The rise of China and the inevitable decline of America


You’re all aware that
the rise of China is generally seen as
a defining feature of the geopolitical landscape
of the 21st century. And I know particularly
those of you who are our masters students
are well aware of that. But I think, in the general
media, everybody is well aware of the rise of China
was the defining feature of this century. Those of you who follow
the debate more closely will know that, in
Australia, it is centered around a couple of
rather more extreme views. And I’m using shorthand here,
in terms of the time available. On the one hand, we have a view
that China already has primacy, and the United States
should accommodate China and acknowledge
that primacy, and that we should have second
thoughts about our alliance with the United States. The other world is
a lot more extreme, but you’ve seen it in the press
and elsewhere in recent months. And that is that
Australia should develop the military capability
to tear an arm off China. And I can hardly keep my face
straight as to what a quaint, ridiculous, and dangerous
proposition that is. And that line of
thought also talks about us developing the
capabilities to decapitate the Chinese leadership. Well, you know,
really easy, isn’t it? It’s only a country
of 1.2 billion people. Piece of cake. Dangerous points of view. I have a different view. I see a China with
serious weaknesses, and there are people here who
know a lot more about China than I do, and I stand
here to be contradicted. But I think we’re in the danger,
and our American colleagues are in the danger of seeing
China as the next Soviet Union. And demonstrably it is not,
in terms of military power. I’m also of the view, and
this may surprise you, given America’s current
economic crisis, which is not to be dismissed,
I think that the United States is an enormously innovative, and
inventive, and dynamic society. And I think it has enormous and
tremendous reservoirs of power to bounce back. But again, you could well
challenge me on that issue. That’s the sort of
theme I’m taking. I think it’s time for a more
measured and robust debate. I’m going to explore
three things with you. First and very briefly, and very
crudely, and I know many of you will be across the
literature on this. And that is, what are
the competing theories about the rise and
fall of great powers and the theories of what happens
when great powers collide? Secondly, let’s,
again, very crudely, look at some of the strengths
and weaknesses of both the United States and China. And finally, I want to talk a
bit about a pet topic of mine. And that is, what sort of
regional security architecture will be best to moderate
these two giants? And can we envisage a
regional security architecture that helps them to avoid
conflict and confrontation? So that’s the outline
of what I’m about. So as to the first
one, the theories about the rise and
fall of great powers, you all know that a traditional
view about a rising new power, like China, competing
against a status quo established power, like the
United States, historically, the historical record shows,
that such powers, a rising power confronting an established
power, go to conflict. And the obvious
model, of course, is Germany in the Second
World War and Imperial Japan, also in the Second World War. You can think of
many other examples, but like all examples in
international relations, there are exceptions. And of course, the exception
that historians often raise is that the United
Kingdom did not go to war as the established
power with the rising power, the United States. And the explanation for
that is often, well, they were both democracies,
and that the track record of authoritarian
powers is not so good at all. Some of you will have
read the book over 20 years ago by Paul Kennedy,
a very famous book, The Rise and Fall of the Great Powers. It was published
in the late ’80s. His final chapter was
called The Coming Decline of the United States. And here we are,
over 20 years later, and it hasn’t yet happened. By the way, his penultimate
chapter in which he footnoted the book I wrote on the
Soviet Union extensively, he did not even see the limits
to the Soviet Union that I saw. The essence of Kennedy’s
thesis, as I recall it, was that, at the absolute
core of “great power” power is economic power. And that gives you
military power, and it gives you all sorts
of other associated powers to do with your economy
and its strength. And again, you see
whilst one is attracted to that explanatory
variable, whether it was the rise of
Germany and Japan or the current rise of Japan
in the ’60s and ’70s and China now that economics
explains it all, and that you need a
big, successful economy, let me put it to you. The Soviet Union did not have
a big, successful economy. It had a fragile,
centrally planned economy that poured 20% of its
gross domestic product into the military. So you know, the exceptions
always challenge the rule. Some of you may have
read a book by Amy Chua. She’s a professor of law
at the Yale Law School. It’s called The Day of Empire,
How Hyperpowers Rise to Global Dominance and How They Fall. And she has a particular
definition of hyperpowers. And she includes the Roman
Empire, the Persian Empire, and particular aspects
of the Chinese Empires, I think in Tang Dynasty. Anyway, she has an interesting
and quite difficult concept in which her explanatory
variable is not economics. It’s what she calls
tolerance and intolerance, that successful hyperpowers
are tolerant on the way up and intolerant on the way down. Well, you know, I might put it
to you that China right now is not one of the most
tolerant powers, and neither is the United States
so we’ve got a slight problem. Some of you will have read
the works by Niall Ferguson. In his 2010 Bonythan
lecture, “Empires on the Edge of Chaos, the Nasty
Fiscal Arithmetic of Imperial Decline,” he argues
that imperial falls are nearly always associated
with fiscal crises, with sharp imbalance between
revenues and expenditures, and above all, with the
mounting cost of servicing– wait for it– a huge
and rising public debt. Now, here we have America
right in that situation. And he makes the point that
the Spanish Empire declined after the bill on
its debt reached 100% of its annual
ordinary revenue in 1598. Imperial France fell after
interest payments reached 62% of annual revenue in 1788. Ottoman Turkey began its
decline after interest payments on its public debt
hit 50% in 1877. And now here comes Niall
Ferguson’s real point. The current United States debt
is set to reach 146% of GDP by 2020 unless there
is radical surgery. And the figure I hold in
mind is, I think some of you know the United States defense
budget is about $700 billion US dollars. A non-trivial figure. And that the interest
on America’s public debt will exceed the absolute figure
of the American defense budget by about 2015, unless
something serious is done. And you see already
there are some minor cuts in the American defense
budget being talked about. And then we have some
rather silly views. One Arvind Subramanian in
the current September/October edition of Foreign Affairs,
who argues that one day, sometime soon, China
will control so much of American treasury
bonds that it will demand that
an IMF bailout is necessary as a precondition for
the withdrawal of the American Pacific fleet. Well, I don’t know what areas of
government he’s ever worked in, but great powers,
even on the way down, don’t destroy their
Pacific fleet. It’s called “going
to war,” I’m afraid. But these are some of the
sillier views we’re getting. My view is that the
21st century will, obviously, economics, GDP,
geography, population, relevance of power, but I think
one of the defining variables will be high technology
and innovation. Things like nanotechnology,
biotechnology, and quantum computing. And in that area, the Americans
are so far ahead of China right now it’s not funny. And the same applies in the
military area, by and large. So let’s move secondly to
the strengths and weaknesses of China and the United States. And I say there are
people in this room who know much more about China’s
domestic situation than me. China and the United States are
two great continental powers. Large land area,
large population, both of them in different
ways, historically, have seen themselves as
exceptional, if not God-given. You are all well aware of
America’s description of itself as the exceptional country,
the light on the hill. China, the Mandate of Heaven,
the central kingdom, and so on. Moving to China,
you will well know that it’s only in the last 200
or so years, a little bit more, that China has not had the
world’s largest economy. The historical
record that we have shows that, before the era
of European conquest of Asia in the 1500s, that China and
India had the world’s first and second largest economies. And it’s only been since the
European Industrial Revolution and the rise of America
that that situation has been displaced. So for China, it’s
a short period of a hiccup in a period of
3,000 years as a unified state. The strength of China’s
economy is quite remarkable. The first time I went
to China was in 1978, as Deputy Head of
Defense Intelligence. I was a guest of the PLA Foreign
Affairs Bureau, so-called. And I remember going to
Shanghai, that wonderful city on the Bund, and Pudong. There was nothing. And I was the first Westerner to
go onboard a Chinese submarine and visit the submarine
building-yard in Shanghai. And you may well ask why. It was the beginning, three
years after the Cultural Revolution, of opening up
and some frankly military transparency in those
days that is better than it is now in China. The Chinese economy recently
has overtaken that of Japan, as you well know, as the second
largest economy in the world. It’s still a long way
behind the United States. When the Chinese
economy, in gross terms, will overtake that
of the United States depends upon whether
you use exchange rates or what’s called purchasing
power equivalent, what you get for your dollar. And some people are saying 2018. Some people are
saying 2025 or 2030. It doesn’t mean to say, of
course, the standard of living, and the R&D, and if you
like, economic throw weight will be the same. But we’re living
through, you’re living through a period in which the
most remarkable transformation in the geopolitical
balance is taking place, based on this
incredible openness of the Chinese economy since
Deng Xiaoping started it in 1978. Compared with some
other great powers, China is relatively
homogeneous, in terms of its cultural makeup. It has a powerful
vision of itself, unlike the former Soviet Union. My personal view is, you
can’t accuse the Chinese of not having a work ethic. Demonstrably, they do. Henry Kissinger, in
his most recent book, published just a few weeks
ago, called On China– it’s marvelous, isn’t it? When you get to
Kissinger’s status, you produce a book called,
one word, Diplomacy. You produce a book
in which his name is bigger than the title
of the book, On China. I wish. He talks in his first chapter
about the singularity of China. And for me, not
being a China expert, it is an awkward chapter. He tries to explain
the difference between the Western
concept of chess, which is conflict and winning, and
the game, which I can’t remember in Chinese, but which in
Japanese is called Go, and that the concept
of winning and losing is much more sophisticated. Kissinger argues in
this first chapter that, unlike other
historical empires that have come and gone, China
boasts a unique history of cultural and
political continuity, and that secondly,
the foundation of this remarkable
continuity lies not in violence or
the use of force, but rather in an exceptional
cultural heritage, the Confucian
value system, which is aimed at domestic and global
harmony rather than conflict. Well, that’s an
interesting proposition. And I find I’ve not fully
read or finished the book, but there are things
where Kissinger is so pro-Chinese, that,
based on the evidence, it’s not accurate. And I can speak from
personal experience. His chapter on when China taught
Vietnam a lesson– now, that’s an interesting phrase from a
country that doesn’t use force and isn’t the hegemonic power. When China taught a fellow
communist country a lesson, and there are people
in this audience who were with me in Defense
Intelligence at the time, Kissinger argues that China won. No, it didn’t. We watched the four Chinese
divisions come across. We watched them in detail. And we watched them try and
beat a Vietnamese division, and they did not win. Kissinger has the same problem
with the division size battle on the Ussuri river in
Soviet Siberia, in which he claims the Chinese won. And I’m afraid the
intelligence evidence that he surely has access
to, it shows the opposite. Well, no book is perfect. The issue of China’s
economy, when I talk to economic friends,
I’ve got a particular friend called John Lee. Some of you know him. The Centre for
Independent Studies. He wrote an article in, I think,
The Financial Review recently, in which he talked about
the structural imbalances, the danger of a housing
bubble boom that would burst. He talked about
the over-investment in fixed investment for
no particular purposes. And some people are
arguing that, rather than that the Chinese
economy just slowing from a mere 10% per annum, which
it has grown by, give or take, for each year of
the last 30 years, that it will slow
to 7%, which is what is in the current
Chinese five year plan. Some people are arguing that
it may peak and begin to slow or even stall. If it stalls as a result
of the second round of the Western capitalist
world global financial crisis, then we will all suffer. And by the way, not
least this country. My information is that China’s
demographic situation is not brilliant. By 2015, the workforce in
China will peak and start to contract, because of
the one child policy. And by 2050, fully
450 million Chinese will be over the age of 60. Don’t tell me there aren’t
geopolitical implications of that. Demonstrably, there are. And I won’t go on about
corruption in China, which Hu Jintao knows is a
problem, environmental issues, and so on. But I will go on about something
I know particularly well, and that’s China’s military. We’re in danger of drumming up
China as the next Soviet Union. And let me repeat once again– China now is nowhere
near what the Soviet Union was at the same
period from its revolution. This is the 62nd year of
the Chinese revolution. In the 62nd year of the
Bolshevik Revolution in 1979, the Soviet Union had
12,000 strategic warheads, nuclear warheads. How many does China have? 200. The Soviet Union had
nearly 300 submarines. How many does China have? 60. 27 of those are obsolete, and
one could go on at length. It is not in the same ball game. But there is a danger, including
the United States as usual, that for the self-serving
purposes of the Pentagon, there is an inclination
to drum up China as the next military power. I think China does
have some capabilities. That wouldn’t surprise me. Having suffered a
century of humiliation, having now got economic
power, the amazing thing is that China didn’t develop
military power earlier. It was the fourth of the four
modernizations until recently. And even now, the
figures show that China spends more on domestic
security, marginally, than on defense. Let’s say the following
things about China. Currently, in my view, it is
a second rate military power. It is nowhere near the
American military power. So why should America
accommodate it, in terms of there is no primacy. It has no experience of
modern combat whatsoever. And let’s not pretend
that the Korean War and teaching Vietnam
lessons in modern combat. America’s had year after year
of modern combat experience. And whether you like it
or not, Iraq, Afghanistan, the first Gulf War, Libya. The Pentagon report acknowledges
that substantial parts of the Chinese military
equipment is obsolescent. Old Russian equipment. And it still reverse engineers
much Russian equipment. And after 30 years
of trying, China can’t even develop, after 30
years, a military jet engine. It relies on the Russian
military jet engines. Which, those of us who
specialized in that subject knew only too well, were
high rate of wear engines. Chinese anti-submarine
warfare is not in the same category
as ours in the west. And you know, I could
go on a lot more. It is true that in
cyber warfare China has made important advances. It is true that in the capacity
to target American aircraft carrier battle groups
with ballistic missiles, it’s making some
remarkable progress. And you may want to
raise in question time how America would react to
being targeted by such a weapons system. America certainly would not
sit back and fold its arms. So my view is that China
still is a second rate military power, making
important progress in areas like ballistic
missiles and cyber, but it is not, and
demonstrably is not, the former Soviet Union. The Pentagon report
says that, by 2020, it may be that China has
a modern, regionally focused military
capability, but of course it makes no measures against
what the United States and its allies will have. It does acknowledge
that China will be unlikely to project
substantial military forces distant from China in
the foreseeable future. However, and there are always
howevers in strategic affairs, there is no doubt– and this
has to be acknowledged– as a result of the
global financial crisis, America’s reputation
for leadership, as a result of the wars in Iraq
and Afghanistan, and by the way America, on and off, has
been in the Middle East now longer than it was in both
the first and Second World Wars– longer– and that the
inability to decisively win in Afghanistan, and
most particularly the global financial crisis,
who would have believed, 20 years after defeating
Soviet communism, that the United
States would be now in this pickle of rampant
capitalism out of control? And I think, as
a result of that, there is a perception
that China is on the rise. And we’ve seen in the last
18 months to two years, China take some
military-related advantage of this growing power. Its threats to Japan in
the Senkaku-Diaoyu Islands, its threats with regard
to its core interest of owning the entirety
of the South China Sea, its most recent challenge,
only a few weeks ago, of an Indian amphibious
ship leaving Vietnam. So there are some issues here
about the rules of the game and norms of international
behavior on the high seas. And I think there is a risk of
an incident on the high seas. And if there is one, by the
way, I know who will lose. And it won’t be
the United States. What about China’s strengths
and weaknesses in Asia? It has enormous strengths. Unlike America, it
is located in Asia. It has 5,000 years
of history in Asia. It has the sort of
soft power influence that the former Soviet Union,
for instance, never had. A diaspora of
overseas Chinese who it looks to in terms of
influence and money in a way that the Soviet Union never had. And important contacts in
Asia over many centuries. Some of those are contacts
like its 1,000 year dominance of Vietnam, that leads
to difficult relations. When you look at, however,
at China’s important friends and allies, who are they? Well, they are a country called
North Korea, which is hardly one of the most brilliant,
successful countries in the world. A liability rather
than something that you would like to have. Then it has Myanmar. Well, a country of no
particular importance. It’s Southeast Asia,
run by the military. And then it has
Pakistan, which has been aided by China with
regard to its nuclear capacity. And that’s about it, isn’t it? That is about it. So no experience
of modern combat, a second rate military
capability that is developing, and a bunch of allies that,
frankly, don’t amount to much. Just a slight exaggeration
here, but I think you get the general point. But, as our white
paper of 2009 says, and I don’t agree
with everything that’s in it by any means, as you’ll
hear me say in a minute, the Rudd white paper
argues that, by 2030, China will be the strongest
military power in Asia, and by a considerable margin. It then goes on to say that,
in the event that a major power adversary operates
militarily against us in our northern approaches,
we shall develop the military
capability to impose substantial military
costs on that power. There is another dangerous,
ambitious capability that has not been thought through. Let’s turn to the United States. Remember how I said,
this is a country that sees itself as
the exceptional power, the light on the hill? I think we Australians often
don’t understand the Americans, just because they speak
a quaint form of English. They’re an entirely different
country in scale and origins from us, the pilgrim fathers,
the role of religion, all those things that never
occurred here in this society. But they do see
themselves as exceptional. You saw that in
the Monroe Doctrine in the Western hemisphere. You saw that when they threw
their weight eventually, and late, into the
First World War I, and more importantly late and
eventually into the Second World War, they won. And when we talk about
democracies being careful about the use of military
force, who dropped two nuclear weapons on Japan? The only time it’s
ever been done. Never underrate democracies
when they get their temper up. And China should
think about that. I don’t agree with
those in America who say that they saw
the Soviet Union off. The Soviet Union saw itself off. And I’m going to talk about
that in another public lecture on the 7th of November. But look at the strengths
of the American economy. Still the largest economy in the
world, accounting for about 25% of world GDP. It accounts for half of
world military expenditure. Let me repeat that. It accounts for half of
military expenditure, about $700 billion US dollars. China’s expenditure, by the
way, it claims, is $90 billion. I’ve yet to meet any
communist country that tells the truth about
its defense budget. And let me tell you what the
Chinese defense budget does not include. It doesn’t include
military procurement, doesn’t include
military pensions, it doesn’t include the
armed militia and police. It doesn’t include a
whole bunch of things. So what do we think? What does the Pentagon
think and the IISS in London think that China
spends on military? About $150 billion. That’s a long way behind
the United States. If you want a figure
that’s my guesstimate, when you’re looking at
advanced military research and development– and I
don’t mean ordinary things. I mean the real high
technology, cutting edge stuff– do you know what
percentage of world advanced military
research and development America accounts for? How about 90%? Who are the others? Well, it ain’t China. And it ain’t the
former Soviet Union. There’s a bit in the UK,
and there’s a bit in France, and there’s not a lot else. Its demographics are
unlike that of China. It’s not one of an aging
population due to the one child policy. It’s a dynamic, youthful,
growing population, largely due to Latino immigration
and growth. And it’s like that of
no other great power, except that of India. It too, like China, has
an incredible work ethic. And I’ve stressed the issue
of American innovation. Ask yourself, which have been
the major successful world companies in the
last three decades? They’re all American. How about Apple, Microsoft,
Google, Facebook, you go on and on and on. Apple recently, momentarily, was
the biggest capitalized company in the world. When you talk about
the things I mentioned, like biotechnology,
nanotechnology, and quantum computing, the Americans
are really seriously in front in my view. Its weaknesses are obvious. Who would have believed
they would have brought, in a self-fulfilling
wish onto themselves, the collapse of larger elements
of the economy due to what I can only call
cowboy capitalism? The indulgence with
regard to banks and financial institutions
and things I don’t understand, like derivatives and so on. And they brought
that on themselves. And I think the
concern is, is America going to pull
itself out of this, what we call the GFC, the
global financial crisis? Or are we bordering
on another one? And if that happens,
there will be some very serious
geopolitical issues, which we’ll come to at the very end. The question is whether these
issues enduring and abiding in the American economy,
or whether, as in the past, they will bounce
out of it, as they did in the Great Depression. We will need to ask whether
it will have a serious impact on the American military. At present, I don’t, as
a former defense planner, think that knocking $300
billion over 10 years is a big impost for America. That’s the current issue. Works out to 5% of
the defense budget. Given the waste in
all defense budgets, blind Freddy can save 5%. The question will become if
the budget cuts cut harder. Kim Beasley, my
former boss, who’s now our ambassador in
Washington, as you know, was chancellor of this
eminent university, was in The Financial
Review last week, in typical Kim fashion saying,
“Never mind this closing gap between China and
American military capability,” says Kimbo the bomber. “The gap is widening. America is racing ahead.” And frankly, given his
long security clearances at the highest level that he
and I shared for many years, he should know what’s
going on, but I haven’t talked to him about it. What about America’s strengths
and weaknesses in Asia? We mentioned China. America sees itself, and always
has, since at least the wars with Spain and
when it colonized, let’s remember, the
Philippines, as an Asian nation. But it is not of Asia. It’s not of Asia in that sense. But it has a web of alliances
and friends, the like of which China simply does not have. And you remember I reeled
off North Korea, Myanmar, and Pakistan. Well, on the other
side of the ledger, we have some of the world’s
other greatest successful economies. Japan, going through a long
period of stagnation, still a very vibrant economy,
with a significant military. Japan, South Korea,
the ASEAN countries, to a greater or
lesser extent, they’re either allies or friends
of the United States. There is, in addition, from
America’s point of view, grave concern, in some of
those countries I’ve mentioned, about growing Chinese
assertiveness, the sort of things China’s
been doing in the Yellow Sea, the East China Sea, and
the South China Sea. So what has happened? Japan, contrary to views that
when a left-wing government came into power in
Japan, it would move away from the alliance,
it is moving closer. And things like Fort Tenma on
Okinawa and the marine base have been settled. South Korea has
also, in my view, moved closer to
the United States, because of China’s
casual attitude to what its great
ally North Korea did, sinking a
South Korean warship and then shelling a
South Korean island. By the way, in my
book, sinking a warship is an act of war that
demands a response. And you know, I
think South Korea has been enormously restrained. Even the ASEAN countries
of Southeast Asia, some in particular,
like Vietnam, are offering America use
of facilities and bases. They’re buying Russian
submarines, Kilo-class, very quiet, relatively speaking. And they obviously decide
in response to China. And you’re seeing that in other
acquisitions in our region. The weaknesses of
America we all know. Its distractions in the last
10 years, since so-called 9/11, a phrase I hate, by the
way, its distraction fighting the so-called War
on Terror, its wars in Iraq and Afghanistan have distracted
it from the rise of China and the shift in the
geopolitical balance. And what I now want to
see is America refocusing. It, like us, is doing a
force posture review, which will have another look at
the American bases at Fort Tenma, in Yokosuka, in Japan,
but there will be no pullout. There will be some
reinvigoration of capabilities in Guam. And I expect you will soon hear
some announcement concerning greater American use of
facilities in Australia. My view of the
United States by 2030 is that it’s still
going to be the world’s dominant power,
the only path that has global military capability. But if they continue to get
their economy wrong, all of it is wrong. I suppose no matter what you
think about my very rough-hand description, my conclusion
is that, whether it’s China, the rise and rise and
rise like no other power we’ve ever seen, or whether it’s the
United States, the decline, decline, decline, that
keeps being predicted and never happens, beware
straight line extrapolations. We did it on the
former Soviet Union. We did it on Japan. And we’re doing it again on both
China and the United States. So thirdly, what sort of
regional security architectures could we conceive of
and that might be best to moderate these two giants,
China and the United States, so they can live together
in peace and harmony? Or, as the Chinese quaintly
say, a harmonious country in a harmonious region
in a harmonious world. Yeah, right. The big question of our time,
and particularly the younger ones here who will be around
to see what China looks like in 2050 or
2060 is, and it’s a big question of our time, and
not least for us in Australia. We’re not parked off in
Europe, or across the Pacific in the United States. We’re a small country
with a small defense force, located in Asia. And we’ve never in the past,
in our short 200 year history, been faced with our
major economic partner not being our major ally. Think about it. From 1788, when the first
fleet settled this country, through to when Japan attacked
Australian forces in Singapore, we depended upon
the United States for our military protection. And it was our greatest
trade and investment power. By the United Kingdom is
still the second largest cumulative investor in Australia
after the United States. And from 1942, when John
Curtin said without regret that he turned now
to the United States, we depend on the United States,
which until a few years ago, was our biggest economic
overall trade partner, imports plus exports. Now we’ve got this bifurcation. And some are arguing
that we will not be able to manage
both things together. That is the crucial
alliance with the United States and a growing and
expanding economic relationship with China. So I guess to use an
old farming expression, we’ll have to straddle
the barbed wire fence and see if we can make it work
without it hurting too much. Which is going to be
very difficult, I think. The question of our
time is, will there be a collision between
these two powers? You remember? The rising, ambitious power
that naturally needs its place in the sun, given the
sad history of China in the 19th century and later. And the United
States that has now been accustomed for a long
time to being the world dominant power. You remember, I said that
history tells us yes, there is a high risk of conflict. But perhaps I should
not be so pessimistic. So what moderated
mechanisms, geopolitically, can we envisage? So there are three that
I’m going to talk about, and there’s one other that I
should talk about, but I won’t. And again, I’ll be very crude. First of all, there’s a
traditional balance of power. The sort of thing that was
successful in 19th century Europe under the Congress of
Vietnam, which, by the way, Henry Kissinger
wrote his PhD about. Until he wrote
the book on China, he was a German
geopolitical realist. He’s now either lost the plot
because of advancing years, or he’s been bought. [CHUCKLING] The balance of
power, in which power is balanced between the powers,
we had it in the Cold War. It was quite simple
but dangerous, between two powers, the Soviet
Union and the United States, Warsaw Pact and NATO. Or the sort of power we might
be moving towards, a multipolar balance of power, particularly Predominant with China
and the United States, but with other major powers
playing a substantial role. Obviously a rising India,
although it’s a fair way behind China, to say the least. A Japan, that is damaged, but
which you’ve heard me say still has strong innovation and a
significant military capability that we in Australia now
are Japan’s second most military relationship, and
we’re going to do more. And there are other
elements in the balance. You can talk about
Russia, although I don’t much these days,
a power that’s busted, but which has a long
history of bouncing back, but it’s going to
take a long time. It has some very serious
deficiencies, which I won’t go into, but you can ask about. Balances of power
work, if there is a common understanding about
the risks and limits of power. And importantly, if one
power doesn’t appease, some would say
accommodate, a the other. Is there a concept in which the
United States and its allies, including Australia,
Japan, South Korea, which are essentially
maritime countries, maritime allies in which
we are used to operating on the high seas,
and in which we have very advanced
capabilities, both above, on, and under the world. So could you conceive of in
this balance, the United States and its allies, its
maritime allies. On the other hand, and
that’s if you like, the Washington
Consensus, what’s called the democratic free
enterprise model of capitalism and democracy. And on the other hand,
what’s called the Beijing Consensus, the authoritarian
state capitalism model, which has been very
successful, and that might include China and Russia,
who are tremendous, by the way, of the Shanghai Cooperation
Agreement, which in my view, doesn’t amount to much. It includes those two
countries and the Stans of Central Asia, Kazakhstan,
Uzbekistan, Kyrgyzstan and so on. Its makes a very neat
geopolitical little model, a bunch of maritime
countries and a bunch of continental countries. I wouldn’t push
that model very far, because I think there are
enormous hidden tensions between China and Russia that
that relationship will not last very long. Are we already seeing alignments
as China’s power rises, and as in recent
couple of years, it’s started to use
power more, and as people are getting more concerned. Are we seeing already
shifting alignments, where countries
such as Australia are taking a hedge against the
risk of China’s growing power? And I refer you to our defense
white paper and what it said. And why do you think we might
get under this government– and I don’t know
about the opposition, because they don’t
have a defense policy. Why do you think we’ve going
to double our submarine force to 12 from six? Why do you think we would be
building the world’s biggest conventional
submarines at closer to 5,000 tons than the
current class 3,000? And why would it have
air-independent propulsion, and why would it have
tomahawk land attack cruise missile capable of
targeting hardened targets at great distance
in a moderate way? Well, there’s only one answer. Is Japan doing more in terms
of its military capabilities? Yes, it is. It certainly was until the
earthquake and tsunami. When I was in Japan
talking to people there about the military capabilities. Why do you think
Japan is developing an anti-submarine
warfare capability to detect Chinese submarines
in the island chain, in the Okinawa
Ryukyus island chain? Well, I think the answer
is fairly obvious. What about other powers,
such as South Korea? Why is it acquiring submarines
and have warfare destroyers with the Aegis air combat
system onboard, the world’s most advanced American
system for shooting down aircraft when you’re on a ship? It sure as hell isn’t to
fight some country called North Korea, in my view. So I say that we’re already
seeing alignments shift. Hopefully, if we are subject to
a competitive balance of power, two things might
ameliorate that, that we haven’t seen before. The first one is nuclear
weapons and the risk of the use of them. And I’m perfectly
convinced that the Chinese, like the Soviets before
them, perfectly understand the risks of nuclear war. And that may be a
limitation, hopefully, on any military competition, or
more dangerously, escalation. The second concept is one
that one of my colleagues is in favor of, a
concert of power in Asia. Let me remind you, a
concert of power in Europe was what happened at the
Congress of Vienna in 1815. It arose after the defeat
of Napoleon’s France. It brought all the
major powers together. It did not humiliate France. And the boast is that
the Concert of Europe brought about
peace for 100 years until 1914 and the
First World War. Well, no, it didn’t. I mean, if you care
to put to one side the Franco-Prussian War between
France and Prussia in 1870, more seriously, if you
want to put to one side the Crimean War, in
which, if you please, High Protestant England,
Catholic France, and Islamic Turkey fought Orthodox Russia. And it wasn’t a side war. 750,000 dead, 500,000 Russians. And despite the agreement
of the Concert of Europe to not humiliate
powers after battle, Russia was very much humiliated. The Black Sea Fleet was
ordered to be destroyed. And as a result, Russia
expanded into Central Asia and knocked on the
door of Afghanistan. Familiar? And grabbed Chinese territory in
the Siberian Russian Far East. They were geopolitical
implications of the breakdown, as far as I’m concerned,
of The Concert of Europe. The Congress of Vienna also was
able to be formed because there was a common European culture,
a common European understanding. Do I see a common Asian culture,
a common Asian understanding, including on security matters? No, I do not. And what I do see
in our region is rising nationalisms,
edgy territorial claims and interests. And frankly, and my colleague
Professor Desmond Ball has written about this,
and Desmond is always careful on these
issues, he now sees elements of arms racing in
North Asia, particularly in the maritime, that his naval
and air warfare capability. I’m going to go on to
third one, but before I do, I would acknowledge that many of
my colleagues, and particularly in international relations would
say there is a fourth model, and that’s called the economic
interdependence model. That here we are in this
globalized economically interdependent world,
not least in Asia, not least with America
and China, you know, where iPods are assembled. Not made. Where iPods are assembled, where
iPads are assembled in China, where almost everything
is assembled– in China. That because of this,
it would be disastrous if America went
to war with China. And there’s obviously
some truth in that. But those of you who
know your history will know that we heard
the argument before. In 1911– 1909, a man
called Norman Angel wrote a book called The
Great Illusion that said it would be disastrous
for Germany, that was so interdependent
in economics, in trade, in immigration, in
the royal family connections, in tourism, it would be
disastrous for Germany to go to war with Britain. And guess what happened? But it is a legitimate argument
that needs to be considered. The final one I
want to discuss is my favorite, a new regional
security architecture. Well, we’ve got the alphabet
soup of security architecture in Asia. And my God, don’t we have it. We have APAC. We have ASEAN. We have ASEAN Plus Three. We have the ASEAN
Regional Forum. We have the East Asia Summit. We have the six party talks,
and they go on, and on, and on. You might ask how much
progress has been made? Well, let me tell you. Gareth Evans, when he
was foreign minister, he and I wrote a document called
Confidence Building Measures for the ASEAN Regional Forum. And Gareth told me, in
that typical way of Gareth, I couldn’t use
“intelligence sharing.” That was a naughty word. I had to talk about
information sharing. And I couldn’t use the
word “transparency.” And we proposed all sorts of
things for confidence building. That was 18 years ago. ASEAN Regional Forum
now is in its 18th year, and it’s still talking about it. I know, because I’m a member
of the ASEAN Regional Forum, so-called Expert/Eminent
Persons Group. And I’ve been on five of these
meetings over five years. And in each of
those meetings, I’ve proposed that we have an
avoidance of naval incidents at sea agreement. Can I repeat that? An avoidance of naval
incidents at sea agreement. In 1972, those archenemies,
the Soviet Union and the United States, had such an agreement. You know, you shall
not point your missiles at a proximate warship. You shall not train your guns. You shall not point laser
beams and blind the people on the bridge. As an aircraft carrier
or any ship with aircraft is steaming in a line that
is crucial for the takeoff and landing, you
shall not interfere. Soviet Union and
the United States. So for five years, in the ASEAN
Regional Forum Expert/Eminent Persons Group, I proposed that. On each single occasion, the
Chinese have knocked it back. And you know what the response
of the Chinese representative is? Oh, that’s not our
priority, Paul. China’s priority is primacy– is piracy, international crime. In my language, hugging trees. And my response to
the Chinese excellency is, so can you
tell me why you’re developing nuclear-powered
attack submarines? Is that to do with piracy
or international crime? You get no answer. So the problem is that we’re
going nowhere with this one. And as my colleague
Des Ball says, we’ve got an arms
race on our hands. Let me tell you what we’ve got. Unlike Europe in
the Cold War, where there were arms
control agreements, intrusive counting rules
for ballistic missiles, including at the factory gates,
Americans at Soviet factory gates counting the
ballistic missiles, intrusive rules for counting
tanks, artillery, submarines, warships, we have no
such agreements at all. We’ve no open skies agreement,
no avoidance of naval incidents at sea agreement. And that’s happening, as Kevin
Rudd pointed out in one of his fist speeches as
prime minister– this time he was right– that’s happening while the
arms race is building up. And it is not a
very nice picture. It’s one fraught with
dangers and difficulties. I’m going to finish
now, but before I do, while I’m talking about this
concept of a regional security organization, Henry Kissinger,
in this book of his, On China, 535 pages beautifully
written, beautifully written, he, in the last 2
and 1/2 pages, he comes up with the idea
of a Pacific community. So after 535 pages, we
get 2 and 1/2 pages. Brilliant. Very well thought through. Not. And what’s he talking about? Well, it’s not very
clear in 2 and 1/2 pages, but that there would be a
common enterprise between China and the United States
with shared purposes. It would not be a bloc, but
it would be joint endeavors. Well, what the hell
does that mean? I mean, if we’re not getting
anywhere with all these things I and others have
been involved in, in 17 years, when
we can’t even get to first base about an
avoidance of naval incidents at sea agreement, when
there’s nasty things going on in the South China
Sea, the East China Sea, and the Yellow
Sea, then we’ve got a slight problem, Henry. But you know? He floats it. 2 and 1/2 pages out of 535. Good read. Not. OK, in conclusion,
you can see I’m more optimistic
about challenging the rise and rise of China. I think it has some weaknesses. And this might be, the wish
is the father of the thought, I’m more optimistic about
America bouncing back. But I recognize I’m
challengeable, and may well be in the minority. But I am pessimistic
and not optimistic as you can see
about tempering what could be a dangerous
competition between the rising power and the status quo power. And they’re both ambitious,
self-centered, strong powers. So if I had a wish
list, it would be to rapidly advance
confidence building measures and arms control measures,
including intrusive inspections, to build
up mutual transparency, and conflict avoidance measures. However, we have been discussing
for 11 years in the ASEAN Regional Forum not just
military confidence building measures, preventive diplomacy. And we now, after 11
years, have a work plan. A modest work plan for
preventive diplomacy. And so you see, the risk
is that the arms build up, and the lack of transparency,
and arms control measures is, we’re going to
run out of time. So if we run out of time,
we’ll be left with, I’m afraid, the dangerous alternative,
from my point of view, of the balance of power. Some will say it
will be moderated by economic interdependence. I hope that’s the case. Some like me will
say that, in the end, it will be moderated by the
fear of using nuclear weapons. Now, in case you think I’m
being very pessimistic, here’s a really pessimistic
note on which to end. I was at a conference
two weekends ago called the Australian Davos
leadership retreat. It’s not Davos. And I can’t give you the
names of who said what, but I can give you the gist
of what our concerns were. There were very
serious discussions in that meeting, mainly
businessmen and women, and economists, and a
few of us security wonks. Very serious discussions
about the state of the American economy. Even more serious
discussions about the state of the European Union economy. On balance, people
were optimistic, but there wasn’t
a huge difference. You know, 60/40,
optimism, pessimism. And I pointed out
to the meeting, if Western democratic capitalism
is in crisis, if it is– and we discussed. We had sessions, by
the way, on is there a crisis of capitalism. If the West is in
that crisis, and I hope it’s not,
then what I’ve said you’ve got to really add
very substantially to. Why? Because the last time in
history that I recall, where there was a serious global
crisis in Western capitalism, at the same time as there was
a tectonic shift in the balance of power, was in the 1930s. And we all know
how that ended up. Thank you. [APPLAUSE] This is a question
seeking reassurance. Suppose I was a Vietnamese
seeking reassurance from you that Vietnam, sitting
next to China, will not go the same way as
Mexico sitting next to America. Why is it that Australia
won’t become like Ecuador? We ship our ore. Ecuador ships bananas. Economically, will it resolve? Can you give us the optimistic,
perhaps counter-intuitive answer to that? No. No, I can’t. Look, Vietnam, 1,000 years
under Chinese’s suzerainty, as you well know. They’ve never forgotten that. And I can’t remember
whether you were here, Doug, but I was criticizing
Kissinger’s book, the chapter which you should read
on Vietnam, when China was teaching Vietnam a lesson. Kissinger claims China won. No, it didn’t. I think Vietnam, I’ve
been there a few times and helped develop
what was called one of the half-tracks for
foreign affairs there in ’96. It is a proud, nationalist,
successful country that has saw off the French
and the Americans, and how. I think the way they’re buying
Russian military equipment, not these submarines, Doug,
that tells us something. The way they’re encouraging ship
visits and maybe port rights by the Americans and
certainly the Indians, it’s significant of
this shift in alignment that countries are
reacting to what China has done in the last couple years. As to Australia, well, we
were the banana republic, weren’t we? I don’t know whether we’re
Ecuador, or Cuba, or something. But I must say, I don’t
buy the argument of some of my colleagues, Doug,
says he carefully, A, that America,
indeed, its allies should accommodate China. “Accommodate” starts
to smack a bit of, and I reluctantly use
this word, “appease.” And secondly, I
think we will have to run a dual policy, which will
be enormously difficult, given that China is, and
will be more so, our dominant economic
power, and that America will remain our ally. We will never have an
alliance with China, unless China
becomes a democracy. I mean, for once,
actually, I agree with John Hammond,
who, last week, on TV, said it’s values
that separate us. It is values. But I think a dual policy
on Australia’s part, which is carefully modulated, which
is engagement with China amongst the whole range of
economic, trade, military, intelligence, cultural, human
rights issues, but in which, much more carefully than
we said in the paper, we have an element of hedging
along with our American ally, is probably the way
it’s going to go. I think– bill, did
you have your hand up? Oh, I did. I’m interested in your
read on flash points of the Asian Pacific– the Balkans starting World War
I, Poland, whatever it took. In Taiwan and the
Korean Peninsula– Yeah. –in particular, a
lot of strategists would say, well,
China is actually being fairly concentrated in
its development of creating capabilities in terms of moving
towards a position where it tests American power, and some
time in the future a showdown in Taiwan. In terms of the
Korean Peninsula, it’s problematic as an ally– I’m probably trying to
saying the [INAUDIBLE]—- as problematic as an ally
as North Korean might be, nevertheless it’d seem to me
to be pretty hard to envision China standing by if there
was an implosion of the North. And you have the same
issue of the Americans up at the Yalu or whatever. Yeah. So I’d be very interested
in your read of how the flashpoints problem figures
in the overall power balance that you anticipate in the
absence of confidence building measures. Yeah. I mean, I think the ones that
have been very high profile recently in the South
China Sea, the incidents I’ve mentioned in
the East China Sea, the incidents I’ve mentioned. And even the Yellow
Sea, when China tried to stop America deploying
the aircraft carrier battle group George Washington, I
think as if a great power is going to avoid doing that. By the way, I might mention,
because I haven’t mentioned this, there is an
interesting Law of the Sea difference between
China and the United States. Remember that America
is not a signatory to the Law of the Sea. Is that right, Bill? Yeah, it has not ratified it. The Western interpretation of
Law of the Sea, and of course it’s a Western model,
not a Chinese one. It’s that countries have
sovereignty in the 12 nautical mile territorial sea. But in the 200 mile
exclusive economic zone, we, the Americans
and allies, reserve the right to push our warships
through without permission. The Chinese do not accept that. And that is going
to be, and is being, I think, a big issue,
particularly given their claims for
the, as far as we can see, the entirety
of the South China Sea and the islands in any
case that generate 200 mile exclusive economic zones. To Taiwan, the latest
Pentagon document released a few weeks ago
points to the build up of Chinese forces, particularly
a deluge of intermediate range ballistic missiles,
which, as I understand it, are getting increasingly
accurate, and combat aircraft. But its bottom line
is that China still lacks the capability, credibly,
to mount a full-scale assault on Taiwan. And it makes it the
very interesting point which I underlined, Bill, that
China does not have the ability to mount a blockade of Taiwan’s
ports against a major power, against the United States. Again, you see, I told
you about the difference in the power situation. I mean, Taiwan is the issue that
none of us want to face up to, frankly. I mean, we support
the two China policy. We don’t want to crucify
our relationships with China on the– is this mood lighting? On the relationship that
we have with Taiwan. You know better than me that,
increasingly, it seems to me, the Chinese are,
to be fair, being very patient about Taiwan. They’re no longer rattling the
weapons system all the time. How many Taiwanese
are working in China? Is it a couple million? You know? Just across the
straits in factories that do all this high
tech stuff and so on. So that’s perhaps one
where even I, Bill, would agree with
economic interdependence being an inhibitor. The Korean peninsula,
I mean, you just wish that North
Korea would go away. But for China, and
you alluded to it, if North Korea should
collapse, like East Germany– by the way, West Germany,
the western part of Germany is still getting over the
costs, as I understand it, of incorporating
the eastern part. And the Korean thing would
be much more expensive. And the lack of
interchange and so on, it’s a totally
different thing altogether, compared with East Germany. If you were Chinese,
what you don’t want is a North Korea that
becomes part of South Korea. And don’t tell me
the South Koreans wouldn’t love to
have nuclear weapons. Yes, they would. We all know which
the target would be. A place called Japan. And that China does
not want to see the risk of American troops,
as you said, on the Yalu River. So the status quo, in many ways,
as difficult as North Korea is, sort of works. A collapse of North Korea
would be hell let loose. Just coming back to Taiwan, I’ve
often argued this in private, that if China
attacks Taiwan, not because of a Taiwanese
declaration of independence, because China’s had
enough patience run out, attacks Taiwan, and American
troops in and around Taiwan are being careful, and American
invokes the ANZUS Treaty, believe you me, the
ANZUS Treaty says, in the event of an attack on
either of the high contracting parties, their territories,
their troops, their aircraft and vessels in the Pacific area,
we shall immediately consult. It doesn’t say we shall
necessarily do it. My concern has always been that
we would be the only country, that America could even look
to, to maybe give assistance. Because the following
countries would not be in a war between
China and Taiwan– Japan, South Korea, all
the ASEAN countries– lined up together
are not worth much in military terms in any case– Germany? I don’t think so. France? I don’t think so. Italy? I don’t think so. And even the country I was born
in, who loves a war, any war, remember the Falkland Islands? I think the Poms
might say “no thanks.” And where would that leave us? On the barbed wire
fence yet again. There’s always Ecuador. I’ve got three
questions lined up. One, two, three, four. Please. I’m Yoko [INAUDIBLE]. I’ve been this year’s
visiting fellow here. I’m originally from Tokyo. Ah. As a Japanese, I found
it difficult to digest the first part of your
presentation, which I found– all of it I found
very fascinating, but it was about the danger
of overestimating China. Yes, if I put it that way. And the second part was
about the importance of balancing China. Now, and your
analogy of the 1930s was also not very helpful. I guess we’re in a
position of Great Britain, seeing Germany rising, but
we are an aging and declining power, although we do
hold a very important international position still. So what should the UK
have done with Munich? Should they have
confronted Germany already in the Rhineland? And our resources are limited. You mean “our” being Japan? Yes, yes. Where should we put it? And that’s going to be a very
difficult choice, because we are aging, and all these
costs of rebuilding after the tsunami. Where should we
put our resources? What’s more difficult? How should we balance
the overestimation and overcommitment
and underestimation? Yeah. Here’s a question
for you, professor. Ah, dead easy. You’ve got three minutes. Thank you. I think it’s very
difficult for Japan, as you say, aging population,
two decades of stagnation. So you’ve got two options. You can accommodate and appease
China, which is effectively what Britain and particularly
France did with the Rhineland in the Second World War. Or you can join a
balance of power with your great and
powerful allies, which is in fact what you’re doing. I mean, you look at what
you’re doing with us. We now have with you a military
logistics resupply arrangement. We’re now discussing
with your officials in Tokyo an intelligence
sharing arrangement. If we can trust your
politicians, by the way. For the first time
in your history, we’ve had our F-18 combat
aircraft using an airbase– I forget its name– in your country. We’ve worked alongside you
in Cambodia, East Timor, and we guarded your troops
building a railway in Iraq. So I think we’ve
come a long way. I don’t underestimate the
difficulties you face. I was in Japan, as my
family knows, the afternoon of the earthquake in Tokyo. Do you know what was fantastic? It was the dignity with
which your people conducted themselves. There was no panic. None of that. The only thing that broke down
was the mobile phone system, which was overloaded. I think that’s
going to divert you. It’s going cost $300 billion
US dollars or whatever it is. By the way, as a
proportion of GDP, that’s less than the
cost for New Zealand. You know that one. Certainly when I was talking
at the vice foreign minister level, I think even with this
left wing government of yours, there is a desire to increase
your military capabilities. You remember I mentioned
the submarine detection capability, the SOSUS Array. And the other thing
you’re discussing– What about anti-ballistic
missile defense? How important do
you think that is? I think for you it’s important. I think the Patriot-3
and the Aegis System, the SAM-6s are
important, and SM-6s. And you should go
ahead with that. I think it’s very
difficult for you, because the instinct would
be, just roll over and let it happen. And we all know what happens
to countries that do that. Folks, we will finish on team. We all have business
and things to get to. It’s almost 10 to 7:00. Up here– yeah, Dr. John
[? Wexland, ?] [INAUDIBLE].. Professor Dibb, thank you for
an excellent presentation. Thank you, Napper. You’re always, always
entertaining, I have to say. And always you have some
compelling arguments to make. You made an
interesting observation about [INAUDIBLE] in Foreign
Affairs, the latest edition. And your criticism of
his conclusions, I think, are very reasonable. But you didn’t
address his argument in the body of
his article, which I found reasonably compelling. He talked about the
projection of Chinese growth perhaps reducing from 10 to
7%, and US economic growth optimistically going from 2.5%
to maybe, if we’re lucky, 3.5%. And even if that is the
case, at about 2030, China will still outpace
the United States. That concerns me. Obviously, it
concerns a lot of us. And you, in your presentation,
talked about issues that you wouldn’t consider,
or that we might have to reconsider if things change. I wonder if you could give us,
just for a couple of minutes, your thoughts on how we
might have to reconsider, if that does happen. I mean, those
figures, again, are based on an optimistic
view of China’s growth. And he claims they’re moderate. Well, they’re not
moderate, because they’re the same as the central planning
agency, the Politburo in China, which is based on 7%. My concern is that people like
John Lee and others I know, David Hale in the
United States, are saying there is a real
risk that China could have a dramatic slowdown,
much more than 10 to 7%, if not some sort of explosion
in the housing boom and so on. And the answer to
the people who do these extrapolations
is, how good were we 10 years ago making judgments? You know? It’s a useful
discipline, by the way, including for intelligence
people, when we’re looking forward in
defense planning terms 20 or 30 years into the
future, go back 20 or 30 years and see how many things we got
wrong, with the end of the Cold War, with 9/11, with
Iraq and Afghanistan. I mean, I do accept, who
would have believed that with the end of World history,
as Francis Fukuyama called it, in which the only
successful model was Western democratic
capitalism, that we’d be in this sort of,
not just economic, but economic and political
crisis in the West, leadership crisis? I think the issues of what
we would face if he is right, remember his measures of
the success of a great power were very crude economic ones. They were GDP, trade, and debt. Well, he chose debt
because it suited. I mean, as long as America’s
the reserve currency, yeah, there’s a problem with that
sort of debt they’ve got, but they can actually just
keep printing the currency. So we can speculate
on if he’s right, then would everything that
I’ve said be a lot worse? To which the answer probably is,
like with the answer to Japan, yes. My name’s [INAUDIBLE]. I’m from the Department
of Nuclear Physics. Department of? Department of Nuclear Physics. Ah. I just want to make a comment. We all know that four great
inventions of ancient China is the compass, paper
printing, and gunpowder. And if you look at the
parallels of those inventions in the modern world. So I think the four great
inventions of the modern world are the airplane, the
computer, the internet, and the nuclear bomb. Yeah. And I think unless a
country can take these four areas of invention
to the next level, I don’t think we can see
a next great superpower. I’ll take that as a comment. Are you doing things that
we need to know about? [LAUGHTER] Well, the dean needs to know. It’s another dean that
has to worry about him. And this will be
our final question. Thank you very much,
Professor Dibb. I’m [INAUDIBLE] from the
administrative [INAUDIBLE] study center, just head
to the fourth floor. And I’m from Vietnam. And I’m very impressed
by your presentation, and I have a question from the
smaller countries’ perspective. Because what we
learn from history, I mean Vietnamese history,
that competition of powers is no good. Because anyone will
have to choose a side, and it happened in Vietnam that
a proxy war happened there, and tragedy happened. And not even after, like
in a hegemonic power, as 100, 1,000 years before,
in Vietnamese history, we have the Chinese
as the dominant power. And Vietnamese people lived by
the way that they deferenced. And one way that they
recognized the status of China as a big power, a
big naval power, but then they tried to
keep autonomy inside. But the situation now
is quite strained. Half of the policy
looks to decide– whether to decide in favor to
sign up with China or the US, or whether they have
to sign up with– I mean, we signed up with
ASEAN for a long time, but it couldn’t prevent China,
especially in the South China Sea. Still, China is also big
puzzle for the policy. Not over the
pressures of the sea, but also pressure from
different directions as well. Because just in the big power
absorb the economic relations. And so all type of relations
have to depend on that. Is there any way out of that? Is there any way out of the
geopolitical competitions? And if you are a Vietnamese
leader, what do you choose? You’d have to pay
me a lot of money. We will. [LAUGHTER] I think it’s very hard,
if I might say so. And I don’t mean this in a– Price just went up. Price just went up? Thank you. You’re getting a cut. I think it’s very hard,
if I might say so, for people like
me, who grew up– I grew up in England, an island. I’ve lived here 45 years more. Anglo-Saxon countries, in their
origins, are island countries. Britain Australia, New Zealand. And even when you look
at America, I mean, it’s an island, really. I mean, is Canada a threat? I don’t think so. Is Mexico? I don’t think so. And we’ve never had a
history, certainly not Britain, Australia, New
Zealand, of being invaded. I mean, the last time
Britain was, was 1066. By the way, the last
time the Americans was, was when we British set fire
to the White House in 1812. So we don’t share common land
borders where war has occurred. I mean, when I talk to
Russians, they absolutely understand that. When I talk to Germans, they
absolutely understand that. You understand it. 1,000 years of
Chinese suzerainty. And despite being fraternal
communist countries, in 1978, China decides
to teach you a lesson. So I think the issue for
you and your survival is the issue of middle powers. And I’ve mentioned South Korea. I’ve mentioned Vietnam. I’ve mentioned Australia. And by the, way
I think in ASEAN, I’m glad to see after almost
an absence of 10 years, for reasons I understand
with Indonesia preoccupied with building democracy,
which it’s doing in a way that Russia in the same period
has absolutely not done, that in my impression at ASEAN
meetings in the last two years, I’m seeing a more
confident Indonesia. And I think that’s good. We Australians certainly want
to see the world’s largest Muslim country, fourth
largest democracy just off our northern shore
being more confident. And if I were you
in ASEAN, although I know there are substantial
weaknesses in ASEAN, I’d be doing more
together that is you in the north and Indonesia
in the south to try and get some more backbone into ASEAN. ASEAN talks a lot
and doesn’t do much. Finally, on South
China Sea, there’s not much you can do
except do what you’re doing with your kilo
class submarines and other military equipment. And frankly, prevail
on the Americans. You need to prevail
on them to ensure that freedom of the high seas,
including through the South China Sea, is an
American interest. Because you can’t
do that by yourself. Ladies and gentlemen, please
join me in thanking Paul for– [APPLAUSE]

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