Ex-PM of Australia speaks out on US-China risks

by Chris Zappone

Former Australian prime minister Kevin Rudd has laid out a compelling assessment of where China-US relations stand, and the contradictions and preoccupations of both sides.

Chinese-speaking Rudd is a long-time student of China, with deep contacts in the nation. At the same time, he has risen to the top of politics as a Labor prime minister in Australia, serving from 2007 until a leadership change in the Labor Party in 2010. His insight into the systems and worldviews of the West and East make him one of the better minds to follow on subject of China’s rise. Sure, he looks like a dentist, but he speaks like a particularly broad-minded diplomat. And his suggestions for a Pax Pacifica are to my knowledge just what is needed at this critical time in geo-politics.

While sounding a pessimistic note (“I have studied the relationship between [China and Japan] for all of my professional life. But I have never seen it as bad as this.”) in the speech in Beijing, Rudd gives an unvarnished views of how China, the US, and the rest of Asia’s views China’s rise. In fact, if you are just coming in to the issue of heightened tensions in East Asia, it’s definitely worth a read.

But Rudd’s otherwise deft analysis falls down when he says.

what we tend to see as the general trend across Asia is two competing forces at work. One is the force of globalisation. The second is the force of nationalism. The force of globalisation brings economies, peoples and countries closer together. The forces of nationalism tend to tear economies, peoples and countries apart. Globalisation is the force of the 21st century. Nationalism is the leftover force of the 19th and 20th centuries. Globalisation has become a positive force. Nationalism has increasingly become a negative force. And nationalism is spreading across Asia.

In as much as globalisation is a global trend, Rudd’s description of it smacks of 1997-era business utopianism, which has been discredited – although not so much in Australia where the economy is relatively strong.

Elsewhere, after the bank failures and the financial crisis, not to mention slumping household income, it’s hard to see globalisation as anything but the precursor to the current crisis. So it is simplistic to say globalisation is a “positive force” that brings countries together. Globalisation may unite countries “on paper” smearing together economies across political borders, but it if the experiment in globalisation in the past 30 years is anything to go by, it’s fair to say it causes plenty of division within nations – both developed and developing.

For people with the means, cross-border trade and investment creates previously unimaginable opportunity. For those without the means, or those who unable or unwilling to engage the world over the border, globalisation has left them behind. This would also be true in Asia, I would suspect.

And it’s this reality on this new disparity of wealth in the US and Europe that will be animating politics in those regions for some time to come. So it’s worth bearing that in mind, when describing the American and European public’s view of China’s rise, that Beijing’s growth has occurred as the middle class in the US has floundered, raising the risk of further social and political disorder.

Where globalised capitalism hasn’t helped drive income inequality, it has freed up migration flows creating social strains between new and existing populations, particularly during recessions. This has happened in the US and Europe.

Francis Fukuyama published a piece last year on liberal democracy’s decline in the time of globalisation.

The takeaway from that piece: the current form of globalized capitalism is eroding the middle-class social base on which liberal democracy rests.

While nationalism is clearly on the rise in Asia, I wouldn’t doubt if a more considered approach to globalisation takes hold in countries of the West. Where there are elements of nationalism increasing in Europe (think: Greece, for example), in the US, it’s the reemergence of the citizen activist, seeking to impose rules and laws on the excesses of the private sector.

But don’t let any of this prevent you from reading up Rudd’s unique take on Where Things Stand, especially if you are living in China or the US.