Current ambassadors of Australia, France, and Singapore to the United States, who all have worked in or with Beijing in previous positions, discuss the global view on the U.S.-China relationship, and how it affects the rest of the world.
FROMAN: Well, good afternoon, everybody. Thank you for being here. And thank you to the several hundred people that are joining us virtually as well. I’m Mike Froman. I’m president of the Council on Foreign Relations. And today is a rare occasion, because we’re joined not by one, not by two, but by three ambassadors. Now, as a former ambassador, I can tell you how valuable an ambassador’s time is. And so we are particularly honored that the three have agreed to be with us today.
All of our panelists today—Ambassador Laurent Bili of France; Ambassador Lui Tuck Yew of Singapore; and Ambassador Kevin Rudd of Australia, on the screen—know China exceedingly well from their prior experiences. Ambassador Bili and Ambassador Lui were their country’s representatives in China just before coming to Washington. And Ambassador Rudd, as many of you know, has spent the last eight years at the Asia Society looking longingly and enviously at the Council on Foreign Relations across the street. (Laughter.) But comes to Washington after having served as prime minister and foreign minister, and a longtime China expert. Indeed, during COVID, Ambassador Rudd decided to go back to school and get his doctorate from Oxford. And wrote a 420-page thesis on President Xi’s worldview. Now, that is only sixty pages more than Henry Kissinger’s thesis. (Laughter.) So, Kevin, we expect even greater wisdom from you than we do from Dr. Kissinger.
Clearly, something’s going on here when three important countries send to Washington, their chief experts on China. And they all came at a critical time to help inform, and influence, and help shape America-China policy. They may not—they may not admit to that, but I’m convinced that that’s why they were sent here to Washington, to share their expertise. And we are very much the beneficiaries of that. It’s been a critical time in U.S.-China relations, from the balloon incident to last week the first visit of a Chinese foreign minister to Washington, D.C. in, I think, seven years. And of course, everyone leading up to the APEC ministerial in San Francisco coming up, and the possibility of a Biden-Xi summit there in a few weeks. Significant issues remain unresolved. We’re looking forward to hearing about that.
And with that, I’d like to give the floor to our panelists and our moderator, Bay Fang, who is the president of Radio Free Asia. Welcome.
FANG: Thank you so much to all of you. And thank you, Ambassador Froman, for that welcome. I’m Bay Fang, president of Radio Free Asia. I’ll be presiding over this conversation. And we’re joined today by CFR members attending in person here in Washington and almost four hundred members attending virtually via Zoom. So I am really excited about this conversation today. As Ambassador Froman said, it comes at a very timely moment in U.S.-China relations.
And given that, I’d like to start the conversation with a relatively open-ended question to each of you. So I’d like to start with Ambassador Rudd. Given that you’ve written a book very recently about the potential and the risks of a war between the U.S. and China, I was wondering if you might give your assessment of where the U.S.-China relationship stands, whether you’re optimistic or pessimistic about any outcome of a potential Biden-Xi visit in in November.
RUDD: Thank you very much. And thanks to the Council on Foreign Relations for inviting me to participate in this panel with two distinguished colleagues, Ambassador Bili of France and Ambassador Lui from Singapore, both countries I know well.
You ask a question about how I view the prospects for the U.S.-China relationship now. I’m neither optimistic nor pessimistic, but, as an Australian, congenitally realistic about where all this—(laughter). Think we need to ground our analysis of the events of the last few weeks and the next few weeks in just two or three points of underlying strategic reality. One is, China is now much more powerful than it was in decades past. Why do we have tensions in the in the U.S.-China relationship? China has moved from the margins of global power to the center of global power, whether its militarily, economically, technologically. In other words, there’s a shift in the balance of power.
I think the second big change driver is Xi Jinping’s leadership. Mike mentioned before, I imposed on myself the purgatorial exercise of reading everything which Xi Jinping has written on questions of ideology over the last several years, to gain a sense of his underlying ideological worldview. And Xi Jinping is a leader who clearly wishes to change the status quo. And so therefore, China’s intention is to change the regional and global status quo in a direction more accommodating of Chinese interests and values. And the third big underlying structural factors is this: For the last five years the United States and its allies and some of its friends around the world have been responding, because many have chosen to resist the direction in which China seeks to take both the regional and the global order.
So that’s the background. So we need to be realistic about these strategic underpinnings. I think in that current environment, Bay, and I’ll just—I’ll leave my remarks at this, because I’m very keen to hear what my colleagues have got to say. Against that background, my judgment is that both countries and their leaders right now are seeking to stabilize the relationship. But stabilize it, not normalize it. And stabilize it with a different lens.
For the Chinese, the interest is to stabilize it in a direction which helps a new level of political, diplomatic, and economic discourse with Washington, which reopens more trade, more investment, or access to capital markets not just for the U.S. but with countries around the world, including Europe. In other words, to relieve some of the internal economic tension which China now faces because of declining growth because of difficulties in its own domestic economic model. That’s where I think China’s coming from.
The United States view of stabilization is somewhat different. It’s embarked upon a conscious campaign of economic de-risking from China, security of supply chains—whether it’s critical minerals, or semiconductors. But it does wish to resume mil-to-mil dialogue with the PLA in order to reduce the risk of crisis, conflict, and war with China in the South China Sea or over the Taiwan Straits by accident. So I think they’re coming at it through different lenses. That’s why I think we will—we’ll, at best, have modest outcomes from the upcoming proposed summit meeting between them in San Francisco.
FANG: Thank you so much.
May I turn to Ambassador Bili, and ask you the same question?
BILI: Well, I think globally we are on the same page. I will just recall maybe that twenty years ago when I was advisor of President Chirac for China, we—I think—I suspect we all forgot that the GDP of China was more or less the GDP of France. And so twenty years, a lot of ground has been covered by China. And it’s no surprise that with these results come also claims. But the last three, four years especially, let’s say the time that with Ambassador Lui we were in China, we have seen a much more assertive China, which have a consequence of the way we, as a country but also our public opinion, see China. And it has been in certain aspect a wakeup call.
So I think, regarding on the situation of where we see U.S.-China relations going, I think China has realized also by basically at the end of last year that that new policy was having side effect. And side effect which were very costly for its economy and its position in the world. And they try to start to start, vis-à-vis Europe and vis-à-vis other partners, kind of sharp offensive. And at the same time, trying to come somewhat to a more stable relation with the U.S.
Then we have also issue of the balloon, which changed a bit the path of things. But I think since the end of last year, we have seen that trend to try to stabilize, as Kevin said, the situation. And I think that’s where we are heading now, but with huge differences. Which leave things very volatile. I’ll stop there.
FANG: Thank you very much.
And Ambassador Lui.
LUI: On U.S.-China, I think right now they’ve been able to stabilize the relationship. They’ve halted the downward spiral. They’re back to talking to each other rather than talking past each other. We hope, of course, that a summit will take place next month between the two leaders. But I don’t believe that through one meeting like that you have a meeting of minds. It’s just too much to hope for. But because the relationship is wracked by mutual suspicion, intractable issues, an absence of strategic trust, I think it will be some time before we can see a sustained uptrend.
And in the meantime, of course, as Laurent has mentioned about the balloon incident, anything of that nature—and there are many possibilities—could result in another downward spiral for which you then take more time, more effort to try and get it back to where it was before you can resume the upward trajectory. I do appreciate what Kevin has shared. And agree very much with what he has said about what China is aiming for. I think you have a China now that is, of course, believing that it is time for it to claim its rightful place in the world. In in a sense, the past 200 years, maybe, we have been abnormality and aberration rather than the norm. It believes that the East is rising, to some extent, the West is in decline. We have heard that before.
To me, I always find that the early years of President Xi, during his presidency, would actually be the most interesting because that was when he was thinking that he only had ten years. And so when you believe that you only have ten years, you lay out a road map. And this is what I want to try and achieve, and this is the trajectory that I want my country to be on even beyond my time. But now that he believe he’s got another ten, maybe another fifteen years, there’s probably a little bit more time for that master plan to be played out. And so there’s the possibility that you can make tactical pauses, tactical adjustments, but yet also to ultimately arrive at the same goal.
FANG: I’m interested in drawing out that question of Xi’s motivations and his strategy, especially in light of what is happening economically in the country now. You were both there, actually, during the—we had this conversation in the green room about the protests last November against the China zero-COVID policies, and whether or not Xi’s 180 on that policy was a reaction to the protests. And I’m wondering if I can draw out a bit from each of you what you see—whether you see Xi’s strategy changing, you know, in terms of a grand plan and, you know, cementing China’s place in the world. Can I start with you again, Ambassador Rudd?
RUDD: Yeah. Well, I think the analysis from both my colleagues and that which I put forward before is fairly similar about where we now find ourselves. And they, of course, have lived and worked in Beijing more recently than I have. My observation from the outside is this—is that the heart of the social contract between the Chinese Communist Party and the Chinese people for forty years has been sustained economic growth, increased living standards, and, of course, reducing poverty. And the party has been actually remarkably successful in that from the period from the late ’70s through until COVID.
I think what we began to see crack, however, after 2017 and before COVID was the underpinnings of the economic model of the past. Remember, the period of reform and opening was a greater reliance on markets, there was a greater reliance on the private sector, there was a greater reliance on productivity growth to generate this double-digit economic growth that we saw for decades and underpinned the Chinese economic miracle. But what we saw with Xi Jinping, really since the Nineteenth Party Congress, is a change in that model and a greater role for the party, a greater role for the state, a greater emphasis on common prosperity against inequality. And as a result, some of the animal spirits of the Chinese economy have left. And so growth has come down.
And the reason I emphasize this in response to your question about Chinese, shall we say, grand strategy, is that this domestic imperative to restore economic growth is now very large. And you see that reflected, for example, in the release of a trillion yuan or a trillion renminbi fiscal stimulus package just recently. You see it also in China’s sending of multiple delegations abroad and receiving many delegations from the world into China itself to reopen trade, investment, capital markets, et cetera, to the greatest extent possible. The reason I emphasize all this is that this is now one large chunk of Chinese active strategy, rather than them simply assuming, as they have in the past, that the economy looks after itself. That is now what is new.
But on the final point, I would say has Xi Jinping’s timetable or his strategic calculus in relation to Taiwan, or in relation to the South China Sea, or in relation to the East China Sea, or in relation to the future of U.S. military alliances in Asia, has that changed in any fundamental way? No, it hasn’t. It remains constant. So these are the two underlying elements now in China’s grand strategy, which is why it still makes for a difficult summit with President Biden on both those questions, when the U.S. is continuing to de-risk economically and, secondly, the United States remains vigilant on the national security questions I referred to just before.
BILI: Well, I think I will agree that the grand plan didn’t change. It’s clearly the rejuvenation of China. So the natural place of China is the first place, and the unification of China is part of the grand strategy. The economy is more, like, a mean to achieve that grand plan. And the unity of China being—let’s say, the unity of China behind the PCC is consider as the indispensable way of achieving it. And the Chinese authorities, and especially Xi Jinping, has been studying a lot about the disintegration of the Soviet Union. And so there is that maybe contradiction between the fact that to achieve rejuvenation, you need a strong economy, but you don’t want to take any risk on the leading role of the PCC. And you are ready to crush some of the private sector, as well as you did with minority and—over (contestation ?).
On the protests, I think it was very difficult to change the zero-COVID policy because it becomes also one of those symbol of the success of China and the superiority of the Chinese model. But the protests themselves were not that big. Maybe they were overt signals, that were as important as a protest. It was very local. Unrest in some neighborhood of people refusing to see their neighbors deported in decentralized quarantine. But most of all, I think it’s the system exploded. And the cost to have a centralized quarantine in full winter in Beijing after a lockdown in Shanghai of such a scale also provoked a real difficulty. I think it was just too much. And we have, obviously, examples of people that we asked if it they were supposed to go to a centralized quarantine, and their capacity were completely overwhelmed. And so it was meaning that we should have use again some gymnasium, this kind of industrial facilities. We will have seen, again, people in boxes in full winter. So that was that—that was clear then. I think it’s much more than that, than the protests, even if they were usual. They were of limited scale. And we were not that political as well.
FANG: Ambassador Lui.
LUI: I think good answers from my two colleagues so it’s very hard to add something fresh and new to it. But I follow on from Kevin’s point about social compact, because I think the question we have to keep asking ourselves is, what’s the legitimacy? What’s the legacy? Legitimacy, party, and its relation to the people, the legacy that Xi Jinping would like to leave behind, because, indeed, the social compact of the past forty years has been very successful for China. That is changing. I think the unbridled promise that each generation will be better than the previous generation in terms of jobs, standard of living, and all that, well, I think they will continue to work hard at it but it’s not a given.
So what will it be? If you look at the pantheon of great leaders in China, I mean, Mao Zedong, of course, one of the greatest. What do we remember him for? It is that you reunited the country. He got rid of the Japanese. And he set the PRC, since its founding, on to a new direction. For Deng Xiaoping, I think we remember reform and opening up— gǎigé kāifàng—his great success in building up Shenzhen. And, of course, although we may not give full credit to him, he was the one who got Hong Kong back for China, went against all odds, and we were thinking that there would be an extension of the lease to Hong Kong to the Brits.
Jiang Zemin, very quickly. I mean, if you look at Pudong today, you will attribute a lot of that dazzling success to his time, the ten years. So for President Xi, what will it be? Is it, Xiong’an, the so-called new capital to compliment Beijing? Is it Hainan? Is it the BRI, different model of governance and modernization that he’s hoping to share with the world, some of these grandiose plans that are underpinned by lofty principles, like the CSF, the Global Development Initiative, the GDI, which is GSI, the GCI, and so on? And what will be the legacy that we remember him for? Is it peaceful reunification? Or what form of reunification with Taiwan, because he’s also said that the Taiwan issue is not one that can be passed on from one generation to the next, right? So these are some of the things that we will be looking out for over the next ten to fifteen years.
I think one of the changes that I’ve seen, certainly I think during the time Laurent and I were then and maybe even a little bit before, is decision making and the inputs into decision making. I think in the past, and if you look at it along the spectrum of ideology, economic pragmatism, for four decades and more really it was economic pragmatism that had been shaping decision making in China. But in more recent years, I think that shift had been towards political ideology having a much bigger influence and impact on how decisions are being made.
Certainly, you do continue to have a group of people, when they talk about reforms, they’re talking about market-oriented reforms. But increasingly, you also have a group that is talking about comprehensively deepening reforms. And the word—the key word, of course, is “comprehensive,” because I think when you look at market-oriented reforms alone, that is not sufficiently comprehensive. And I think by comprehensive they mean party-led, politically driven. And so you see a more complicated decision-making matrix in China for the last few years, and I suspect so going forward.
FANG: Thank you so much. You brought up Taiwan, and I was wondering—if I can go to you, Ambassador Rudd, given that there have been increasing tensions and flashpoints in both the Taiwan Strait and in the South China Sea, I was wondering if you could tell us what you think about the Biden administration policy. Is it going—is it doing enough to try to ease those tensions in both of those areas?
RUDD: I think the United States has been very clear in its analysis of what Xi Jinping seeks to do in relation to Taiwan. They’ve noted that, for example, Xi Jinping has said that you cannot achieve the great rejuvenation of the Chinese nation without Taiwan. They’ve noticed carefully what the head of the Taiwan affairs office has said, which is reunification should be achieved in the new era, the xīn shídài, which means the Xi Jinping era. They’ve also noticed what the PLA reform and modernization timetable is, being brought forward from 2035 back to 2027.
So the United States, I think, in looking at all these things, has reached conclusions, which are alive across the rest of the analytical community, that from 2027 on for Xi Jinping to achieve his own sense of manifest destiny, the reunification of the country as he would see it, would look at the possibility of using force if necessary to regain Taiwan. So the real question is, if that’s the analysis, and it’s one which is fairly widely shared, then what do you do to preserve the status quo? The U.S. strategy has been focused on deterrence, both in terms of its own forces, in terms of what Taiwan itself is capable of on the island, how it begins to bring together also friends and partners in the wider region.
For example, through its collaboration with Korea and with Japan in a trilateral format, such as the one which recently occurred at Camp David, but with countries such as our own through AUKUS-type of arrangements, through other things like the Quad, which brings together Japan, India, United States and Australia. Also bringing China onto the NATO agenda, which it has now done successfully in recent NATO meetings, particularly given China’s level of diplomatic and economic support for Russia despite the latter’s invasion of Ukraine.
Against those measures. I think when China looks out it sees a much more complex and much more difficult strategic environment than it did, say, five years ago in the wider region. So is the United States succeeding on this question? I think that there is a greater sense of strategic equilibrium and there was before. But it is still unstable, particularly if you’re taking the example of the regularity and levels of danger, of intercepts of aircraft, of near collisions on the waters of the South China Sea between Chinese and U.S. warships as well. So therefore, so far, so good, but still it is unstable. Which is why a great outcome from this upcoming summit would be if Xi Jinping and President Biden could agree to, frankly, have the militaries once again engage in dialogue, substantive dialogue, to restabilize the military relationship.
FANG: Thank you. I could keep asking questions, but at this time I’d like to invite members, both in-person and on Zoom, to join our conversation with any questions you might have. A reminder that this meeting is on the record. And we’ll start if there are any questions from here in Washington. I’ll start with—yeah, please go ahead.
Q: Thank you very much. Thank you, Prime Minister Rudd. Thank you, ambassadors. Terrific discussion. I’m Ariel Cohen, with the Atlantic Council. And I do work on rare earth elements.
My question is for the European countries, for the U.S., for AUKUS, besides rare earth mining and refining—where China controls 60-plus percent of mining, close to 90 percent of refining—what are other technologies that we need to worry about in terms of reinvigorating or rebuilding our supply chains? Are these microchips? Are these—China is taking a lead in EVs, batteries, PVs, et cetera. What should be the three top priorities in terms of industries and technology? Thank you.
FANG: Is that—would anyone like to take that? Was that even towards anyone? OK.
BILI: We take them one by one?
BILI: Well, I’m not sure I can answer properly the question, but I’ll say that after the pandemic one of the issues that we had was really to look at all supply chain and to make sure that even a very tiny limit of something is not having a disastrous effect on our production. So I think the question is really also on how we are organized, and to make sure that we have the supply chain which are diverse enough to be able to cover what we are doing. Just referring that at a certain moment, when we had the first analysis and we were not so sure that China’s industry will be able to export that quickly—as quickly as they did, we had some very preoccupying scenarios on, say, some industries. I don’t want to enter in into the details. But sometime just a small element missing can have disastrous reaction. So I think de-risking is also not only because various key sectors, or key rare materials, but also the old supply chain has to be reviewed.
FANG: Go ahead.
LUI: I’m not sure that I have any specialist knowledge in this particular area to add to a very good reply. But my take on this is that, look, we are moving away from international, you know, trading order that has been premised on interdependence, to one where you need to guard against overdependence. And hence, the drift is towards greater independence, somewhat of a bifurcation, de-risking, whatever the case is. Is that completely possible? Probably not. But in the most critical areas, in the most selective areas, whether it is rentals, whether it is chips, whether it’s in new energy, batteries, or other materials like cobalt, and so on, well, I think you will see greater efforts to try to make sure that each side is able to secure their own supply chains as best as they can.
FANG: Ambassador Rudd, do you have anything—
RUDD: Just quickly on the question which has been posed, I agree with Laurent that all of us around the world had a global wakeup call with the pandemic. That’s just true. And it didn’t just apply to PPE. It just didn’t apply to pharmaceuticals. It caused us to look more broadly at all of our supply chains. So we’ve all been going through the same process.
Second point, when we talk about security of supply chains it’s not just countries of the West, or other countries around the world beyond the West. China itself now has a national strategy of national self-reliance. The Chinese phrase is zili gengsheng. And this has been embraced over several years now. In fact, going back to the Nineteenth Party Congress, prior to the—prior to the problem of the pandemic. In fact, if you go back to 2015, China’s own, Made in China 2030 Strategy was about achieving technological self-reliance, self-sufficiency, and/or predominance in ten major leading technology categories around the world, because China ultimately wanted to be confident they can have access to them domestically. So that’s what China is doing.
I think the rest of us around the world are now catching up. And so your question, or the questioner, went to what are the priority areas? Obviously, pharmaceuticals and medical supplies, because that’s near and dear to the hearts of all of our communities in all the countries which we come from. The second area, because it’s so fundamental, is energy and new energy and clean energy security of supply. And this is complex, but that’s where countries are going because they fear being left marooned. And then thirdly, underpinning that again such critical areas such as critical minerals, whether it’s lithium, whether it’s cobalt, whether it’s nickel, whether it’s copper, whether it’s rare earths.
And in our own country’s high-level summit with president of the United States last week in Washington, the central focus of much of those discussions were about the future of critical minerals and how they could be secured so that no country in the future runs the risk of having, for example, a rare earth supply cut off from it. And that goes to not just supply but also processing. And one of the things we’re blessed with in Australia is being an abundance supplier of critical minerals to most countries in the world, and we’ll move further down the value-added chain into processing in the immediate years ahead.
FANG: OK. We’ll take a question from one of our members on Zoom. OK—(laughs)—we’ll go to someone in the—
Q: Was that meant for me? Excuse me. This is Winston Lord. I had was—I was told to unmute. But was that meant it’s my turn?
FANG: (Laughs.) Yes, go ahead, Ambassador Lord.
Q: Yeah. My name is Winston Lord. I was once ambassador, like the others, to China, but many, many centuries ago, a long time ago. I want to thank all the ambassadors for their insights. I’d like to salute the Radio Free Asia for its courageous and crucial work, not only in China but in the region.
My question to the ambassadors is what kind of grades would you give the Biden administration’s policy toward China? Kevin’s mentioned briefly the Taiwan issue, but generally how are they doing in handling China bilaterally with its friends and allies, with the Global South, with other adversaries? With particularly emphasis on the technological and economic challenges? Thank you.
FANG: Great question. Would you like to start, Ambassador Rudd?
RUDD: I just finished an exhaustive set of remarks. It’s good to hear from you, Win. (Laughter.) And you were in China when I was in China, but I was a humble first secretary at our embassy. So I think we were both there in Lord Macartney’s time, if I’m remembering, the late eighteenth century, so. (Laughter.)
A word or two about the administration. Look, this is a difficult challenge for any administration. But when I look at one core element in the administration’s strategy, which was to restore the health of U.S. alliances around Asia and around the rest of the world, in general, quite apart from the particular references to deterrence in relation to China over Taiwan, maintaining strategic balance and equilibrium. Against where we were a number of years ago compared with where we are now, you’d have to say that the administration has achieved some remarkable progress.
When I look at President Yoon and Prime Minister Kishida at Camp David recently, when I see our own prime minister in the White House last week, when I’ve seen the ASEAN and the Pacific Island heads of government in Washington recently, when I see the depth of the relationship now between Delhi and Washington, and the fact that China now is comfortably on the agenda at most NATO summits, this did not happen easily five years ago. It is happening now.
I think if there are challenges for the administration, its overall strategy. And this will be of no news to you, Win. It’s on the question of the economic agenda. Where do we now take IPEF for the future, the Indo-Pacific Economic Framework? Can we begin to unfold that in terms of new levels of market access into the future? And so that the future of trade and investment between the United States and the emerging and dynamic economies of the wider region is fully realized? I think that’s where the challenge lies for the future. Back to you.
FANG: Thank you.
BILI: Well, I’ll say that the administration doesn’t have an easy job because, unlike in most of the European countries where China is naturally a domestic issue, in the U.S. it’s quite a hot potato. And one of the elements of bipartisan consensus, which feel also some time very heated debate. So it’s not so easy to have a policy when also atmosphere is so—is so tense. And that was, I suspect—I suspect a question will come, so I prefer to take it before. That was one of the elements of the declaration of President Macron when he came back from China. He mentioned that the idea of stepping up the issue of Taiwan was not necessarily in our interest, being all global interest, because sometime long containment is not the most efficient.
And I think, like Kevin, I agree that a lot of good things have been done in the recent years. And I think it’s important to show that there is—that we are ready. But at the same time, to have a very emotional declaration or visit is not really useful in that sense, because in China it is seen as a kind of aggression. So it’s fueled nationalism. We were speaking about a more ideologic China, basically. So ideology is about nationalism, much more than anything else. So if you touch that national feeling, you somehow help the equation of the people behind the party. I’m not sure it’s exactly what we want to achieve.
But, again, if I put that nuances that we are not in the same domestic position, I don’t see much difference about sort of global trend of our policies. The administration is speaking about de-risking and de-coupling. That’s where—that’s where we are. We are not naïve in terms of foreign trade. We are having—we do our duty, I will say, passing in the strait regularly. We send a clear message during the visit to the President Xi with President Biden—Macron—sorry. (Laughs.) Said clearly that we were against the use of force. That we were in favor of the status quo. That China should refrain to fuel the tension. So, globally, I think we are quite in harmony with the position of the administration, but we have also domestic situation which are different and probably change the tone of the communication.
FANG: Ambassador Lui.
LUI: Well, firstly, it’s not for small countries to be giving a grade to any administration, let alone the U.S. administration. So forgive me if I don’t do that directly. But sitting from where we are in Asia, we really appreciate what Biden administration has done in terms of rejuvenating alliances. It’s actually taken the time and trouble to listen to the views and even the concerns of countries in the region. We wanted the U.S. to be more engaged economically. And I think IPEF really has made remarkable progress over the last eighteen or so months. And hopefully, we’ll be able to reach some substantial conclusion by next month.
I think that the administration understands when we say that we want to be friends with both sides, because there are significant accounts that all countries have both with the U.S. and China, we want to be friends with both sides. We rather not choose a particular side. But when there are specific issues, we will have to weigh in, depending on our national interests, depending on the principles behind it, and depending on the circumstances. And no two countries may actually take the same position. I mean, you look at Singapore versus some of our ASEAN counterparts. The statements that we have made with regard to Russia-Ukraine, Israel-Hamas, you will find that our position is somewhat different. OK, maybe it is closer to what the U.S. would position itself to be, but we come up with those positions not because we want to please one side or the other, but because of our own particular circumstances.
On Taiwan, I think in recent months, the U.S. has been proceeding very cautiously. I think it understands that for Taiwan there is careful calibration of dual deterrence and dual assurance. You typically think of it as you need to deter China, you need to reassure Taiwan. But the truth also is that you do need in some way to quietly deter Taiwan not to shift further towards independence. And you do need to quietly reassure China that peaceful reunification is not out of the window, right? So it’s a careful calibration of dual deterrence and dual reassurance. And I think the U.S. is managing that, I think, quite well, if you ask me.
I mean, the concerns that people have expressed about the U.S. moving away from strategic ambiguity—and I’m sure you know very well what that refers to—I think there are others who ought to be just as concerned whether China is moving away from strategic patience. Because it is that strategic patience, that peaceful reunification in whatever form is within reach, that has helped to preserve the peace and stability of our part of the world.
FANG: Thank you. Let’s take a question from the room. Go ahead.
Q: Thank you. Laura Delgado-Lopez. I’m an IAF fellow studying Latin American space cooperation.
And the question I had kind of relates to the comments you have just made. I’m studying this trend where the partner nation that has collaborated with China in space-related developments. Part of it is the perception of China as a partner, and how it compares with the United States. And so, for example, I have heard from some experts that in Latin America there’s the perception that the U.S. comes in with a lot of requirements and a lot of—you know, a lot of notes in the contract. Whereas China, at least not initially, it’s looser strings. And so I’m curious if, perhaps starting with you from Singapore perspective, has that opinion of China as a partner vis-à-vis the United States shifted? Or is the other side really, really not following the mirage that China is an easier partner to work with? Thank you.
LUI: Thanks. Well, I think if you—if you look at, for example, the surveys of how the population in many countries feel about China, across different parts of the world you would find that the so-called approval rating and trust of China has declined. One of the rare exceptions would be—would be Singapore, where we have both—for both U.S. and China, I think, an equally favorable view of the two countries. And that is no bad thing, because I think it gives even greater policy space for our leaders in terms of how we engage with both countries. And it’s somewhat different, the texture of our relationship with the U.S., texture of the relationship with China.
I guess I can understand why some countries would prefer the Chinese model of development, governance, modernization, which China is indeed promoting as what they can offer to the world. There are others who, of course, sort of lament this debt trap thing, which I think personally is overstated and wrongly defined. Because if you—if you define debt trap as owing too much to one particular country, then it’s probably not the case. But if you look at—and staying on the issue of debt trap, just as an example, if you define debt trap as borrowing from a particular country where during a time of difficulty and emergency that limits your options or the speed at which you can borrow from the multilateral development banks or from other countries, then I suspect that is a broader definition of what a possible debt trap might mean. Because it locks you into a particular account, which limits your options going forward.
We don’t see it in Singapore. We can understand some of these concerns, some of these perspectives. But I would say that for a small country like us, it is very, very important to have good relations, not just with the big countries but with countries near and far, large and small. And the success of our diplomacy is if we have been able to do that. And hopefully, be of some use to the countries across different parts of the world.
FANG: Thank you.
BILI: Well, I suspect that you were referring more to developing countries which get access to credit without strings attached, while Europeans or Americans will have asked for human rights and things like that. So then I’ll come back to what Ambassador Lui was just saying. That in that case some didn’t really have a choice also, because that was the only way to get cash at certain moment. And the fact that there were no obvious strings attached doesn’t mean that there is no consequences for what you’re doing. If you are—if you are speaking about doing business or doing cooperation in China, in the U.S., I’ve never felt when I was in China it was so easy to cooperate and to work in China. But at certain moments, there was interest. And when there is joint interest, it’s, of course, a situation to be explored. But we are not equidistant between China and the U.S. So there is things that we can do with the U.S. and things that we can do with China. I hope it answers your question.
FANG: Ambassador Rudd, do you have anything to add?
RUDD: Just one sentence. I mean, the big transformation in the last decade is that China has transformed from being a country which held very few sovereign debt accounts around the world to, in fact, becoming a country which holds a huge number—a huge number of bonds around the world. And so therefore, this is a transformation in China’s status in the last ten years, off the back of the Belt and Road Initiative but also beyond the BRI, with the lending programs by a number of China’s development banks. The China Development Bank, among others, China Investment Corporation, et cetera.
So therefore, this is a brand-new challenge for Beijing, which is how do we, as China, manage our debt relationships with the—with the Global South? You’ve seen this played out in public for a, like Sri Lanka and elsewhere. And I think there is a huge debate underway in Beijing at present as to how this should be managed in the future. So this is a real-time, lifetime debate, where I think our friends from the Global South have a great opportunity to register with Beijing how these relationships should be managed in the future, particularly on questions of debt rescheduling, particularly in terms of how to prevent any sovereign debt arrangement with a debtor country from spiraling into a more general debt crisis if those countries become incapable of servicing their debts. So this is a real live—real live debate now for policy circles in Beijing and across the Global South, as we speak.
FANG: Thank you.
LUI: Maybe just on that, to add—just—I don’t think that China is going to be as generous as it was, because they already face the reality of the burden and countries which can’t pay. And we already see the change of trend, and China being also much more cautious.
FANG: We have a question from a Zoom member.
OPERATOR: We will take our next virtual question from James Gilmore.
Q: Good. Thank you very much. I’m Jim Gilmore. I’m the immediate past United States ambassador to the Organization for Security and Cooperation in Europe.
When we started this discussion, all three ambassadors seemed to indicate that stability was the strategic goal that would be desirable. And I want to—I want to question that. I want to ask whether or not stability should really be our goal. China was happy to be aggressive, and still is. But when they end with domestic problems that might challenge their party rule, now all of a sudden, they want to be stable. Nobody wants a war. So I’m not suggesting that. But shouldn’t we be challenging China’s authority and/or its dominance and its master plan, so to speak, instead of going to stability, which gives them time to reorganize and reload, and then come back on their master plan to challenge the West once again? Thank you very much for your participation today. I’m thoroughly enjoying it.
FANG: Yeah, go ahead.
LUI: I’m not so sure that we offered stability as a solution. I think our premise was that both sides have managed to stabilize the relations. And that’s a little bit different from stability as a goal, as a quest that we’re after. I’m not saying either is right or wrong, but I’m just trying to make a differentiation between what we said about stabilizing the relationship, which is I think the right thing to do, and where the stability ought to be the goal the day after. But to me, when I look at it, I’d rather have gradual shifts rather than an abrupt change in any part of the world, right? And I think stabilizing the relationship allows you to make incremental changes and developments in a more peaceful, controlled environment, that certainly would be better appreciated, I think, in many parts of the world.
BILI: Well, I’m quite on that line, too. Well, I suspect that we—when I mentioned the change of China in twenty years, and the relation with the GDP of France, we’re just trying to put—to make the point that the change has been so quick that we have difficulty to adapt. And we have all to adapt as the reality of a new China. But China has also to adapt itself for his new power and the consequences of it. But also, it’s a dynamic country, in the sense also that various demographic trend, various trend within the country which are going to change China, especially if we look at the longer term with One Child Policy and an elder China—elderly China. But on your question, I get the impression that there was a sense of exploring the stability within China, which was—I’m a bit uncomfortable with the idea, because I suspect that despite all the difficulties we haven’t seen any sense of something like real unrest in China. So I’m not sure on that point I really understood what you—if it was a point that you were making on playing with China’s domestic policy.
LUI: Ambassador Rudd, I’ll let you have the last word.
RUDD: In my original remarks when we began this discussion this evening, I said that we need to go back to some strategic fundamentals. Which is China, as Laurant has just said, is more powerful than it was. By the way, Laurant, when I first went to Beijing to work the Chinese economy was the same size as the Australian economy. (Laughter.) So they’ve been through Australia, they’ve been through France, they’ve passed Germany, they’ve passed Japan. And now they’re on the way to this final economic competition with the United States. So it’s huge, the amount of change over, frankly, you know, a working person’s career, in my case.
Secondly, Xi Jinping, unlike his predecessors, does not believe in preserving the status quo. Through active government policy and leadership, he seeks to change the status quo. And, thirdly, the United States and its allies is now responding. So why is the region dynamic, and therefore inherently unstable? It’s because of these factors coming together. So when you turn to the question of U.S. strategy over the core strategic question of Taiwan, it’s strategy is one of integrated deterrence in order to maintain strategic equilibrium across the Taiwan Straits and broader East Asia, in order to secure long-term stability.
That is a strategy which allies the United States and friends and partners are generally supportive of, because it is the best way to prevent, frankly, the unconscionable from occurring. As Laurent said before, preserving the status quo is frankly what most of us seek to do in relation to Taiwan. I don’t think any of the countries represented in this forum would in any way support any move by Taiwan towards independence. That’s fundamentally a violation of the One China policy. So therefore, the alternative is to preserve the status quo. And therefore, the means by which that is best achieved is through a strategy of integrated deterrence.
If we can maintain the status quo and preserve broader regional strategic equilibrium then, frankly, we can get back and on with the big challenges of growth, the economy, development, and what we’ve not touched on at all this evening, which is the granddaddy of them all, climate change, which washes across all our shores, literally. And that’s where future collaboration should lie. Back to you.
FANG: Thank you. And much as I’d like to continue this conversation, I think we’re out of time. So I’d just like to thank all of you for joining this meeting. Thank you so much to Ambassador Bili, Lui, and Rudd for speaking with us today. Please note that the video and transcript of this session will be posted on CFR’s website. And if you’re here in Washington, please join us outside for a reception. Thank you again. (Applause.)