News

China meeting will be vital for Gillard's standing



8 April 2013

First published in the Australian Financial Review.

Conversations the Prime Minister has in Boao with the new Chinese elite are crucial in setting the template for future diplomatic relations.

If you want to know how a new Chinese leader views the world, then the annual Boao Forum, held on the southern Chinese island of Hainan, is a good place to start.

Vast districts around the conference centre were in security lockdown at the weekend, ready for the presence of new party secretary Xi Jinping in his first major outing at an international forum since being made President a month ago. His regal presence at the meeting shows an intention to make the Boao Forum the Davos of Asia.

That Prime Minister Julia Gillard, in her second visit to China since coming to power, has taken the largest and most high-level delegation to the forum and to other activities in China is no more than an admission of political aid commercial fact.

In a diplomatic cable released by WikiLeaks in 2011, former United States Secretary of State Hillary Clinton was reported as saying it was hard for the US to "argue with its banker". For the US, the leverage China has is the more than $US1.5 trillion of debt it owns in US Treasury bonds. For Australia, it's the more tangible fact that China is its largest trading partner, and the stock of Chinese investment in Australia is rising.

The cost of bust-ups now would be horribly high. Going all out to avoid them is worth the effort.

But the question "What does Australia mean to China?" is put into perspective when it is asked at Boao. Europe's woes are still thick in the air here, despair at the ever-looming fiscal cliff in US still lingers, and then there is the raw political headache of North Korea, the poorest of Asian economies in terms of per capita GDP and yet the one that takes up so much of the major powers' time.

In all of this, Australia is a victim of its own stable contentment. Xi himself needs no introduction to the country. He visited Australia several times on his path to party leadership, visiting every state except NSW. For him, the levels of wealth, equality, education and development in Australia are probably about where he hopes the "China dream", to which he has referred in speeches since the end of last year, is heading.

For Gillard, this visit is a big deal. She has to put Australia in the minds of the new elite leaders in Beijing and try to persuade them to extend the benign, slightly complacent vision they have of the country. The time she spends with them, getting to know them, enabling a more complicated and richer understanding of Australia, is crucial.

Power is spread out in the US or European Union, and you can at least choose some of your interlocutors. The brute fact in China is the seven members of the Standing Committee of the Politburo are the only show in town if you want to get real decisions made. Access to this elite of elites is hard to get. A head of government of a major developed power is accorded that access. The points Gillard makes in her interaction with Xi and Premier Li Keqiang, and the tone of those conversations, are crucial. They set the template for diplomatic relations that the rest of the vast machinery in China will then work towards.

The Americans put immense effort into this intellectual spadework. They try to get under the skin of their Chinese interlocutors, working out the way they tick, the paths they have taken to where they are, the vision they have for their country and the ways the US can work within that. This super-elite interaction is labour intensive.

Gillard is a politician whose focus on becoming leader was domestic issues. In her interaction with Xi and the new Chinese leadership she needs to look at them in the same light; as a group of people who are edging towards some of the most momentous decisions their country has faced in the past four decades, for whom international issues are more often than not a distraction from the challenges they face at home.

Xi's language since last year has been thick with talk of "a vision", the Chinese renaissance, the life-and-death battle with corruption, the need to address the grinding poverty in large parts of rural China, the fearsome environmental, energy, food security and sustainability issues.

They are heading into this with a critical lack of legal infrastructure, and a governance system in desperate need of reform. Australia, to them, is indeed a lucky country". Gillard has to show that Australia has important things to say about China's internal issues.

The one task she can really undertake on her visit is to move the conversation between Australia and China beyond the transactional, trade-related issues. They are important, but they will happen mostly on their own.

For her, the task is to clarify a very simple question: do we, the Chinese and Australians, have the same view of development and modernity? Do we work within the same intellectual and moral framework on these matters? Are our visions for social development and justice the same?

It is a strange thing to say, perhaps, but it is more as a philosopher than a politician that leaders have to come to China these days. And those who can engage best on these broad conceptual questions will probably be seen by the Chinese elite as the ones who offer the most in the country's immense struggle to become not just a modern economy, but a modern state.