This coming Friday, it will be 90 years to the day since America’s 32nd President, Franklin Delano Roosevelt, delivered his historic address “I Hate War” to the 1936 Chautauqua Summer Assembly.

In preparing this lecture for the 152nd Assembly, I watched once again that grainy, black and white footage of FDR as he stood before his audience for twenty agonising minutes as one who had been struck down by polio fifteen years before.

It is as if FDR, a great American President, was speaking to us afresh. FDR said way back then that ‘in the hurly-burly of domestic politics it is important that our people should not overlook problems and issues which, though they lie beyond our borders, may, and probably will, have a vital influence on the United States of the future.’

FDR continued:

“I am more concerned and less cheerful about international conditions than about our immediate domestic prospects. I say this to you not as a confirmed pessimist but as one who still hopes that envy, hatred and malice among Nations have reached their peak and will be succeeded by a new tide of peace and good-will. And I say this as one who has participated in many of the decisions of peace and war before, during and after the World War; one who has traveled much; and one who has spent a goodly portion of every twenty-four hours in the study of foreign relations.”

In 1936, FDR was right to be less than cheerful. His ‘I Hate War’ speech was delivered only three years after Hitler came to power in 1933. It was delivered less than a year before the full-scale Japanese invasion of China in 1937. And barely five years before that ‘day of infamy’, the attack on Pearl Harbor in 1941. For FDR, his hopes for America were noble, while the international political realities he faced were dismal.

Both his hopes and his fears had been shaped by his experience as Assistant Secretary of the Navy during the Great War under President Woodrow Wilson. Wilson himself had been an idealist who wished the Great War to be indeed the war to end all wars. FDR, his presidential successor, despite having seen Wilson’s hopes for American membership of the League of Nations dashed, still hoped for the same. As FDR famously told this gathering all those years ago:

“I have seen war. I have seen war on land and sea. I have seen blood running from the wounded. I have seen men coughing out their gassed lungs. I have seen the dead in the mud. I have seen cities destroyed. I have seen two hundred limping, exhausted men come out of line—the survivors of a regiment of one thousand that went forward forty-eight hours before. I have seen children starving. I have seen the agony of mothers and wives. I hate war.”

The world then had emerged from the combined horrors of the Great War and then, barely a decade later, the Great Depression. FDR, forever looking for the best in humanity rather than the worst, confronted a world infinitely more difficult, dangerous and complex than our present and more pampered age. It caused him to reflect on why men routinely chose to destroy one another. And what might be done about it. As he argued at the time:

“Many causes produce war. There are ancient hatreds, turbulent frontiers, the “legacy of old forgotten, far-off things, and battles long ago.” There are new-born fanaticisms, convictions on the part of certain peoples that they have become the unique depositories of ultimate truth and right. A dark old world was devastated by wars between conflicting religions. A dark modern world faces wars between conflicting economic and political fanaticisms in which are intertwined race hatreds.”

FDR could just as easily have been speaking of our own age as of the state of the world nearly a century ago. To apply FDR’s words to today, we too can see ancient hatreds and turbulent frontiers, as in Russia’s brutal invasion of Ukraine. We also see ‘new born fanaticisms’ of our modern age. Just as we see those, both at home and abroad, who believe their convictions ‘have become the unique depositories of ultimate truth and right.’

The Emergence of the Post-War Global Order

FDR and Churchill had outlined the principles of the post-war international order in the Atlantic Charter of August 1941, several months before the US entered the war. Their objective was to agree on ‘certain common principles in the national policies of their respective countries on which they base their hopes for a better future for the world’. Importantly, the Charter also agreed that ‘they respect the right of all peoples to choose the form of government under which they will live.’ It stated that they wished ‘to see sovereign rights and self-government restored to those who have been forcibly deprived of them’. And it also stated that ‘after the final destruction of the Nazi tyranny, they hoped to see established a peace which will afford to all nations the means of dwelling in safety within their own boundaries, and which will afford assurance that all the men in all the lands may live out their lives in freedom from fear and want.’

Over the next seven years, these bilateral arrangements would become reflected in a new set of universal norms, principles and institutions for the wider international community:

• First, the UN Charter, concluded at the San Francisco conference in 1945 , created the United Nations, agreed on the rights of sovereign states to be free from the ancient fear of foreign invasion through wars of aggression, and empowered the Security Council to give effect to these principles.

• Second, the Bretton Woods Agreements, concluded in 1944, established the World Bank, the IMF, and then the General Agreement on Tariffs and Trade in 1947, gave collective effect to the international community’s common economic agenda;

• Third, Universal Declaration of Human Rights, voted into effect in 1948, enshrined the international legal principles of the intrinsic dignity of the human person, the universal right of individual freedom and the right of peoples to choose their own governments.

Harry Truman, Roosevelt’s Vice President, would take over the task when FDR finally went to meet his maker in April of 1945. American officials, in partnership with US allies including my own country, had painstakingly worked their way through these founding documents to frame the institutional, procedural and normative underpinnings of the post-war international order. FDR’s widow, the formidable Eleanor Roosevelt, who also spoke here at Chautauqua on many occasions including her remarkable 1933 address on the New Responsibility of Women, would go on to chair the UN working group that drafted the Universal Declaration of Human Rights.

It is hard for a modern audience to understand how revolutionary this new global, rules-based order was for the time. States for the first time were to be constrained in the external behaviour against other states, particularly in the arbitrary use of force. States were also to be constrained in their internal behaviour towards their citizens, as universal political and economic rights became entrenched in international instruments - instruments which authoritarian governments have sought to unravel ever since.

But these new provisions of international statutory law and the normative and institutional principles embodied in each of them would not be sufficient in themselves. To constrain the actions of the Soviet Union militarily occupied Eastern Europe between 1945-47, and then North Korea in its military invasion of the South in 1950, the United States under Truman then resolved to establish a network of bilateral and plurilateral mutual defence treaties. These were designed to respond to the core questions of hard security, both in the Atlantic and the Pacific.

In other words, the United States in framing the new global, rules-based order, embraced simultaneously three core principles:

• First, after two world wars had ravaged the planet within the space of a quarter of a century, it was time for the United States to lead this new global order. Not to ignore it. Nor to isolate itself from it. In the end, Americans finally agreed with John Donne that no man was an island. Nor, for that matter, was any country an island. And that included America. We were all connected, one to the other.

• Second, this new global rules-based order would be predicated on a new set of normative principles - both the inalienable and universal rights of the individual, as well as the sovereign rights of states to be protected against armed attack.

• Third, to bolster the soft security offered by this new international political system, the US was also sufficiently principled and pragmatic to engage in the business of hard security - to confront authoritarian states which, in many cases, had sought to undermine the new international system from the get-go.

These then became the essential features of the post-war order. By no means perfect. But demonstrably better than what had preceded it. Even if only measured by the fact that there has been no global war in the 80 years since then, although at times we came close.

The Ethical Underpinnings of the Post-War Order

So what were the ethical underpinnings of what some have called this liberal international order? How are they under challenge? And can they hold for the future? This is not the place for a granular exposition of the theological, intellectual and ethical forces that were at work in the post-war world that shaped the norms and institutions of our post-war order. Instead, I will offer some general observations on a number of the critical forces that were at work.

First, at its most elemental level, the visceral, global revulsion at the orgy of orchestrated violence that the war had delivered to all humankind became a moral force in its own right. C. S. Lewis’s wartime reflections, first delivered as radio broadcasts and later collected in Mere Christianity, offer a remarkable insight here. He points to universal moral norms, whose cogency extends well beyond the constraints of national cultures, and which the peoples of the world knew in their collective conscience had been fundamentally violated. The war had violated individuals. It had violated states. And it had systematically violated races, as seen in the horrors of the Holocaust.

The world’s conscience had been assaulted and it demanded something better. So when the UN Charter speaks eloquently of the galvanizing imperative of avoiding once again the ‘scourge of war’, it speaks to the depths of this post-war moral anguish. This reflected a profound moral impulse proceeding from the deepest awareness that our consciences had not only been violated. They had been deracinated in their entirety. And this in turn produced a the call to some form of spiritual and secular repentance, reconciliation and resolve.

In other words, the war had created the moral shock and therefore the moral capital to construct an entirely new order.

Second, the notion of the intrinsic, inalienable and universal dignity of the human person, and the resulting obligation of states to protect the rights of such persons, comes from two sources. These sources are often seen as being in conflict with each other rather than as reinforcing each other. But this should not be the case.

One of course is the secular Enlightenment and the various declarations of ‘the rights of man’ that proceeded from it. But on closer inspection there is also a second source as well: and that is the cumulative contribution of millennia of Christian belief, as well as parallel forms of religious belief that reach well beyond the Christian communion, concerning the intrinsic dignity of the human person.

Christianity teaches that individual human beings have an intrinsic human dignity that proceeds from the belief that each person carries with them the divine spark of the creator God. As a result, Christianity also teaches the sanctity of all human life. On this question, if not on others, Christian teaching has positively shaped the conclusions of the Enlightenment project on the inalienable rights of man.

This is seen, for example, in the animating principle behind Pope Leo XIV’s recent encyclical Magnifica Humanitas on the impact of artificial intelligence on the dignity of the human person. On human consciousness. On human conscience. On human agency rather than the agency of machines. On dignified human relationships. And on the dignity of human work.

After all, for scholars of the Enlightenment, beyond simply asserting that human beings possess an intrinsic dignity which should be respected and protected, where does this secular conviction actually come from?

Marxist materialists have traditionally approached this question differently, treating human beings primarily as matter rather than spirit. Furthermore, Marxism teaches that the historical significance of a human being derives from the social and economic class to which they belong. This marks a fundamental divide between a Marxist-materialist view of the human person on the one hand, and the combined Judaeo-Christian and liberal-democratic Enlightenment tradition on the other.

Within the UN system, we see this idea of an intrinsic human dignity, as opposed to one that is socially constructed through the agency of class, alive in the following international instruments:

• the UN Charter itself,

• the UN Declaration on Human Rights,

• the UN Covenant on Civil and Political Rights,

• the Convention Relating to the Status of Refugees, and

• in a range of other UN conventions providing normative and institutional structures for protecting the rights of women, children, persons with disabilities, as well as conventions against human slavery.

So while the sons of the Enlightenment may have fought the fathers of the church for over 350 years over the proper relationship between crown and altar, or between church and state, I argue that Christian belief in the inalienable dignity of the human person has, in reality, been translated into the Enlightenment belief in the inalienable rights of the individual.

A third factor that has shaped the moral foundations of the global rules-based order is to be found in the social and economic covenants of the UN Charter. These too come from both the Christian and Enlightenment traditions. They are also reflected in FDR’s ‘four freedoms’ when he spoke of “freedom from want”.

In the Christian tradition, these principles proceed from the ethical imperatives outlined in the Gospels. We see this in the Sermon on the Mount. The Parable of the Rich Young Man. The teaching in Matthew on the final judgment, and whether we have fed the hungry and clothed the naked. Also the prophetic traditions of Micah and the injunction to ‘do justice, to love kindness, and to walk humbly with your God’. And the constant preferencing of the poor and the powerless across all the scriptures. The concept of freedom from want proceeds from all of these new testament principles.

So too with the most basic precepts of social and economic equality. In the history of the Catholic Church, we see this with Pope Leo XIII’s great encyclical Rerum Novarum of 1891 as the church finally caught up with the horrors of the Industrial Revolution. We see it one hundred years later with Pope John Paul the Great’s Centesimus Annus.

In secular politics, we see it in the birth of Labor Unions, Labor Parties and Social Democratic parties around the world. Social Democrats over the last 150 years have sought to thread the needle between both Christian and Enlightenment traditions of social justice. The Australian Labor Party is one such party.

And in the post-war international order, we see it in the economic and social chapters of the UN Charter, in the International Covenant on Economic, Social and Cultural Rights, and in the poverty reduction missions of the World Bank. Once again, there is both a Christian and an Enlightenment thread running through all of these.

Fourth, there is the creation itself, our common environment, our responsibility to other living things and the kind of planet we would bequeath to those who come after us as a matter of intergenerational justice. Here the Christian tradition is richer than the Old Testament traditions that preceded it. Christians would argue that our mission is not simply to ‘subdue the earth’. Rather, it is to steward the earth.

This principle is not simply to be found in some misty-eyed rendition of Saint Francis’ “Canticle of the Creatures”, his hymns to Brother Sun and Sister and Mother Earth, or his preaching to the birds. While I am a great admirer of Saint Francis, there is a much deeper biblical tradition underpinning our concern for the environmental commons. It goes to the fact that the earth is God’s creation, not man’s. That we are tenants, not owners of the planet. And therefore as stewards, our responsibility is to nurture the planet for all, not to exhaust it.

In the last half century, these ethical imperatives have combined with the findings of environmental science on the mounting dangers of ecological devastation and the need instead for sustainable development. This extends not just to climate change where the science is clear. But also across the other eight planetary boundaries which cover the land, our waterways, the oceans, and the quality of the air we all breathe, right across the entire global environmental commons.

Within the institutions of global governance, what has emerged has been the IPCC on climate science, the UNFCCC on climate policy, as well as a number of individual global agreements covering everything from Ozone, Antarctica to endangered species.

Finally, among the ethical factors shaping the modern global order, there is the more vexed question of national and international security. Historically, the Christian church has often had a troubled relationship with the institutions of the state in this most complex of policy domain - whether it is security within states or security between states.

Even after the Edict of Milan in AD 313 established the official tolerance of Christianity, and then with Christianity eventually became the religious orthodoxy of the late Roman Empire some decades later, these problems of church and state have persisted. The Roman state had once sought to eliminate the threat from Christian belief. Then later it became a militant defender of the Christian faith, at times relying on the coercive power of the state to do so.

Those familiar with the writings of the great protestant theologians Dietrich Bonhoeffer, Karl Barth, and Reinhold Niebuhr will be aware of structural tensions in this church-state relationship, particularly when it falls to the church to insert a spoke in the wheel of the state, by whatever means, to overcome an existential evil.

This certainly was the case with Bonhoeffer who paid for this with his life at the hands of the Nazi state.

On the question of Christian belief, ethics and practice as they relate to external threats to the security of the state, the Catholic tradition offers us the deep teachings of what is called the Just War. Offensive war, as the Pope recently reminded the international community, does not fall within the scope of a Just War.

By contrast, a defensive war, if your country is attacked, does.

That is why, for example, Christian and other faith traditions support chaplaincy services for the defence forces in our collective democracies. And that is why developing our defence capabilities to act as an effective deterrent against potential aggressors is, in my argument, entirely compatible with conventional Christian teaching. There is a world of difference between that approach on the one hand, and the perverse and simplistic theologies of ‘Gott Mitt Uns’ or “God King and Empire” on the other.

In all this, we are also mindful of the injunction in the Beatitudes of ‘Blessed be the Peacemakers’. The place, therefore, for diplomacy, for effective arms control, and for international law remains. But in the brutal and unstable world of what is now the second quarter of the 21st century, these instruments offered through the UN system may be necessary, but of themselves they are not sufficient, to sustain a just peace.

Again, we cannot simply wish away the military capabilities of authoritarian states.

They exist. History tells us that authoritarian states respect strength. They are contemptuous of weakness. And appeasement can be fatal. The history of the 1930s reminds us what happens when dictators see, smell and feel the policies of appeasement being applied in response to aggression.

For those of faith, these are often uncomfortable questions. But we cannot walk away from them. Nor could FDR. Not that long after he first proclaimed from this very place ‘I hate war”, FDR declared war on Japan and Germany.

These, then, are some of the core ethical considerations that flow, however imperfectly, from the community of faith, together with the fellowship of reason, into the global rules based order we have painfully constructed together since FDR helped lead the Allies to victory in 1945. Faith and reason, not as adversaries. But in creative partnership, as envisaged by Saint Thomas Aquinas, with one tempering and reinforcing the other.

In summary therefore, our moral impulses have been as follows:

• First, the visceral horror of war and the resulting moral determination to defend the peace.

• Second, the intrinsic dignity, inalienable rights and personal freedom of each human being.

• Third, the social justice owed to the weak, the poor and the oppressed.

• Fourth, our stewardship of the global commons.

• And fifth, our resolve to deter and defend against armed attacks upon our peoples by aggressors.

And So What of the Future?

What we have been discussing so far is the ethical and institutional architecture of the global and regional rules-based orders that were built out of the ashes of the Second World War. As I’ve noted earlier in this lecture, while there may have been many imperfections in the design of this order, it was infinitely better than the one that preceded it. It may not have produced perfection. But politics is the art of the possible. And for reformists, the perfect is often the enemy of the good.

It is true, however, that many countries, both large and small, have sought to violate its norms, rules and institutional arrangements. It is true that after 80 years, the institutions that support the order are now weaker than ever before. Let us take stock for a moment.

First, the UN Security Council is increasingly deadlocked, as we see with the rolling crisis over Iran.

Second, the UN General Assembly has become a place of performative posturing for the record, rather than a substantive chamber for political debate and policy resolution, in the face of the great challenges the world now confronts.

Third, it is decades since we have seen a UN Secretary General with the political courage of Dag Hammarskjöld, a Swedish Lutheran whose writings reflect a profoundly Christian spirituality and ethical framework, and who was killed in the Congo while trying desperately to resolve a civil war. Or a Kofi Annan, a Ghanaian Methodist, who had the courage to caution against the invasion of Iraq because UN Weapons Inspectors had concluded there were no weapons of mass destruction there in the first place.

Fourth, since the Global Financial Crisis, the IMF has become marginal to global financial stability. It is true, however, that the World Bank is undergoing a revival under its current leadership in its contribution to global development for the world’s poorest countries. Meanwhile the World Trade Organisation has never been weaker, in part because China has ignored the rules on industrial subsidy, and in part because the United States, with its bipartisan addiction to tariffs, has now left the institution altogether.

Fifth, ten years into the Sustainable Development Goals, they have largely failed and no longer constitute an effective framework for eliminating global poverty and lifting prosperity for the most marginalised.

Sixth, the UN humanitarian agencies including UNICEF, the WFP and UNHCR are now experiencing funding cuts of more than 25% and are finding it impossible to do their basic job in saving the lives of women in the children in the face of natural and man-made disasters.

Seventh, the WHO failed spectacularly to both prevent and then to effectively manage COVID. It failed too to conclude what caused it. And now the US once again has withdrawn.

Eighth, on climate change, despite the inconvenient truth that now dare not speak its name in Washington for fear of being labelled “woke”, much of the planet is now literally on fire. The US has now left the UN Framework Convention on Climate Change for the second time. And now the International Panel of Climate Change Scientists, that body of 2000 nerdy scientists who for decades have delivered regular, brutally factual reports on the state of global temperature increases, extreme weather events and species eradication, is itself under threat.

Finally, as for the UN Human Rights Council, the normative structure we the international community established to give effect to the normative structure that Eleanor Roosevelt helped establish back in 1948, it too is under existential assault. China has it in its sights. And once again the United States has withdrawn.

Against these simple measures, the report card on the global rules-based order is therefore increasingly grim.

As I wrote in a review of the UN multilateral system a decade ago, it’s not as if the UN will be formally abolished any time soon. Rather, as I warned back then, the risk is that the world increasingly walks around the rules-based order that together we have so painstakingly created.

We see this for example in its failed efforts to produce the beginnings of an effective regulatory regime for AI. This is despite the real world threats of frontier models, both in China with Kimi K3, and the US with Hugging Face, escaping their respective sandboxes. And while escaping a sandbox may sound exotic, the potential autonomous destruction of cyber protections around the world by both state and non state actors is a real and present danger to our most basic infrastructure and therefore to our peoples.

The UN multilateral system, rather than being abolished, is increasingly simply fading away. It is dying the death of a thousand cuts. And looks increasingly like the League of Nations during its later years.

I remarked earlier in this lecture that notwithstanding the near-death experience of the Cuban Missile Crisis in 1962, the one thing for which we must be grateful is that for all these flaws, so far we have avoided World War III. This is no small thing. But the risks of global war remain stark as the habits of dialogue weaken and the temptations of appeasement grow.

Alternatives to the Current Order: China’s Challenge to US Global Leadership

So what about the second quarter of the 21^st Century?

If the trajectories we see at present for the global rules-based order continue, there is a grave risk that it degenerates into inertia and then entropy. The UN multilateral system could fade into obscurity, much as the institutions of the Holy Roman Empire did before the Empire was formally dissolved in 1806. In other words, the machinery might formally remain but increasingly becomes a Potemkin Village, while real decisions in the real world are taken elsewhere.

Apart from what is left of the multilateral order, there is also the question for America itself on what role it sees for itself as a global leader of what remains of the international order. I am not an American. I am not here to preach to you. That would not be appropriate. But it is clear to all of us who are longstanding friends and allies of this country that there is a visceral debate emerging in the depths of the American political soul about your future role in the world.

The parameters of this debate range from avoiding “foreign entanglements” altogether, as some of the Founding Fathers warned, to a much broader retreat into a form of splendid isolationism. Another tenet in the debate is whether America retreats from the world and seeks only to be a hegemon within its own hemisphere, the Western Hemisphere. There is a third fault line which says, beyond the Western hemisphere, America cannot retreat from the Pacific where its island states and territories by definition mean that America remains a quintessentially ‘Pacific power’. A fourth thread in this rolling national debate is about America’s future in Europe, and the burdens and obligations it took upon itself on the beaches of Normandy and at the birth of NATO. And finally there is a discourse that America might still in the future breathe life back into the institutions of the same global rules-based system which were largely the product of American diplomatic handiwork in the first place.

None of us know how these debates will land. That is a matter for your own domestic and constitutional processes. And we wish you well in them.

But the news for America is that there is now a challenger to an American-led world order, and that is the People’s Republic of China. This is not just the product of China’s enhanced military power, given that it now boasts the largest surface fleet in the world and is now, according to the Pentagon, America’s single pacing challenge. It is not just because China is now the second largest economy in the world, while also being the world’s largest trading country, the world’s largest exporter, as well as the world’s largest manufacturer now representing nearly a third of all global manufacturing output. Nor is it simply because China, as of a decade ago, entered formally into the race to catch up with the US and the rest in cutting edge technologies. And that a decade later they have in large part done so (indeed there are only two AI powers in the world today: the US and China).

It is not just because of these accumulations of national power that China’s leadership now senses that its time in the sun has come. It is also because they have internally concluded that America is increasingly a spent force. For example, when China speaks of the rise of the East and the decline of the West, that is his reference to China’s rise and America’s decline. And this is not seen as a long-term, historical aspiration. It has now been translated by China’s Marxist-Leninist leadership into what they see now as unfolding in real historic time.

And within that frame, they see artificial intelligence, quantum computing and nuclear fusion, their priorities in technology and innovation over the next ten years, as turbocharging China’s relentless progress – not just catching up with the US and the West but, in their own literature, ‘leapfrogging’ them. And then bringing about a ‘paradigm shift” through which China’s state capitalist model, aided by the allocative mechanisms of AI algorithms, breaks through the traditional dominance of market economies. China’s internal Party literature is redolent with these themes.

For these reasons, for some years now, Xi Jinping has been rolling out a series of ‘Global Initiatives’ whose medium- to long-term objective is to change both the institutional and normative structure of the international system. We’ve seen this through five major initiatives announced over the last ten years:

• The Belt and Road Initiative (the BRI), which is a trillion-dollar-plus investment initiative across the Global South;

• The Global Civilization Initiative (the GCI);

• The Global Development Initiative (the GDI);

• The Global Security Initiative (the GSI); and now

• The Global Governance Initiative (the GGI).

Within the Chinese system domestically, these five initiatives are described as the product of a new ideological initiative for the Chinese Communist Party called Xi Jinping Thought. Xi Jinping Thought is now treated with the same priority as Mao Zedong Thought. And in Marxist-Leninist China, ideology still matters, although most Americans have concluded that it no longer does.

If you were to sit down with each of these initiatives and work through their at times impenetrable language, you will not, at first blush, find anything particularly offensive. The concepts are deliberately vague. They are vague in order to maximise political constituencies of support across the Global South. And then, over time, these concepts are populated with sharper meaning.

They also have the added advantage of how they are sold in the world as being expressly supportive of the existing institutions of the UN multilateral system. This of course is where China has the additional national advantage of being one of the Permanent Five member states of the UN Security Council.

On closer inspection, however, what China is seeking to do gradually over time is not replace the system but to redefine its normative structure from within. We see this, for example, in the Global Security Initiative, where the primacy of state security needs over the rights of individuals becomes paramount. We see it also in the Global Development Initiative and the centrality of states rather than the market in driving development forward. We see it too in the Global Civilizational Initiative where the goal is to find commonalities across civilizations, particularly in the most ancient systems, in order to find common ground. China’s contributions to these debates is to offer the hierarchical precepts of state Confucianism as a civilizational offering to the world – a system in which social harmony is achieved as a consequence of everyone knowing their place within a pre-existing hierarchy, rather than each individual being free to exercise their inalienable rights under the law.

Then there is the Global Governance Initiative, reinforced by multiple draft UN resolutions over the last decade, which seeks bit by bit to chip away at the human rights infrastructure anchored in the Universal Declaration of 1948. As well as the UN Covenant on Civil and Political Rights in 1966. And the UN Human Rights Council that seeks to give these covenants practical effect. It is in this area that the contrast between the pre-existing global rules-based order, and what Xi Jinping envisages for its replacement, has now become the sharpest.

The Future of Human Rights as a Pillar of the Global Rules-based Order.

Xi Jinping’s most definitive statement on what China means by ‘human rights’ was delivered in December 2018 on the 70^th anniversary of Eleanor Roosevelt’s handiwork, the Universal Declaration of Human Rights, back in 1948. Xi Jinping stated that “the paramount human right was the happiness of the people’. The term the people reflected in this statement has been chosen explicitly to contrast it with liberal democratic concepts of the inalienable rights of the individual. Put more bluntly, the Party represents the people within the Chinese conceptual universe, and it is therefore for the Party to determine the happiness of the people.

Xi Jinping has also said that the rights to subsistence and development are basic human rights of paramount importance. Of course, this is clear in the content of the International Covenant on Economic, Social and Cultural Rights. Although Xi is nowhere on record providing a parallel endorsement for the International Covenant on Civil and Political Rights. At the UN General Assembly in 2021, Xi stated ‘we should protect and promote human rights through development’ which is directly connected to ‘people’s happiness, benefit and security as well as their well-rounded development’.

Furthermore, in China’s internal political discourse, Document No. 9 released by the Party in 2013 makes it absolutely clear that the Chinese system is fundamentally opposed to what it describes as ‘Western concepts of human rights’.

There is, therefore, a clear fault line in all of this. Between Xi’s concept of the rights of the people represented by the Party on the one hand, versus the inalienable rights of the individual as outlined in the Universal Declaration on the other.

What is important, particularly with a gathering such as this, is to understand what the seminal debates were within the UN system between 1946 and 1948. This was when the working group which Eleanor Roosevelt led had lengthy internal deliberations on the origins and content of the concept of universal human rights. And the results of these deliberations would finally be embraced within the 1948 declaration itself.

China’s representative at the time (albeit Republican China, not Communist China) was Ambassador P.C. Chang. Chang was not a Christian. He was, in anything, a classical Confucian. But as he explored the notion of rights within the Chinese classical tradition, he concluded that individuals did have universal rights. And that these were balanced by universal responsibilities.

Chang’s legal and philosophical advisor was John C.H. Wu who was a Chinese Catholic and a frequent correspondent with the great American contemplative Thomas Merton. John Wu’s writings at the time very much reflect his view that in the tradition of Thomas Aquinas. The universal rights of which they were speaking during their negotiations of the Universal Declaration were, in his view, the product of Divine Providence. They reflected the intrinsic dignity of the individual human being. And these in turn were reflected in the principles of natural law.

The reason I am making these lengthy reference to Chinese participation in Eleanor Roosevelt’s working group between 1946 and 1948 is that contrary to some Chinese assertions, there was in fact an extensive civilisational debate held within that group on the precise meaning of the term human rights.

Furthermore, this working group was also made up of many other representatives of the Global South. The idea that the Western tradition of human rights, as defined by Judeo-Christianity and Enlightenment traditions, was somehow unilaterally imposed on the emerging countries of Asia is not based in fact. The final text of the Declaration was the product of extensive internal debates and multiple drafts from the working group’s leading participants, including an extensive consideration of comparative philosophy, comparative religion and the translation of values from the language of one culture to that of another.

Finally, when the PRC finally acceded to Republican China’s seat at the UN in 1971, Beijing did not enter in any formal reservations about Republican China’s previous adoption of the UN Human Rights Declaration. China voted for its adoption on 10 December 1948. P.C. Chang in fact served as Vice Chair of the Inaugural UN Commission on Human Rights. And at no subsequent stage did the People’s Republic of China register any formal objection to the Universal Declaration.

The important thing for us all to understand here is that the language and concepts embedded in the Universal Declaration transcended traditional divides between East and West. It was not a Western implant. And neither the then Soviet Union, nor later the People’s Republic of China, formally opposed it.

This is an important debate. The Human Rights pillar is one of the UN’s three pillars overall. The other two are Peace & Security and Economic Development. It is the Human Rights pillar, however, which Chinese diplomats over the last decade plus have been seeking most particularly to redefine.

So What Then Is To Be Done?

The purpose of this lecture has been to outline how the current global rules based order emerged out of the ashes of the Second World War.

It has also been to outline the broad ethical foundations of the UN’s founding documents.

It has also sought to describe America’s broader role in upholding strategic stability against the challenges posed by post-war authoritarian states, well beyond the powers of the UN system itself.

I’ve also sought to describe how gravely the current global order is under challenge.

And finally, I have examined where the current fault lines in global governance are likely to proceed over the next quarter century, and how China is actively seeking to construct an alternative order, albeit one based on the formal framework of the current UN multilateral system.

To conclude this lecture, I should offer several ideas on how the free peoples of the world might profitably respond to these current challenges.

First, it’s important for the democratic world to rediscover the overwhelming power of the virtues, values and ideals for which we stand. In doing so, liberal democracies need to embrace both the traditions of Judeo-Christianity and those of the secular Enlightenment in breathing life back into our underlying belief structure. For secularists, the idea that the deeply human values represented by the community of faith are somehow irrelevant to the current framing of debates about intrinsic human dignity, inalienable human rights and freedoms, as well as freedom from want, is an ahistoric absurdity. Similarly, the Judeo-Christian tradition needs to have about itself an appropriate intellectual modesty about how slow the church has been in modern history to embrace political reform, the extension of the democratic franchise, the abolition of slavery as well as the broader imperatives of social justice. In other words, both secular and religious traditions which have emerged in the democratic world over the last several centuries need to get beyond the barricades and start working together in a fundamental way. The bonds between them are now rich. And the common authoritarian adversaries we now face who would happily extinguish both traditions are real.

Second, in this country, the United States, I would encourage Americans both of the left and the right, to re-embrace the imperative of American leadership in the world. Nature abhors a vacuum. And if a vacuum is left, others will fill it. However, I am not politically naïve about such things. It will take skill of the type that FDR was most able to deploy in this forum all those years ago, to marshal a political argument for the American domestic body politic for America once again to become the light on the hill. This is not just political idealism. It is anchored in economic realism for the simple reason that America now needs the rest of the free world as much as the free world needs America. The simple mathematics of global economics and market scale underscores this reality.

Third, if America continues to remain ‘out to lunch’ on the question of the UN multilateral system, the very system that America itself crafted in 1944-48, then the other democracies of both Asia and Europe, as well as those of Africa and Latin America, will need to work together to re-strengthen the normative values and operational cogency of the UN system. Prime Minister Carney delivered a speech in Davos in January about the future role of Middle Powers. I can think of no better answer to his challenge than to say that the other leading democracies should join Canada in not only defending the UN multilateral system, but also advancing the UN’s mission through the resources that UN institutions now so desperately need.

Fourth, both the United States and the collective democratic world also need to reflect long and hard on the continued ethical imperatives of military deterrence. We cannot simply push these difficult subjects to one side. It is imperative if we are to sustain strategic stability for the world to double down on deterrence in all its forms. This applies as much to the future of Ukraine and NATO in Europe as it does to the challenges we increasingly face through deterrence in Asia. We should all remember the lessons of Munich and appeasement. It always ends badly.

Finally, the international community of faith, Protestant, Catholic and Orthodox, as well as other faith traditions, need to engage in all these debates. They are not the province of secular politicians alone. These are hard questions about which religious leaders also need to determine their positions. The hour is late. The harvest is rich. But, at present, the workers are few. Let us all become labourers afresh in bringing in the harvest.

Conclusion

Recently, I spent several weeks in Ireland on holiday with my wife. I rediscovered Yeats as we drove around Sligo, Mayo and Galway, reading from an anthology of his verse. This gathering will be familiar with his extraordinary contribution to our literary canon.

Easter 1916. An Irish Airman Foresees His Death. And then, most troubling of all, The Second Coming, written in 1919 and published in 1920, in the immediate aftermath of the great global eruptions of his time. These included the First World War, the Russian Revolution, the Irish War of Independence and the global flu pandemic.

The most bewitching of his verses is as follows:

Turning and turning in the widening gyre

The falcon cannot hear the falconer;

Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world,

The blood-dimmed tide is loosed, and everywhere

The ceremony of innocence is drowned;

The best lack all conviction, while the worst

Are full of passionate intensity.

I feel that Yeats, like FDR, is speaking afresh to our current age. Let us rediscover the passion which threw all of us in the democratic world together into the collective defence of freedom in freedom’s darkest hour in the Second World War. And then in the program of systematic decolonisation that followed as old empires collapsed. And then in building and rebuilding a global rules-based order anchored in the continuing principles of universal human rights, freedom from want, and the deterrence of those who would seek to lay waste to it all.

All this lies within our grasp, if we have the imagination to see it, the moral fortitude to grasp it, and then the courage to act.

Since 2012, Xi Jinping has been the leader of the Chinese Communist Party. He has consolidated power to a level very few people ever expected, and under his rule, China has strengthened technologically, diplomatically and militarily. It is now widely understood to be an industrial juggernaut on a scale the world has never seen, in a way the world does not quite know how to respond to.

But Xi’s ambitions for China go far beyond that. In the long term, he wants China to be the pre-eminent world power. In the near term, he wants it to control Taiwan.

You cannot understand modern China — what it is now and where it is going — without understanding Xi and the power he wields and the ideology that drives him.

My guest today is Kevin Rudd, who has had a unique way of trying to understand that ideology from many different angles. Rudd has an amazing biography. He began as an Australian foreign service officer serving in China. He’s a fluent Mandarin speaker who rose to be prime minister of Australia in the late 2000s. Along that rise, he got to know Xi personally, in a way very few other world leaders have.

Then, after serving as prime minister, Rudd went on to pursue a doctorate at Oxford, and he wrote his dissertation on Xi Jinping’s ideology, reading everything that has come out under Xi’s name — which is quite a lot. He has published that in a book, “On Xi Jinping.” He is also the author of “The Avoidable War.” He recently served as the Australian ambassador to the U.S., and he’s now the president of the Asia Society.

So Rudd has a really rare set of perspectives — academic, diplomatic and political — on China, Xi Jinping and the U.S.-China relationship.

Ezra Klein: Kevin Rudd, welcome to the show.

Kevin Rudd: Thanks for having me on the show.

Before we get to Xi, I want to talk a bit about your career. Not many people go from being prime minister to getting a Ph.D. and being a grad student again. So tell me a little bit about your path.

Well, I seem to have this permanent appetite for career demotion. I was prime minister, then foreign minister, then did a Ph.D. and became ambassador. I’m now running a think tank. So it’s one steady slide for me.

Why did I do a Ph.D.? A lot of folks in the world and, particularly, my former counterparts as international political leaders, would ask me this question: Hey, Kevin, you’re a China guy. What does Xi Jinping think?

And I thought I knew pretty well the answers to that until I began to have doubts myself about the authenticity of my answers. So I decided to force myself to read everything that this guy had ever written, and I thought the best way to force myself to read everything this guy had ever written was to enroll in a Ph.D. at Oxford at the age of 59.

That’s exactly what I did. The principle at play was male vanity: It would be too humiliating and too embarrassing having enrolled in such a program to then withdraw because you’d lost enthusiasm.

It’s a commitment device.

Yes, that’s right.

But you also had a history with China. You began your career working in the foreign service. Do I have that right?

As a kid, I started first-year university with modern Chinese language, classical Chinese language and Chinese history. So I’d done four or five years of that. Then, because I was essentially unemployable in the 1980s, I found that the only place that had an interest in taking on my talents was the Australian foreign service.

Eventually, I ended up in Beijing as one of their better Chinese linguists at the time. They did send me to Sweden first — just to make sure I would lose my language. [Laughs.]

What year were you in Beijing at that time?

In Beijing from ’84 through until virtually the beginning of ’87.

What was it like then?

It was China at its most dynamic. It was China opening up to the world for the very first time, where all things were possible under heaven. This was almost the high days and holy days of China’s international engagement, and it was fully two years before Tiananmen, which was the first great Leninist wake-up call.

I think it’s after this period, but when do you first come across Xi Jinping?

Well, it’s interesting. When I was a junior woodchuck in the Australian Embassy at the time ——

Is that an official term? [Laughs.]

Increasingly, yes. Basically, the guy who does the photocopying.

When I was there, our prime minister was visiting at the time — a guy called Bob Hawke.

And Bob wanted to go to places other than Beijing. So we organized for him to go to one of the newly opening-up cities, what they called a special economic zone, at a place called Xiamen.

I went to Xiamen to do the advance work, and I met with the then vice mayor of Xiamen, who was a guy by the name of Xi, given name Jinping. That’s where we first met.

Was it a long and extensive boozy dinner? No. But it was the first time I met the guy.

I’ve met a lot of politicians in my time, for my sins. Sometimes you run across somebody, and you can feel the gravity of history warping around them.

The first time I met Barack Obama, you could feel the weight in the room. It shifted things. Trump has this quality. I’ve met people early in their careers, and they just have that quality. I’ve met other people who don’t, even though they rise quite far.

What was Xi like? Did he feel different to you than other mayors and vice mayors and party bureaucrats? Would you have told me after that meeting: I just met somebody, and that young man is going somewhere?

Because I was a student of contemporary Chinese politics, I knew of his father, Xi Zhongxun, who was already a member of the Politburo. But I’d be fibbing to you if I said to you today that the room shook for me when I first met him.

Much later on, when I was prime minister of Australia and Xi Jinping was visiting Australia as vice president of China, I remember sitting in front of the fireplace in the prime minister’s residence in Canberra — it was winter — and spending a couple of hours over a glass of Australian red, talking about the state of the world with him, in Chinese.

That’s when I sensed that this was a man of history — for the simple reason that all of his references were about his place in the context of unfolding Chinese history. So that’s the first time in which I had that sense we were dealing with something, somebody, some person, who was unique.

Say more on that. When you say that he referenced himself in the unfolding, what was he unfolding, and what was his self-understood role? Because this was before he was leader of the party.

That’s true — and when his position was still somewhat contested. It wasn’t absolutely clear that he would become paramount leader.

The conversation, which, as I said, ran for a couple of hours, was free-flowing. We didn’t have interpreters.

Essentially, his thesis was that China is intrinsically a great power. Historically, it was demonstrated as such throughout a couple of thousand years of recorded history.

Not the 5,000 that the Chinese often boast about, but just a couple of thousand. Given we’re up to the 250th anniversary of the birth of this country as a republic, a couple of thousand is pretty good — and certainly, measured against Australia, it’s very good.

But he saw that the trend of Chinese history was: China was a great power when it was: a) unified and b) able to keep foreign adversaries under control and divided. And China collapsed as a great power when neither of those propositions held true.

So for those reasons, spinning into the 20th century and then into the 21st century, when I was meeting with him, he saw the contemporary mandate of the Chinese Communist Party as to maintain China’s domestic unity and to keep it free from external pressure so that it could once again become a global great power.

He wouldn’t say directly: I, Xi Jinping, therefore have a unique mandate to do this on behalf of 1.4 billion Chinese people. But for me, the subtext was pretty clear.

So Xi is a man with a sense of history. And also a man with a very particular history. You mentioned his father a moment ago. Tell me his story.

His father, Xi Zhongxun, is a fascinating figure in modern Chinese politics in the period of the party’s crucible, which was when they had to retreat to a place called Yan’An, in northwestern China, where they effectively holed up for the better part of 10 or 15 years.

That’s when Xi Zhongxun comes to the fore as a trusted military lieutenant in Mao’s system. But Xi Zhongxun also runs through a period whereby he is repeatedly criticized and, in fact, purged by Mao — including during the Cultural Revolution, ’66 to ’76.

And as we know from our study of human psychology, particularly in authoritarian states, such experiences of purges from the party center can have either one of two consequences.

One, it makes you even more loyal to the party because you have recognized your errors through this process of criticism and self-criticism. Or second, you turn absolutely hostile to the party as an abuse of Leninist power.

Xi Zhongxun, Xi Jinping’s father, was very much in the first category. In fact, he reminds me of that last scene in Orwell’s “1984” with Winston, where he realizes as he disappears into oblivion that he loved Big Brother all along, and the party always comes first.

That’s where Xi Zhongxun fits — despite being purged, always coming back to the party because the party knows best — a true Leninist.

I think Americans who hear that story, given our particular culture, which has a bit less experience with purges ——

So far.

When you were saying that, I was thinking about a number of people who have been purged or nearly purged from Donald Trump’s Republican Party, having watched some of them go down alternative paths.

So I agree with you — so far.

But I think we have a somewhat naïve sense that the natural reaction is the second reaction: hostility to the party, recognition of the tyranny. And even if you have to buckle under for a little bit, you’re always plotting in your heart.

So you imagine being the son of a person who is purged somewhat repeatedly, whose family, in a way, is humiliated by the party.

And has physically suffered — been sent down to the countryside and lived in quite impoverished circumstances for several years, as a young Xi Jinping was.

I think people imagine it would create a hatred. You’re saying for many people, it does the opposite.

What did it do for Xi Jinping, and why?

Well, my analysis is that Xi Jinping, like his father, Xi Zhongxun, concluded that, ultimately, the party knows best and that, ultimately, the party has the nation’s interests at heart. It’s not to say that the party is infallible — they will make mistakes. But in the full sweep of history, we owe our loyalty to the party.

You’re right, most Americans would say: This is just nuts. In fact, all Australians will think it was completely nutso.

It’s simply not within our realm of lived experience if you’d been treated that way. But there’s something about Leninist induction that creates veins of steel in these folks, and Xi Jinping is of that ilk.

He’s ultimately unemotional about these things, ultimately absolutely hardheaded — some would say coldhearted — but absolutely resolute that this beast called the party is the engine that takes China into the 21st century, not just as a country barely surviving against the external predations of the West or whoever else but on its trajectory to become a global great power.

That’s why I always say to American interlocutors: Never underestimate Xi Jinping. Never, ever, underestimate him.

You talk about Leninism creating, I think you called it, “veins of steel.”

I don’t think most Americans are very familiar with Leninism, either in its initial form — how it modifies Marxism — to say nothing of its Chinese form, which is a modification on top of that.

So what is this Leninism of which you speak?

Marxism, as we know, is an economic ideology, and it’s all about ultimately creating an egalitarian or equal society through an equal distribution of goods, but to be achieved through a process of dialectical change.

A Leninist party is designed to accelerate the natural historical forces of change through the active intervention of a vanguard party, which accelerates the course of history through its own violent actions. Therefore, it’s a history accelerator. That’s how they see it.

Of course, when applied to China’s own circumstances, this Leninism essentially has all the hallmarks of Stalin’s party. It’s like Stalinism frozen in time. It is an unrelenting discipline anchored in absolute loyalty to the leader himself, and this is rehearsed time and time and time again in the party’s internal ideological discourse and reflected in what the party does in practice.

We talked a bit about how Xi’s father was purged. He also becomes, at certain times, unpurged.

Mao dies, Deng Xiaoping takes over. And I think this gets into something worth talking about. You described it as a bit like the Stalinist party “frozen in time.” But then, because of its fealty to the leader, it is also able to make quite radical changes.

So how does the Communist Party in China — and, beyond that, China itself — change after Mao?

It’s gone through, I think, two big changes. The first reaction under Deng Xiaoping, who effectively replaced Mao in ’78, was called the great period of reform and opening. “Reform” meant, basically, introducing market disciplines into the economy rather than state planning, and “opening” meant in order to grow, we need to open to the outside world.

He didn’t fundamentally change its Leninism. He certainly changed its Marxism. He changed the economic ideology in a quite artful way by saying that at this period of economic history, the factors of production needed to be fully unleashed in order to pull China out of poverty, and therefore it was necessary to contemplate and embrace a long period of inequality while that occurred.

When asked how long, he said dozens of generations — which, you don’t have to be a mathematical genius to work out that’s hundreds of years, dozens of generations.

That orthodoxy effectively enabled market-based reforms in the economy domestically and engaged with the capitalist world externally.

Which is how, frankly, a generation or two of Americans — and Australians, for that matter — became familiar with Deng’s China, Jiang Zemin’s (Deng’s successor’s) China and Hu Jintao’s (Jiang Zemin’s successor’s) China — because the overriding ambition was to grow the economy, bring people out of poverty and make China a global economic great power — effectively for 35 years, right through until 2012 and starting way back in 1978.

The second big change after Mao, though, is with Xi Jinping. He becomes general secretary of the party at the end of 2012. And he has changed that ideological script again back to what I would call the Marxist left — a much more state-driven and party-driven economy, with much tighter levels of Leninist control.

I want to track how he gets into position to do that. I was just doing my simple math — I think when Mao dies, Xi was 23 or so.

Thereabouts, yeah.

What are the positions he holds? A young guy, he’d been in the countryside a bunch; his father was a complicated figure. What is his path upward, and what makes him a figure who keeps getting promoted upward by the Chinese Communist Party?

Through this period of reform and opening, which is quite interesting.

If we’ve looked at our Machiavelli carefully, in “The Prince,” he often speaks of the need to mask one’s own ambitions and to mask one’s own ideas while being a loyal servant of the prince of the time before you end up in power.

Of course, there are parallel axioms in Chinese traditional political wisdom about that, as well. So bear that in mind as we trip through his political career.

By the late ’70s and early ’80s, he lands a position as the private secretary to the then minister for defense, whose name is Geng Biao — and this was before I met the guy down in Xiamen. He spent a couple of years doing that — and he has always prided himself on therefore having something of a military grounding or military background.

He then undertakes prefecture-level positions as party secretary, where he often refers to how much he learned from working closely with the peasants on the ground.

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As party secretary in a prefecture, your job is to raise local living standards, to organize agricultural production, to ensure that agricultural surpluses are able to be sold on private markets on weekends. So you begin to see the emerging of a local semi-capitalist economy.

So a kind of technocratic governance job.

Technocratic governance, and it’s a standard pathway to ultimate advancement. He then is elevated to become vice mayor of Xiamen, which is one of China’s four special economic zones at the forefront, not only of domestic economic reform, like in the countryside, but of opening to the outside world, where I encountered him for the first time.

I’m sure he does not recall meeting me. I’m sure he met a whole bunch of foreign barbarians at the time.

Then he slowly is elevated to the point that he ends up as the provincial party secretary of the entire province of Fujian.

He then ends up, for a long period of time, as provincial party secretary of the province of Zhejiang.

Then he ultimately goes to Shanghai as party secretary before he’s then elevated by Jiang Zemin to the center, when he ultimately becomes, in 2008, vice president of the country and vice chairman of the Central Military Commission.

What is his reputation in this period? The Chinese Communist Party had 110 million members, many, many, many people vying in various bureaucratic positions for advancement.

Why is Xi unique among them — moving up and up and up and up? What are other people saying about him? What is he considered to be good at?

In the Chinese Communist Party ecosystem, it is invariably advantageous to be what they call hong’erdai, which is second-generation red. So because his father is Xi Zhongxun, and his father has been rehabilitated in the reform and opening period, it is of no small advantage in your own career elevation.

Mind you, his major competitor for the job at the top, a guy called Bo Xilai, was also the son of another revolutionary leader called Bo Yibo, and he was on a similar career trajectory.

For those of us in the China analytical world, these two careers were moving toward a point of collision. Of course, those in and around Xi Jinping and those otherwise opposed to Bo Xilai dealt with Bo Xilai. So that’s one element of his advancement.

The other is at a technocratic level, in terms of the growth data coming out of Xiamen, coming out of Fujian, coming out of Zhejiang and coming out of Shanghai. He has an impressive set of numbers to demonstrate to the party center that he’s not just a political show pony.

As I reflect back on his career, he’s always been a safe-hands sort of guy, keeping his provinces stable while allowing the private sector to do its bit.

I think sometimes from the outside, we look at the Chinese Communist Party and don’t see politics. We just see a lock-step organization. We don’t understand its internal workings very well. But it does have politics. It does have factions. It has a lot of people in it.

Why him? What is his pitch to the party, and what do his supporters want from him? What do the other factions fear in him?

What is the understanding of how he becomes a leader and why he becomes a leader and what it means that he is the one chosen to be the leader?

This is the question that many of us in the analytical world are least equipped to answer because we weren’t in the room. But let me have a go anyway.

The kingmaker at this stage is Jiang Zemin, even though he’d been formally out of the position for a decade. Jiang Zemin, a wise old bird — I met him a couple of times in my political life.

He loved to sing, by the way. We once had him in Sydney when he was mayor of Shanghai himself. He insisted on performing onstage at the Sydney Opera House, so we made sure there was no one else in the opera house at the time. But he liked it. He was performing onstage at the opera house. He could say he’d sung there.

Was he a good singer?

The Chinese would say, “Mama huhu,” which is, “Yeah, OK.” [Laughs.] A bit like me in the shower, you know?

Sure. A confident singer.

A confident singer. A man who likes to sing.

I admire that.

That’s right. It requires a limited level of self-awareness in order to really enjoy it.

Or the knowledge he can purge whoever doesn’t like the way he sounded.

True. Mind you, as a junior Australian diplomatic official at the time, I appropriately applauded his performance at the opera house. That’s kind of what you do.

But anyway, you roll the clock along. Jiang Zemin has worked out that there are problems in terms of party corruption, there are problems in terms of indiscipline, and there are problems in terms of allowing any further slide in control, given where they ended up in ’89.

So against the alternatives that they were faced with at the time, I think they saw in Xi Jinping someone who was a party guy, first and foremost. And second, having presided over three heavily reformist provinces — Shanghai, Fujian and Zhejiang — which were very much at the cutting edge of economic progress, they thought the economic reform program would be safe, the opening to the outside world’s economies would be safe, as it would be safe in terms of party political control.

I think that’s why they made their bet with Xi Jinping. And I think Jiang Zemin, by the time he died only a couple of years ago, would have been deeply surprised by how much Xi Jinping then set out to change the center of gravity of the Chinese political economy in a big way.

Why would he have been surprised by that?

Because he assumed that the economic reform program would continue, that there would still be a lot of space for the Chinese entrepreneurial class, that China’s international economic engagement would continue, that China would progressively integrate itself with the global economy.

Instead, what he saw, certainly by the time we get to 2015, is Xi Jinping turning the levers very much toward the Marxist left: greater role for central planning, lesser role for interim inequality as Deng had conceived of it originally.

At the center of this is Xi Jinping’s rehabilitation of an old Maoist saying, which was along these lines: It doesn’t matter whether we’re talking about north, south, east and west, whether we’re talking about the government, the military, the academy, commerce or society — the party leads in all.

Xi Jinping pronounced that and brought it back with a certain Maoist flourish. That’s what would have surprised Jiang Zemin.

The other thing that I had heard of him being known for was a series of anti-corruption campaigns. Tell me about that side of his story.

During the period in which he was party secretary, I haven’t seen a strong evidence trail that he had led crackdowns against corruption at the provincial level. At the same time, as soon as he takes over as party general secretary for the entire Communist Party at the end of 2012, almost the first thing he does is to launch a nationwide anti-corruption campaign.

So he has been, I think, observing, noting, seeing how corruption under his predecessors had moved from a retail level to a commercial level to an industrial scale, and he very quickly draws out the analogies with the collapse of the C.P.S.U. — the Communist Party of the Soviet Union — and says, in effect, that the fish rots from the head.

What happens when a fish rots from the head is that ideological corruption gives rise to physical corruption, gives rise to the dissipation of all forms of political discipline. He saw that as fundamental to the collapse of the Soviet Union.

The collapse of the Soviet Union has become this long-playing training video for various folks in the Chinese Communist Party of everything that you should not do.

Tell me about — as you understand it, because he’s written quite a lot about it — the way that Xi Jinping would narrate the collapse of the Soviet Union and the Communist Party.

Because I think the story here that is largely believed is that the Soviet Union collapsed under its own contradictions and Ronald Reagan’s defense buildup and moral leadership.

But that’s not how they see it in China. How does Xi Jinping see it?

One, remember that in the Gorbachev period, it was governed by these dual disciplines of glasnost and perestroika, which translated effectively to “glasnost” meaning “opening” and “perestroika” meaning “reform.”

Sound familiar to reform and opening under Deng Xiaoping?

So he’s got this rolling around in the back of his head that if you unleash too much of the capitalist impulses of the Chinese people, like the Russian people, then ultimately you’re going to shake the inherent disciplinary structures of the ruling party. That’s Point 1.

Point 2 is what he said, particularly in a remarkable speech he gave in 2013 to a meeting of funsters, otherwise called the propaganda and ideology department of the C.C.P. That would be a fun conference if ever you want to go to one. I’ve never been invited, but I think that’s where they really get into their Marxism and Leninism and propaganda together.

That’s where he spoke most clearly about the corrosive influence of capitalist values and about the attrition of Communist ideological values in the last days of the Communist Party of the Soviet Union.

The third reason he gives in his extensive corpus of writings and teachings is his wistful reflection that there was not one single man prepared to stand up in the Soviet Red Army to defend the party when things fell to extremists in 1991.

It caused him to double down in terms of his determination that the party will always be in absolute control of the army.

You mentioned being in China not long before Tiananmen Square.

I’ve certainly read many histories of China where the sense is that the Chinese Communist Party’s response to Tiananmen Square — very different from how it’s understood in the U.S., as this moment of horrific crackdown and barbarity — is, in another sense, the moment the Chinese Communist Party decided not to be the Soviet Union.

It was not going to allow an economic opening to lead to the kind of social rights and discontent that could shake their power.

I’d finished my diplomatic posting by then, but I happened to be back in Beijing at the time, working in a different incarnation. We arrived in Beijing on the 20th of May, which was the day they declared martial law. They were already into that massive set of student protests within the square. The military crackdown, when all the students were killed, was on the 4th of June.

So because our entire program of whatever else we were supposed to be doing was canceled because of the chaos, I then went wandering in the square for a week to talk to all these kids.

It was remarkable to see the spontaneous outburst from kids — and not just kids, not just university students, but from other units of the Chinese Communist Party, calling out for freedom and democracy.

I remember walking to the square for the first time, coming down across the ceremonial bridges in front of Mao’s portrait beneath the Gate of Heavenly Peace, to look at the square for the first time.

I’d seen the square on multiple occasions when it was full of the normal Communist Party paraphernalia. This time it was like a massive comprehensive exercise in iconoclasm. To the left was the museum for the history of the Chinese Revolution, which had one giant flag planted on top in the Chinese characters saying “minzhu” — democracy.

The Great Hall of the People, full of big character posters, calling for the purge of a whole bunch of people within the Chinese leadership who are old-fashioned leftists. And then in front of you, there was this crowd of, I think on our particular day, half a million kids in the middle. It’s quite a large gathering.

The scale is unbelievable.

And then in front of them, as I looked, there were these parade marshals who were organizing individual protest marches of various units of the party. I looked to see which ones they were. One protest group from the Central Party School, another protest group from such and such foreign policy academy and so on.

As I wandered around the square and saw this sight for the first time, as a student of Chinese history — modern Chinese history, in particular, but classical Chinese history, as well — I could feel the instinctive reaction of someone like Deng, an old-fashioned Leninist, who would just say: This is “gaoluan” — a Chinese expression meaning “creating chaos.” So I had this enormous sense of foreboding that the clock was already ticking.

So why did they do it? I think Deng concluded that unless he drew parameters around this, the party would rapidly lose power and, furthermore, that you would have this sort of chaos spread right across China. So they acted.

Through the rest of the ’90s until probably about 2000, there continues to be this internal debate within the Chinese Communist Party about whether we could execute a form of political transition to a Singaporean-style, long-term democracy or guided democracy, as they would see it, in order to create an exit ramp for the Chinese Communist Party over time.

After Deng died, in ’97, that debate rapidly reached its conclusion, and they said: No, we’re hanging on for the long term.

That’s where I see the fundamental changes having occurred. And remember, that’s a decade before Xi Jinping comes to power.

One thing we’ve seen under Xi is, first, a lot of consolidation of power, but also a pretty hard crackdown on Chinese civil society — rights lawyers, labor organizers, journalists, international NGO workers.

Tell me about freedom in China under Xi and why he has felt the need to do this.

From his first year in office in 2013, you could already see the directives going out to pull in the reins of control over the exercise of freedom in multiple domains. Religious freedom, for example, the independence of journalists — to the extent that they had it before, but they did have some. There was some investigative reporting underway.

The legal system, the independence of lawyers and also those who had been engaged in academic-level discussions about other forms of democratic governance experimentation in China at the village level.

Xi Jinping’s conclusion was that all these added up to an erosion of the Leninist control of the party. Therefore, crackdowns unfolded.

In the case of religion, because religious practice is so widespread in China, it’s not an abolition of all forms of religious expression. Not at all. But reining in anything that was not authorized.

So if you were to look at it in 2026, it’s vastly less free than it was a decade before.

More recently, we’ve seen some purging happening in the military. What have you made of that?

With the military, in particular, he has sought to reassert his control. It’s not just that we’ve seen multiple senior Chinese commanders, including those in the Central Military Commission, removed, but in the last several years, we’ve seen a hundred senior P.L.A. generals purged, as well.

What’s it about? Why has he done it? First, he genuinely thinks that corruption in the military impedes the professional capacity of the military to execute its mission in relation to Taiwan or other contingencies.

Second — and here it’s harder for us to reach these judgments, but I have some confidence in them — he’s not really prepared to brook a whole lot of internal dissent within the military or alternative views.

The most recent purge, for example, of Zhang Youxia, who was effectively the deputy commander of the Central Military Commission — a lifelong friend of Xi Jinping’s going way back, through their fathers — reflected an ultimately unemotional view that unless you are 1,000 percent on board the Xi Jinping bus, then it’s not the place for you.

In what ways were these figures, these officers, not fully on the Xi Jinping bus?

Here we have to speculate. It’s not as if they were engaged in preparations for a military coup. That’s not the nature of the beast. It’s more internal disagreement, I suspect, about the nature of levels of military preparedness for deploying the P.L.A. against and into Taiwan contingencies.

So an officer who says in a meeting: I think this would be a disaster — is not long for the world?

Or a senior officer who might say: Comrade Xi, I think we have two or three capability sets that need to be further improved.

That would be the more cautious way of putting it.

Whereas my suspicion is that Xi Jinping’s response to that will be to say: You guys are supposed to be providing absolute confidence in the system that we are ready. How can I therefore be trustful of your leadership of the system when you yourself are the sources of doubt?

That, I have to say, is a hypothesis. I do not have strong evidence for that. But it’s not just a corruption equation.

I’ve also seen American analysts say, for example, that the purges in the military make it much less likely that Xi Jinping would deploy the P.L.A. against Taiwan in the coming years.

My experience of these things is that for everyone who is purged, there’s a queue of 100 people waiting to take the job. The P.L.A. is a very big beast.

How much of the corruption campaigns are about corruption, and how much are they about control?

I think control is the dominant factor in the equation. Therefore, the ability of the system to be able to deploy a corruption file against anybody on anything is large in a formidable security apparatus.

Remember, in the organization department of the Chinese Communist Party, which is basically the über-personnel department, everyone has a file, and on that file goes a whole bunch of stuff, and some of it may well be fabricated.

So it is ultimately about whether I choose to pull your file out.

For this Ph.D. thesis, this book, you read everything Xi Jinping has written, which is quite a lot. I find this to be an interesting thing about him — he is much more well published than most world leaders.

That’s true. Of course, at the end of the day, we don’t know how much is the hand of Xi Jinping, how much is his writing group of people who may get two or three lines of instruction and off they go, and how much of it is actually a formal party document that simply has his imprimatur later on.

I’m not sure that matters. I have a belief, which is not always shared in my profession, that the things politicians say in public are much more important than the things they say in private.

You’re absolutely right. Having been a political practitioner myself, you are very mindful as a political practitioner of the parameters you set for yourself for the future, for your party for the future and for the country — as opposed to private ruminations over a beer.

Yeah. Politicians will tell you in private all kinds of things they shade to the audience. They muse. When they say things in public, it is a steadier signal of where they’re actually going to go, and we treat it the opposite.

In my profession, we love the off-the-record comment. We love what is said over a beer. We think that is like a guide to the truth. And it’s often, I think, a way in which we badly get the future wrong.

If I understood the Republican Party from what Republican members of Congress told me privately over the course of the Trump era, I would have predicted it completely wrongly.

Whereas, if you take seriously what they do in public and their speeches, you get a fairly good sense of where it’s going.

Which is all to ask: What is the ideology of Xi Jinping that emerges out of these documents? You’ve described it as Marxist-Leninist nationalism, a turn to the Marxist left.

For an American audience who’s not that familiar with these terms you’ve been bandying around, what’s your synthesis of it?

Let me answer it on two levels. The first is I’ve read enough of Xi Jinping to conclude that he is a convinced Marxist dialectician. What do I mean by that? Because it’s not a term that we bandy around at Starbucks much here in New York.

It’s important we understand how the other person thinks, but more important, their methodology, their epistemology, the way in which they reach conclusions about that which is real and that which is not, that which is true and that which is false.

A “dialectician” — it sounds like a horrible word. It comes from Hegel, the German philosopher adopted by Marx and Engels. It is, essentially, a view of history that there are two fundamental sets of forces changing historical developments over time. One is called dialectical materialism, and the second is called historical materialism.

So what the hell is that? Dialectical materialism is a worldview by Marxists that says that change in society, the economy and politics occurs between this constant push between progressive forces and reactionary forces — which they describe as the forces of the working class versus the capitalist class.

Ultimately, one pushes hard against the other, overturns the other and creates a new synthesis: a Communist state.

So that’s dialectical materialism ——

Basically the inevitable historical engine that pushes through the capitalist state to Communism.

That’s true, and through the agency of what they call class struggle, or just struggle.

By the way, one of the things that Xi Jinping has rehabilitated as a term in China’s political discourse today is “struggle” — struggle, struggle, struggle — a term that largely disappeared during the Deng, Jiang and Hu period.

So bear with me for a moment. This is turgid stuff, and I apologize to your listeners.

This is a safe space for turgidity. They know what to expect. [Laughs.]

This is seriously turgid. I’ve had to read this stuff, and I wouldn’t recommend it to any of you unless you’re suffering from deep insomnia. I can give you the relevant chapters of my book, which will send you off to sleep.

But historical materialism is the parallel discipline that asks Marxist historians this question: Where are we in this current historical moment and the evolution of this inexorable struggle between progressive and reactionary forces, between the working class and the capitalist class, between working-class nation-states and capitalist nation-states in producing this final resolution through struggle of an evolution toward a Socialist and Communist society?

They say through historical materialism that China is now moving out of what they call the primitive stage or the primary stage of Socialism into something higher than that, and that the role of the Chinese Communist Party under Xi’s leadership is to further accelerate that change.

Applied to the nation-state, not just China’s society and economic experiment domestically, when they talk about changes not seen in 100 years — a favorite phrase of Xi Jinping — when they talk about the rise of the East and the decline of the West, these are all euphemisms for a historically materialist view that China’s time has come to emerge on top in this inexorable process of dialectical change.

It may sound like gobbledygook to you and me, and I don’t really subscribe to any of it. But we would be wrong to conclude that this is not the analytical mechanism used in the central organs of the C.C.P. to understand where China is today and where the rest of the world is today.

Well, let me try to build that empathetic bridge.

I think to most of us in the U.S., even the socialists — who sometimes pretend to be Marxists — I’ve met relatively few who truly believe in dialectical materialism or historical materialism.

I think if you’re here and you’re trained in the way we see our society, the way we do our thinking, the idea that history is linear or teleological in that way — that there are forces playing out that fairly inevitably are moving toward a certain end state — I actually find this the hardest thing to believe that other people believe.

I can imagine why you believe a Communist state is better or a Socialist state is better, but the belief that it is driving in that way — that history has a direction — is, I think, often the hardest part of the pill to swallow.

But as I understand what you’re saying, it is that Xi Jinping and the Communist Party do believe that history has a shape. And that shape is very important to the way they understand their role and structure their governance and direct their society.

Is that fair?

That is a fair summary. Remember, this teleological trajectory of which you spoke just before has not historically been unique to Marxism-Leninism. There have been Judeo-Christian variants of this at various times in history, moving toward an ultimate telos, which is the realization of the kingdom of heaven on Earth, etc.

I’m a bit like you. I’m somewhat skeptical about both of these propositions. But when you describe and say that this is the way they think — that history has its own force, that it is moving, and you can make it move more rapidly through the agency of a Leninist party — that is precisely what they think.

We would be analytically derelict if we did not explain that to others because it underpins their ultimate analysis of where the rest of us fit in the world and where they think they are taking China today. They call it scientific socialism.

But there’s another dimension. It is also, for Xi Jinping, specifically Chinese. Attached to this Communist or Marxist theory of history is also a theory of China’s history and its role in history.

So how does Xi’s nationalism, his story of China and its role in the world, play into this?

I argue in the book that simultaneous to these shifts to the Marxist and Leninist left, there’s been a shift to the nationalist right. By which I mean a permanent and growing appeal to China’s own inherent nationalism, anchored in its civilizational achievements in the past, anchored in the idea that we have been badly done by the rest of the world during the 100 years of foreign humiliation from the Opium Wars through the end of the war with Japan, in 1945.

And now we’re on this trajectory to make China once again a global great power — the global superpower — and to be proud about that. Be superproud about that.

So you have this turbocharge of history in the nation, with the nation now being the vessel or the vehicle through which this great ideological enterprise of Marxism-Leninism is realized into the future and will become the vehicle through which that is then taken into the world.

It has been much longer than I would like it to have been since I’ve been in China. My hope is to go back sometime in the next year or two.

But when I was there in 2010 or 2011, the most common thing that members of the party and members of the private sector said to me was that China was not going to be stable beneath something like 8 percent growth.

The way they described China to me was almost as a transaction between the party and the public, where public support for the party was dependent on this roaring growth rate.

And then I watched over time as that growth rate began to fall, and then under Xi, as the growth rate began to be deprioritized, as he began to do things that were clearly about control and ideology that were sacrificing that level of prosperity. I’ve wondered how much of this has been a turn from growth above all to nationalism as the new way you hold the country together.

Everybody seemed obsessed with the question of: How do you hold together a country as big as China? How do you keep it unified?

Is that accurate? I’ve always found this puzzling because it seemed to happen very fast. We went from this thing everybody was talking about to: Oh, we’re just going to experiment with actually letting the economy be much weaker than that — and doing so fairly successfully.

I think Xi’s response to the dilemma of national control is at two or three levels.

One, his first impulse is always ideological. Remember the analogy with the Communist Party of the Soviet Union — we just need to get these kids to read more Xi Jinping Thought, and that will brighten up their day.

In my view, not an enormous recipe for success, but that’s his first impulse: double down on ideology and double down on ideological propaganda.

There’s the whole view that they can produce a whole new generation of what they call little pinks — that is, little reds, xiao fenhong — who will capture this vision, transcend into the future.

The second response to the challenges of national and political control during a period of sliding growth is simply the surveillance state. The so-called white-card movement was a protest movement where people didn’t hold up protest signs, they just held up blank white cards. Well, those people were tracked down through surveillance systems — their phone locations, etc. — and whisked away.

So understand that the surveillance state — through iris recognition, gait recognition, facial recognition and the monitoring of all your payments, which are all done electronically — means that, frankly, the tools available to the surveillance state today are stuff that Mao and Stalin would have dreamed of way back when. So that’s No. 2.

No. 3 goes to the core of the economic dilemma that the party faces at present. Effectively, through a series of central economic policy decisions, what Xi Jinping has said and what they are now doing is placing an absolute priority on the supply side of the economy rather than the private demand side of the economy as the growth vehicle.

The supply side of the economy is manufacturing, it’s industry, it’s high technology. It’s ensuring that we have complete control over our own supply chains, and that we progressively control the supply chains of the world. That’s what we’re doing, because against a future national security crisis over Taiwan, we will not allow our country to be vulnerable to external pressure. And that’s what they’re doing.

That is, therefore, sacrificing the normal evolution of private domestic consumption as the driver of growth. If you look at China’s domestic savings rate, which remains high, and the private domestic consumption rate, which remains low, relative to where they would normally be as a low-middle-income country, there is a direct trade-off here.

So we are likely to see continued lower growth in pursuit of these national economic, industrial policy and national security objectives in the economy with this trade-off. But the problem is: lower levels of employment, higher levels of youth unemployment and people, frankly, becoming increasingly disenchanted.

I want to zoom in on the youth protest movements, like the white-card movement. You also have people just lying down. There’s a sort of quiet quitting, so to speak.

“Lying flat” is the term.

Lying flat. It’s hard to know from the outside how meaningful things like this are, but typically when you begin to think about a society with sustained levels of youth unemployment, you imagine a certain ferment to that, a certain space of dissatisfaction.

Now there’s a lot of surveillance — a very, very powerful central party. But it’s also a party that does have to respond, at some level, to a public if it is disenchanted.

What is the theory of this? Does the Chinese Communist Party see this as a problem — or just see it as a discontent to be managed?

They see it as a problem, but in Xi Jinping’s calculus, they see it as the lesser problem against the greater problem, which is national economic self-reliance and national economic dominance in the driving technologies of the future — what they call, in the party’s discourse, the new productive forces, which is essentially A.I., quantum and everything else.

If you want evidence of this, just look at China’s Made in China 2025 strategy, which is the largest-scale exercise in any nation’s industrial policy seen in economic history.

So what’s their theory of the case? This massive investment in industry and in leading-edge technologies will ultimately produce a new wave of productivity in the economy, which will create a new wave of wealth, including in the related services sectors.

But this will take a while to wash through. In the meantime, maintain surveillance and do a certain amount to keep the economy and growth as stable as possible.

For example, the property sector has been the one in which most Chinese citizens have had their savings over the last 20 years. Over the last five years, the property market has collapsed through the floor through a series of policy and political interventions by Xi Jinping.

Xi Jinping, rather than allowing the property sector to collapse completely, decided, as of about 2024, to put a floor under it, to rescue some of the property development firms and also to ensure that people were not going to lose anything and everything.

So there’s an awareness that you can’t just allow private consumption to be destroyed completely. You can’t allow that.

But has that dissipated his fundamental ideological resolve to build this all-powerful Chinese industrial state that controls supply chains at home and abroad? No, it hasn’t compromised that one bit.

The bottom line is Xi Jinping’s response to a very disgruntled body politic was: What you need to do is to learn how to chiku, which is to eat bitterness. That’s what we’ve done throughout the most difficult periods of party history.

Of course, if you’ve got a formidable, all-seeing, all-dancing surveillance system across the country run by the security intelligence authorities, you can say “chiku,” eat bitterness, with some effect — because the system will be out there to round you up if you don’t do so accordingly, and with a smile on your face.

Well, let’s talk about the way he’s building that industrial juggernaut. There was a way of looking at Xi Jinping’s economic policy a few years ago that made it seem like he was, in many ways, decapitating the productive factors of the Chinese economy.

This is maybe a good place to talk about Jack Ma and Alibaba, which was the Chinese national champion, globally competitive, until Ma was seen as getting too big for his britches. And then something happened.

What happened to Jack Ma?

Well, Jack was always larger than life. I’ve known Jack quite a lot over the years in one form or another. If you ever listen to Jack’s English, you’ll notice an Australian twang. It’s not from me, but as a young person, he went off to Australia to learn some English. So we’re responsible for Jack’s version of the English language.

But the bottom line is this: Jack became adulated across China as the symbol of this new entrepreneurial class. This poor boy from nowhere could build up this extraordinary firm to become world leading. But in the party’s view, and in Xi Jinping’s view, he became bigger than the party.

Where all this came to a head was a number of years ago at what’s called the Bund Summit in Shanghai, which is an annual conference.

Jack decided to publicly attack the party’s financial management policies and how constricting it was on new forms of innovation in the Chinese financial services sector, where Ant Financial, one of Jack’s subsidiaries, would be a major participant.

Xi Jinping just cracked right down, and not just on him, but on what was then called the collectivity of the platform companies, including Tencent and a number of other firms.

Then there began a series of antimonopoly or antitrust moves against the size these companies had reached, and then that spilled over into a broader campaign against the excessive display of private wealth, private influence, ostentation and the private sector writ large.

That led to a further campaign to implant party secretaries in each of these private firms, and to say to these private firms: By the way, we think it’s a good idea under a mixed economy model that the state begins to take equity in your companies.

Needless to say, this didn’t lead to a set of happy campers among the Chinese private sector.

As a result, you began to see not only this trend that I referred to before — which is static or declining figures for private domestic consumption, consumers driving the future of growth — but private fixed capital investment also began to slide, as well.

Both these things created a dilemma for the party’s overall growth discipline. As you correctly said before, the unofficial social contract used to be 8 percent growth, then it became 6 percent growth. Hey, 4 percent would be OK, but it was beginning to slide south of that.

So they’ve tried to stabilize both of these things since about 2024. You may remember a high-level meeting in early 2025, when Jack was finally brought in from the cold together with others.

He had sort of disappeared for a while. You didn’t see him anymore.

Yeah. He’d been actively studying texts, and I’m sure that included Xi Jinping Thought, though I’m not quite sure. He wasn’t arrested, but he was not exactly completely free to move, either.

So there’s been an effort to bring these folks back into the circle, because even under Xi Jinping’s industrial policy, with cutting-edge new technologies led by artificial intelligence at the fore, Xi Jinping realizes: Guess what? State-owned enterprises can’t do all of this. In fact, most of the juice lies within the Chinese private sector. We’d better re-embrace them.

So there’s been an attempt to correct. But we should not lose sight of the fact that the fundamental move to the Marxist left, move to industrial policy über alles, move to China controlling global supply chains and the national party-state view of the world is still predominant. It is.

These other two corrections for consumers and for private entrepreneurs have been more at the margins.

Well, let me speak from what I think to be the American perception of China and how it has changed in this five-year period post-Covid.

There was a period when Jack Ma was suddenly gone, and you could see Xi cracking down on a bunch of these companies. Many people in the U.S., I think, had the view — especially since “zero Covid” was considered to have gone on way too long and been something of a disaster — that we were finally seeing the thing that had been long predicted.

Countries with that strong of a centralized government — call it authoritarian, call it Communist, however you want to frame it — eventually begin to break because the leader can make bad decisions, and eventually will. Paranoid decisions, power-consolidating decisions.

You saw China’s growth rate going down and thought that maybe this period of Chinese rise was coming to an end. This was very much how the Biden people felt things were as they left office.

And then I would say over the last two years, that shifted — again, this is my perception of the zeitgeist — to a sense now that China’s industrial juggernaut has jumped a series of levels such that it is no longer just copying America, but it can now do things America, to say nothing of the Europeans or others, cannot do.

It is nearly level with us in A.I. but much more able to build some of the underlying infrastructure of A.I., like energy. Its ability to produce electric vehicles, its ability to produce functionally anything, because of its manufacturing ecosystems, is now beyond where we are.

So it was wrong, this sense a few years ago, that the Chinese model was beginning to break down. In fact, whatever its problems, it has developed perhaps not economic prosperity but economic power that is very, very real.

In some ways, all of these stories seem true to me, and I’m curious how you think about that kind of whiplash that has been happening in the American story of the Chinese economy and its power.

Well, I think, Ezra, you’re right to describe that evolution of American perceptions, and American perceptions are not entirely detached from the underpinning Chinese economic reality.

Sometimes I worry, though, in this country where I’ve lived among you now for the better part of 10 years, that sometimes hope becomes a substitute for analysis and strategy.

Americans, or at least those in administrations of one hue or another, look at Chinese demography, they look at the slowing of growth, and they say: Yeah, we told you so. Problem fixed. And we move on.

It ain’t fixed. China is formidable. Particularly under a leader like Xi Jinping, it’s doubly formidable. And given his surveillance apparatus, it’s trebly formidable.

I think in terms of the periods you’re talking about, yes, post-Covid growth slowed. But underpinning it all was always this continued red thread of Xi Jinping’s core organizing principle, which is: I’m building the world’s most powerful industrial state, and I’m not going to let any bunch of private entrepreneurs or consumers get in the way of that. I’m just going to do it.

That was Made in China 2025, the technology objectives he set for himself in 2015. If you look at the double down in the current 15th five-year plan announced ——

These are technologies like semiconductors, electric vehicles ——

Yeah, E.V.s, aeronautics, batteries.

If you look at the list of where they were in 2015, which was nowhere much, and where they were by 2025, at the end of last year — frankly, as an exercise in industrial policy alone, whatever the economic inefficiency may have been in getting there, Xi Jinping regards that as a bit of loose change compared to obtaining the commanding heights of these new driving technologies.

America is keeping Chinese electric vehicles out — not because they’re bad cars but because they’re such good cars. And if they came in here at their cost, they would annihilate the American electric vehicle sector.

I think this is a change. For so long, our theory was they’re copying us, they’re stealing our intellectual property. Now we are quite afraid, in some cases, of their intellectual property.

I think this has been a big evolution in reality. Does China engage in industrial espionage? Yes. Do they copy stuff that is obviously available through open patent? Of course. And they have the great advantage of scale, and they scale up rapidly given the automatic leverage of their domestic market.

But given their domestic market is still flat because of problems with disposable income, deploying this surplus capacity, this surplus production on global markets, is their next best step. And since America has erected the tariff wall, all roads lead to Europe, which is why you see such a huge reaction now from European political leaders.

That’s what’s unfolding, and it’s all of those things, everywhere at once and at a pace of knots. Like, this thing is happening at speed now.

Is it sustainable for China itself? Ultimately, there is a problem of finance, and we need to think this through. How does China finance this level of industrial subsidy?

For them and their calculus, this is a temporary exercise. That is: We will, through our level of industrial subsidy, ultimately destroy the world’s competition and opposition. Those will fold, then we can restore prices at a level that makes sense for us in terms of the cost of production domestically. But by then, the alternative sources of production have gone.

This is a very elaborately thought-through strategy on the part of the Chinese. And so far, to give them credit, it has worked remarkably well. But they cannot sustain it indefinitely.

They’re currently borrowing from Chinese consumers and their personal savings in banks to keep this whole thing afloat. Industrial subsidy, which is of an order of magnitude not seen in economic history before, cannot be sustained forever.

I want to slow this part down because I think it’s really important. Earlier, you were describing the problem that the Americans just sort of hope the problem is solved.

Now what is the problem? How does one define the problem?

We’re not always very clear about that, but I think it’s something quite close to this: The challenge China poses to the rest of the world is that it is able to suppress domestic prosperity, take money from its own people and keep their wages down in order to put it into these industries to attain scale.

This would functionally make it impossible for other countries to compete in these industries. They will just be too far behind, and the Chinese goods will be much cheaper.

I mean, that is the theory, in part, of the tariffs you saw come out in the Biden administration, and obviously even more in the Trump administration. If China is going to make its products artificially cheap, we are going to make them artificially expensive. From that perspective, is that a wise strategy?

It is a perfectly logical response to the challenge that China’s industrial policy — which exists on the basis of massive industrial subsidies — poses.

The alternative is you simply allow the Chinese industrial juggernaut to dominate every single industrial and sub-industrial sector. We’ve already seen that in terms of critical minerals and rare earths, both raw and processed. If you want a case study of what that looks like in practice, look at that sector.

Not only did they dominate that, they were so dominant in it that they were able to break Trump’s tariff policy and break his trade war by simply threatening to remove our access to their rare earths and magnets and so on. They had leverage over us that we did not have over them.

The Chinese are highly intelligent, highly disciplined masters of economic statecraft, and they know where leverage lies. And because their political culture is dominated by a culture of engineers, they understand precisely, instinctively — before you get an elaborate, dumbed-down briefing to your average Western cabinet — where they stand against the periodic table of critical minerals and rare earths, how many they’ve got both on the extraction side and the processing side, and where they, therefore, will end up by year X in their ability to exercise leverage elsewhere.

I think I want to flip the question of what Xi Jinping believes for a minute. We’ve been talking about what he believes about China. What does he believe about the United States of America and about Donald Trump?

He hasn’t told me, so again, we’re into the realm of speculation here. But let me start with his view of America, and then we’ll move on to the president.

His view of America is that it’s the only country in the world potentially standing in the way of his national, political, economic and geopolitical ambition. Why? Simply because of your scale.

And second, for 100 years, you guys have represented, since the early days of Dewey liberalism, an alternative script for how you construct the politics of a country.

So when Xi Jinping looks at America, he looks at it through these two lenses.

You represent this massive alternative ideational force, and the attraction to that idea still causes many successful Chinese to go to live in the United States and the rest of the collective West. Because “freedom” is not a hackneyed phrase, particularly if you’ve lived in a country where there is none.

But at the level of raw national power — the power of the U.S. military, the power of Indo-Pacific Command, the power of what you have in cyber and space and your nuclear forces, and the power of American innovation reflected through Silicon Valley — he looks at that and says: That’s the only thing that can get in my road.

That’s why America occupies this unique position, whether you’re run by Republicans or whether you’re run by Democrats.

We’ve talked about how Xi Jinping has a dialectical, historical view of China’s rise and Communism’s rise. Does that extend to a similarly inevitable view of American decline? Does the mainstream thought of the Chinese Communist Party believe America to be in a structural decline?

They do have this belief, and it’s expressed in two different ways.

There is a Chinese concept of what they call comprehensive national power. It’s a standard analytical framework for aggregate American power versus aggregate Chinese power against all indices of power. They look at the size of the U.S. military, the size of allied militaries and the size of their own military, and they make their own calculus.

They also make a calculus about the solidity of U.S. alliances abroad, and when those are under pressure or when they’re beginning to fracture. They also look at the solidity of the U.S. domestic body politic and the degree of unity and disunity against the predetermined unity of the Chinese unitary state.

Interestingly, they stopped publishing this stuff for the rest of the world to see what their conclusions were about 12 years ago. I think because the results were beginning to look increasingly indicative that China was really rising rather rapidly.

The second, in a propagandistic Chinese phrase, is “dong sheng xi jiang,” which is the rise of the East and the decline of the West. In Chinese political parlance, that’s a euphemism for China and the United States.

And if there’s a third phrase, it’s probably Xi Jinping’s oft-used phrase, including during his summit with President Trump most recently: The world is now experiencing changes not seen in 100 years.

He first began using that phrase in 2017 on the 100th anniversary of the Bolshevik Revolution. The internal interpretation of the phrase is that we, the Chinese — now with our own revolution, now going out into the world at large — represent as seminal and shaking an event to the certainties and certitudes of global politics today as the Bolshevik Revolution portended back in 1917.

Two things here. One is that in the time Xi Jinping has been leader, American policy toward China and American political elite thinking toward China has changed dramatically. It has become far more antagonistic. The sense that China would become more liberal and democratic as it became richer has dissolved.

The sense that we allowed China to take advantage of us has become a bipartisan theory, and that we are locked in a great competition with them — possibly a Thucydides trap leading to war — has become fairly widely believed and certainly widely prepared for.

And, of course, American politics itself has changed, falling into this period of Trumpism and much more internal division. You wrote a book called “The Avoidable War” that was at least partly about this.

What is their narrative of us in this era?

They saw a sea change just under 10 years ago and during the first Trump administration, when the official American strategy toward China changed from strategic engagement to strategic competition.

H.R. McMaster, then Trump’s national security adviser, wrote that in the national security strategy, I think, in December 2017. That wasn’t just a piece of language. You could almost hear the creaking of the entire machinery of the U.S. state across all agencies of power.

Before that, Obama talked about his pivot to Asia.

That’s true. But he did not have an organizing principle, which is that we are in a competitive relationship with China about which country becomes the dominant power in the Indo-Pacific and in the world. So that’s the big change.

That dominated the second half of Trump’s first term, and it really dominated the Biden administration and then, through until the most recently convened summit in Beijing, where we now have a different organizing principle announced for the first time — this time by the Chinese — called constructive strategic stability. And the White House briefing paper that came back at the conclusion of the visit said: Yeah, that’s the framework we accept, so long as it’s fair and reciprocal.

So what does that mean if you decode it? I think what the Chinese are seeking to do is to cause the United States to be more stable, less unpredictable and less antagonistic going forward.

What is it going to mean in practice? I don’t know. One of the advantages may be that the two sides begin to have an active and substantive negotiation on the regulation of the most dangerous and destabilizing forms of artificial intelligence, which is what came out of Scott Bessent’s conversations with his counterpart He Lifeng. For the rest of the relationship beyond A.I. governance, I’m not sure yet.

I find U.S. policy toward China to be one of maybe the most major areas of policy where my own thoughts are most unsettled.

There’s one story that I think has become a more popular story, and I think you could extract out it of at least part of our conversation, which is to say: Xi Jinping and the C.C.P. under him are highly ideological organizations and individuals bent on eventually attaining Chinese supremacy, particularly economically and industrially, and you need to understand the relationship as having a competition and an antagonism at its heart.

You can manage that better or worse. You can manage it more erratically or more systematically. The Biden administration, I think, was trying to do it very systematically: build up American industries, impose very targeted tariffs and boundary certain kinds of technologies.

The Trump administration, I think, has managed it more erratically. But, fundamentally, openness toward China in this telling is very dangerous. You don’t want their technologies here, you don’t want their industries with too much penetration here, and you are trying to compete with them, not learn from them.

There’s another argument — and for me, I get nervous whenever anything becomes too bipartisan in Washington — that says: This is a mistake. You actually need to learn right now from things like Chinese E.V. manufacturers. You want technology exchanges. You want to understand their manufacturing systems.

You don’t want to make antagonism self-fulfilling. You don’t want to create a lot of room for misinterpretation. There are advantages, economically and otherwise, that openness creates. And the shift toward seeing it as fundamentally opposed is actually missing a lot of positive-sum opportunities in trade and innovation. If China has a lot of really interesting bio research coming out, if they invent new medications, that’s wonderful for us.

Where do you fall on this spectrum?

The third way. Let me explain what I mean by that.

One, as I’ve said before, don’t mistake the fundamentals here, which is that Xi Jinping and the party he leads are Leninist, and they have a very clear-eyed view of where they wish to be at home and abroad.

At home, it’s for China to become a fully developed economy. Abroad, it’s for China to be the most powerful state in the Indo-Pacific region and in the world — and to surpass the United States. So let’s just be clear about that. It’s an unemotional, clearheaded, realist, but ideologically driven view of the world.

What I’ve argued for a long period of time — and I think there are levels of agreement and disagreement with this approach — is what I call managed strategic competition: Accept the reality of the competition and manage it. It’s far better than unmanaged strategic competition, which can end in crisis, conflict and war.

What do I mean by that? Three points, really.

One, accept the fact that there are fundamental strategic red lines that they can’t cross and we can’t cross. Managing those red lines — particularly over the question of Taiwan, the South China Sea and the East China Sea — is the meat and potatoes of sustained deterrence. That actually creates the strategic stability for the rest of the management of the relationship to ensue.

The second element of managed strategic competition is for the economy writ large — whether it’s trade, investment, capital markets, currency markets, technology markets, talent markets, ideas markets, the ideation of the future, the liberal international rules-based order or one headquartered in Beijing — to make this a full and open competition, and may the best system win.

The third component of managed strategic competition is those areas that we define as in our mutual interest to cooperate on: the future of A.I. governance; preventing the next global pandemic, given how much we all screwed up on the last one, particularly the Chinese; the future of other forms of global public health, like cancer research and biotech.

These are quite rich areas for collaboration. My view is we can walk and chew gum at the same time in these three different domains — while recognizing that we’re not ultimately engaged with those organizing a Sunday school picnic.

Well, that brings up Taiwan, which is something we should talk at least a little bit about before we end. What I hear in your managed strategic competition framework is an orientation toward clarity. Where do we compete? Where do we cooperate?

Taiwan — the fundamental nature of that is ambiguity. America has a studied, ambiguous description of what Taiwan is and what is going on with it, and even what our policy toward it may be.

We know what Xi Jinping wants, which is, ultimately, unification and control of Taiwan, but we don’t know what he will do to get it or when. That’s the one where I hear the most constant concern because neither side, I think, really understands the other.

So how do you think about where the Chinese are on Taiwan, and then how do you think about the overall framework for managing that strategic competition appropriately?

Now, Ezra, this is a really important element of our overall conversation because it’s the most time-relevant in terms of problems that could arise before you and I look much grayer.

I look much grayer than you, by the way. My hair turned white because of the global financial crisis — I was in office at the time.

[Laughs.]

It might fall out if we have a Taiwan crisis.

So where is Chinese thinking on Taiwan? Xi Jinping has made it clear that he wants a reunification with Taiwan before the centenary of the founding of the People’s Republic, and that’s in 2049. That sounds like an eternity away. It’s now 23 years away, so that’s not exactly an eternity.

Second, his policy toward Taiwan is increasingly hard and sharp.

Give me an example of what you mean by that. What is he actually saying?

He is saying, on the question of Taiwan, in his most recent engagements with President Trump in Beijing, that unless this is handled prudently, this is a very dangerous issue that could result in a collision and conflict.

He hasn’t used those formulations before. So these are not just: I’m shooting the breeze with my best pal Don, and this is what I felt like this morning after I’d had my waffle.

And he’s not like Trump. He speaks very carefully.

Yes, he’s a Leninist, and words are bullets for these guys, and they often result in bullets.

And then third, what do we see? The patterns of Chinese military exercises in relation to the Taiwan Strait move from just being abstract exercises of China’s military preparedness against, for example, a Taiwanese unilateral declaration of independence — which is, I think, a 0.0 percent possibility — to exercises that increasingly resemble rehearsals for either taking a Taiwanese offshore island, imposing a blockade or a full-scale invasion of the island.

Don’t we have satellite imagery of very precise replicas of various Taiwanese buildings for military exercises?

Well, because I’m still subject to various national security requirements, given my most recent job, you can speculate on that. I couldn’t possibly comment.

I’m just saying we’ve come across reporting on that.

That’s good. I’m glad that you’ve so reflected.

Anyway, we’ve moved from abstraction to reality. We’ve moved from ahistoric time to historic time.

In Xi’s calculus, he’s now 73 years old. He’s up for reappointment at the end of next year. He probably has a couple of terms in him yet. But he’s also, as a good Marxist-Leninist, looking to where the dialectical forces take him in terms of unique periods of opportunity.

Does he perceive 2028 as a unique period of opportunity? I don’t know, but I do notice a sharpening in his levels of preparedness.

Something you said at the beginning of this conversation is that he wants China unified and its enemies divided.

Say what you will about Trump, whatever you believe about him, this is — and he is — a divisive time and force in American life. The next presidential election year is 2028. There is not going to be a lot of appetite among the American people for foreign adventurism, particularly after the Iran war has proved something of a disaster. In America, there’s not a high level of commitment to Taiwan. It’s not a place we think about.

I’m not saying that Xi Jinping is going to choose to invade Taiwan at that moment, but he and the Chinese Communist Party see America as in a political and even terminal decline via historical materialism.

So I wonder how he sees this, and if this is a sort of moment of opportunity.

Yes, I’m worried very much that Xi Jinping could miscalculate in 2028. Why I say 2028, by the way, and not 2027 or 2026, is that the Taiwanese have their own presidential elections in January 2028. And if the existing Democratic Progressive Party, which is anathema to Xi Jinping, gets re-elected, it will be for its fourth term, and it has run consistently on an independence-leaning platform. Will they get re-elected in January 2028? I don’t know, but I think it’s a 50-50 possibility.

Does this, therefore, become a trigger for Xi Jinping to say enough is enough? Open question — given he will have just been reappointed as general secretary of the party the previous October or November. And he’s aware that 2028 is a presidential election year here in the United States.

What do I fear? A miscalculation by Xi Jinping about the level of American resolve. Do the Chinese conclude post-Iran, for example, that the likelihood of any American leadership to deploy forces in the event of a Taiwan crisis would be reduced as a result of the Iran experience?

And then there’s the more mechanical question of the extent to which the American arsenal depth, magazine depth and capability set have been impaired as a result of Iran.

So my concern as an analyst is: Could he arrive at a conclusion through a bout of excessive self-confidence that a unique opportunity has arisen? The danger is that he actually miscalculates.

To act against Taiwan would be to cause President Trump to look weak. And the one thing I’ve observed about President Trump in the last several years I’ve been in Washington: The last thing President Trump likes is to look weak.

So I think we are in potentially dangerous territory.

One question I hear from Americans is: Well, why should we care about Taiwan? Why is this our problem?

When you say: What if they miscalculate American political will? — they might calculate it correctly. There is an American elite commitment to Taiwan. Do swing voters in Ohio care about Taiwan? Does the American public, in general, care about Taiwan?

What is your actual answer to that? Why is the answer to Taiwan’s being a flashpoint actually to say: Maybe it shouldn’t be? Maybe it’s not America’s problem?

I think the reason you’ve had such buy-in to deterrence over Taiwan is not because of some feel-good American emotional commitment to those nice folks over there. It’s actually much more hardheaded than you would give credit to.

No. 1, it was the Congress that framed the Taiwan Relations Act back in 1979, at the time of diplomatic recognition of the mainland, which is a de facto form of security guarantee for the Taiwanese — and that’s an act of your Congress. Therefore, if you go to the congressional leadership, Democrat and Republican, they have seen themselves as the long-term custodians of that set of arrangements.

But the second is this. Let’s hypothetically assume, Ezra, that Xi Jinping walks into Taiwan tomorrow, decapitates the leadership. It’s gone, and it has now become China’s province. A fully fledged red flag goes up over the presidential building in downtown Taipei, and the first party secretary arrives to take over the administration of the province and the suppression of the locals, there having been much bloodshed in the process.

I think what Americans need to consider is what happens to the rest of the world’s perception and conclusion about U.S. strategic reliability worldwide at that point. It becomes very much the point at which the notion of Pax Americana disappears in the collective consciousness of allies around the world.

The Japanese, for example, may then conclude it’s time for them to go nuclear. If they go nuclear, the Koreans will conclude: Well, if the Japanese are going nuclear, we’ll be going nuclear.

In other words, the whole dynamic of this region changes.

And the third thing for Americans to consider: Is it the conclusion here in the United States that China, already having assembled the world’s largest surface fleet, for example, having taken Taiwan, that it’s time then to deliver to the Chinese people a grand peace dividend that we will then reduce the size of the Chinese military by two-thirds because we’ve achieved our historical mission, and we’ll all, therefore, have better social security payments as a result?

Unlikely, because Xi Jinping has made plain that China’s power projection should be pan-regional beyond the Taiwan Strait and because of existing behaviors, increasingly global.

And then I think there’s this final point, which is if you guys still see yourselves as the light on the hill, are you indifferent to places which have, of their own volition, evolved into democracies and to open societies and open economies around the world, like the 23 million people in Taiwan? And if you’re indifferent to that, what does it say about your indifference to freedom worldwide?

I think those are active considerations for the American body politic. But as a barbarian living in your midst, far be it for me to tell you what’s right or wrong.

So then what is a wise policy behind those considerations?

The wise policy is, in fact, the least expensive and most effective: sustained deterrence. If you sustain deterrence, and we therefore sustain the status quo across the Taiwan Strait, as Deng Xiaoping once said, we kick the ball down the road for future generations who will be much wiser than us to resolve this intractable problem.

I think that is a good place to end. Always our final question: What are three books you’d recommend to the audience?

Because we’ve been talking a little bit about China today, you’ll be pleased to know, Ezra, I’m not recommending a text on dialectical materialism. But one I thought might be of interest, given your line of questioning, and perhaps to those who are listening, is: Where did Xi Jinping come from? There’s a great book by Joseph Torigian called “The Party’s Interests Come First: The Life of Xi Zhongxun, Father of Xi Jinping.” It’s a great book and a great read.

The second is Ian Johnson’s “The Souls of China: The Return of Religion After Mao.” It’s about what has occurred on the ground, at the grass roots, with the rise of various forms of Taoism, Buddhism, Protestant Christianity and other forms of religious belief as a reaction to the uber-materialism of China’s ideological orthodoxy. That is a great read.

The third one is by Pope Leo XIV — or as we would call him in Australia, Pope Bob I — a guy from Chicago. It’s the encyclical on artificial intelligence. I’ve been working my way through, and it’s a great read about the essential dignity of the human person and how A.I. uplifts that dignity or how it might impair that dignity.

Kevin Rudd, thank you very much.

Good to be with you, Ezra.

Those of you who have seen the topic for this evening’s lecture may have died of fright. It’s meant to be a genuine rib-tickler: “The Evolution of Chinese Economic Strategy Under Xi Jinping”, subtitle, “On Becoming a Techno-Industrial Superpower by 2035: The Ideology of AI and Xi’s New Quality Productive Forces”.

Now, I can see that’s resonating already with this crowd. There is a certain shimmer of excitement, at least on the part of one or two people that I can see here, if not the rest.

Xi Jinping’s ideological project

Xi Jinping—for those of you who have read his stuff, and I made it my business to read all of his stuff when I, at the tender age of 59, decided to do a DPhil at Oxford and produced a book called On Xi Jinping, having studied for four years his ideological framework—takes ideology seriously, in a country which takes ideology seriously.

If you read Xi Jinping’s ideological framework carefully, my three-line summary of the ideological changes he’s brought about in the Chinese system is as follows.

Number one, Xi Jinping deliberately set about moving the centre of gravity of Chinese politics towards the Leninist left: more power for the Party.

Two, he also took a deliberate decision, probably from the 19th Party Congress in 2017, to move the centre of gravity of Chinese economic policy towards the Marxist left.

And three, throughout this period, we see a parallel shift in China’s approach to its foreign policy and national security policy by moving its centre of gravity towards the nationalist right.

If we are to make sense of the Xi Jinping ideological project, it is reflected in these three dimensions.

People often say to me, here we are in the 21st century: why does ideology matter?

In a Marxist-Leninist system—and certainly in the Chinese political system, of which I have been a student for now 50 years, since I arrived here as a 17-year-old, which makes me about 49 now; I didn’t do maths—ideology matters.

This system in China, from the inception of the Chinese Communist Party in 1921, through to the success of the Chinese Revolution in 1949; through the rigours of the Great Leap Forward and the Cultural Revolution, and the self-inflicted damage occasioned by both of those disasters in modern Chinese history; through to the rise of Deng Xiaoping in the post-Mao period and the heralding of the beginning of the period of reform and opening; through to Xi Jinping today—each of these epochs within Communist Party history, policy and performance has been heralded by shifts in ideology.

Ideology, if I could put it in these terms, constitutes the headwaters of change in a Marxist-Leninist system. It is then translated into policy over time, which in turn is changed into forms of behavioural change within the various instruments of the Chinese Party-state and broader Chinese society.

I think it’s useful, before we begin to look in detail at what’s evolving within Chinese economic policy and technology policy, to understand the ideological frame within which all this rests.

The great rejuvenation and comprehensive national power

As part of the nationalist vision for China, Xi Jinping, upon taking power at the end of 2012 as General Secretary of the Party, and then as President of the country in March 2013, took his colleagues across Tiananmen Square from the Great Hall to the National Museum of China, incorporating what used to be called the Museum of the Chinese Revolution.

He then took them to an exhibition of China’s humiliation at the hands of the British and the French in the Opium Wars. That is where he pronounced for the first time to the Chinese nation his vision for what is called the great rejuvenation of the Chinese nation.

This has been his galvanising nationalist ideological project now for the better part of a decade or more.

In its subsets, it is about this: how does China now move from being a country and an economy which is a middle-income economy—by some measures an upper-middle-income economy, by others a lower-middle-income economy, depending on where you are looking at the geography of the country—and how do we bring China to advanced economic status by the time of the centenary of the founding of the People’s Republic in 2049?

That is his galvanising mission.

If you look, therefore, at the various instruments of policy which have unfolded since then, each relates back to that fundamental nationalist purpose.

When you look at China’s concept of its own national power, in order to give effect to the great rejuvenation of the Chinese nation, power itself is defined by a Chinese concept called comprehensive national power, zōnghé guólì.

If you look at it carefully, it is a concept—or a macro-concept—of power which builds within many, many subdivisions. It is not just classic military power, as in a 19th-century realist view of the state. It is also about economic power, trade power, the power of capital, as well as the power of technology.

It is also about the fundamental underlying resources of the country. It is about how that power is deployed in the world. And comprehensive national power is invariably measured in relative terms against China’s assessment of the power of other states as well—principally the United States of America, but also American allies in the region and the world.

So the Chinese approach to the implementation of this national vision for national rejuvenation is driven by this broad concept of national power, zōnghé guólì, within which the economy looms large. It is not an exclusive measure of power, but it is a dominant measure of power.

From Mao to Deng

This brings us to how China’s economic policy has unfolded in the period since Xi Jinping took office.

When Deng Xiaoping decided to change China’s economic course at what is usually called the Third Plenum of the 11th Central Committee in 1978, he did so in a deliberate and ideological fashion.

Under Mao Zedong, the principal ideological challenge of the Chinese Party and people was to continue class struggle at home and abroad. This gave rise, ultimately, in its most extreme form, to the Cultural Revolution.

But it placed at an absolute premium an equality of classes, and therefore Mao’s determination never to allow the emergence of a bourgeois class in China which would supplant either the proletariat or the ruling working class—or their self-designated representatives, the Chinese Communist Party as the Leninist party.

For Mao, growing the economy, while it may have been a real concept within classical Marxist economics, frankly did not occupy the first slot in his list of priorities. It was always about class struggle. It was always about ensuring that the purity of the revolution, which they had won through blood and effort in 1949 after 28 years of civil war, was preserved as an ideological project.

The problem was, by the time Mao died in 1976, the country was broke.

If you speak to Chinese ministers and leaders at the time about how they financed in hard currency their first travels to the United States, it’s a searing tale, in fact, of how empty the coffers had become by that stage.

And so Deng Xiaoping looked at this. By the time we reach the 12th Party Congress in 1982, he takes Mao’s definition of the core mission of the Party—class struggle—and turns it on its head.

He says that, in the Party’s ideological definition, the fundamental challenge of the Party at this stage in history, since 1982, is to unleash the factors of production in order to give rise to national wealth, and therefore to afford the Chinese people a better living standard and release them from poverty.

If you want to trace the ideological wellspring from which the period of what we loosely call reform and opening came, it is that congress of the Party—the 12th Party Congress—and the resolution it adopted, formally changing the Party’s central mission or, to use Marxist language, the core central contradiction, zhǔyào máodùn, around which the Party would organise its future efforts.

From 1982 to 2017, that remained the central galvanising ideological project of the Chinese Party-state.

As a consequence, over that period of time, you would have seen, with some interruptions, average double-digit growth through the 1980s, the 1990s and into the most recent decade as well. China moved from an economy which, as of the end of the Cultural Revolution, had the same GDP in aggregate size as the Australian economy, to become the second-largest economy in the world.

Xi’s shift towards the Marxist left

When Xi Jinping became leader, he initially embraced this vision. If you look carefully at the Party Congress which brought him to power in 2012, and the resolutions which followed, they embraced this reformist vision: a greater role for markets, both at home and abroad, in unleashing the factors of production and unleashing wealth for the Chinese people; raising living standards; and also growing the economic power of the nation.

Deng Xiaoping saw these and said, “We need to ensure that these, in fact, continue to deliver wealth into the future.” When Xi Jinping looked at these, by the time we got to 2012 and 2013, he said, “Yes, let’s double down further on the market.”

But then something difficult happened within Chinese financial and economic system management around 2015.

For those of you who studied it closely, in 2015 there was a significant domestic financial crisis within China. There was a run on the stock market. There was a panic in the property market. As a consequence, people’s shareholdings lost much of their value.

It was around that time—and remember, we were also existing in the long afterwash of the response to the global financial crisis, and financial markets globally out of control—that you see a deep reappraisal by Xi Jinping of the economic pathway forward.

As a consequence, by the time he got to the 19th Party Congress in 2017, Xi Jinping looked back at the origins of the Deng reform and opening period and readjusted the Party’s ideological mission.

This never makes it into the newspapers. It’s dull ideological news. It’s what theoretical nerds like yours truly trace and examine in order to see where the origins of policy change lie.

If you look carefully at the text and the resolution of the 19th Party Congress, 35 years after the 12th Party Congress back in 1982, what Xi Jinping said was this: Deng Xiaoping said that the central challenge for the Party in the future was to unleash the factors of production to grow wealth for the Chinese people. Xi Jinping said this model of economic growth had become unbalanced and was producing inadequate results.

We might say: what does that mean in real language?

What Xi Jinping was signalling was that the time for the supremacy of the market, in the way in which the Chinese socialist market economy had by that stage been conducted, had come to a close. It was time for the Party, through a rejuvenated Leninist party, to resume direct intervention in the running of the economy.

You begin to see from that stage the dial shifting fundamentally.

If you look at the barometers of change, you see, for example, a rise once again in the centrality of central planning, and a relative decline in the significance attached to market disciplines in themselves.

You see the rehabilitation of state-owned enterprises, as juxtaposed against private-sector corporations which, by that stage, were already being deemed to have become too big—and therefore too large for the Party to control.

And in terms of the income disparities which had been generated over 35 years through the period of reform and opening—when Deng said it is glorious to be rich; when Deng said it’s fine for people to get rich first, and others will then get rich later—Xi Jinping’s response was to say, “We are now heralding a new era of common prosperity”, gòngtóng fùyù.

So the juxtaposition between these parameters of economic policy then became clear. That is why I’ve said in my opening remarks that Xi Jinping deliberately, ideologically, at that congress chose to move the centre of gravity of the Party’s economic policy towards the Marxist left.

Right now, here we are almost 10 years on from that, and we are in the long economic shadow of that ideological decision taken back then.

I will leave to one side the relative impact of COVID, which disrupted everybody’s economy, and most particularly the Chinese economy, given that’s where COVID came from in the first place, in Wuhan.

But if we were to extract the COVID factor from China’s economic performance and ask ourselves what growth has been like in the period since the ideological change, even on the official numbers, average growth has reduced to around 5 per cent from double digits.

Independent economic analysts would say that, in the last five to six years, despite the official figures being registered at around 5 per cent, the real figures are in fact closer to 2 or 3 per cent.

We might say: why is that the case?

The core reason is that you had a fundamental recognition on the part of the private sector that they had to begin to trim their sails. The private sector was no longer going to be allowed to run triumphant across the Chinese economy, as Xi Jinping feared these companies had become too large for the Party itself to control.

You will recall that it was not long after that you saw the largest platform companies—píngtái gōngsī—and a number of their chief executives being hauled in and reprimanded, disciplined and, in some cases, temporarily disappeared, as happened, for example, with Jack Ma from Alibaba.

And the message to the body politic, and the corporate body politic, was this: understand now, my friends in the private sector, you are working within the remit of Party control, as opposed to the previous 35 years, when it was indeed glorious to be rich.

The impact this has therefore had on private-sector behaviour in the period since COVID—and there was evidence of this even prior to COVID, in 2018 and 2019 before COVID broke out in 2020, and certainly once COVID restrictions were lifted by the time we get to 2022 and 2023—is the long afterwash of this deep ideological change in the way in which the Party views the role of the private sector.

The engines of China’s current economic growth

How do we best diagnose it today in terms of the data?

If you were to look today at the most recent data produced on the Chinese economy, both from the official numbers and from the unofficial analyses—which look at different matrices through which you analyse growth—point one: private domestic consumption within the Chinese economy is flat.

And representing such a huge slice of GDP, if you have a flat performance from your domestic consumers, let me tell you, it’s very hard to reconstitute the growth numbers from the other drivers of growth.

The reason for that is that consumers, having been through COVID, but also having seen other things happen in the economy and becoming more cautious about their futures, have now begun saving again at record levels.

Savings ratios in the Chinese economy have gone up, as private domestic consumption numbers have headed in the reverse direction.

So private domestic consumption, a major contributor to economic growth in any economy, either emerging or developed, has now been flat for the better part of half a decade or more.

Second, private fixed-capital investment—a second big driver of growth in most economies—is also flat.

The reason is self-explanatory: the individuals in the private sector I referred to before, who were investing big in their corporate futures in the past, were now receiving different signals from the Party centre about their future.

A third driver of growth, normally in any GDP matrix, is private residential construction. The residential construction sector in China has imploded completely in the last six years and continues to be in recession.

This has had profound flow-on effects for the rest of the economy. First of all, back to the good old consumer: most consumers had put their savings into residential construction, buying their classic investment property, only to see the value of those investment properties collapse—often to zero.

The second consequence of the collapse of the private residential construction sector has been felt through local government finance-raising, local government taxes and local government revenue-raising. This was the sector which generated most local income growth for the state, and therefore you’ve found in recent years that Chinese local governments are often not capable of paying the salaries of their workers.

So the profound implications of the collapse of the private residential construction sector continue to work their way through the Chinese economy today.

What, therefore, against those measures, is working in order to keep growth north of zero?

There are two answers to that.

The first is net exports.

If you look at China’s export performance around the world—in the United States, though that is now declining because of the tariff wall which has been constructed defensively in response to it; in Europe, where at present a tariff wall has been contemplated but not yet executed; and in Southeast Asia—China in the last 12 months has generated a US$1.2 trillion trade surplus with the rest of the world.

This is the most powerful engine room remaining in the Chinese economy today: net exports.

The critique of it that you hear in the United States, Europe and elsewhere is that China, because of suppressed or depressed domestic demand, is maintaining its production levels and, in fact, exporting that at subsidised prices to the rest of the world, thereby disrupting global supply chains and global production, and causing the reverberations we see today in German manufacturing and the loss of jobs in that sector and across industrial Europe.

This, however, is a single driving force in China’s current economic performance.

The other one is investment by the state: public investment in Xi Jinping’s techno-industrial vision for the country’s future.

AI and the techno-industrial strategy

This brings me to the question of how Xi Jinping views his techno-industrial vision for the future.

Artificial intelligence, in the Chinese context—and looking carefully at the way in which it’s reviewed in their ideological and policy literature—is seen as an overwhelming positive for China’s aggregate economic competitiveness and future in the world.

Whereas in this country, and around the democratic world, there is an emerging parallel debate about the risks presented across the spectrum by artificial intelligence—risks to individuals, psychosocial risks, employment risks, the security risks which arise from agents escaping from the sandbox of the type that we have seen most recently—this is not prominent in the Chinese literature.

What is prominent in the Chinese literature describing the AI revolution is how this will turbocharge China’s economic growth into the future.

In Marxist economic theory, the view is that we have four factors of production: land, labour, capital and technology—and now a fifth, as of 2019: data.

There was an early recognition that data of itself becomes a new latent force to drive the economy forward.

With the arrival of artificial intelligence, of course, there is an ability now to harness data for extraordinary economic applications across all industrial sectors.

If you read carefully how Xi Jinping conceives of this, he sees artificial intelligence and the algorithms alive within it, together with other new advanced technologies, as now providing this turbocharging device to lift total factor productivity across the entire economy, in every field of endeavour.

That is why, in large part, they are doubling down on this so hard through this massive campaign of public and publicly directed investment in this sector.

In fact, if you read the literature, they fully recognise, as Marxist economists, that the traditional advantage of liberal capitalist economies in the past has been their relative efficiency in the allocation of resources.

However, they believe they now possess a unique opportunity, as a centralised state, to deploy the new algorithmic powers available within artificial intelligence across the total production spectrum—and not just in goods, but prospectively in services as well.

This brings me to a broader point: why Xi’s literature on what he calls new quality productive forces, driven by artificial intelligence and other advanced technologies, represents for them not just a means by which to catch up with the United States across the AI stack; not just to keep pace with the US and the collective West in terms of where artificial intelligence has reached; but to now “leapfrog” the West, which is the term now used in the literature, and to achieve what is also described as a paradigm shift against Western economic models.

The conundrum faced by Marxist economists since the relatively humourless Adam Smith sat on the docks of Glasgow to observe merchants loading and unloading goods from the North American market—from which he ultimately devised The Wealth of Nations and his theory of price being determined in a marketplace by supply and demand—is that this has been a remarkably efficient allocative mechanism for scarce resources within an economy.

Marxist economists have long recognised this, including in China. In large part, that explained why Deng Xiaoping opened the door to price-based market economics in the period of reform and opening that I’ve described before, between 1982 and 2017.

The invisible hand, as described by Adam Smith, works mysteriously in an economy, allocating resources where there is an accentuation of demand or a problem of the depreciation of supply, and so setting the most efficient price.

This has presented a conundrum for Marxist economists from the very beginning, and for Chinese Marxist economists as well.

But this is where the literature becomes sharp and real in the current debate.

If I read it carefully, what the Party is now saying in its theoretical literature is that, quite apart from increasing total factor productivity within the Chinese economy as a consequence of AI and other advanced technologies, what we are looking at much more broadly across the entire economic paradigm is a superior macro-allocation mechanism for resources within the economy, which will be algorithmically driven.

No more invisible hand of the market. The explicit term now used in the literature—the Chinese Marxist literature, the Chinese ideological literature—is the visible hand of the state.

Therefore, the paradigm shift which is now emerging, in the literature at least, is this: we in socialist China believe that, through the arrival of this enormous change-generating set of forces, of which artificial intelligence is the core, we now have at our disposal for the first time in economic history an alternative to the free market for the efficient allocation of resources.

This is one of the reasons why I believe we should take ideology seriously, because all this is in the ideological literature—not yet in the policy literature and not yet, frankly, adopted by firms, corporations or state entities in the real marketplace.

But, as I said before, my observation of ideological change in China over the last 50 years is that ideological changes occur at the headwaters, and they feed into policy changes and behavioural changes later on.

And that, my friends, is where Xi Jinping’s definition of new quality productive forces, including artificial intelligence, now stands.

First, catching up with the United States and surpassing it in terms of total factor productivity growth, thereby turbocharging China’s current low growth levels into a new level of high growth.

And second, engineering parallel to that a game change—a paradigm shift—in terms of the ultimate economic orthodoxy which distributes resources efficiently within an economy.

The private-sector conundrum

There’s one conundrum, however, which even the ideological literature of the Chinese Communist Party recognises: AI and innovation writ large, across the advanced technologies, are happening primarily, but not exclusively, in the Chinese private sector.

And so therefore, how are we going to square the circle?

We need the innovation, enterprise, expertise and cutting-edge technological skills of this sector on the one hand. But on the other hand, we don’t want to return to the ideology I have just put into the past, which allowed this class of individuals within the country to become ever so powerful.

If I read the literature carefully, that is where the debate within the Party now stands: seeking to square that circle between these competing tensions.

Liu He, in the last Xi Jinping administration, famously said that the Chinese private sector represents more than 70 per cent of technological innovation. It provides more than 80 per cent of urban employment. It also contributes more than 50 per cent of overall Chinese tax revenue.

The ideological, political and policy dilemma faced by the current administration is therefore how to reconcile those tensions: ideology in one corner and, in the other corner, the self-interest of a private sector wishing to maximise profits, whose members will not necessarily find their daily inspiration to get out of bed and invent new things through having read another volume of Xi Jinping Thought.

The bet—and its vulnerabilities

To conclude, the reason why this debate is important, and why I thought of making it the centrepiece of what I said in this lecture this evening, is because where the Chinese economy goes now fundamentally determines the future of Chinese power in the region and the world.

Xi Jinping has made an enormous bet on his techno-industrial strategy.

He has said that this will transform China’s economic paradigm. He has said that it will also lift, in time, China’s presently languishing private domestic consumption within the economy. And he has said that, when the private sector gets on board, it will also contribute to a further generation of fresh growth in private fixed-capital investment.

Thereby, the growth conundrum that he’s confronted over the last decade is changed and solved as a consequence of his betting big on a techno-industrial strategy.

The final point is this: how do you pay for it?

Always an important question in politics. Always an important question in government, wherever you are.

And the answer so far is: we in China can navigate this period ahead on the condition that we continue to harvest a trillion-dollar-plus surplus in our export relations with the rest of the world—in the hope that the rest of the world doesn’t construct tariff walls in response to our subsidised industrial strategy.

So that is vulnerability number one.

Vulnerability number two is the Chinese consumer who, remember I said before, is saving more and more and more, so that the Chinese savings ratio is now reaching levels which we didn’t think were possible anymore.

Because Chinese savers are not investing in the property market anymore—their fingers have been burnt comprehensively—and because the stock market is not seen to be sufficiently stable or predictable in terms of providing a return, these savings are staying in very low-interest-earning deposits in the Chinese banking system.

It is that enormous volume of individual Chinese citizens’ bank deposits which is being drawn upon by the Chinese state, through a series of loan instruments—local, provincial and national—in order to give effect to the techno-industrial strategy that I referred to before.

Is that sustainable over time?

Perhaps. But that’s part of the big bet which Xi Jinping has made.

So how will this turn out? I’m not sure. But I think the beginning of wisdom in our analysis of these things, in Australia and elsewhere in the world, is to understand clearly what China’s strategy is.

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On this the 80th anniversary of D-Day, as we honour the greatest generation, let us all acknowledge afresh the price of freedom everywhere.

In the Atlantic.

In the Pacific.

And here is Hawaii, now the home of Indo-Pacific Command, where freedom’s price has also been paid in the greatest of measures.

The price of freedom remains eternal vigilance.

Just as the price of freedom remains continuing deterrence.

The United States, China and Taiwan have a deep and common interest in avoiding open military confrontation on the future of Taiwan – which The Economist described recently, accurately in my view, as the most dangerous place on earth.

That is because the risks of the general escalation of any such confrontation into an all-out war over the future of the island are very great indeed.

Furthermore, the economic costs, domestic political impacts, and unknowable geo-strategic consequences that such a war would generate would likely be of an order of magnitude that we have not seen since the Second World War.

In other words, whatever the outcome (an American victory, a Chinese victory, or a bloody stalemate), the world is likely to become a radically different place after such a war than it was before.

And that of itself should induce great caution on the part of all strategic decision-makers.

That is why two years ago before going back into government, I wrote a book entitled “The Avoidable War”.

It’s why, in large part, I accepted our Prime Minister’s invitation to come to Washington last year as Australian Ambassador, to make a small contribution to the big challenges we all now face.

I also acknowledge the important work done by analysts here in Honolulu, in DC, and around the world, both in and out of government, on the Taiwan challenge.

Much of our collective focus has been on how to deter China from launching a full-scale military invasion to take Taiwan by force.

There has been less attention, however, on the question of what the literature now generally refers to as “scenarios short of war”, their cumulative impact on our common objective of preserving the status quo across the Taiwan Strait, and the role of deterrence in responding to that – including deterring escalation.

What follows are some personal reflections on this important question for us all, doing so in my capacity as a China scholar and not as an official representative of the Australian Government.

Underlying US, Chinese, and Taiwanese Interests

While all three parties (the US, China, and Taiwan) might share a common interest in avoiding a catastrophic war over Taiwan, the underlying reality is that each is driven by different interests on how to achieve this within the framework of their wider national objectives.

The US

For the US, its core national interest lies in the retention of its global strategic primacy – militarily, economically, and technologically.

It also seeks to remain at the fulcrum of the global political, economic, and wider international system.

In doing so, the US seeks explicitly to respond to what it identifies as the ‘pacing challenge and most consequential strategic competitor’, both regionally and globally, that is China.

It also seeks more broadly to maintain the efficacy of the US-led international rules-based order, particularly when challenged by fundamental assaults on that order such as the Russian invasion of Ukraine, as well as other threats to peace, stability, and security, such as we currently see in the Middle East.

Furthermore, there is a growing recognition across the United States Administration that the US can no longer sustain the rules-based global framework that upholds its interests alone: that it must increasingly do so in partnership with its treaty allies and other strategic partners around the world.

Specifically applied to Taiwan, the US is committed to retaining the status quo. For the US, this is anchored in its three communiques with Beijing; the Taiwan Relations Act of 1979, which guarantees US arms sales to the island to secure its long-term defence; and the so-called “six assurances” from the United States when President Reagan reaffirmed to Taipei that this Act would not change; that there would be no end date for these arms sales; that the PRC would not be consulted on them; that the US would not seek to play a role in any mediation effort between the PRC and Taiwan; that there would be no change in the US’ position over Taiwan; and that the US would not pressure Taiwan to enter into negotiations with the PRC.

More particularly, the US does not support an independent Taiwan, while maintaining a posture of “strategic ambiguity” on the question of whether or not it would militarily defend Taiwan, in order to encourage restraint on both sides of the Taiwan Strait.

At the same time, the US recognises that if China successfully militarily annexed Taiwan, it would have an immediate, profound, and potentially irreversible effect on the perceived reliability of US alliances worldwide, together with the wider political credibility of the United States as a future global actor.

These are the underlying reasons why for the United States, the psychology and physical machinery of military deterrence, and the military and industrial capacity to fight and win a war initiated by China across the Taiwan Straits if deterrence was to fail, with both these elements underpinned by the political will to do so, is fundamental to future strategic stability.

These are the essential elements of an effective deterrence strategy.

Operationalising these represents the day-to-day challenge confronting America’s political, strategic, and military leadership.

These are lonely, difficult, and conceptually challenging jobs.

They are materially relevant to all US allies and strategic partners, irrespective of their geography, given the global consequences that are at stake, therefore requiring our collective engagement.

Just as they remain critical for the wider international community, given their collective interest in sustaining regional and global strategic stability in a world which has long forgotten what it would be like to navigate and survive a genuinely global war.

Effective deterrence, therefore, remains essential business for us all in preserving our precarious peace.

Taiwan

As for Taiwan, as a new and vibrant democracy where much remains politically contested, it is sometimes difficult for Taipei to define with precision its own core and continuing interests.

However, at least over the past decade or so, despite all the sound and fury of Taiwanese domestic politics, a number of common principles emerge from the political noise.

First, the Taiwanese people have now on three successive occasions voted for a government which rejects political unification with the mainland.

Second, when we look at Taiwan’s three major political parties, while some are more ambiguous than others, none of them now advocate a specific model for unification.

Third, Taiwan’s governing party, the historically pro-independence Democratic Progressive Party (DPP), has now embraced a policy committed to maintaining the status quo on Taiwan’s current political status: i.e. no longer moving toward any form of de jure independence, while at the same time rejecting any form of political unity with the mainland, claiming that in reality Taiwan effectively operates already as an independent entity.

Fourth, Taiwanese public opinion polls also now overwhelmingly support maintaining the status quo – 91 per cent in a poll last year – rejecting both the extreme positions of independence on the one hand or unification on the other, whatever their preferences may be for Taiwanese domestic politics, and whatever type of economy, society, and environment they may want on the home front.

And finally, Taiwanese opinion polls, particularly since the Russian invasion of Ukraine, indicate a rising public commitment to defend Taiwan if attacked, hovering between 65 and 75 per cent of the population in recent years – higher than that of Ukraine before Russia attacked^[1].

At the same time, polls in the last year show most Taiwanese are still sceptical as to whether China would ever attack (although less sceptical since Ukraine), as well as having a divided view on whether the US would in the end come to Taiwan’s military aid in that event, with only 50 per cent believing the US would militarily intervene^[2].

All these factors have given rise to the Taiwanese administration’s decision to begin the process of increasing its defence budget after decades of attrition, modernising its military capabilities and reforming its military doctrine to deal with the possibility of unilateral Chinese military action, including reintroducing military conscription, enhancing its cyber defence and wider economic resilience, and rebuilding Taiwan’s civil defence.

Taken together, these point to Taipei seeking to avoid Chinese red lines on its future political status, while at the same time recognising that this of itself will be insufficient for Beijing’s demand to see substantive progress on unification, hence Taiwan’s belated recognition of the need to build its own national deterrence capabilities, although not as rapidly as the US would like.

China

Xi Jinping, of course, rejects Taiwan’s approach, as recently articulated in his hardline political and military response to President Lai’s inauguration on 20 May.

It’s important, however, to remember that apart from unification with Taiwan, Xi also has a large number of other major national objectives he needs to prosecute, although we would be foolish to diminish the significance he attaches to his unification project.

Xi’s wider priorities include:

• The political durability of his own regime and his own personal hold on power with a now slowing economy;

• Maintaining overall national unity against the wider forces of separatism;

• Continuing to grow the economy while maintaining ideological and political control over the private sector;

• Reducing environmental damage, pollution, and climate change, given their impact on the underlying social contract;

• Expanding and modernising the Chinese military to meet multiple future contingencies, not just Taiwan;

• Managing China’s 14 neighbouring states to make them politically compliant and economically dependent on Beijing;

• Extending China’s maritime periphery to the east to push the United States back to the third island chain if they can;

• Extending China’s continental periphery to its west to maintain a benign relationship with Russia, Central Asia, and Central Europe where China would be the dominant power;

• Leveraging the Belt and Road and other such initiatives to entrench Chinese trade, investment, and foreign policy power and influence across the Global South; and

• With the support of the Global South, reform the norms, values, and institutions of the international system in a direction more compatible with Chinese interests and values - in a manner which seeks to invalidate the role of US alliance structures in global security, to legitimise a new form of a state capitalist development model, and to undermine the idea of universal civil and political rights as defined in the 1948 Universal Declaration in favour of culture-specific rights that do not challenge the power of the state.

Xi’s Taiwan strategy is anchored within several of these core interests, but not in all of them.

Xi has nonetheless been relatively plain about his intentions on Taiwan.

He has stated clearly that what he describes as “the great rejuvenation of the Chinese nation” cannot be achieved without unification with Taiwan.

He has also said that national rejuvenation is to be achieved by 2049, which means that, at least according to Xi Jinping, we are all now on a 25-year glide path.

In 2015, he launched a military reform and modernisation campaign to make the People’s Liberation Army (PLA) by 2027 into a world class fighting force capable of “fighting and winning wars” – with a new set of Taiwan-focused military regions, a new capacity for joint operations, and a new, fully “informationised” warfare doctrine.

Since 2022, China has also changed its longstanding military exercise patterns so that PLA airforce violations of the median line in the Taiwan Straits and Taiwan’s claimed air defence identification zone have now become more routine and more numerous, together with repeated naval drills around the north, south, west and, in a new development, to the east of the island.

Then there is the question of China’s “gray zone” activities against Taiwanese offshore islands, their surrounding seas and maritime assets, where China is using its coastguard against Taiwanese vessels, impeding the operational space for the Taiwanese coastguard, and incrementally asserting its sovereignty claims.

Xi has made plain that he would prefer to secure Taiwan’s unification by a combination of peaceful political means, reinforced by economic rewards and punishments, and a relentless campaign of political, economic, and diplomatic pressure.

But if this approach fails, as is likely given the underlying condition of Taiwanese public and political opinion, Xi has made it clear that the military option would still be on the table to unify Taiwan by force.

In other words, Xi’s Taiwan strategy is relatively clear, although his more detailed timetable of course is not.

This is where we are all left to speculate.

On this, we would be unwise to ignore the question of Xi’s own sense of personal and political mortality as someone who turns 71-years-old this month.

Indeed, it is not unreasonable to assume that if Xi wishes to emulate Mao by achieving final national unification while he is still active in political office, then he is more likely to seek to do so in the decade ahead – i.e. before he finds himself in his 80s.

Xi’s political rhetoric directed towards Taiwan has also subtly changed over his first decade in office.

The high point was the 2015 meeting in Singapore between Xi and then-Taiwan President Ma, when Xi stressed only the so-called 1992 Consensus as the basis for progress on unification.

Now Xi insists that Taiwan’s leaders explicitly accept Beijing’s one-China principle and ‘one country; two systems’.

Furthermore, while China has always decried Taiwanese independence, Xi has expanded the definition of what that means, by now saying that China will not tolerate ‘incremental independence’ (渐进台独).

On top of these subtle rhetorical shifts, China’s military posture has also changed.

Indeed, we would be foolish to ignore the increasing clarity of China’s military signalling, including the pattern of its most recent military exercises, Joint Sword 2024A, following the May inauguration.

The fact that this exercise was called ‘A’ also suggests that China intends more like it in the year ahead.

Joint Sword 2024A was designed to simulate a blockade of the island and, according to Beijing, “to punish” the Taiwanese for their democratic choice in their elections.

It built on two earlier exercises: Joint Sword, the exercise that followed former President Tsai Ing-wen’s April 2023 transit of the United States; and the unnamed military exercises that followed then-US Speaker Nancy Pelosi’s August 2022 visit to Taiwan, which was the first time the PLA practiced encirclement drills around Taiwan.

Both the 2022 and 2023 exercises simulated a blockade and also included live-fire components designed to simulate an attack and invasion.

Xi Jinping’s accumulating military capacity and his political intentionality to take Taiwan by force, if he judges he can, is therefore relatively clear.

But it is equally clear that Xi would prefer to achieve his political objective by non-military means.

What remains unclear is how much Xi’s overall risk calculus is determined by what he perceives to be the deterrent effect, war-fighting capabilities, and political intentionalities of the US, Taiwan, and US allies.

As I have written before, while Xi Jinping might be a risk taker, he is a calculated risk taker, rather than a reckless risk taker.

That is why a central question for our time, if we are to avoid war across the Taiwan Straits, is to understand how Xi Jinping actually interprets the deterrence strategies of the US, Taiwan itself, and US allies and strategic partners.

Second, what, therefore, constitutes the optimal content of what the US now calls its overarching strategy of integrated deterrence towards Taiwan.

And third, how these combined considerations play out in Xi’s overall calculus given the range of other national interests he is also required to calibrate.

Defining Integrated Deterrence

In April this year I sought, in a lecture at the US Naval Academy in Annapolis, to define what is meant by this broad framework of integrated deterrence.

In my Annapolis lecture, I listed the various components of an effective integrated deterrence strategy.

Each is complex in its own right. Together, however, they constitute a strategy.

These were:

• Clarity in communication to the Chinese leadership that neither the US nor Taiwan have any interest in changing the status quo in terms of Taiwan’s international political personality, thereby avoiding long-standing Chinese red lines on independence. This should be accompanied by a parallel clarity of communication that the US and its allies have no interest in changing the political status quo in China itself, notwithstanding China’s Marxist-Leninist political system, as this is a matter for the Chinese people alone. This represents a broader red line for Beijing, although not directly linked to Taiwan.

• Second, the capacity of the Taiwanese administration, military, and civilian population to fight, to degrade an incoming Chinese force in the air-sea gap, to retard its advance on the island itself, and mindful of Ukrainian precedents, to retain political control, all in order to provide an effective first line of deterrence;
  

• Third, the power and predominance of the US military across all five war-fighting domains to convey an effective deterrent message to Beijing over Taiwan (and, for deterrence to be credible, the US military’s capacity to fight and win if deterrence fails);

• Fourth, the political will of any future United States administration and Congress to use its military for these purposes;

• Fifth, the particular role of nuclear deterrence, particularly given China’s decision to expand its force and to potentially abandon its long-standing doctrine of non-first use;
  

• Sixth, the financial, economic, trade, investment, and US dollar dimensions of integrated deterrence and the capacity of these to impose both perceived and actual costs on the Chinese system in the event of unilateral military action;
  

• Seventh, the rapidly unfolding technological dimension of deterrence, particularly in AI, and its impact on an increasingly integrated civilian and military battle space;
  

• Eighth, the foreign policy aspects of deterrence in the eyes of the rest of the international community, particularly given the potential human and economic cost of a Chinese military invasion of Taiwan, and its impact on international public opinion, including the Global South;
  

• Ninth, the role of US allies and strategic partners in the operationalisation of integrated deterrence; and
  

• Finally, and parallel to the overall deterrence equation, is how Xi Jinping views each of these elements, and how he assesses them both in aggregate, and in the context of his other national priorities. In this, we also need to be particularly mindful of not simply “mirror imaging” the CCP by automatically projecting onto the Chinese leadership what we assume should (and therefore would) be Beijing’s response to a given set of deterrent actions, rather than what those reactions would actually look like in practice. This is arguably the hardest part of effective deterrence, but it is by no means impossible to make judgements about.

Here in Honolulu, the home of Indo-Pacific Command, I hope to look at the first of these elements – namely the extent to which we can assess whether Taiwanese and American assurances on Taiwan’s political status are having any moderating or deterrent effect on China’s posture towards the island.

If not, what strategy is China now embarking upon, short of preparation for an actual invasion, to achieve its political objectives in relation to Taiwan?

And what is the role of deterrence in responding to such a strategy?

The Meaning of “Maintaining the Status Quo”

The key to Beijing’s red line on Taiwan’s political status is China’s fear that Taiwan will become an independent state, and be effectively recognised as such by the international community, thereby destroying the possibility of unification with the Mainland.

This in turn is based on Beijing’s insistence that any political dialogue between Taiwan and the Mainland must be based on the so-called “1992 Consensus” – an ambiguous arrangement with a complex textural history, broadly based on the principle of “one China”, albeit with differing interpretations of what that means to each side.

Because the DPP, unlike the KMT, remain opposed to the ‘one China’ element within the 1992 Consensus, Beijing has rejected all official dialogue with the Taiwanese administration since 2016.

The DPP’s 1999 Resolution on the Future of Taiwan and subsequent statements said that Taiwan was already independent and so it had no need formally to declare it.

President Tsai Ing-wen took this concept further – continuing to reject the 1992 consensus, while now conceptualising the DPP position on Taiwan’s status as one committed to “maintaining the status quo”.

This position has been sustained by President William Lai in his 20 May inauguration speech. For those of us who seek stability across the Taiwan Strait, that is welcome. It stays well within China’s formal red line.

But at a different level, Beijing has made plain to foreign interlocutors that avoiding a formal act of independence is not sufficient.

What is necessary in Beijing’s view is progress towards unification through negotiations based on Xi’s re-articulation of the 1992 Consensus precondition for such negotiations to take place.

Or as other Chinese government representatives have made plain, maintaining the status quo might sound acceptable to the United States, but it is unacceptable to Beijing as China perceives Taiwan’s ongoing and growing autonomy to be intolerable.

In other words, far from being relieved that the DPP some time ago stepped back from the brink of any formal declaration of independence, Beijing is signalling loud and clear that its political objective remains to force Taiwan into negotiations on its preferred “one country-two systems” model that it has used for Hong Kong.

It is important that the international community understands that while William Lai has uttered the magic words “maintain the status quo” and has also made reference to the “Republic of China Constitution” as the underpinning legal framework for his presidency (of itself, also important from Beijing’s “one-China” policy perspective), these do not alone satisfy the PRC.

Indeed, given the continuing impasse over the 1992 Consensus, Beijing will conclude that Taiwanese self-perceptions of its autonomous status and international perceptions of the same will become irrevocably entrenched.

If this is so, and now that Beijing’s main hope, the KMT, has lost yet another election, and as time, from China’s perspective, begins to run out, we are beginning to see a change in Chinese strategy towards what it defines as the “Taiwan problem”.

That does not necessarily mean preparation for an imminent invasion, given the extraordinary risks that such action would entail, although such contingencies can never be ruled out.

Rather it’s more likely to explain the growing recourse to a multi-dimensional “gray zone” strategy over the past 18-months or more, aimed at applying new forms of pressure on Taiwanese and international public opinion to force Taipei to the negotiating table.

Is China Now Changing its Strategy on Taiwan

For these reasons, we should not assume that China is somehow locked into a static strategy on Taiwan.

Indeed, the evidence suggests that while China’s strategic objective is constant, its tactical approach is increasingly dynamic.

And this explains in part the recent and rapid increase in multidimensional gray zone pressure being applied to Taiwan.

This also appears to be the assessment of William Lai who stated in his inauguration address that “China’s military actions and gray-zone coercion are considered the greatest strategic challenges to global peace and stability.”

Importantly, there is nothing preventing an accelerating, multi-dimensional “gray zone strategy” from folding into a broader blockade or even military invasion if gray zone measures fail to procure their desired political end-state in Taiwan itself.

In an important article by two of America’s foremost China-Taiwan analysts, Jude Blanchette and Bonnie Glaser, a “gray zone” is defined as the “contested arena that lies between routine statecraft and open warfare,” in which an actor probes for advantage and gains without “crossing a threshold that results in open war.”

Blanchette and Glaser go on to argue that “the simplest way to conceptualise it is as a political strategy that seeks economic, military, diplomatic, or political gains without eliciting a costly and direct response from an opponent.”

There are also other related terms of art in this area, such as measures “Short of War” as used recently by a landmark study on China and Taiwan by a team led by Dan Blumenthal from the American Enterprise Institute and the Institute of War Studies.

All three authors point to an emerging combination of political, military, diplomatic, economic, and cyber measures where the objective is to achieve a psychological, attitudinal and then behavioural change on the part of Taiwanese public and political opinion.

According to the authors, these include intensifying political assaults by Beijing to de-legitimise Taiwanese political leaders opposed to unification.

They include intensifying naval, air, coast guard, and other intrusions across the median line, Taiwan’s 24-mile contiguous zone and in and around Taiwan’s offshore islands to demonstrate that the Taiwanese administration, in the eyes of its people, is increasingly incapable of managing Taiwan’s claim to sovereignty.

They embrace punitive economic measures (well short of a blockade) aimed at impeding Taiwanese trade, investment and other national income, all in cost-of-living sensitive areas, in order to demonstrate to the broader, more a-political Taiwanese voting public their vulnerability to coercive measures of this type.

During her own recent tenure, President Tsai Ing-wen already pointed to mounting cyber intrusions into Taiwan’s economic and communications infrastructure, again with the intention of demonstrating to the Taiwanese people their acute vulnerability to systems collapse against an integrated cyber attack.

Diplomatically, China’s existing and successful approach of rapidly reducing the number of Taiwan’s diplomatic partners around the world (from 21 to 12 in eight years) will continue.

As will Beijing’s vigilance in seeking to reduce Taiwan’s international space, including its involvement in multilateral forums such as the World Health Assembly.

A further example of this strategy of political and diplomatic isolation is China’s efforts since its 2022 Taiwan White paper to increasingly conflate its one-China principle with UN General Assembly Resolution 2758 of 1971. This is the resolution which switched the PRC’s accession to the China seat at the UN in place of what the UN then described as ‘the representatives of Chiang Kai-shek’ – although the resolution made no explicit reference to Taiwan’s status, or indeed the Republic of China on Taiwan.

China is therefore seeking to use Resolution 2758 to resolve for itself and for all time the international legal status of Taiwan as being “part of China”, consistent with Beijing’s interpretation of its “one China principle”.

Given China’s growing political constituency across the Global South, the UN is providing a useful forum for Beijing to leverage this argument more widely across the international community.

Indeed, China’s Defence Minister again made reference to this in his remarks to the Shangri La Dialogue in Singapore last week.

This is generating new momentum in China’s efforts to constrain Taiwan’s ability to engage other multilateral institutions, as well as its ability to expand its bilateral engagements with other states.

Its wider purpose appears to be to advance a broader claim in international law that because Taiwan is part of China, Beijing can therefore use any range of measures in the future to respond to what it might define as secessionist or insurrectionist activities.

Beyond these growing challenges to Taiwan’s political status, Blanchette and Glaser also point to targeted disinformation and psychological warfare campaigns aimed at the US-Taiwan relationship in particular. They refer to the following as examples:

“Chinese spokesperson Zhu Fenglian claimed that the United States was preparing to “abandon” Taiwan after turning it into a “minefield” and “ammunition depot.” Still another narrative held that the United States is seeking to provoke a war in the Taiwan Strait in order to protect its regional influence from growing Chinese power, and that Taiwan should be wary of becoming America’s cannon fodder…. This messaging campaign is facilitating the spread of “American skepticism” (疑美论) and an accompanying decline in belief that the United States would come to Taiwan’s defence, as measured in a number of recent Taiwan polls.”

For those of us who have followed Chinese “short of war” or “gray zone” strategies in both the South and East China Seas, there are some similarities in approach.

Japan has seen this with the intensity of PLA Airforce sorties around Senkaku-Diaoyudao.

We have also seen China assert non-lethal coercive actions in relation to the Second Thomas Shoal and the Philippines.

With Taiwan, however, there appears to be a growing intensity across the full range of “gray zone” activities.

The Role of Deterrence

The question for the international community is how to respond to this rapidly unfolding change in China’s Taiwan strategy.

China’s “gray zone” measures are likely to intensify beyond those which we have seen so far, given the recent re-election of the DPP.

That is not to say that China has somehow suspended its efforts to build the military capabilities necessary to take Taiwan in the future by using overwhelming military force if it chose to. Those efforts continue.

But there is no incompatibility between these two approaches from China’s perspective. China’s political strategy for unification with Taiwan has always had a military component.

Indeed, these two approaches are entirely compatible if the cumulative effect of a sustained, multi-dimensional gray zone campaign against Taiwan is to reduce Taipei’s deterrence and war fighting capabilities, as well as its political, social and economic resilience, which is also a core part of the overall deterrence equation.

In terms of a wider strategy of integrated deterrence on the part of the US and its allies, our common aim is preserving the status quo across the Taiwan Strait as part of a wider objective of sustaining long-term strategic stability in the Indo-Pacific region.

Deterring China from launching military action against Taiwan is the cornerstone of this strategy.

The question that therefore arises for all of us is where to locate, within this wider framework of integrated deterrence, China’s emerging menu of strategic measures that remain “short of war” and “short of invasion” but which share the same political objective, which is to force Taipei to capitulate?

The AEI/IWS report of April 2024 offers one detailed study of the emerging shape of what it describes as China’s possible “course of action” for the four years ahead, leading up to the 2028 Taiwanese elections as the next major political inflexion point.

The study also points to a range of policy recommendations for the US, Taiwan, and others in response to such a strategy, as well as how to deter the further intensification of this strategy, by drawing a clear linkage between identifiable gray zone actions on the one hand and a series of calibrated policy responses on the other. Rather than no response at all. Which presumably is Beijing’s current expectation.

These are matters on which governments from across the region and the world will now increasingly engage.

Of course, if in the future, the Taiwanese body politic chose of its own volition to engage in a fresh round of negotiations with Beijing on easing cross-strait tensions, new forms of economic cooperation and new approaches to the political relationship between them, that is entirely a matter for the Taiwanese people.

Indeed, all our interests would be served by breaking the 1992 Consensus impasse so that effective dialogue can recommence after nearly a decade of silence. Silence accentuates tension; talking can reduce it.

But there is a difference between a voluntary, agreed approach to negotiations, as opposed to a coerced one.

And from Beijing’s own perspective, there is also the salutary lesson that coercion rarely works in international relations.

Indeed, it can produce the equal and opposite reaction to that which is sought as local populations literally rally around the flag and dig in even harder.

Conclusion

We live in the decade of living dangerously.

For Beijing, strategic reassurance that Taipei and its international partners will sustain the status quo in relation to Taiwan’s future political status is essential for strategic stability.

But with Xi Jinping’s evident frustration at Taiwan’s ongoing autonomy, this reassurance alone, while it is necessary, is not sufficient to preserve that stability.

It needs to be part of a much wider equation of integrated deterrence which will command all our efforts for the decade ahead if we are to successfully preserve the peace.

^[1] https://indsr.org.tw/en/respublicationcon?uid=15&resid=2996&pid=5329

^[2] https://taiwanpolitics.org/article/92170-core-public-attitudes-toward-d…

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I was recently in Austin, Texas, and I had the opportunity to spend some time at the LBJ Presidential Library. I have long been an admirer of LBJ, notwithstanding the difficulties he faced in his political career, particularly in relation to the Vietnam War.

LBJ, however, was a man of courage. And he joins that long line of US Presidents who had worn the uniform of the US Navy before themselves becoming Commander in Chief – JFK, Nixon, Ford, Carter, and HW Bush.

While at the Library, I discovered something of LBJ’s war service record, he having joined the US Naval Reserve in 1940, before enlisting for active duty two days after Pearl Harbor in 1941, then seeing active service in my own country of Australia and in Papua New Guinea.

General Douglas Macarthur found LBJ’s presence at his field headquarters in Brisbane (my own hometown) to be a positive pain in the you-know-where. But he tolerated Johnson, not least because LBJ at that stage had been a long-serving US Congressman from the great state of Texas. And when he heard of LBJ’s participation in reconnaissance flights over enemy-occupied Papua New Guinea when much of the aircraft he was in was blown away, he reversed his tune and promptly awarded LBJ the Silver Star.

I was taken in particular while visiting the Library with a singular, pithy observation by the 36th President taken from his State of the Union in January 1964, who said: “We must be constantly prepared for the worst, and constantly acting for the best. We must be strong enough to win any war and we must be wise enough to prevent one.”

There is something of an old fashioned, almost Lincolnian farm-boy wisdom about LBJ. Because in that single aphorism, from that single reflection, he
sums up the central dilemma that brings us together in this conference today some 60-years later: namely, how to deter a Chinese invasion of Taiwan and how to do so wisely and in a manner which does not provoke Chinese unilateral military action in the first place.

The Importance of Military Dialogue

Thank you, therefore, for inviting me to deliver this lecture to the annual Foreign Affairs Conference of the US Naval Academy.

This is my second time speaking at the Academy.

I have to confess, I’ve also spoken previously to the Army at West Point, as well as at the National Defence University in Washington DC.

I’ve also been privileged to address a range of private gatherings with various arms of the US military and intelligence communities over recent years on many of the complex questions concerning China’s rise.

As a result, over many years now, I have been constantly impressed by the calibre of the US military leadership, those who have occupied distinguished positions from Chair of the Joint Chiefs, the individual service chiefs, and much nearer to home in Australia, the Indo-Pacific Command or, for those of a certain age such as myself, what was once called PACOM.

So, I begin my remarks today by saluting your service as those who proudly wear the uniform of United States Navy, with whom the Royal Australian Navy has been working together, both in peace and in war, over the better part of a century. Or indeed, those of you serving in other militaries from our friends and partners around the world.

For the record, over many years now, I have also spent time in China, speaking to various gatherings of the Chinese military.

As a student of China and Chinese language for nearly 50-years now, I’ve had opportunities to speak at the National Defence University in Beijing, the Xiangshan Forum, as well as the People’s Liberation Army’s Annual Conference on Sun Tzu’s ‘Art of War’ in Qingdao.

I was able to do much of this when we lived in happier political and geo-political times. In more recent years, as you will all understand intimately in this gathering, it has become much more difficult.

Although I have always been of the view that it is much better to talk than not to, particularly in the case of the military, not least because it is the armed forces of the two countries that ultimately put themselves in harm’s way, not the political class who direct them – and as Australia’s Foreign Minister Penny Wong said in a speech earlier this week, the circumstances we face only reinforce the need for militaries to be in contact.

The Intellectual Legacy of Sun Tzu

Those of you familiar with Sun Tzu’s ‘Art of War’ will know that it is one of the seven great Chinese military classics.

These classics are imbibed by most of China’s political and military elite. In the case of Sun Tzu’s ‘Art of War’, the scholarship generally concludes that it was written sometime in the warring states period in China’s pre-imperial history [475BC to 221 BC] and represented a military guide to a number of China’s contending kingdoms – before the Kingdom of Qin finally prevailed in 221 BC, thereby establishing China’s first unified empire under Emperor Qin Shihuang.

When I addressed the Sun Tzu Conference in Qingdao nearly ten years ago, just after leaving the office of Prime Minister in Australia, I spent time, in particular, emphasising Chapter 1, Verse 1, of the ‘Art of War’, which states:

“War is of vital importance to the state. It is a matter of life and death. A road either to safety or to ruin. Hence it is a subject of enquiry that can on no account be neglected.”

Last weekend, when preparing for this lecture, I looked back at my 2014 text and saw that I spent much of the time analysing the core elements of the ‘Art of War’, including such classical Chinese precepts as the arts of feint and deception, as well as the ultimate desirability for political leaders and military commanders to “win without fighting”.

I was at pains to remind our Chinese audience that these precepts were no longer national secrets. I said they were now widely studied across the western academy. They therefore had entered the realm of universal military art and science, in the traditions of both Machiavelli and von Clausewitz in the West.

I nonetheless concluded my remarks to that Qingdao Conference by underlining one of the lesser-known conclusions from Sun Tzu’s ancient text.

Quoting from Sun Tzu Chapter 12, Verses 21-22, it states that:

“But a kingdom that has once been destroyed can never come again into being, nor can the dead ever be brought back to life…hence the enlightened ruler is heedful, and a good general full of caution. This is the way to keep a country in peace and an army intact.”

In other words, Classical Chinese strategic thought tends to exhort caution rather than reckless risk.

These are sobering reflections from the ancient sage, both for Chinese and American audiences, as we approach the great subject of today, which is the future of the United States, China, and Taiwan.

Purpose of the Lecture

Ten years after making those remarks in Qingdao, the year after Xi Jinping had come to power, we are now well into the second decade of Xi’s rule.

We now confront much starker strategic circumstances than we did back then, although if we look back, there were already emerging trend lines.

Today, we are confronted afresh with the great questions of history: namely how to prevent a war which none of us want and, how to fight such a war if indeed we must.

And in our examination of deterrence, these are opposite sides of the same coin.

Today, I’d like to address what I judge to be the central question of our time. Namely, how do we deter Xi Jinping from undertaking unilateral military action against Taiwan.

I want to discuss what we mean by deterrence as a concept, both as defined in the US literature as well as articulated through our own doctrinal statements in Australia.

Second, I want to describe what I see in China’s contemporary literature concerning its own strategy for the future of Taiwan.

Third, I’d like to discuss what integrated deterrence actually means in relation to Taiwan, if in reality and not just in theory we are going to be successful in deterring what would otherwise be a war of truly catastrophic proportions between the world’s two largest economies and militaries, and one with unknowable geostrategic, geoeconomic and geopolitical consequences for the rest of the century.

In doing so, my disclaimer is that these are very much my own views as a China analyst, rather than necessarily reflecting those of the official position of the Australian Government. 

Understanding the Concept of Deterrence and Integrated Deterrence

The single most significant development in recent times in terms of overall US strategy towards China has, in my view, been the US National Security Strategy of November 2017.

You will recall that this was when the US formerly replaced a doctrine of strategic engagement with one of strategic competition as the central organising principle governing its overall relationship with the PRC.

In many respects, this represented a belated recognition of the underlying nature of the US-China relationship as it evolved since the earliest days of Xi Jinping.

Certainly, that is the realist prism through which China views the US relationship, irrespective of the sunny, declaratory language that China may prefer to use to describe the relationship.

Indeed, strategic competition is very much the substance of the relationship when we carefully observe China’s operational behaviour across most policy domains over the better part of a decade.

What is remarkable about the 2017 document is the fact that it has now been embraced on a bipartisan basis, and across multiple US strategic policy documents in the nearly seven years since then, thereby providing a remarkable degree of strategic continuity, notwithstanding the significant changes and continuing partisan debates within US politics.

Within this frame of strategic competition, the US, through the national security and defence strategies of both the Trump and Biden Administrations, has also embraced fully the concept of deterrence as the principal mechanism to prevent war with the PRC over Taiwan, which successive documents have now described as “the US pacing challenge”.

Under the Biden Administration, we also saw the introduction of the concept of integrated deterrence through the 2022 National Defence Strategy. This document outlined the broad conceptual content of this idea across all military domains, non-military domains, as well as the full spectrum of potential conflict across peacetime, grey-zone, and up to and including direct, kinetic engagement.

It is to this concept of integrated deterrence as it relates to China and Taiwan that I will return later in this lecture.

Australian Strategic and Foreign Policy Doctrine

Deterrence is also a concept readily embraced across Australian strategic, defence and foreign policy doctrine.

In the Australian Defence Strategic Review of November 2023, deterrence is defined as compelling an actor to defer or abandon a planned strategy or activity by having in place steps or responses to change its risk assessment, and therefore its decision-making.

The document states that deterrence can be achieved through raising the costs or reducing the benefits to an adversary through denial or dissuasion or punishment.

Importantly, it acknowledges that deterrence exists in the “state of mind” of a would-be adversary, thereby making the credibility of deterrence especially important if it is to have any prospect of actually changing real behaviour by a would-be adversary.

The Defence Strategic Review is also clear in the breadth of deterrence across five domains: maritime, land, air, cyber and space.

Furthermore, it underlines the fact that such a deterrent effort requires a “whole of government framework” and relies, in turn, on harnessing all elements of national power.

Speaking at the ANU National Security College Conference earlier this week, the Australian Foreign Minister spoke about the need to deploy Australian national power to ensure that the perceived costs and risks of an adversary are greater than any perceived benefit.

She made clear that this requires not just an ability for Australia to be able to defend itself and have the resolve to do so, but more broadly, to have the national resilience necessary to withstand, endure and recover from any significant external disruption, thereby making Australia a harder target and less susceptible to various forms of coercion.

The Foreign Minister also made plain that without credible military capability, the efficacy of diplomacy is invariably diminished. Diplomacy plays an important role in framing the calculus each country faces. Diplomacy signals intent, and even red lines.

Australia’s new concept of National Defence, outlined in the forthcoming inaugural National Defence Strategy, argues that as we seek to maintain peace in our region, our nation’s front line is diplomacy.

What the Minister said earlier this year also made clear that while Australia worked towards maintaining the conditions of peace through diplomacy, we also play our part in “transparent, collective deterrence of aggression”.

The Minister noted that across the region “we see military powers expanding” and that Australia had a responsibility to “change the calculus of any potential aggressor so that no state concludes that the benefits of conflict outweigh the risks”.

The Foreign Minister has made plain that “our foreign and defence policies work together to make Australia’s contribution to the strategic balance of power that keeps the peace in our region” and that this was “a balance where strategic reassurance through diplomacy is underwritten by military deterrence”.

The Foreign Minister has also observed “that our foreign and defence policies are two essential and interdependent parts” of Australian influence in the region and the world, and that together “they make it harder for states to coerce other states against their interests through force or the threatened use of force”.

She stated that “combined, our foreign and defence policies contribute to the strategic balance of power that keeps peace in our wider region”, noting earlier statements by the Australian Defence Minister and Deputy Prime Minister that “deterrence is not an alternative to cooperation, because they are in fact mutually reinforcing”.

On the wider Indo-Pacific region, the Foreign Minister has said that “countries want a region that is peaceful and stable, and that means sufficient balance to deter aggression and coercion, a balance to which more players – including Australia – must contribute if it is to be durable”.

To this, our Deputy Prime Minister and Defence Minister has added that in the Indo-Pacific, “Australia will need to contribute to a more effective balance of power to avoid a catastrophic failure of deterrence”.

On the specific question of China and Taiwan, the Foreign Minister has been equally explicit:

“A war over Taiwan would be catastrophic for all. We know that there would be no real winners. And we know that maintaining the status quo is comprehensively superior to any alternative. It will be challenging, requiring both reassurance and deterrence, but it is the proposition most capable of averting conflict and enabling the region to live in peace and prosperity”.

In terms of reassurance, I believe this is primarily about three things.
The first is being clear-cut in our communications with Beijing that neither the US nor its allies have any interest in overturning the Chinese political system, given that China’s governance is entirely a matter for the Chinese people themselves – although this will never cause us to resile from our view on universal human rights norms as anchored in existing multilateral covenants to which China too is a signatory.

Second, that neither the US nor its Allies will support or condone, let alone encourage, a Taiwanese declaration of independence, but instead support the status quo.

And third, that mutual reassurance could be enhanced between the militaries of both sides through effectively operating guardrails, or what the Foreign Minister has described as preventive architecture, that would lessen the risk of crisis, conflict, and war by accident, arising from collisions between the naval and air assets from China, the US, and US allies in the region.

In summary, the Government of Australia has a realist, balanced, and well-developed concept of what deterrence means as an operational concept in Australian foreign and strategic policy, and in partnership with our friends and allies.

Chinese Strategic Intentions

Chinese strategic intentions in relation to the Indo-Pacific are best encapsulated in Xi Jinping’s concept of the great rejuvenation of the Chinese nation.

This is not only a concept which deals with China becoming a global economic superpower.

It is also about China being a military superpower, armed with a “world-class military”.

Furthermore, it is about China successfully reclaiming what it perceives to be its lost territories across multiple borders – including Taiwan, the Senkaku-Diaoyudao islands in the East China Sea, its maritime claims in the South China Sea, and its land claims along the Sino-Indian border, including the Indian province of Arunachal Pradesh.

Specifically on Taiwan, it has been made plain through Xi’s statements that national reunification must be achieved by the time China’s national rejuvenation is to be complete, namely 2049, the centenary of the establishment of the People’s Republic of China.

Even on this most expansive of measures, we are therefore now within the last 25-years of this timetable, and if a relatively low-cost opportunity arose, Xi could be minded to seek to secure Taiwan’s return within his own political tenure.

This is one of the reasons why the decade ahead looms as what I call “the decade of living dangerously”.

Of course, there have been multiple efforts to secure Taiwan’s return in the past, including through various Taiwan Straits crises during the 1950s and 1960s.

However, under Xi Jinping, a number of measures have been undertaken in order to enhance China’s military capacity to achieve its political objectives.

As this Conference will be well aware, Xi Jinping in 2015 launched the single largest internal reform that the PLA has seen in its long history, including the reduction of the number of Chinese military regions from seven to five, the establishment of joint command structures within each of these military regions, and the operationalisation of what Xi describes as “fully informationised warfare” – all in order to achieve Xi’s overriding objective for military reform, namely to have a PLA that is capable of “fighting and winning wars”.

We have also seen Xi Jinping’s determination to create a military that is politically loyal, and one that is “capable of fighting and winning wars” through his rolling anti-corruption campaign across the PLA, including multiple purges across its most senior leadership structure.

The pattern of China’s military expenditure growth under Xi Jinping is clear.

Similarly, the pattern of China’s expanding range of military capabilities, including a new range of offensive capabilities, whose central organising principle is to create an integrated force capable of securing Taiwan by force.

Of course, there are other mission statements for which the PLA may be called upon – not just in relation to the South China Sea, the East China Sea and the Sino-Indian border, but also in the expansion of China’s global network of military, naval and air bases across the Indo-Pacific and, prospectively, beyond.

Beyond rising military budgets and expanded capabilities, we have also seen the steady evolution of Chinese military exercises in a manner which, particularly in the post-Pelosi visit environment, are increasingly designed to probe, rehearse and test a range of military scenarios whose central objective remains securing Taiwan by force, once the external strategic circumstances are maximally propitious in the accommodation of that objective.

Therefore, it is clear from the series of doctrinal statements and behavioural changes on behalf of the PRC leadership and its operational deployments across the region, that China’s strategic intentionality concerning Taiwan remains unchanged.

Of course, we have all been pleased to note recent efforts at stabilising the US-China relationship, most recently brought about by the summit meeting between President Biden and Xi Jinping in San Francisco last November, and in the two leaders most recent extensive video summit which sought to “sustain the spirit of San Francisco”.

Stabilisation is welcome. Bringing the geo-political temperature down several notches is equally welcome. So is the reopening of channels for high-level communication.

From China’s perspective, stabilisation is also useful as it seeks to deal with a range of other domestic and foreign policy challenges on its plate.

These include the overwhelming challenge of rebuilding Chinese economic growth given the failure of growth to recover in the post-pandemic period.

Furthermore, there is plainly a realization across the Chinese leadership that in its foreign policy, half a decade of wolf-warrior diplomacy has won more enemies for China than it has won friends, let alone won those who have been subject to various forms of economic coercion.

Whatever Beijing’s motivations may be, a stabilisation of the US-China relationship, in order to create a more benign foreign policy and strategic policy environment, is of benefit to both sides given the underlying and continuing fraught nature of the military relationship.

As for the military itself, it has also been welcome to see the resuscitation of military-to-military links between various levels of the Chinese and US command structure.

Nonetheless, it remains to be seen whether this thawing in the mil-to-mil relationship translates into more effective, theatre-level command-to-command communication links capable of reducing the risk of collision between military assets, and in managing escalation/de-escalation scenarios that would most likely unfold in the event of such a collision.

We need, however, to be deeply sober about the fact that notwithstanding the period of stabilisation which we have now entered in the US-China relationship, that there is nothing in our analysis which suggests that China’s strategic intentions in relation to Taiwan, nor its military preparations for achieving that objective by force, have in any way changed.

In fact, they continue apace.

Xi Jinping, in some respects, sought to communicate the difference between Chinese tactical and strategic change in his own important article on what he called “the Six Major Relationships” delivered through the party’s theoretical journal delivered last September.

The thrust of this article, delivered on the eve of the San Francisco stabilisation summit, was to make plain to CCP elites that in the pursuit of strategic objectives, certain tactical adjustments would always need to be made.

While Xi made no explicit reference in this particular article to US-China relations let alone Taiwan, from an analytical perspective, it is significant that Xi, at this stage of the process, sought to make the distinction between strategy and tactics abundantly clear.

Credible, Integrated Deterrence as it Relates to the US, China, and Taiwan

This raises the question that if China’s strategic intentions remain unchanged, what therefore constitutes credible deterrence, or to use the US term, “integrated deterrence” in causing Xi Jinping to conclude that it is still too risky to embark upon unilateral military action against Taiwan?

The complexity of this challenge is compounded when we contemplate the vast range of scenarios which could ensue in relation to Chinese military and paramilitary actions against Taiwan.

This includes intensifying grey-zone activities of the type we are witnessing at present around Jinmen; speculation concerning future possible blockades of Taiwan itself; as well as the ultimate scenario of a fully-fledged amphibious and/or airborne invasion.

Of course, there are multiple sub-scenarios associated with the above, including possible military annexation of small, individual islands currently occupied by Taiwan, but not lying far off the Chinese mainland.

We have seen something of this at work in terms of recent incidents in and around the Taiwanese island of Jinmen and the intervention of the Taiwanese coast guard and the type of Chinese countermeasures subsequently adopted.

The reality is that integrated deterrence is not simply about deterring a Chinese invasion of the island.

It is about deterrence as it relates to the full range of scenarios described above.

And in contemplating what the constituent elements of integrated deterrence might look like, it is important that we seek to analyse it not in terms of what we might see as a rational deterrent action, but how in fact these actions are viewed through the lens of China’s military, political and, most importantly, party culture.

Strategic Reassurance

The first component of effective integrated deterrence, at least in my argument, could best be described as ‘strategic reassurance’.

I have referred to this earlier in my remarks. It is one of the reasons why it figures so prominently in the public political language of our Foreign Minister.

This goes to the fundamental Chinese lens being placed on all deterrent actions by the US and its allies.

We all know that the Chinese view our collective actions as part of a carefully integrated doctrine of containment rather than deterrence.

Just as we all know that that particular Chinese strategic conclusion is wrong. Had the US and the West been engaged in the containment of China over the last 25 years, none of us would ever have allowed China to join the World Trade Organization, nor would we have allowed such a comprehensive web of trade, investment, capital and technology market engagements between China, the US, its allies and across the rest of the free world.

If indeed the US had adopted a strategy of containment against China [as Kennan, the architect of containment against the Soviet Union, defined it], there would have been zero economic engagement at all, and that would not have been limited to the domain of militarily applicable technologies.

This does, however, bring us back to the question of Chinese strategic perceptions.

Leaving containment to one side, the two sets of Chinese perceptions which we need to constantly bear in mind are Beijing’s views concerning US, allied and other efforts to overturn the Chinese state and our underlying intentionality concerning the future political status of Taiwan.

On the first of these, I know of no US administration since Nixon which has had the faintest interest in overturning the Communist administration that the CCP achieved through armed revolution in 1949.

The position of the US, and of all allied governments around the world, is that China’s future domestic governance is a matter for the Chinese people themselves.

Therefore, it is important in the business of strategic reassurance, we make that plain on a continuing basis to the Chinese leadership, given the latter’s preoccupation with the colour revolution phenomenon across former Communist Europe over the last 30-years, as well as its own enduring political and strategic nightmare – namely what occurred with the collapse of the Soviet Union and the CPSU in 1991.

The second and, I think, most important element of strategic assurance lies in the future political status of Taiwan itself.

Without in this speech entering into a complex discussion on the various theological interpretations of the three communiques agreed between China and the US in 1972, 1979, and 1982, the bottom line is that the US and its allies, both from what they say and what they do, must continue to reinforce the fact that under no circumstances do we support Taiwanese independence.

For the Chinese, this has long been a redline.

And for those reasons, we need to continue to acknowledge its salience in Chinese strategic and political thinking. Most importantly, we need to do so in relation to our dealings with the Taiwanese Government. Those of us who have followed the ebbs and flows of these debates since democratisation of Taiwan in the 1990s will understand how difficult this can be.

And with the impending inauguration of William Lai as DPP President of Taiwan next month, we will need to be doubly mindful in our dealings with Taipei so that the policy of the Taiwanese Government and the DPP remains committed to maintaining the status quo, and not to disrupt that status quo by any form of unilateral declaration of Taiwanese independence.

This level of strategic reassurance is fundamental from Beijing’s perspective.

US Political Resolve

A second element of an effective integrated deterrence towards China over Taiwan will lie not in the US military, but will lie in Chinese perceptions of the level of US political resolve to deploy its military in a crisis.

In this room, you will be familiar with the rolling CCP critique of the rise of the East and the decline of the West.

You will also see successive Chinese analyses of what they perceive to be the growing political divisions in this country and the growing levels of economic division and social fracture.

For these reasons, therefore, how the CCP leadership analyses US political resolve over the decade to come, will be one of the most critical components of the overall deterrence equation.

This will be particularly important when Beijing analyses the question of future US political resolve over Taiwan through the prism of what the US does in the future in relation to Ukraine and Russia.

Leading Edge Military Capabilities

The third, and arguably most critical component of the overall integrated deterrence equation, lies with the US military itself.

The conventional wisdom within the CCP over many years, has been that US power in the world rests on three premises: the power of the US military; the power of the US dollar; and the power of US technology.

I see little evidence that this traditional Chinese assessment of US strengths has in any way changed.

At the same time, I see integrated efforts being directed by the CCP against all three of these American core strengths through various instruments of Chinese strategy.

For the US military, and for the Congress which funds it, the challenge and the opportunity remains clear: to continue to maintain a strategic edge across all military technology platforms, across all five domains of land, sea, air, cyber, and space, in order to continue to create sufficient doubt on the part of CCP military planners about their ability to prevail in the battle space if they were to launch an action against Taiwan.

In this context, the CCP has long sought to understand the US military, including its patterns of operational planning and behaviour, in a manner which is able to be presented to its political leadership as a known and static equation.

Without intruding into the professional space of those engaged in the hard-edged business of deterrence in this room, the challenge for the US, within the framework of strategic predictability, is nonetheless to provide not static deterrence, but dynamic deterrence, in order to cause our Chinese friends to constantly be in the business of having to adjust their overall strategic calculus and advice to their own system.

Chinese strategic thinking always prefers to have a known adversary who they know will behave in a known fashion, deploying known military platforms.

There is a fine balance, therefore, to be struck between the strategic predictability of US responses to Chinese actions on the one hand, while doing so in a manner which constantly presents the PLA with a range of challenging, new concerns on how that response is delivered on the ground.

Economic Deterrence

A fourth element of integrated deterrence lies in the economic domain – which Australia’s Foreign Minister also detailed earlier this week. This is not just about trade, restrictions to trade, or the prospect of limited or comprehensive trade sanctions against China under given scenarios.

It is also about foreign direct investment. It is also about China’s access to capital markets. And, most importantly, it is about China’s continued access to US and allied technology markets.

This is not simply a debate about semiconductors, which very much constitute the engine room of the unfolding technology revolution.

It is most acutely about the future application of artificial intelligence to a range of civilian and military platforms, as China seeks to leverage AI to achieve a quantum shift in its relative technology advantage against the US and its allies.

This, arguably, is the most complex domain of all in constructing the overall dynamics of an effective deterrence.

Significantly, when Xi Jinping recently recommended to President Biden that AI be included in a specific US/China dialogue, in addition to the resumption of mil-mil dialogues across the board, it indicates a level of Chinese strategic anxiety about which of the two countries possesses the leading edge in AI, whether any rules of the road might be possible in relation to military applications, and what other possibilities may exist.

Economic Resilience

A fifth and related component of integrated deterrence, of course, lies in economic resilience. This applies not just to the US.

It also applies to US allies across the world.

This brings us directly into the terrain of the security of supply chains – whether it is in critical minerals, advanced technologies and other forms of essential economic resilience.

In our understanding of this part of the deterrence equation, economic resilience applies most particularly to the island of Taiwan itself.

The question which needs to be answered is how resilient would Taiwan be under a series of Chinese military scenarios, and what this means in terms of Taiwan enhancing its own resilience against those contingencies.

The Role of Foreign Policy in Deterrence

Another element of integrated deterrence lies in foreign policy. This goes to the actual consequences for Taiwan, the region and the world in the event of China launching a military attack on the island and the outbreak of war.

The loss of life on Taiwan itself (a densely populated island about half the size of Tasmania, but with some 23 million people on it) would be impossible to predict.

The impact on the global economy would be unprecedented as all economic engagement between the world’s first, third (EU), and fourth (Japan) largest economies, and China (the world’s second largest), ground to a halt.

Trade and investment flows with the rest of the world would also be undermined.

Global investor confidence would collapse.

International capital markets would likely seize up.

One Bloomberg calculation of the economic cost of war over the Taiwan straits looms at more than 10 trillion dollars.

Sometimes our minds are numbed by figures of this order of magnitude. But to be plain, a $10 trillion economic cost would equal 10 percent of global GDP.

Not only would the global economy be thrown into recession, we should also anticipate it triggering a global depression.

The Australian Foreign Minister noted this week that economic integration provides a critical incentive for peace as regional economies share the benefits of prosperity.

For these reasons, it is important that the region and the world-at-large understand that they have a collective responsibility to reflect to the Chinese leadership that the launching of unilateral military action against Taiwan, which would carry with it the inevitable risk of crisis, conflict and war, would also pose an unspeakable human and economic cost to the world-at-large, and therefore should be avoided at all costs.

Beyond that, the long-term strategic consequences of such a war, however it was ultimately resolved, are impossible to predict.

The Role of Friends, Partners, and Allies in the Overall Deterrence Equation

One final component of integrated deterrence involves the role of US friends, allies, and partners around the world.

As noted earlier in my remarks, deterrence is not simply a burden to be shared by the US itself.

It is a collective burden.

Therefore, we need to be clear about what, across the various arms of integrated deterrence, can legitimately be expected of other countries as we seek to avoid the catastrophe of war across the Taiwan Straits.

The voice of the Europeans, in this context, is of critical importance.

Just as is the voice of the Global South, given the consequences which would flow to them should there be such a radical rupture to the operation of the current international rules-based system.

Conclusion

Credible, effective, integrated deterrence therefore represents the most complex of challenges in US strategic policy.

However, my argument as a lifelong student of China, is that deterrence can prevail.

For those who are students of China during Xi Jinping’s first decade in office, we observe a style of rule vastly different from that under Deng Xiaoping, Jiang Zemin, and Hu Jintao.

Nor is this the China of the Mao years, despite the fact that Xi has, on many occasions, referred positively to the achievements of Mao Zedong.

Mao demonstrated throughout his political and military career that he was not just a risk-taker, but often a reckless risk-taker (look, for example, at his intervention in the Korean War in 1950, look also at the Cultural Revolution domestically).

We have seen some risky behaviours from the PRC in recent years, such as island reclamation in the South China Sea, as well as Beijing’s embrace of Vladimir Putin at the time of Putin’s invasion of Ukraine.

But these are calculated risks not reckless risk-taking, which is what we saw with Mao.

Beijing knows, therefore, what the consequences would be for the leadership of the CCP writ large were they to roll the dice on Taiwan only to incur failure on the battlefield.

The consequences for the leadership, the party and the country would be catastrophic – as they would be for the whole region.

In reaching its rolling calculus about the deliverability of China’s political and military objectives in relation to Taiwan, Beijing will also be aware of the cautionary tales alive within Sun Tzu’s ‘Art of War’.

And within that text, we should, once again, be seized of its opening lines:

“War is a great matter of states not to be taken lightly, because if you lose the war, you lose the state.”

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It’s an honour to be invited to this great American University, and to this great American School of Public Policy, to deliver the Commencement Address for 2026.

It’s also an honour to be the first person to have served as Prime Minister of Australia to do so.

We in Australia see you in California as our natural American neighbours and cousins, just across that largish pond which lies to our east, and your west, which some call the Pacific.

That said, you’ll be pleased to know that we in Australia have decided, in absolute solidarity with the Canadians, to shelve, at least for the time being, our long-held ambition of annexing California as Australia’s next state. So, Californians, relax — you can remain American for now.

How many of you have spent time in Australia? After all, it’s just over there! That’s not nearly enough!

So Trojans, one and all, I now want you to spend your next summer Down Under. Do I hear a yes?

On the condition, of course, that there is no drinking, no partying and no fraternisation with the locals, given that we Australians are, like you Californians and you Americans, such a shy and retiring people.

By the way, when you’re down there, watch out for the sharks, the snakes, the spiders, the things that bite you — not to mention a few crocs — because they regard Americans as a particular delicacy.

If you are in any way like I was on the day I graduated, you’ll be experiencing a number of emotions.

You’ll be excited. You’ll want to celebrate. You’ll want to party, party, party. And you’ll want to thank your families, friends and faculty who have supported you all the way through.

At the same time, you may also feel anxious about what comes next — about where you will work, what type of work that might be, or whether there will be any work at all.

You may also feel fear in the pit of your stomach as you run through the impacts of the AI revolution that is now sweeping the world — of which the Dean just spoke.

In the face of all these emotions — a mix of excitement, anxiety and even fear — and yes, I felt all of them the day I graduated a little while ago, my message to you today is simple:

At the dawn of this second quarter of the 21st century, as President Roosevelt reminded America nearly a hundred years ago: “There is nothing to fear but fear itself.” And that remains true for the future.

And because America chose not to be afraid, America came through the great global depression, it came through a global war, it came through the threat of global nuclear annihilation, and delivered an end to the Cold War peacefully.

And Americans then set about making this country the greatest country on Earth. Not just for the 20th century. But also, my friends, for the 21st. Because despite all your challenges, Americans by instinct are not a fearful people.

Fear is not in your national DNA. Nor is it in ours. Fear is not in your national mindset. It is simply not who you are as Americans.

Although there are now some in the world who say that your time is now past, seeking to persuade others in the world that freedom has had its day, and that the light on the hill will soon be extinguished — I do not agree.

For there is now, across the world, just below the surface, and not yet fully declared, a raging battle for the world’s hearts and minds, its imagination and its soul, as others now seek to take America’s place.

But as President Lincoln reminded us: “America will never be destroyed from the outside. If we falter and lose our freedoms, it will only be because we destroyed ourselves.”

If it is helpful, let me share with you a little of my own life in the hope that it might resonate, at least in part, with your own — to reflect on some of life’s enduring principles that I have oftentimes experienced, sometimes applied, and sometimes ignored to my peril along life’s journey.

Fifty years ago this year, as a shy, slightly acneous kid from a farm in rural Australia — where yes, there were indeed many things that could bite and kill you — I began my studies at the Australian National University.

Neither of my parents had been to high school.

Our local elementary school had three chickens, four teachers and five cows.

My father, having died in an accident when I was 11, left my mother to retrain as a nurse and raise me as a single parent against the often bleak charity of the time.

At our local country high school, I was blessed because some of my teachers took an active interest in me as a kid who had a natural curiosity for the world that lay beyond our little town and beyond our nation’s shores.

They said I should go to something called a university to pursue my abiding interest in the wider world — although I had no idea what a university actually was.

And so I enrolled in a five-year course in modern Chinese language, classical Chinese and Chinese history, because half a century ago I thought that China might loom large in the world’s future.

That was the year that Mao died, when the Cultural Revolution was still raging, and when China was at daggers drawn with America and the West.

When I graduated, however, I found myself to be largely unemployable because China had yet to capture the world’s attention.

But to my great surprise I was accepted as a young diplomat in the Australian Foreign Service, without having the faintest idea what a foreign service actually was.

I was posted to our embassy in Beijing, and later found myself in Tiananmen Square in 1989 where thousands of young Chinese students were shot protesting for freedom.

I became disillusioned with the foreign service, because I became tired of writing elegant essays about the state of the world, while being impotent to do anything about the state of the world — and so I went into politics.

I then lost my first election to parliament and in my mind my world had collapsed.

Three years later I won. Seven years after that I became leader of my party. And the following year I was elected as Australia’s 26th Prime Minister.

But this came at the dawn of the global financial crisis which destroyed banks, jobs, economies and therefore governments around the world. They fell like ninepins.

I worked closely with President Bush and then President Obama, as well as Chinese leaders, to help prevent the global financial crisis becoming a total economic collapse. It worked. We worked together.

Meanwhile back in Australia we acted decisively to prevent a recession; I began Australia’s climate change transition to a renewable energy future; and I delivered a formal apology to Aboriginal Australians after more than 200 years of abuse by white Australians. We can change the way things are.

I then lost the Prime Ministership, was appointed Foreign Minister, before returning once again as Prime Minister, before losing the subsequent election.

After that I left Australian politics and went to Harvard to research and write on the future of US-China relations, because I thought that was the most pressing challenge of our times — as I still do.

Realising that I needed to understand more about China’s leadership, even though I had met most of them in my previous job, at the tender age of 60 I went to Oxford to do a PhD on Xi Jinping’s ideology. This was a little humbling when my fellow students, although with some affection, routinely called me Grandpa.

My own government then asked me three years ago to go to Washington as Ambassador, first to the Biden Administration and then the Trump Administration.

And last month I returned to New York as the global head of an American think tank called the Asia Society.

So why have I told you all this? It’s simply to say, young people, those of you graduating: life is never smooth.

Life is rarely linear, moving neatly from being promoted from one position to the next on an ever-upward, halcyon trajectory. In fact, in my own career it has been the exact reverse, given that my most recent record of the last decade has been one not of systematic promotion, but of systematic demotion.

I’ve done it all in reverse: first Prime Minister, then Foreign Minister, then Ambassador, now head of a think tank. Maybe my next job will be back in Beijing as First Secretary in the embassy where I began 40 years ago.

But if I’ve learnt one thing in life, it is the central importance of human resilience in navigating life’s many shoals.

So what is this thing called “resilience”?

And what does it mean for America at large?

Because we cannot have a resilient nation unless we are a resilient people.

When I was at Harvard, I taught a course called “Politics and Purpose”. It had about 50 students from across Harvard College. Being Harvard, they all wanted to become President of the United States — over there — including the 25 or so foreigners who also happened to be in the class. They wanted to be President of the United States too.

It was my melancholy duty to remind them of certain provisions of the US Constitution which might make that a little difficult.

But rather than regale the class with political war stories from the trenches of democratic electoral politics, I simply outlined five core principles for life.

First, understand what you believe. What is your philosophy? Do you have a theology? What is the intersection of these twin engines of the Enlightenment — both faith and reason — in working out a purpose-driven life?

Second, having worked out what you believe, it is equally important to understand why you believe it — what the philosophers call epistemology, or how you know these beliefs to be true, so that they can withstand the first gust of wind which comes along and doesn’t blow you away, or the first brick wall you happen to run into and fall over.

Third, think through carefully what values these beliefs give rise to — both personal values and social values.

Because values are the best predictor of character. And character, not just your talents, will define you for the rest of your life.

I realise that talk of values is out of fashion these days but, let me tell you, you can already see that they’re making a comeback.

Basic values such as honesty, loyalty, the importance of family and of friendship, respect for others even when those others may be strangers, compassion, curiosity, aspiration, self-discipline, persistence and yes, good old-fashioned hard work.

Then there are wider societal values such as liberty, equality, justice, sustainability, peace, as well as the importance we attach to reason, evidence, knowledge, wisdom and, yes, truth, as we seek to apply these animating principles to the changing circumstances of our public — not just our private — lives.

Each of these values becomes the headwaters of the streams and then the rivers that will flow through the decisions you take throughout your life.

That is why it is important to be conscious of them, rather than simply relying upon some Jungian subconscious, in the hope that they will somehow spontaneously bubble to the surface when you need them.

Fourth, having worked out what you believe as well as the values that flow from these beliefs, work out what you are deeply and passionately interested in. What is it that lights up your soul?

Because as Therese, my wife of 44 years, who is a psychologist, tells me: whatever gives you the most joy in life, that is what you are going to be best at. And we are all wired differently.

You are at an age now where you can readily change course.

A guiding principle worth thinking about, and one I seek to live by, is this: “Never die wondering.”

Finally, draw your beliefs, your values and your interests together and craft a future course for your lives which embraces all three. In other words, not just what job might interest you. But what is your vocation.

And as I said to that Harvard class all those years ago: if politics still happens to be your calling in life, what the hell are you doing in my class? Because you should be out there organising for the next election.

After all, politics should be much more than just Hollywood for ugly people.

As I said in my own first speech to the Australian Parliament nearly 30 years ago: “Politics is about power. It is about the power of the state. And whether that power is used for the many or the few.”

These then are my five principles for personal resilience. They’re not perfect. But I’ve found them to be helpful. And don’t worry if you haven’t done the foundational work yet. You’re young. But get to it soon.

As President Lincoln said more than 150 years ago: “The best way to predict your future is to create it.”

Or as the Chinese philosopher Confucius wrote nearly 2,500 years ago: “移山者始于搬起小石子” — “The man who moves a mountain begins by carrying away small stones.”

It seems the sages of both East and West are in raging agreement.

And finally, what of America’s future?

I said before that a resilient people is a necessary precondition for a resilient nation. And so too for America.

I have now lived in your great country for the last decade.

In that time I have travelled the length and breadth of this still imperfect union.

From Abyssinian Baptist in New York’s Harlem, to Montgomery, Alabama.

From Silicon Valley, to that other valley called the Shenandoah.

From the Oval Office in Washington, D.C. — with presidents of both political persuasions — to the Governor’s office in Sacramento, to the Mayor’s office in Atlanta, Georgia.

What I have seen is this.

America is a good country, and it remains so.

The American people are a good people, and they remain so.

America, despite its loud, extreme and partisan rancour, remains a free country.

America, despite its inequalities, remains the most dynamic, innovative and entrepreneurial economy in the world.

America, notwithstanding its division and debate, remains a free society, because I have lived in societies which are not free, and I know the difference.

In America, both Catholic and Protestant, Muslim and Jew, Hindu and Buddhist, believer and non-believer, despite sectarian difference, manage to live in remarkable harmony with one another.

And in America, you remain blessed by the courage, professionalism and integrity of your millions of men and women in uniform, whom you rightly venerate as the ultimate custodians of this nation’s and your allies’ security.

America is not without its problems. Nor is Australia. On this, I’m no Pollyanna.

But as a nation, after 250 years, you have proven to be remarkably resilient. As a people, you have proven to be remarkably resilient.

You’ve come a long way since those first shots were fired on Lexington Green in 1775.

America’s historical resilience, grounded in its citizenry, nurtured by its institutions, represents the cumulative efforts of each generation.

From Washington’s through Lincoln’s.

Through the Roosevelts’, both Teddy and FDR.

Then JFK’s generation, LBJ’s and Reagan’s, through to this day.

And now it falls to your generation. To respond once again to the call to public service — public service in whatever form that public service takes.

So, as the prophets of old would say to the peoples of old when confronting the existential challenges of their time:

Be not afraid, for there is no room for fear. Remember what FDR said — instead, be strong and of a good courage.

For this graduating class from this great American university, build resilience into your souls in the quietness of the evening and through the morning’s light, to be that same resilient people the world has come to know since the trials of Valley Forge.

And on those sturdy foundations — foundations of rock rather than sand — continue to build this nation’s resilience as well.

For now, more than ever before, the world needs a resilient America.

So, friends, graduating students: may God bless you as you embark on the great voyage of life.

And may God bless these United States of America.