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| China’s “true friend” enters the fray | | Print | |
| May / June 2008 | |||
 Rowan Callick analyses Kevin Rudd's recent visit to China. There have been few such eagerly awaited international visits as Australian Prime Minister Kevin Rudd's to China.That certainly didn't make it any easier. On the contrary, the expectations were so high that it was hard to see how even such a "Zhongguo tong" - China expert, as most of the taxi drivers in Beijing seem to describe him - could fulfil them. And as the clock ticked down to his arrival, it all began to appear doubly difficult. For his preceding visits, to the US and Europe, went off even more smoothly than expected, setting a high benchmark. But China's relations with the West were by then beginning to fall apart, as the Tibetan stand-off continued, and the linkage with the Olympic Games was entrenched by the torch relay protests in Europe and North America, and then by the willingness with which China's own propaganda arm took up the cudgels in return, rousing a righteous nationalist response. It looked as if Rudd's visit might be swamped, certainly in terms of media coverage and audience interest back home in Australia, by that imbroglio. In the event, he finessed the Tibet issue, made more progress than expected on the trade and climate change fronts, and charmed much of China, setting up a framework of good working relationships ready for concrete outcomes for business and for the environment in the next couple of years. His first function was crucial. The success of the whole visit hinged on it. He spoke to 700 students packed in to a hall in Beijing University's delightfully bucolic campus, sprouting spring flowers. They already knew he spoke Chinese, but when he actually began to talk, clearly and with excellent tones, there was a universal intake of breath followed by massive applause.  His message was that Beida (Beijing University) had played a crucial role through its 110 years in China's drive to modernity, and that this should continue to be its focus for this generation of students, "that will see China's full integration into global society, the global economy, and the overall global order."He also spoke frankly of how "China's growth can also cause anxiety," and said it is "necessary to recognize that there are significant human rights problems" in Tibet. He did so, he said, as a "zhengyou" - a true friend - of China, a kind of friendship "I know is treasured in China's political tradition." He did not persuade China's leaders to change their stance on that subject during his visit, but he did arouse widespread applause, still rippling around the Chinese community and the wider world, for introducing this concept into the debate. Rudd - or Lu Kewen, as he is known in Chinese - was asked half a dozen questions by students, of such diversity and eccentricity that they could not have been scripted. He responded with humour and commonsense. Then he attended a lunch with financial institution leaders from Australia and China, as well as Chinese regulators. He made it a focus of the visit, to stress to China's leaders the innovative but non-threatening capacity of Australia's finance sector. He briefed President Hu Jintao, during their hour-long meeting on the final day, about the importance of providing opportunities for Australia's institutions to increase their engagement with China as part of building what he called "a broader, deeper and stronger economic relationship." He urged, during his visit, greater access for Australia's fund managers - with Australia, thanks to its mandatory pension scheme, having the fourth largest fund pool in the world. In the late afternoon he spoke to a conference organized by the Melbourne-based Global Foundation, an influential "citizens' organization" chaired by former Commonwealth Bank head, now Future Fund chairman David Murray, that fosters international cooperation to tackle the big issues of the day. Inevitably, it is currently addressing climate change and clean energy. Rudd picked up two flags in front of him as he opened his speech. Holding first the Australian flag, then the Chinese flag, he said: "This is the largest coal exporter, this is the largest coal consumer. If between us we can't fix this problem, I don't think the rest of the world will think well of us. It's a core challenge." In his audience were the heads of many of Australia's and China's biggest companies, including Telstra chairman Donald McGauchie, ANZ chief executive Mike Smith, China National Offshore Oil Corporation chairman Fu Chengyu, China Shenhua Energy Company chief executive Ling Wen, and Xie Zhenhua, China's environmental protection chief. Rudd, flanked by his Climate Change Minister Penny Wong, said that he had just arrived in China from speaking with the British and Norwegian prime ministers, the presidents of the USA, the European Community and South Africa, and that "about a third of the global discourse" is focused on climate change issues. Unless all economies can agree a path forward, he said, "there's a great risk that we will undermine our long term capacity for development." He said it was crucial for the global community to agree on a global target. "We are driven by the science, and if the science tells us we need to stabilize emissions at a certain level by a certain time," or irreversible and unsustainable climate change will result, "this has to inform our carbon targets." Australia has a target of 20 percent of its energy coming from renewable sources by 2020. China's target by then is 16 percent. The governments agreed during the visit to meet at a ministerial level annually on climate change, to expand the Australia-China Climate Change Partnership involving joint projects, and to cooperate on low emission technologies, especially on clean coal. That evening, Rudd launched a groundbreaking exhibition at the embassy of the work of artists who mostly work both in Australia and China. On April 10, he received an official welcome by an honour guard in the Northern Hall of the Great Hall of the People, then conducted the main official talks of the visit, with a Chinese team led by Premier Wen Jiabao, in the adjacent Eastern Hall. He had lunch there, and in the afternoon held meetings with Wu Bangguo, the chairman of the National People's Congress, and then - especially importantly - with Vice Premier Li Keqiang, who will succeed Wen as Premier in five years. He launched EventTrack, a high tech system for shuttling VIPs around major events such as Olympic Games, that has been developed by Sydney based SmartTrans. Then he spoke at dinner to the Australian Chamber of Commerce - outlining the main outcomes of the discussions during the day. The chamber's dinner was attended not only by leading Australian businesspeople - including the country's richest man, Fortescue Metals Group chief executive Andrew Forrest - but also by Chinese business leaders including CITIC Group chairman Kong Dan, Shenhua Group chairman Chen Biting, Sinosteel president Huang Tianwen and Chinalco president Xiao Yaqing, the latter having in February paid $A15 billion for a 9 percent stake in Rio Tinto. Rudd told them: "I want to expand our economic relationship with China. We already have strong trade in energy, resources and agriculture. We have solid trade in manufactured goods. Our services trade has huge scope to develop." The governments have agreed to develop a ministerial level services roundtable, whose details were to be discussed the week after his visit by Trade Minister Simon Crean and Commerce Minister Chen Deming. The Prime Minister said: "China can be a baffling place the first time you come - for business or for study. To the uninitiated it can be a little intimidating. That is why I am so keen to push ahead with our free trade agreement negotiations. It can help smooth the way for Australian companies in all sectors trying to do business in and with China." Ten rounds of talks have taken place over three years, and now "it is time we moved towards an outcome - an outcome that offers real freeing up of commercial opportunities. Premier Wen Jiabao and I committed to accelerate the FTA negotiations." And the trade and commerce ministers were to "sit down and develop a road map to identify remaining obstacles and find solutions to them," and report back on progress to Rudd and Wen. Rudd praised the 37 Australian companies that are substantially involved in the Beijing Olympics, and said: "Our vision for the Australia-China economic relationship is about more than trade. It is about cooperation, joint projects and investment in both directions. "We welcome investments that are fully commercial and pro-development. We welcome investment in resources infrastructure which will improve our production capacity and help meet China's demand for many years to come. "At the same time, our companies are looking for improved access for Australian investment into China. China continues to regulate foreign investment in many sectors. Our economic cooperation would get a real boost if there were more investment opportunities for Australian businesses in China." He said Australia is seeking greater investment access via the FTA talks. On Friday morning, he inspected Gaobeidian power station, where Australia is spending $A4 million on a carbon capture and storage project to be operative in August, then flew down to Hainan island to meet President Hu and to speak at the Boao Forum, which is being developed as an Asian version of the World Economic Forum based in Davos, Switzerland. Former prime minister Bob Hawke is a Boao board member. Rudd and Hu discussed the importance of Australia's role as a reliable partner for China's long-term energy needs and of practical cooperation on clean energy, and Rudd stressed that the mechanics of this partnership should be left to the market. He said the president "emphasized the importance attached to the recommencement of FTA negotiations that I had discussed with Wen." After the visit, Guo Chunmei of the China Institute of Contemporary International Relations, wrote in Shandong's Dazhong Daily that Rudd's "pro-China image won the deep favour of the Chinese. From his speech at Beijing University to that at the Boao Forum, from his dialogue with state owned enterprises to his talks with the national leaders, from trade and the economy to human rights, the effects of his visit go far beyond people's expectations." He said that "despite some trade frictions and differences over human rights, Chinese people simply can't stop liking him.' *Rowan Callick is The Australian's Beijing-based China correspondent.
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