Her Excellency Ms Frances Adamson
Australian Ambassador to the People’s Republic of China
‘Xí Jìnpíng and his China Dream’
Centre for China in the World, ANU, Canberra
16 June 2014
Distinguished co-chairs Professor Richard Rigby and AIIA President Cameron Hawker, ladies and gentleman, China scholars.
I am pleased to join you this evening in the new building of the Australian Centre on China in the World (CIW) .
This is a truly impressive and important venue for developing and sharing ideas.
Its architect, Gerald Szeto, was here just a few weeks ago to deliver the fourth CIW annual lecture, when he spoke about the design and construction of the Centre.
I was interested to learn that the Centre was designed to reflect a unique combination of Australian and Chinese design elements around the principles of:
jiè jǐng (借景) or “borrowing from the landscape” and
shān shuǐ (山水) “embracing both hills and water”.
I want to acknowledge the vital role the Centre, under its Director, Dr Geremie Barmé, is playing to strengthen research about China.
The Centre is living up to the mission it was set in 2010 by former Prime Minister Kevin Rudd when he announced its establishment and called for an institution that would contribute to:
“a well-informed debate that engages the broader Australian population in a dialogue that directly concerns their future”.
Since then, the Centre has enhanced Australian understanding of China, and lifted the profile of China-related work in Australia and globally.
I am honoured to serve as an ex-officio member of the Centre’s Advisory Board.
The Centre’s superb Year Book is a must-read for anyone with a serious interest in China.
I acknowledge, too, the contribution of Professor Richard Rigby, Associate Director of the Centre, long-term China scholar, and a former colleague.
I would like also to recognise the contribution of the AIIA and its members, many of whom are present this evening.
Since its formation in 1924, the AIIA has continued to promote interest in and understanding of international affairs in Australia.
I thank Garth Hunt, Event Manager for the AIIA’s ACT Branch, and another former colleague with formidable China experience, for the invitation to speak here tonight.
I am also delighted to see such an impressive number of students from China here this evening.
This is a true reflection of the strength of ANU’s long-standing links with China.
Tonight I will speak about “Xi Jinping and his China Dream”.
I will delve into some of President Xi’s more significant public statements and policy measures to try to shed some light on his vision for China.
I will talk about President Xi’s priorities and prescriptions, particularly as they relate to economic reform in China.
Many of these were outlined in some considerable form at the Chinese Communist Party’s important Third Plenum in November last year.
My focus is on the steps President Xi and his leadership are taking to respond to the important challenges facing China.
I will also outline what I think President Xi’s plan for China means for Australia.
Xi Jinping sets out his priorities
The Chinese leadership under Xi Jinping has moved swiftly to set out the priorities for China in the decade ahead.
Mr Xi outlined his broad vision for China in late 2012, in the Great Hall of the People, after leading out the six other members of the new Standing Committee of the Party’s Central Committee Politburo, to greet waiting media.
That important moment in Party history saw the end of a decade of administration under Hu Jintao and Wen Jiabao during a period of significant change and challenge for China,
not least the global financial crisis, the continuing challenges of rapid modernisation, the growth of China’s cities and industries,
and, with this, a widening wealth gap and growing social and environmental stresses.
Much of this Mr Xi had seen from the centre, as PRC Vice President, or close to the centre, leading some of China’s most important provinces and municipalities.
Speaking publicly for the first time as Party General Secretary, Mr Xi said:
“Our responsibility is to unite and lead people of the entire Party and of all ethnic groups around the country, while accepting the baton of history and continuing to work for realising the great revival of the Chinese nation, in order to let the Chinese nation stand more firmly and powerfully among all nations around the world and make a greater contribution to mankind”.
Invoking history, Mr Xi’s emphasis was on the strength of Chinese civilisation, and on the hardships the Chinese nation had endured in more modern times.
Mr Xi gave recognition to the aspirations of the Chinese people to a better quality of life.
These he framed in terms of better education, more stable jobs, better income, more reliable social security, higher quality medical care and a cleaner environment.
He underscored the role of the Communist Party – as the “firm leadership core” – in delivering on these aspirations.
So too Mr Xi set out his intention to strengthen the Party by striking against corruption and indiscipline and by deepening the Party’s links to the people.
This was an early signal of the sweeping anti-corruption and mass-line campaigns he would later launch.
President Xi, in his many subsequent speeches, in China and abroad, has sought to further enunciate his vision for China and the future.
The themes he set out late in 2012 have, since then, appeared consistently:
national rejuvenation
placing the Party closer to the people
tackling official corruption
moving ahead on economic reform
China, confident and assertive internationally
So too, in numerous speeches in China and abroad, Mr Xi has called for China’s assertion of its rightful place in the world, and defence of its national interests.
Mr Xi provided an early articulation of this in January 2013, shortly before he assumed the PRC Presidency, when he said:
“We will stick to the road of peaceful development, but will never give up our legitimate rights and will never sacrifice our national core interests”.
Mr Xi’s underscored his ambitions for China on the world stage during his “shirt sleeves summit” with President Obama in June last year, when he spoke of the need for both sides to
“work together to build a new model of major country relationship based on mutual respect and win-win cooperation for the benefit of the Chinese and American people, and people elsewhere in the world”.
As China seeks to have a greater voice on international issues, commensurate with its economic weight and ambitions to be a major international power, we are seeing a more assertive China.
This is creating strategic ripples across the region, as China’s interests meet the interests of other countries.
President Xi himself is composed, confident and active on the international stage.
President Xi and Premier Li Keqiang have engaged extensively with their international counterparts – our engagement with China’s new leaders is but part of a wider story.
President Xi has visited Russia twice, South Africa, North and South America, Central Asia, South East Asia (Indonesia and Malaysia) and Western Europe (Germany, France, Belgium and the Netherlands).
By our count, President Xi has met the Heads of Government and Heads of State of around 80 countries, including of course Prime Minister Abbott in Beijing in April this year and at APEC in Bali last October, and former Governor-General, Quentin Bryce, in Beijing in October last year.
Introducing the China dream
Central to President Xi’s explanation of his vision for China is the “China Dream”.
The China Dream is a term that has been interpreted and re-interpreted by many inside and outside China, as the world has watched Mr Xi’s leadership take shape.
Two weeks after his appointment as Party General Secretary, Mr Xi made a highly publicised visit to the “Road to Rejuvenation” exhibition at the National Museum in Beijing.
There he announced that,
“realising the great rejuvenation of the Chinese nation is the greatest Chinese dream of the Chinese nation in modern times”.
Then and subsequently, President Xi has linked the China Dream to the achievement of the two centennial goals, which set the targets of:
doubling 2010 GDP and per capita income to build what the Party terms “a moderately prosperous society” by the 100th anniversary of the Party in 2021; and
developing China into a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious by the 100th anniversary of the founding of the People’s Republic of China in 2049.
In November last year, on the eve of the Party’s Third Plenum, Xi told a gathering of senior foreign guests in Beijing that, not only was the China dream about the
“renewal and rejuvenation of the Chinese national civilisation and its positive development to global peace and development”
but, at the same time, was also about
“creating an opportunity for every person to achieve his or her own dream”.
The CIW’s China Story annual in 2012 has offered what I consider to be a persuasive interpretation of the China Dream:
“only by pursuing economic reform to improve living standards and maintaining national stability by enforcing social harmony can China become both a wealthier country and a great power. This is what the Chinese people want and it will allow us to return to our former greatness”.
Shaping political institutions
It is not just about language.
President Xi is also seeking to reinforce his ambition for China by making practical changes to Party and government machinery to drive reform.
A good deal of this appears to involve strengthening the authority of his own position, to break through entrenched interests that might resist or oppose his reform plans.
Xi is investing considerable personal authority and prestige in his reform agenda.
He has placed himself at the head of the “leading group on comprehensively deepening reform” – the key body charged with driving forward the Third Plenum agenda.
He leads the newly established “National Security Commission” – a mechanism designed to bring greater coordination over the management of external and internal threats and risks.
He heads the new “leading group on the internet and informatisation” – its establishment seemingly recognition of the powerful way that social media is transforming China, including by providing new, but fragile, platforms for social expression, and so challenging the ability of government to shape public opinion.
We glimpsed him on television last week leading discussion at a meeting of the Leading Small Group on Finance and the Economy.
And Xi, importantly, retains overall command of the armed forces, as Chair of the Central Military Commission.
These points illustrate Xi’s authority, but they also highlight the daunting extent of his task, and that of China’s government:
to rebalance the Chinese economy towards a more sustainable economic growth model to ensure continued growth and prosperity
to transform the PLA into a professional outward looking modern military, capable of supporting China’s strategic objectives
ensuring internal stability in the face of profound economic, social and environmental change, and likely lower and more volatile growth rates as the economy adjusts
Above all, for Xi, is the question of how to ensure the leading role of the Party as China becomes more educated, globalised, affluent and demanding.
Economic modernisation is one part.
Strict political control is another.
I have to remark here that President Xi’s priorities clearly reflect the priorities and history of the Communist Party of China.
We can’t pretend we will be comfortable with, or agree with, everything China does in the years ahead.
This has always been the case.
When we have clear differences, such as on human rights, we need to deal with these even as we build a relationship based on common interests.
What do we know about Xi Jinping?
Before outlining China’s reform blue print, I would like to convey a little of what we know about Mr Xi, through his long-standing connection to Australia.
A connection that begins through his father, Xi Zhongxun, a veteran of the long March, a former Vice Premier, and a leading figure in the early stage of China’s opening and reform.
Xi Zhongxun was keen to learn from the economic experience of western countries.
In 1979, as Guangdong Party Secretary, he led a delegation to Sydney, Newcastle, regional parts of New South Wales, Canberra and Melbourne.
To better understand the workings of a modern economy, he visited markets, farms, ports, docks, factories, schools and research institutes.
And, with then NSW Premier Neville Wran, signed a joint declaration on Guangdong–NSW friendship and cooperation on 5 December 1979.
This declaration led to Australia’s first official sister-state/province relationship with China.
We now have more than 80 such relationships.
They all add ballast to our broader political and economic ties.
Xi Jinping has visited Australia four times.
He likes to remark that he has visited all States and Territories in Australia, except Tasmania, and that he hopes to visit Tasmanian soon.
He is particularly fond of Kakadu.
It is perhaps not a widely known fact that Mr Xi’s first visit to Australia, in 1988, was under the Department of Foreign Affairs and Trade’s Special Visits Program.
The SVP is a program which continues to create value for Australia, by enabling us to identify and engage future leaders, and to shape positively their perceptions of Australia.
We count not only President Xi but also Indian Prime Minister Modi among SVP alumni.
In 1988, Xi Jinping was Vice Mayor of the city of Xiamen, a key harbour and manufacturing hub in Fujian,
and one of a small handful of special economic zones that at that time pioneered China’s economic transition.
By 2000, he had risen to the position of Governor of Fujian.
In 2001, Mr Xi paid his second visit to Australia – a brief stopover in Brisbane, a city to which he will return this November for the G20 Leaders Summit.
In 2002, Mr Xi was elevated from Fujian to the position of Party Secretary of Zhejiang, an economically important coastal province - China’s fourth largest provincial economy in GDP terms.
In this role, he returned to Australia in 2004, visiting Sydney, Perth and the key resource centres of Western Australia.
Zhejiang and Western Australia have shared a sister-state/province relationship since 1987.
Visiting the Pilbara and Karratha, Mr Xi explored potential cooperation in LNG and mineral resources.
In 2007, following a brief period as Party Secretary in the major municipality of Shanghai, Mr Xi assumed the Vice Presidency and took a seat on the elite Politburo Standing Committee.
Mr Xi’s fourth visit to Australia was in 2010, as Vice President.
His delegation included the heads of some of China’s largest state owned enterprises.
His visit, which took in Melbourne, Canberra and Darwin, focussed strongly on expanding our resource and commercial ties.
Here, on this campus, Mr Xi witnessed the signing of an MOU between the Central Party School and the ANU, covering agreement on training, joint research and exchanges of personnel.
What is his reform plan for China, and what does it mean for Australia?
I spoke earlier of some of the key challenges facing President Xi and his leadership.
What then is his reform plan?
While it is still early in what we can expect to be a ten-year term, some of President Xi’s plan is clear from the Resolution endorsed by the Party’s Third Plenum in November.
The Resolution is an ambitious reform blueprint – endorsed at the highest level of the Party.
It reaches beyond the economy, into areas of social policy, governance and party-state relations.
At its heart is the recognition that, in order to provide sustainable and balanced growth in the decades ahead, China’s economic model must be reformed.
The Resolution calls for markets to play a “decisive” role in allocating resources in the Chinese economy.
The importance of this decision, and its practical implications, remains to be seen.
For the Resolution also specifies that the market cannot negate or replace the role of government.
What we might see in terms of a stronger role for the market is better pricing of resources, like water, oil, gas, electricity and telecommunications.
And while we may see reform of State Owned Enterprises, with some opened to a degree of private investment and made subject to competition, SOEs operating in core strategic sectors – likely energy and telecommunication – can be expected to retain a privileged position within the economy.
The Third Plenum recognises the enormous impact that urbanisation is having on the shape of Chinese society.
It foreshadowed reforms to reduce income inequality, particularly between rural and urban areas and measures to improve household registration (“hukou”) arrangements.
But this will be difficult and sensitive work, and reforms in areas such as land ownership will open challenging questions around transparency and the law.
We look to see whether and how the commitment in the Third Plenum to China continuing to open itself to foreign trade and investment, including in finance, education, health care and other services will be implemented.
The China (Shanghai) Pilot Free Zone is an important initiative to promote economic reform.
By trialling a light-touch “negative list” model for regulating foreign investment, the zone is positioning China for a greater role in the services sector.
The reform path will be difficult but the Third Plenum has set out a blueprint for action.
For example, China appears set to continue the process of financial reform and increase its integration with the international system
The Third Plenum reiterated China’s intention to pursue financial liberalisation, including by further internationalising the Renminbi and, over time, unwinding its capital controls.
Chinese authorities have widened the Renminbi’s daily trading band and announced plans to liberalise interest rates within two years.
Steps have been taken to link mainland and offshore financial markets, including through the Shanghai - Hong Kong Connection Scheme, allowing mutual access between the two exchanges.
The announcement of direct trading between the Australian dollar and the Renminbi last year means Australia is part of this process.
More broadly, as China rebalances its economy, Australia is well positioned to provide the resource, energy and food security China needs to drive future growth.
And Australia will remain a stable and transparent investment destination for China.
But while there will be more opportunities, there will also be more competition.
Not only will there be more competition from other countries, but China’s own firms will be vying strongly for the Chinese consumer dollar.
If Australia is to take full advantage of a more consumer-driven Chinese economy, we must be competitive, and we must have long-term relationships with, and a deep understanding of, the market.
We have prospered by selling resources, often to large SOEs.
The rest of the world will be better placed to compete with us in agriculture and services – even though we have clear strengths on which to build.
China in the region
I said earlier that we are seeing a more confident and assertive China in terms of its engagement with the region and more broadly.
We see this in the steps China is taking to set the regional agenda, for example with Asian Infrastructure Investment Bank and the Free Trade in the Asia Pacific (FTAP).
And in China’s growing role in global economic governance – for example the G20 – something Australia firmly supports.
And we see this in the assertive approach China is taking in relation to its maritime interests.
As China’s economic and strategic weight grows, the impact of China’s actions abroad will have profound importance for the region.
As Australia’s Minister for Foreign Affairs said recently, we have an “opportunity to ensure China’s rise as a powerful voice on the world stage happens in a positive, peaceful way”.
Australia is concerned about regional maritime disputes.
We don’t take a position on claims but we have a legitimate interest in peace and stability, respect for international law, unimpeded trade and freedom of navigation.
We will continue to be frank and open in discussing these matters with all parties, including China.
Our diplomacy will be aimed at helping to de-escalate tensions.
To repeat the words of the Prime Minister in Shanghai in April, “we all advance together – or we won’t advance at all”.
Conclusion
President Xi will make his fifth visit to Australia, his first as President, in November.
This will be a milestone in what both Australia and China are calling a “Year of Opportunity” in the relationship,
underscored by the strong collaboration we are sharing through our respective hosting of APEC leaders meeting and the G20 Summit, where we share an interest in driving economic growth, infrastructure development and open, integrated markets.
President Xi’s visit will be a key opportunity to build on the significant outcomes achieved during Prime Minister Abbott’s visit to China in April,
which saw China’s agreement to take hundreds of Australian government-funded students under the New Colombo Plan,
and the announcement of renewed funding for the Australia-China Science and Research Fund.
It is Australia and China’s strong wish that an FTA be finalised by the time President Xi visits Australia in November.
I believe the FTA will serve the interests of both sides and provide increased opportunities for Australian and Chinese companies.
President Xi’s visit will also be an opportunity for Australians to form a stronger understanding of what sort of leader he will be for China, and what his leadership means for the bilateral relationship.
Should he accept the Prime Minister’s invitation to address both houses of Parliament, we will have a unique opportunity to hear directly from President Xi.
I dare say that in that setting, and in others, we’ll hear more of the China Dream.