what we think

On 11 June, John Crozier-Durham, Counsel at R&P China Lawyers, was invited to represent the firm at the American Australian Association’s Annual Spring Lecture Lunch.  Titled ‘Alternative Futures for U.S. – China Relations,’ the even featured the Honourable Kevin Rudd and was hosted by J.P Morgan in New York City.

Kevin Rudd was Prime Minister of Australia from 2007 – 2010, and again in 2013.  After leaving office, Mr. Rudd served as a Senior Fellow with the John F. Kennedy School of Government at Harvard University, and is now leading the Asia Society Policy Institute (ASPI) in New York City. He is proficient in Mandarin, and his Chinese name is Lu Kewen 陆克文.

Mr. Rudd explained that as Head of ASPI, he views Asia through the framework of, ‘What does Asia think? Why does Asia think that way? To what extent is Asia’s view malleable or fixed?’  (He astutely noted that viewing the region as ‘Asia’ is a ‘European convenience,’ given the area’s nuance and cultural diversity.)  ASPI’s goal, as he sees it, is to determine ways in which the United States can engage with Asia on Asia’s terms, rather than attempting to impose its own Western views and expectations on Asia.  Mr Rudd believes this framework is especially useful when dealing with complex issues such as those currently involving the South China Sea.

Mr. Rudd also spoke about the future United States’ relationship with China over the course of the next 10 years.  He noted that with regard to purchasing power parity, China surpassed the United States’ economy last year; when applying market exchange rules, it seems likely that China will be the world’s largest economy sometime in the next 10 years. He also observed that this will be the first time since George III where a non-English speaking, non liberal-democratic country will be the largest economy in the world. This, he said, would reflect a profound shift in the centre of global geo-economic activity.

Additionally, Mr. Rudd spoke about his report, ‘U.S.-China 21 – The Future of U.S. China Relations Under Xi Jinping’ available from the Asia Society website here. The report calls for relations between the two countries to be underpinned by “constructive realism”, that is, constructive collaboration on certain identified issues whilst maintaining realist recognition of the two Nations’ fundamental differences and in some case conflicting national interest.

Finally, Mr. Rudd spoke about the private narrative each country may have about the other; that China is of the view that the US will never yield its place whilst the US feel it facilitated, accommodated and supported China’s entry to the WTO and hence the US is dismissive of the idea that it does not understand its place. Mr. Rudd called for a “common strategic narrative,” radically different from these privately held views which he expands on in his report.

For foreign investors to China, Mr. Rudd’s proposed framework for understanding Asia and promoting diplomatic relations may serve as a useful guide in how to engage Chinese counterparts.