Is China’s emergence displacing the global system?

In light of China National Day celebrations, GVS is looking at Pak-China relations. Here, a former Australian prime minister weighs in on the emergence of China as an economic and political power on the global stage.


Kevin Rudd served twice as Australia’s Prime Minister (2007-10 and 2013) and also as its Foreign Minister. He is currently President of the Asia Society Policy Institute, in New York and chairs the Independent Commission on Multilateralism. He has served as Senior Fellow with John F. Kennedy School of Government and as Distinguished Fellow at Paulson Institute Chicago. He has worked at Harvard on China-US relations and is considered as leading “Sinologist” in western political leadership.

Najma Minhas, Managing Editor, Global Village Space (GVS), took the opportunity to sit down with Kevin Michael Rudd, during the Salzburg Forum organized by International Institute of Peace (IPI) at Salzburg, Austria, and explored his ideas about China as an emerging great power and its impact on the western world. What follows is a brief version of that discussion.

GVS: Why do you think understanding China is important for the world and the West in particular?

Kevin Rudd: Because of the scale and the speed of change and the underpinning geopolitical and geo-economic realities and the impact of ideas associated with China’s view of itself in the world. China will emerge not just as the largest economy in the world by purchasing power standards (PPS) but will also start to emerge as the largest economy in the world in market exchange rates as well. So what we know from the history; where economic power goes there goes political power. One follows the other.

Secondly, China in the last three years has begun to reflect that political influence in the world and you see the formal abandonment of the Deng Xiaoping’s ancient axiom of ‘par dual strength and ‘par dual time’ (Hide your strength and bide your time) into a new axiom of Xi Jinping which they describe in broad terms as an active foreign security policy.

China has its own values and traditions and is quite different from the West; for these reasons, it is important for the West to understand it so that a working relationship can be established with the Chinese.

Read more: In outgoing interview, Chinese envoy talks India, CPEC, and the West

GVS: In one recent presentation, you mentioned that within five years, there might be GDP shift in which combined GDP of the USA and the European Union will be equal to the combined GDP of India and China. What do you think will be the implications?

Kevin Rudd: I think, what increasingly we’ll find, given the combined diplomatic footprints of China and India around the world, is that, what those two countries think, either within the BRICS framework or separately, will carry as much weight in the world as for example the positions of Europe and the United States today and the world should be prepared for that and they need to be since it is just a changing reality.

And I think there had been a degree of denial in various parts of the world, in the West in general and certainly in the United States that China could ever exercise global influence, but the process has already begun.

GVS: But if you look at the publications like Foreign Policy, Foreign affairs and also the books that are being published in the US, it looks as if many experts think that the clash between China and the United States in particular and the clash between China and West, in general, seems inevitable…?

Kevin Rudd: I certainly don’t accept that; partly because I’ve never accepted a determinist view of history, nor do I believe it’s the intention of either side to have such a clash which is definitely not in their interests. However, it’s possible because as we know the logical crises of armed conflict is a different logic which can sometimes begin to prevail.

From a Chinese perspective, the Chinese do not want such a clash because they’d be uncertain about the outcome. Chinese strategic thinking going back millennia will not encourage its decision makers to enter into a conflict at this point in time.

There are tripwires for which the Chinese would not simply turn a blind eye to. One, of course, is Taiwan; which deep within Chinese strategic consciousness is part of the Chinese nation and state and second, of course, is the future of North Korea.

Read more: Xi Jinping: The leader who gave the world ‘Belt and Road’


GVS: Recently, especially in the last few weeks, it seemed there is a sort of potential tension building up between India and China. In your opinion, was there a possibility of a conflict and why Indians have withdrawn suddenly?

Kevin Rudd: Well on this particular border standoff [Doklam in 2017]. I’m not briefed and I would be very cautious about commenting on its details because the Chinese and the Indians haven’t provided us with any level of the specific briefing. Nevertheless, I think it’s not in the interests of either state to enter into a war with each other…

First of all, the Chinese are about to host the BRICS meeting, in fact, hosting as we speak. Secondly, despite decades of strategic mistrust between India and China, overwhelming economic interests of both countries have found a way through to broaden their economic relationship.

And thirdly, I think if rational mind prevails in New Delhi and Beijing, it is a curious piece of real estate (Doklam) to have a conflict over.

Read more: Forever friends: Enduring Pakistan-China relations

GVS: So do you expect, China in the near future, as its economy grows, to be spending more on defense since right now its defense expenditures are much less than the United States?

Kevin Rudd: Well, of course, the United States has been spending a lot for a long time and if we look at the US defense expenditure, it is currently running at about seven hundred billion US dollar ($700 Billion) per annum against Chinese defense expenditure which is running at about two hundred and fifty billion per annum ($250 billion).

Over a debate about the precise figures, given non-disclosed areas of Chinese defense expenditure, it will be quite some time before the two lines intersect. But that leads us to the cumulative impact US defense outlay has since the Second World War. To run ten to twelve carrier battle groups around the world is a matter of turning on the defense expenditure today and seeing force projection tomorrow; this is a generational project.

GVS: You repeatedly refer to the global institutions and you mentioned that the rise of the China will have implications for the multilateral global institutions which were set into place after the Second World War. In what respect these institutions can be transformed?

Kevin Rudd: Well at present the U.N. or the Bretton Woods institutions created in 1944 or 1945 reflect the prevailing consensus of Western values as these institutions were established before Pakistan and India’s independence and even before the emergence of the Peoples Republic of China. And it was before the emergence of the other one hundred and fifty member states of the United Nations.

So, in other words, you had a set of values which reflect western values. So if you roll the clock on more than three-quarters of a century you find yourself, therefore, confronting China which does not necessarily accept some of the values construct which underpin the formation of those institutions; we can all point to the most obvious one: human rights. But that is one point the second is simply the nature of the Chinese voice which starkly has been passive in these institutions. Unless a current Chinese interest was threatened, e.g. Taiwan.

But China remains silent and often in the corner. That is now changing and we are seeing a more activist Chinese voice simply as an influential party now seeking to influence outcomes. Now you see, for example, China’s Peace initiative in various theaters around the world.

So there’s that happening finally…it’s from the impact of China’s financial contribution close to being the second-largest contributor to the UN simply because of the size of its economy and there are the individual discretionary contributions to the individual agencies.

Read more: The China that I Saw

GVS: So what do you think and how do you look at the One Belt One Road (OBOR) initiative since 2013 and its first part which is now passing through Pakistan ie. CPEC?

Kevin Rudd: Well I always have been a supporter of ‘One Belt One road’ for the simple reason because I deeply believe in international development as necessary for raising people’s living standards, but also for removing the ground for long-term radical extremism.

And if you look across Central and South Asia, and West Asia you have a massive infrastructure deficit across all categories which need to be filled so, therefore, you’ve raised the question, who’s going to fill that? Is it going to be the World Government banks or is it going to be ADI? Is it going to be private finance at this juncture? And so when the Chinese say we can organize the finance for this, my general response is, this is good for the region.

CPEC will significantly enhance Pakistan’s infrastructure and will provide economic benefits to millions of people which will be beneficial for not only Pakistan but the region as a whole.

This piece was published originally in September 2017. We reprinted this in light of recent events. Najma Minhas, Managing Editor Global Village Space (GVS) recorded that discussion at Salzburg Forum organized by International Peace Institute (IPI) at Salzburg, Austria, 3-5 Sept 2017 and is grateful to IPI for their cooperation and facilitation – especially Vice President, Adam Lupel and his team.

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