley industry. Let's see if we can withstand this because we know the game that China's playing. The idea is those barley growers and the wine growers are all going to run off and vote for the opposition party and change China policy. So it seems to me like both sides actually know each other a lot better now after a few years of argy-bargy. And I can't see for the coming years at least any great change, except maybe a bit of a tone down from the Australians. Maybe, but then again, it depends what happens. I can't, despite some of those people like, what are they called? Not thinking of the wolf warriors, the wolf pack or whatever they're called in the Australian Parliament, the Inter-Parliamentary Alliance on China or whatever. I see some of them in the paper this week talking about maybe we should boycott in 2021 games, but I don't think that's probably gonna gain traction within the Morrison government as a position or anything. So yeah, I don't think it's gonna improve any time soon, frankly, but I can't imagine it getting too much worse. We're probably, it's probably just gonna be pretty rocky and not particularly friendly for a long time and that's the new normal. So Mike, I'm gonna ask Kirsty about iron ore, but the Chinese press, if you read it, I mean, people tend to dismiss the global times. I wouldn't do that completely. They said a number of times, there's a whole series of items that China sells to Australia that can be replaced. And it looks right now that they're going through the list and are actually replacing them. So how do you see the outlook for wine, meat, barley's already suffering and being cut off? There's a whole vitamins and the like. Do you expect to see this China pile the punishment on in terms of trade commodities? Yeah, well, almost everything, the Chinese ambassador to Australia flagged in his interview with the AFR back in March has sort of come true that the list is all there. It's sort of tourism, students, wine, there was barley, we've got the wine anti-dumping inquiry happening now. Look, it's pretty safe to predict that Australia's probably gonna lose out of that. So they do seem to be working through this list. There's a lot of speculation around at the moment that dairy will be the next one to go. There's a lot of sort of talk of a possible anti-dumping inquiry into dairy. The industry's very nervous. We don't actually know if that's gonna happen or not. So there's wool, there's a whole lot of other Australian products. But I mean, I think at the end of the day, China doesn't block off stuff that it really needs or its consumers want. I mean, wine's a classic example. It does have a lot of other options, a lot of other countries it could buy from. So if its consumers really want our products, it's probably not gonna completely axe them. But it's sort of safe to say almost everything except maybe iron ore and sort of some other commodities are at risk here. It's just sort of hard to tell. I think they'll probably just maybe chip away at things rather than sort of start completely banning our coal or something. But the other risk for Australian exporters now is that it's not necessarily an order from the top from Beijing. You're gonna get sort of some heavy-handed medium level customs officials who might start giving Australian importers a hard time. They'll get a shipment of Australian wine or whatever coming in and they might ratchet up the health inspections and just slow everything down. And the other risk and a lot of traders have said this to us in interviews is that they want Australian products, particularly seafood traders have said this to me. They want Australian seafood but they're kind of nervous something's gonna happen. There's gonna be some sort of bureaucratic decision made in Beijing. So they're sort of looking at other markets anyway just in case they can't get our product in the future. So that's another risk to sort of be wary of. I think that's a good point. There'll be a lot of sort of preemptive buckles in other words, people who think Australia is going to be banned so they'll look elsewhere to start with. Kirsty, on the issue of iron ore, of course with coal, China imports a very little coal comparative to its consumption. Iron ore, that's not the case. And in fact, that's been a driving force in macro terms of Australian trade. We've had a spate of stories again about new mines in Guinea, greater investment in Brazil and the like. Give us your sense of the iron ore trade and whether China can in fact replace Australia in that respect. I think I wouldn't talk long term because certainly there's been reports that Brazil who's the other supplier there's been these super carriers testing of these big ships that can go longer and carry a lot further. Perhaps they are sizing Brazil up as an alternative to Australia. But at least in the short to medium term, there doesn't seem to be a replacement to Australian iron ore. And it's sort of a key trade to look at when you look at the Australia-China diplomatic relationship at the moment because it really does seem to be figuring into the Morrison government's thinking. They're talking a lot now about mutually beneficial trade. They'll talk about, as you see, Chinese trade reprisals, what the Morrison government would call threats of economic coercion, all these other areas. You'll see this line coming from Morrison and his ministers that trade is mutually beneficial. It's two-way trade. The China's benefited greatly from our resources and they're talking there about iron ore. So they're aware that that is something that's unlikely to be targeted and perhaps that is stiffening the backbone a little when they continue to speak up and you'll often hear them talking about national sovereignty. We're not going to trade our values in response to economic coercion. And what that seems to be about, I guess traditionally, I mean, Australia was one of the first countries to become quite trade reliant on China. It now seems to be one of the first countries in looking at how do we continue to speak up as a democracy on issues like Hong Kong, issues like the pandemic inquiry. I mean, I think the thinking in the Morrison government from people I spoke to at the time, it wasn't that we are bolstering the US position on this. We're trying to find another position. Remember at the time that Australia was talking about the need for an inquiry into the source of the pandemic. They were ringing other world leaders. They had their eye on this world health assembly process, a multilateral process. And over in the States, you had Donald Trump and Pompeo saying much more hawkish things about virus leaks from labs. So Australia perhaps felt that this was more pragmatic, a more multilateral approach to the issue. And I think they feel that they will be speaking up more often in multilateral forums on these issues, issues of democracy and value. And it makes it easier for them to do that if they know that while all these diplomatic tensions going on, iron ore sales are reaching record. I think it was 100 billion this year that they reached for the year at the same time as the really harsh war of words was going on. Yes, of course, iron ore seems safe for the moment, but a whole bunch of other commodities are being affected. As Bill said, the Chinese phrase about eating bitterness, Australians might be sort of more about drinking beer sort of thing. So I'm not quite sure we can go into the eating bitterness as they've done, but that's a real test for us in coming years. So going back to COVID, it was only in about January, February that people were talking about China's Chernobyl and the like that the Chinese system was coming undone under the pressure of the spread of the virus and the coverup and the uproar in China about that. And look at where we are now in September, October, China is recovering, it's opening its borders and the like. And the Chinese leadership Xi Jinping is telling the Chinese people, this shows our system works. Look at America, what a mess, democracy in America doesn't work. Bill, you were talking earlier about how up front, how much more visible the party is now, people's wearing lapel pins and the like. What's your sense of the system? I mean, is the system as it is now with a dictatorial figure, a cult of personality with Xi Jinping at the top and the like, a stronger party, greater party involvement in the economy, chance your army, is that sustainable? But... Yeah, Richard, I can't imagine the party ever being stronger than what it is now. It's in an unbelievably impressive position because you now have all the tools of a surveillance state to absolutely snuff out any opposition to the party, quick smart, which, you know, you saw the property developer Ren Zheng, was it Ren Zheng Fei? Ren Zheng, sure, I can't remember his name off the top of my head, but he got 18 years this week. He wrote an essay, he was an outspoken princeling and he didn't name Xi Jinping, but it pretty clearly referred to him as a clown, partly because of the COVID fumbles at the beginning of the year. And he wrote this essay and this past week, he's been given 18 years in the slammer, supposedly for corruption, right? And the thing is what's significant about him is he's a princeling, he's cut from the same cloth as Xi in a way, he's the descendant of the Red Royalty and he's supposed to be somewhat protected, but no, he's not. So, yeah, the COVID situation has been a massive win for China. It has been a huge win, I can't stress this enough. And it is like a parallel world between what you hear about COVID in China and what you hear about it outside of China. It is almost unfathomably different. And so, everybody has kind of moved on from the whole Wuhan stuff up in China because it's been snuffed out and the coverage has been shaped and anyone who wants to still bang on about Li Wenliang and all that, it's all kind of been funneled towards a narrative controlled by the party. On the ground, China has absolutely smashed COVID. They've almost, the government there through its policies have almost eliminated COVID, domestic transmission in a country of 1.4 billion that's densely populated. Compare it to Indian export door, compare it to the US, compare it to Brazil. It is an extraordinary achievement. So, and then the US just gave China this gift with its terrible handling of COVID, which has been absolutely exploited for all political gain domestically in China through the state media, why not? So, yeah, I think she comes out of this absolutely rock solidly stronger than at the start of the year. And people who kind of say, ah, maybe this is China's Chernobyl or something, they really underestimate the many levers of political control and media control and information control that the party now has. I can't imagine a stronger position for the party to be in, except of course, the US trade war and the opposition overseas, et cetera. That's sort of like another discussion. But certainly on COVID, they've come out of it, absolutely laughing. Mike, those controls of bills, Bill talks about don't always work so well with an economy. Outwardly speaking, China is doing very well bouncing back both in terms of infrastructure spending and retail spending. But then again, you look at the past 10 years when the GDP figures have been good, but the amount of debt accumulation and the buildup of sort of assets in the Chinese banking system has been nothing short of astounding. I think 40% of global debts are now held in the Chinese banking system up from about 10% 10 years ago. I mean, what's your sense is the economic story sustainable, particularly as you've got a sort of attention between the private and state sectors in China under Xi Jinping? Yeah, we had that interesting call by Xi, I think it was last week for the sort of the private sector to rally around the party. And this was another really strong indication that perhaps the private sector, once again, is taking a backseat to the party, calls to be faithful to the party. I mean, this particular speech is sort of reignited concerns that private Chinese companies are in fact controlled by the party, which is obviously a huge issue in the US-China relationship and the tensions there. So it sort of feels like the party's again reasserting its control back over the private sector, which it probably already had. I mean, the economy is at a very fragile place, but I mean, every month the statistics come out and they do on the surface seem to be sort of getting there. All the data for August was pretty strong. You always have to be skeptical of that data. There's sort of no firm proof at the moment that they are really struggling. I mean, I think it's sort of clear in the very bottom of the private sector, the very small enterprises, they're not doing very well, but I mean, the beige book survey of over 3,000 companies came out today, that's sort of a fairly well-respected survey that showed they'd sort of been a strong pickup in the second quarter. There's still challenges in China's services sector. Look, Chinese people, particularly after what they've been through aren't as confident as they were before and they're not gonna spend as much. And then of course, you've got this other great problem is China's export markets, you know, all of China's biggest customers are struggling economically, so they're not gonna buy as many products. So you put all that together, there are huge risks, but at the same time, China's GDP figures seem sort of fairly strong economists are now predicting 5% growth in the third quarter, which seems astounding when you think where the rest of the world's at. So I guess we'll sort of see longer term how this plays out, you know, the state media is making a big fuss about this sort of dual circulation strategy, which is all about China becoming more self-reliant again, so it's sort of gonna be interesting to see how that plays out. Kirsty, thinking of the levers again that Bill talked about that China has internally, externally it's a different story. The so-called wolf warriors, the more assertive Chinese diplomats. If you look at China's relations, not just with Australia, with the US, with Canada, with the UK, to some extent with France, with Scandinavian countries, most importantly, perhaps with India, Singapore to some extent, you know, China is not winning a lot of friends diplomatically at a time in theory, when it is a much, much stronger country and may have, you know, many more selling points. Now in part, that's because of COVID. What's your sense of Chinese diplomacy? I mean, why is it so clumsy? And do we underestimate it? In other words, can it improve and can they win friends in the world? Yeah, the trend for wolf warrior diplomacy seems to have really fallen flat and it was a really bad time for that, for that tactic to have been taken. And I wonder whether initially it was a response to Trump's Twitter diplomacy, that you'd initially seen a big shifty US diplomacy that you saw Trump and Pompeo, you know, saying some quite strident things. Trump using Twitter, then we saw with the wolf warrior diplomacy in China, ambassadors and foreign policy spokespeople taking to Western social media Twitter, which of course can't be accessed in China without a VPN and, you know, echoing some of these very strong and strident messages, but it doesn't, it doesn't seem to have connected, it doesn't seem to have worked. And the other aspect of it though, it seems to have been a more assertive stance taken by Chinese ambassadors around the world. When we talk about this current diplomatic crisis, you know, over the coronavirus inquiry, of course there was a, you know, an infamous interview given by the Chinese ambassador in Australia where he sort of raised the possibility of certain trade that could be impacted or boycotted by the Chinese people. And just overnight in the States, Pompeo on the campaign trails been in Wisconsin and talking there about letters that Chinese consulates in the States have been writing to Wisconsin, to other US States and strongly urging local governors to make public statements in support of China and the coronavirus and really, you know, falling flat and really, you know, tone deaf to be writing that kind of assertive letter demanding something in support of China. So it's really, it's not working. And I wonder if we will see them sort of stepping back and assessing that. I just want to come briefly before we go to questions to Bill and Mike. Just your experience a few weeks ago, you were advised by the Australian embassy in China to leave the country. You were prevented or told you'd be prevented from doing so. You had the sort of midnight knock on the door from state security. Your sort of passage out of the country was negotiated after an interview with police. Without going through the whole story, starting with you, Bill, is there anything now when you look back on that experience that, you know, perhaps comes to the fore that didn't previously? Oh, I think of Canvas is so well Richard in one too many interviews that probably nothing in particular. I still stand by my overall impression of the whole thing as being a sort of tit-for-tat, Australian diplomatic issue that we were embroiled in that didn't personally relate to us. And, you know, we're just talking today, you know, China heads might have caught that two Australian researchers, you know, Clive Hamilton and Alex Josky, Hamilton of Silent Invasion fame, Alex Josky from the think tank, Aspie, were named today by the Chinese. Was it the foreign ministry? I'm not sure which ministry, probably the foreign ministry, as being unable to enter China, as in we've banned these two anti-China academics. And that obviously was a very clear tit-for-tat response to the Australian authorities cancelling the visas of two Chinese academics over here. So I think Mike and I were both embroiled in this whole thing for pure bilateral political reasons. It's a great shame for something like that to happen when you're just a pawn. That's what we were, and that's why we're here now in Australia. I guess there's one difference is that Josky and Hamilton wouldn't have dared to even try to go to China and the Chinese academics did want to come here. Mike, what about yourself? Anything that you look back on now that you'd want to reflect on? Yeah, I totally agree with Bill. I think we were pawns in this wider game. I mean, early on we didn't quite know what was happening. Of course, it's since emerged after we returned that ASEO raided the homes of four Chinese journalists. So you think there's always going to be a tit-for-tat reaction. I mean, China's gonna say, well, hey, you messed with our journalists, so we're gonna mess with yours. No one told us that at the time. Was our experience directly related to that? It seems like there must be some link. But look, it's all still unclear. We don't know exactly why Cheng Lei has been detained. So, but it all seems to be linked in some way. But I'm like, Bill, I mean, I'm quite disappointed to leave the way we did. It just feels like a real shame for journalism. It's obviously gonna be hard to get back in there for a while and it's just really gonna erode the understanding of, you know, Australia's understanding of China and it's sort of not gonna do China any favours either. Terrific. We'll now go to audience questions. I'm gonna combine two questions to start and any of you should feel free to speak on these topics. First is Darcy French, a master's student for at Seance Po and Peking University. As a student who was meant to start studying in Beijing this week, what might be the future for Australian students studying in China? And I'll combine that with a question from Angela Lehman, an education analyst, the LIGAN group. Do you think Australian academics working in and with China are facing new risks? Bill, you have a go. Thanks, Richard. On students, first of all, I don't think there were that many Australian students in China relatively to begin with, even when times were good. It's not like the huge number of Chinese students over here. So yeah, there might be a drop-off in the enthusiasm of Australians to go and engage with China, but you already have a relatively small number studying at Chinese universities in various courses. I don't think there'll be a huge drop-off. There may be problems for students getting visas in future. Chinese side wants to be a bit mean about it. But yeah, the question is, when will they go back? When will they be allowed to enter China again? That's obviously a coronavirus issue. And the other second question, I'm sorry, I can't quite remember it. That was about academics facing risks. Why don't somebody else take that on? And Michael or Kirstie, who would like to talk about that? Yeah, I mean, I think the academic issue is gonna work both ways. I mean, before this all happened, I mean, we spoke to about six very prominent Chinese academics about four weeks ago and they all told us that it wasn't worth their while engaging with Australia anymore. They didn't feel like they were gonna get a fair hearing. They didn't feel like the media in Australia were gonna give them a fair hearing. And it was almost like they've given up. So in terms of, I haven't spoken to any Australian academics planning to go over, but I imagine their appetite's gonna be diminished. There's always the threat of visa problems. I don't think China's gonna start running around detaining our academics, but there are gonna be more hurdles thrown up. But I guess if you're very passionate about China and the border restrictions are lifted, you're probably still gonna try and get over there. Certainly the DFAT advisory for China is still about the threat of arbitrary detention, but certainly I hope Darcy does manage to get back to study there because I think we need to have Australian students studying there. Now we've got something from Tom Parker, AFL. I don't know whether that's the AFL. Bill touched on the changes in visibility of the party since 2015. How has daily life changed at the same time for the average Joe? That's a joke, by the way. Joe, as in Z-H-O-U. In other words, the average person on the street does the greater, more intense politics. Does that affect people in their day-to-day life? Kirstie, do you wanna have a go at that? What's your sense of that? Well, I'm thinking to 2019 now when I was there most recently. And to be honest, I don't, on the street, I don't think so. Although there was certainly a push for the Communist Party units and Communist Parties within private companies with any kind of company to reinvigorate those roles. So perhaps that's where it would be more visible, perhaps through the workplace. And certainly now I'm recalling at schools there as a parent of a child. I did hear and read that there was sort of, a greater scrutiny on school textbooks, scrutiny on foreign textbooks going in there. So perhaps in those kinds of ways. Bill or Mike, anything on that point? Yeah, I really noticed a shift after coronavirus, particularly around April, and Bill sort of touched on this before, but this idea that the whole Wuhan issue, I found even some Chinese friends, they seemed a bit more nationalistic than they used to be. They took huge offence at this notion that the virus originated in Wuhan. It actually came up at a very tense dinner party one night with a big group of friends and there was a Chinese guy at our table who I didn't know very well. And he got hugely offended by this idea. He was very well educated. And he was telling me that the US Army bought this thing into China. So I sort of noticed shifts like that occurring. But I mean, I think day to day life, not so much people want to get on with life and it is interesting. I mean, Bill and I were there just a few weeks ago and you're out on the streets of Shanghai and Beijing and everyone's out shopping and they're sort of worried about their kids' education and their incomes and all the same stuff that we worried about. So I think to a certain extent, people are just sort of trying to get on with their daily lives. That's a good point about your friend at the dinner party and the power of Chinese narratives inside China about issues like the coronavirus. Let me ask a question related to a piece of the Australia-China trade that we haven't covered and that's about education. We've got a question from Anaheid. What do the panel expect for the future of Chinese international students enrolling in study in Australia? We could extend that to a restart of the tourism market. You might have seen that China is opening up. There's travel corridors between China and a number of countries in Europe, in Asia, in Japan and the like. Australia seems a long way off. Of course, our borders are closed at the moment as well. But Bill, we'll start with you. I mean, what's your sense that are we ever going to go back to what it was? No, Richard, I think it's peaked. I think that the COVID experience probably is driving quite a, I don't know if I'd say many, but a significant amount of Chinese families towards maybe looking at staying at home for university for their kids in China. And also to the general hostilities between China and the West, I think is discouraging this idea of overseas study. That said, China's a big place. You're still gonna have a huge, huge number of people or parents who want a Western education for their kids at high school, at least at university, at least there's something different from the sort of heavily ideological environment that China's education is going towards. And the biggest thing about, I think, Australia is China has picked diplomatic fights with basically all of the main rival markets for students. You know, when Huawei banned, sorry, when Britain banned Huawei, that kicked off diplomatic hostilities with the UK. Canada, say no more. I mean, they've got left, right and center. They've got diplomatic hostilities over once again, Huawei and various other issues. The US, where do you start? And so, frankly, if you are a middle-class Chinese parent who wants to send your kid to an English-speaking country for university, if you're really so nationalistic or so swayed by the rhetoric that you would not send them to Australia, why the heck would you send them to the US then? Why would you send them to Britain? Frankly, I think there's gonna be a drop-off in general of all overseas students from China in the coming years in the sort of post-COVID environment, but I don't think Australia's gonna cop it any worse than the other key Western markets. I think that's a good point. Australia, in fact, might be attractive because Melbourne aside, we've done a much better job than the UK and the US on COVID and health is very important. Kirsty, you made the point that China made efforts to open up tactically, perhaps, ahead of the 2008 Olympics. This is a question from Joanna Lester. Bill talked about the Wolverines and obviously some people in the States. I think Mr. Pompeo, the Secretary of State, talking about a boycott of the Beijing Winter Olympics. What's your sense of that issue? Do you think that's gonna come up as a big issue and can you see Australia getting on that bandwagon? I haven't seen anything from any government ministers here or any official indication that Australia would get on that bandwagon. I think that suggestion came from one of the Wolverines International Branch, I think may have been involved in... That's correct. You meant the Parliamentary Alliance on China. And so this is an important point to make when we're talking about Australia taking, I guess, a tougher position against China, I think it's important for consumers of media to differentiate between what the Wolverines and these kinds of groups, which are largely backbenchers that aren't in cabinet, are saying and then what government ministers and cabinet decisions are being made because there often is a difference between those. Yes, and I think in that case, the statement by Ian Duncan Smith in the UK in favour of that wasn't really warmly welcomed by all members of the Alliance outside of the UK. But I think that issue is going to come back. I've got another question from James Maeger. I think it's from Bloomberg. He hasn't said it here. But are there any policies the Australian government or business can take to improve the bilateral relationship or is it a question of waiting for a change in the situation in China or internationally? Secondly, what do you think is missing from Australian understanding of China? Mike, I'll throw that to you. It's a good question. I mean, it sort of feels like at the moment there's probably nothing they can do. I mean, I'm sure everyone at DFAT and in Morrison's office is trying to think of how they can improve ties. There's sort of no circuit breaker. There's no meetings coming up. So look, I can't think of much. It might just be a waiting game, whether you do wait till after the US election. Do you wait another six months and hope that things cool down? I mean, I think at the moment that that's all you can do. I mean, I spoke to a lot of sort of former diplomats and foreign ministers recently for a piece and they were sort of saying, look, there's always these back channels of communications that maybe the Australian government can utilize better. I mean, that the Whitlam government did it back in the 70s during Mao's time. Look, it's hard to say. I mean, I think a lot of those back channels are actually closed now. But it's certainly much harder than it has been for decades. So look, it could be a matter of waiting it out for the time being. Bill, what's your sense of that? Is there anything we should do or do we just wait for things to settle? Yeah, I mean, you could, the Australian government could do all sorts of things that could rapidly improve the relationship. But they're not things the Australian government or the Australian people necessarily want to do. You could sign Belt and Road. You could invite Huawei in. You could commit to not ever raising any concerns about Xinjiang or Hongkaz or whatever, Hong Kong. But that would sort of be a compromise of Australian values. You look at Wang Xinying, the deputy ambassador the other day in a press club speech in Australia and he sort of put China's position on the table and said, what we're asking for is mutual respect. And mutual respect is a euphemism for basically, we stay out of your business and you stay out of ours and then we'll be happy and the relationship will go well. But this really is an imposition of Chinese Communist Party values on Australia because this idea of we don't talk about what happens in other countries and you don't talk about ours, that's not a Western value. Western values of sort of Australian values or whatever you want to call them a free speech of taking an interest in the affairs of other countries of speaking up when there are human rights concerns. This has long been something that you've seen Australia do, other countries in Europe or the US do. So the idea of this mutual respect bargain with, hey, what would be a really fair thing is you shut up about us, we shut up about you and it's all hunky-dory. That really would be an imposition of the sort of Chinese Communist Party's political value on Australia. That's what's really being offered here. You can improve ties Australia but you gotta do it on our terms. So I don't think there's anything particularly palatable at the moment for the Morrison government that would dramatically improve ties. And certainly China does care greatly and have a bit to say and does a little work about Chinese communities in Australia and elsewhere and what they say about China. So I'm not sure how that fits the non-interference principle. Now here's a question I'm sort of a bit reluctant to buy into this sort of cultural issues but people do raise it. This is from Sarah Huang. She says, politics and ideology aside, do you see cultural differences at play here? Do you think it can be handled a bit better if Australians understand Asian culture a bit more? Now, Chinese culture is Chinese culture, Asian culture, leaving that aside. Who would like to comment on that? Are we mishandling it because we're a bit noisy, we've got to give China face, all that sort of thing. It's surprising the number of people who say that. Kirstie, do you want to talk about that? I think one answer we could find to that is looking at what a path forward that the Morrison government seems to be articulating, which is working with other countries within the Asian region. So if they see that the solution for Australia in dealing with a more assertive China is to be working more closely with Japan, with India, with Indonesia, with ASEAN countries working and seeing Australia as part of Asia, that would perhaps suggest that it's not a cultural issue. Perhaps it's more about, you know, the world's number two economy, a rising superpower, being more assertive, and Australia as a middle country and a trading partner, how do they deal with that? And part of their solution is working with other Asian nations. That would suggest that perhaps it's not an Asian versus Western issue. That is more about China than Asia, in other words. Yeah. OK, we've got another question from Mae Chan. She says, the Australian government questions the Chinese government's actions in Xinjiang, yet the Australian government does not give the same critique to other countries, for example, Saudi Arabia, which I might say doesn't talk about Xinjiang. In other words, to Saudi Arabia, she says, who have poor human rights record. Could this imbalance, by which I think she means hypocrisy, be contributing to the strains in the bilateral Australia-China relationship? Mike, what do you think? Well, that's a tough one. I mean, I think the answer to that is, we all know Saudi Arabia has a terrible human rights record. But I mean, we don't have a lot to do with them in the same way that we deal with China and trade with China. And we have a huge Chinese population here. So I mean, I guess we can't comment on what every single country in the world does. So that's my only answer to that. I'm not saying that what China does is not as bad as what Saudi Arabia does. But I guess the Australian government can't spend its time commenting on every country. I think that's the only way I can answer that one. Any others want to comment that? Are we hypocrites in this respect, Bill? Yeah, Richard, I think Mike's point is really important that we have a lot to do with China. There's a huge Chinese population in Australia. There are Uighurs in Australia who have actually many times throughout the media said that family members here have been threatened and so forth. These are, in many cases, either Australian citizens or permanent residents. They're here in Australia. If they're being coerced by a foreign government, it's going to attract attention. And you could name any roll call of nations in the world and for various human rights abuses, the fact is we have a huge relationship with China. And for that reason, China is going to attract far more discussion and attention than pretty much any other country bar, maybe the US. And that's just the reality of it. And it's one of these sort of what aboutism things. It's like, well, why are you criticizing, why are you raising Saudi Arabia or why are you raising Iran or something? Well, we don't have much of a relationship with those countries. But the point is to raise concerns about one country or to raise concerns about actions of your own country doesn't disqualify people or governments or whoever from talking about other countries. It's not like you can't have your cake and eat it too. You can talk about multiple issues in the world at any time. And yes, so this idea of like, you got to give every country equal attention, otherwise you just keep it critical. I don't think it kind of accords with reality. Okay, we've only got about a couple of minutes left. I haven't given you notice of this question, but just in a very brief amount of time, what's the one big thing you're watching in China next year? Very briefly, Mike, you go first in the hot seat. I think a really important thing to watch, it's not necessarily next year, but she's second term expires in 2022. So, you know, one element missing in all this discussion is, well, will he remain on? Won't he? It looks like he will at the moment. We're not seeing any sign of a successor in the way that we did in the years leading up to his initial appointment. So sort of what happens after him is really important. I don't know if we're gonna see any sign of that next year, but it's certainly something to look out. Of course, as you know, Richard, you know, it's a bit of a black box up there at the top of the party. So you don't know how much dissent there really is. You don't know how much dissatisfaction there is with his leadership. But I think it's something, you know, we should really keep a good eye on next year. Kirsty, very briefly, yourself? I'm fascinated with what's happening in the technology sphere. We've seen recently with TikTok and WeChat with the Huawei supply chain. So whether we do see China and the USD coupling, do we have parallel technology futures in the world? I'm fascinated to see what China does there. Bill? I'll just keep it really brief. I know this sounds kind of broad, but the economy, the latest, what was it? Second quarter GDP figure of 3.2%. If you break it down and think about it and felt what it was like on the grounds, it's kind of very difficult to really believe that figure. And yeah, so in the years going ahead, it feels like China has really built out so much stuff that you can't possibly imagine genuine high rates of economic growth continuing year after year, given how much sort of overproduction and overcapacity there already is. So yeah, the economy. I'll finish with the other big thing next year, which of course is the 100th anniversary, the founding of the Communist Party, so you can expect a lot of big celebrations and parades when that happens. Look, we've run out of time. I really thank all of you for taking part today, signing off from the Lowe Institute. My name is Richard McGregor and we hope to see you all soon. Thank you very much.