Andrew Leigh

LAUNCH OF THE CHINA STORY YEARBOOK

AUSTRALIAN NATIONAL UNIVERSITY

MONDAY, 9 APRIL 2018

I acknowledge the Ngunnawal people, the traditional owners of the lands on which we meet today, and thank ANU’s Centre on China in the World for inviting me to speak here today. I also thank our hosts, Professor Brian Schmidt, Dr Jane Golley and Linda Jaivin, and their colleagues Dr Natalie Kohle, Dr Graeme Smith and Ms Wen Meizhen.

In the very early years of this century, the literary critic James Woods was trying to give a name to a new fiction genre that he recognised in the minutely observed, sprawling surveys of contemporary society. He called it hysterical realism because it had an edge of paranoia - seeing connections where there were only incidents, plotting causes and intention in fascinatingly random human activity.

These doorstop novels would take diverse threads of history, politics and popular culture and weave them together into intricate patterns. ‘Hysterical’ because these patterns emerge as the vision of a single organising intelligence – one mind, overfull.

But take away the angst and the overburdened pessimism of that single viewpoint and you get a different sort of tapestry.

A broadly ranging, yet expertly detailed, depiction of a contemporary culture.

This is the kind of collective project that arrives each year in the form of the China Story Yearbook: an almanac, an intricate mural of essays that is simply fascinating across its many dimensions. Troubling at times, impressive, inspiring, timely and precious.

We see ‘Grey Rhinos’ stalking ominously in the background of stable markets, and a spike in the market for donkey hides. (Curious? You’ll have to read the yearbook.)

We learn how censors are playing whack-a-mole with unruly bloggers who seek to overturn official doctrine by posting irreverent satire and social criticism.

We see the braggadocio of rampant prosperity – government sanctioned ‘Red Rappers’ broadcasting aggressive nationalism – juxtaposed with the protest apathy of those who see themselves uncoupled from the momentum of moderately prosperous modern China.  ‘Why can’t I just waste time by the river?’ asks the motto of one prevailing slacker counterculture.

We see all the manifestations of the middle class’s rise and rise: the individualism of aspiration, consumption, angst – and the industries and services that are catering to the drives of free market id set loose by expanding disposable incomes.

We take a trip to the ‘fang village’, a robber town pursuing prosperity at the remote margins of centralised state power - emblematic of local fiefdoms whose roving populations harvest illegal wealth from other regions to sustain the economy of their home village.

It feels never-ending – all the shapes and patterns of entrepreneurial, organisational, aspirational humanity. And all concretely particular.

It reaffirms what an invaluable resource this annual volume is for anyone trying to understand the China story from afar, or to keep up with the rapid evolution of this vast and vastly significant regional neighbour.

This latest volume surveys Xi Jinping’s fifth year as leader of the Party and state and draws on the prevailing vision Xi set out in 2017 of a ‘moderately prosperous society’ with no Chinese individual left behind.

It reflects a year in which broad and shared prosperity has become a state endorsed marker of China’s ascendancy.

China’s brand new Charity Law has encouraged and formalised a culture of philanthropy. The law provides a framework for transparency and compliance but also a way for the government to focus private giving on issues government has prioritised. A move that sits alongside the gloriously organic spread of tap-and-go payments to street beggars. An unruly adaptation, and a clear sign of the ubiquity of smartphones.

‘Superstars’ and ‘goddesses’ are no longer acceptable terms of reference for celebrities, but relaxation of other cultural constraints has meant more private jet planes for the super-rich and a boom in the field of psychotherapy.

Prosperity is enabling but also disorienting. It creates its own rules and its own maladies. And it creates new friction points wherever the natural energies that are fuelling China’s growth crash against the imperatives of the Party.

As space for burials becomes scarce, property speculators are cornering key plots in sought after cemeteries – the Party urges frugality and cremation, but the parallel valorisation of prosperity has encouraged conspicuous consumption - ‘Death has become big business.’

It’s just one more example of how modern China is redefining its virtues.

It’s worth noting at this point how important the growth in China’s prosperity has been for Australia.

China has benefitted from a period of great stability. China’s prosperity and the prosperity of the region has been built on a platform provided by a long period of peace.

As I noted in Choosing Openness, China’s economic development has not only been to the benefit of China and the hundreds of millions of people who have been lifted out of poverty, it has been to the benefit of Australia too.

We should also acknowledge that China’s prosperity is a cause of anxiety for some, who wonder what the nation might ultimately do with its growing resources and strength.

Recent events have highlighted some of the readjustments that are necessary in regional understandings.

With the United States and China on the brink of a trade war, it’s worth recalling the dire warnings of Deloitte’s 2017 report, which suggested that a sharp growth slowdown in China could lead to the loss of half a million jobs in Australia.

The Australian economy is less diversified than either the US or China, and more trade-dependent. So it stands to reason that we have more to lose than they do from a sharp slowdown in Chinese trade.

The Smoot-Hawley tariffs of the 1930s didn’t cause the Great Depression, but they did delay the recovery.

By contrast, the story of Australia – particularly in the 1970, 1980s and 1990s – was a nation that recognised the value of unilateral tariff cuts – of taking rocks out of our own harbours.

As Paul Samuelson once noted, comparative advantage is the best example of a proposition in the social sciences that is both true and non-trivial.

It has never been more important than now for Australia to remind our trading partners of the value of comparative advantage, and the mutual gains from trade.

Because if a trade war starts, it won’t be someone else’s trade war – it will be ours too.

Nations can choose to sit on the sidelines of a shooting war. But in an interconnected world, we all suffer when the trade walls start to go up. As Shadow Trade Minister Jason Clare puts it, ‘if this escalates from tit-for-tat tariff increases into a genuine trade war, then both countries will suffer but more than that, the whole world will suffer’.

As Australia negotiates our path around and through these readjustments, the knowledge store of the China Story will be invaluable.

It can’t be overlooked that this past year has been a bad one for human rights and human rights activists in China.

2017 was the year Nobel Laureate Li Xiaobo died in custody. It was a year that saw the tightening of restrictions on historical research, bans on public discussion of Party rule, and increasing efficiency of efforts to stamp out online satire and criticism.

To be a good neighbour to China we need to see it with clear eyes.

It’s this kind of pragmatic principle – a sober realism – that guides Labor’s policies in the region. Let’s draw back a bit from China’s absorbing particularities and survey the broader scale.

You’ll have heard this before, from my colleagues Penny Wong, Chris Bowen and Jason Clare: Asian economies are changing, and Australia is not keeping up.

So what does the story of prosperity in modern China look like? Four decades of rapid growth have transformed the Chinese economy into the world’s second largest economy.

And if current trends continue, in a decade or so, China will overtake the United States and claim the number one spot.

As of 2017, China has more billionaires than America. And their wealth is growing faster than the economy overall. The US Congress has no billionaires. China’s National People’s Congress has some one hundred of them.

Venture capital is flowing freely to tech savvy entrepreneurs, who are tailoring their products to the needs tap into needs of the mobile-saturated middle classes.

Global online platforms are disrupting traditional retail and service markets, and in China the disruption is taking place faster and on a larger scale. In the past year, Alibaba eclipsed Amazon as the world’s biggest e-commerce company, while the ride-hailing service Didi overtook Uber in market valuation.

Rapid growth has not only benefitted companies and individuals at the top end of China’s income spectrum. In the five years since Xi Jinping rose to power, a further sixty million Chinese people rose from poverty.

Though stark income disparities remain between city and country, coastal and inland areas and men and women in China, this statistic still represents an outstanding achievement.

As Penny Wong put it in Labor’s FutureAsia policy: ‘Australia has much to learn from China. If we want to keep up, we need to change our thinking. This does not involve tinkering or gradualism, but a whole of government approach to deepen, broaden and consolidate out engagement with China. If we want to keep up our record of economic growth, if we still want our place in the G20 in decades to come, it’s critically important that we improve our trade, investment, education, security and cultural links with China.’

How do we do that? We take an interest. A broad interest. An interest in the human dynamics, the shared passions and the areas of minor and major social friction. Or as Penny Wong puts it, we ‘engage with China as it is, not as others might perceive it or as China might represent itself.’

You’ll see we’ve put our money where our mouth is with our FutureAsia commitments – with plans to:

• arrange internships for Australian professionals to gain experience in the Chinese market;
• make Australia Week in China an annual event, and
• establish a specialised team to help Australian businesses tackle non-tariff barriers in Asian markets

Part of the way we consolidate this relationship with China is by getting to know China better.

And this will help us understand ourselves better too, because how we respond to China and the relationship we form will define our identity for decades, if not centuries, to come.

Where to from here is always a good question to close with – I don’t have an answer, but I will end with a juxtaposition from the China Story.

In October last year, the Nineteenth Communist Party Congress amended the Party Constitution to add ‘Xi Jinping Thought for the New Era of Socialism with Chinese Characteristics’ as the guiding ideology for the ‘New Era.’

This makes Xi the first leader since Mao Zedong to have an official ideology named after him. A matter of weeks ago, the Party Congress voted to remove the limit on presidential terms.

Hold that in your mind while you consider this.

China has 730 million internet users. The daily news aggregation site - Toutiao (‘daily headline’) – is using artificial intelligence and machine learning to track a user’s clicks and curate a news feed to suit.

Their powerful algorithms generate satisfying results for their users, but the site has earned the ire of the official newspaper and the state by serving up ‘click bait headlines’, ‘uncivilised content’ and ‘eye-catching news’. State-approved information and sanctioned news is none of these things.

While users appreciated how the algorithm spared them from political messaging, the Party was unimpressed. Toutiao’s artificial intelligence would even learn from users and amplify their unflattering attitudes towards the Party.

How will the state moderate this expression of the middle class’s group mind? Does it need to?

I’m already looking forward to next year’s China Story Yearbook.

ENDS

Authorised by Noah Carroll, ALP, Canberra