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ELIZABETH:

From Schwartz Media, I’m Elizabeth Kulas, this is 7am.

Xi Jinping’s ambitions for China are paranoid and expansionist. His mindset mirrors that of the guerrilla fighters in the Chinese Civil War. Peter Hartcher on how understanding this history helps us understand Australia’s relationship with China now.

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ELIZABETH:

So, Peter, let's start with Xi Jinping. What do we know about his life up to the point of becoming the President of the People's Republic of China?

PETER:

He had a good start. He was born in 1953, which makes him almost as old as modern China itself. Within four years of the very beginning of the foundation of the People's Republic.

ELIZABETH:

Peter Hartcher is the political and international editor at the Sydney Morning Herald. He’s also the author of the latest Quarterly Essay, Red Flag: Waking up to China’s Challenge.

PETER:

His dad was one of the original revolutionaries on the long march. A close ally of Mao Zedong, the founder of modern China and the leader of the revolution. Now that means that Xi Jinping was automatically, when he was born, became one of the so-called red princelings, a child of one of the original revolutionary greats. While that meant his dad was very close to Chairman Mao, the Great Helmsman, as he later came to be named, it's a dangerous place to be close to Mao as well as a privileged one. And later on during the Cultural Revolution, that mayhem and madness where essentially everything was torn up.

Archival tape -- Unidentified Man #1:

“It was on this day in 1966 that Mao Zedong began China’s cultural revolution. Hundreds of thousands of people were killed as the country transformed itself over the course of a decade. Mao called for the cleansing…”

PETER:

Schools and universities were canceled and the students were ordered to go and question and punish their teachers.

Archival tape -- Unidentified Man #1:

“Those who heeded Mao Zedong’s call for revolution would make up the Red Guards - groups of youths that targeted political enemies. To cement his grip on power, Mao would go on to purge the communist party, relying on millions of young people for support.”

PETER:

During all that chaos, Xi Jinping dad was purged, sent to work in the countryside in a factory, and later he was jailed for four, five years. And the young Xi Jinping, he didn't do so well out of that either. He was sent to live in a cave in the countryside. He had steady work. He was a local Communist Party secretary. But it still wasn't exactly the luxury that he'd grown up with, because until that point, he and his family were living in the leadership compound in Beijing, the red walled Zhongnanhai, which nobody's ever seen the inside of, unless of course you’re a leader of China.

He tried to escape from his fate in the countryside, he was captured and sent back into the countryside. He spent years digging ditches and doing other undignified things. During all this Cultural Revolution mayhem, one of his sisters was murdered, actually, by the Red Guards, ransacking his family home.

Now, all of this experience, you'd think, Elizabeth, would send someone one way or the other. You'd either be appalled at the abuse of power, at the loss of freedom in a system where the whim of the man at the top is the only thing that matters and there is no such thing as human freedom or human rights. And that he would work to try and create a sense of liberty in China. Or you'd think he'd go the other way and say, well, hang on, this isn't so good being on the receiving end of all this power. I'd like to be on the dispensing end of it instead. And that's the course he chose.

He worked with the party. He worked his way up through the party.

And he did everything right until finally...

Archival tape -- Unidentified Woman #1:

“I announce that…”

PETER:

...When China was searching for its next leader...

Archival tape -- Unidentified Woman #1:

“...Comrade Xi Jinping is elected...“

PETER:

...He became the compromised candidate between the founding great family cliques and factions in China, and emerged on top.

Archival tape -- Unidentified Woman #1:

“President of the People’s Republic of China…” [applause]

ELIZABETH:

So, Peter, when he was made President, what was the general impression of Xi Jinping?

PETER:

We didn't know much about his full character. We knew that he'd been an efficient and effective party secretary and he'd run some of China's provinces and had a number of jobs where he was quite effective. He showed some enthusiasm for anti-corruption campaigns, which marked him up in the party hierarchy. Apart from that not a lot was known.

He was made Vice-President of China before ascending to the presidency. And in that phase, he did spend some time abroad. He was really preparing himself, briefing himself, for being the leader of China. The two foreign, well, or two Western leaders with whom he spent most time were Joe Biden, who was then the Vice-President of the United States.

Archival tape -- Joe Biden:

“I told Vice-President Xi, his visit to Iowa tomorrow will ensure him more delegates than I got the last time I was there.” [Laughter]

PETER:

And our very own Kevin Rudd.

Archival tape -- Kevin Rudd:

“A true friend is one who can be a zhengyou, that is a partner who can see beyond immediate benefit to the broader and firm basis for continuing, profound and sincere friendship.”

PETER:

Those two leaders both declared that Xi Jinping was a man that we could work with, a man that we could do business with. Now, of course, they both turned out to be completely wrong.

Archival tape -- Unidentified Man #1:

“Chinese President Xi Jinping has warned any attempts to split the country will lead to quote “bodies smashed and bones ground to powder.”

Archival tape -- Unidentified Man #2:

“They confirmed a three-year campaign against ethnic minorities, corralling up to one million people in the country’s west into prisons and internment camps.”

Archival tape -- Unidentified Woman #1:

“They link president Xi Jinping to the campaign through speeches he made in 2014 calling for absolutely no mercy in the crackdown.”

Archival tape -- Unidentified Man #3:

“The scale of the brutality being organised by the Chinese Communist Party is frankly astounding.”

PETER:

Xi Jinping has surprised, shocked and dismayed, in varying measure, world leaders, some of the people in his own in his own country and his own party, as well as impressing many, of course, which is why he managed to get away with making himself ruler for life, as he's often called.

Archival tape -- Unidentified Woman #2:

“The most dramatic political change in China in decades. A vote to scrap term limits for China’s President. Put in place in the 1980’s, now history. The move clears the way for Xi Jinping to stay in power indefinitely, and possibly for life.“

ELIZABETH:

And how is Xi positioning himself and his vision for China differently to those leaders that came before him?

PETER:

In his own words, he's said he wants the “China Dream,” which is the great rejuvenation of the Chinese nation. He said that this will involve the full recovery from what the Chinese have long called their century of humiliation, where the country had been torn apart by the British, the Japanese, the Americans, the other Europeans, that he's going to end that century decisively. He's going to return China to what he describes as being closer to the centre of world affairs and a moderately rich country, he says, by the end of 2019, so that's practically upon us.

Xi Jinping is all about the assertion and protection of the dominance and power of the Chinese Communist Party exercised through the organs of the state and therefore, China itself. Really, it's a mindset that was created during the guerrilla Revolutionary War in the Civil War, when the communists led by Mao were still trying to take power. So it's underground, it's guerrilla, it's paranoid because they're always in the fear of being rubbed out. Even though China today is such a great and powerful state, he still has this mindset that the party must always work to spread its tentacles, enlarge its power, that it must protect its own power by spreading as far and wide as it can across the world until and unless it meets resistance.

ELIZABETH:

We’ll be right back.

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ELIZABETH:

Peter, your Quarterly Essay is about this dawning realisation of China's influence in Australia. And I wanted to go to one example that you mentioned in the essay, a meeting you described between Joe Hockey and China's finance minister, Lou Jiwei, which happened in 2013.

PETER:

Yes. This was a story that Joe Hockey personally confirmed to me. And it was pretty memorable because he was completely shocked when it happened.

Joe had only been the Australian treasurer for two days and he was immediately sent off to represent Australia at a finance ministers meeting in Bali. And he was completely amazed and shocked when Lou Jiwei came in to meet him and he rocked up and he said, “So, why won't you let me buy Rio Tinto?”

ELIZABETH:

Hmm.

PETER:

Because the Chinese state owned company tried to buy 15 percent of it and got bogged down. And then Lou came back with his next bid. He said, look, all I want is to buy 15 percent of your top 200 listed companies.

We just want to buy your stock market, to buy your industrial sector, which would buy our economy. Pretty, you know, pretty brazen stuff. And Joe Joe Hockey eventually after, you know, laughing at the sheer brazenness of it. He said, look, why don't we get on to talk about something more meaningful.

ELIZABETH:

What do you think Hockey took away from that? What did he say his impressions were after that meeting?

PETER:

Well, he was stunned that it was such a bold and obviously unacceptable bid by another country to do a political deal to buy control of the Australian, you know, corporations, stock market. It would have made the Chinese Communist Party the single biggest and most influential shareholder in the country, with a great deal of political influence, influence over the regulators - the whole thing.

Second, it was interesting because it showed Hockey that despite the Chinese government always saying that, no, our companies are separate to the government, they’re independent, the state-owned enterprises make up their own minds. Here was a Chinese finance minister not making any distinction. In other words, he fully expected that Chinese companies would do exactly what the government told them to do and buy whatever they were told to buy.

ELIZABETH:

Do you think Lou Jiwei was serious?

PETER:

It's hard to know. Hockey seems to think that he was. But it's such an outrageous proposal that I think there's a fairly good chance that he wasn't. In which case, what was he trying to achieve? And I suspect that he was trying to intimidate him a bit, to awe him with his personal power and China's might.

ELIZABETH:

Hmm. The other example I want to talk to you about was, I think it tells us something different but similar about the influence of the CCP on Australian politics. And it's the anecdote that you report involving Stephen Conroy.

PETER:

Yes. At this point, this is June 2016, a couple of weeks out from the federal election. At this point, Labor was in opposition federally. And Stephen Conroy was the shadow defence minister. He'd given a speech, a position, at the National Press Club..

Archival tape -- Stephen Conroy”

“The ongoing campaign in the South China Sea, which is over now two or three years, seen oil rigs towed into other country's waters, fishing zones declared unilaterally, absurd building of artificial islands on top of submerged reefs…”

PETER:

..setting out a pretty firm Australian position, if Labor were to win power, in the South China Sea.

Archival tape --

“To those who have been doing it, it is unhelpful. It has been destabilising the region…”

PETER:

And he took a phone call from a member of his own party, general secretary of the New South Wales Labor Party, Kaila Murnane. Kaila said; “Steve, if you don't change your China position, we are going to lose $400,000 in a promised political donation”. He turned down the proposition. But he was shocked and went around and told quite a number of his Labor colleagues about what was going on.

And we learned later from the proceedings in the New South Wales ICAC, Independent
Commission Against Corruption, that the wannabe donor was Huang Xiangmo, who is the guy who since had his Australian permanent residency canceled for being of bad character. He was the same guy who was the benefactor of Sam Dastyari, the Labor senator who was drummed out of the Senate because of his conduct over China related questions and his relationship with Huang.

ELIZABETH:

I know there are many things we could extrapolate out of this example, but surely one of them has to be how cheap Australian politics and political influence can be.

PETER:

Bingo. It's exactly right. So four hundred thousand dollars is enough for the Labor Party official to try to get the party to change its national defence policy. Yet for Huang, it's nothing. We know from leaked Crown Casino internal emails that this same guy, Huang Xiangmo, in a single year bet $800 million on the gaming tables at Crown Casino in Melbourne. Eight hundred million dollars was his play money in one year at one casino alone. So $400,000 or even the $100,000 that the ICAC heard he'd given in a plastic Aldi shopping bag to try and buy off the local party...

ELIZABETH:

Loose change.

PETER:

Absolute, I mean, you know, its parking meter change.

ELIZABETH:

So, Peter, what Xi does want, but we also have some information about what he doesn't want for China through the leak of a document called Document Number 9, which happened in 2013.

PETER:

Yes. So Xi’s own regime issued a set of instructions which has become famous. Document Number 9 is now known as the seven taboos or the seven unmentionables, which run through the seven attributes that Xi Jinping said we need to make an intense struggle to wipe them out .

He went to the heart of every value that makes a liberal democracy work, and said that they were all taboo. Civil society is taboo because it may threaten the power of the party. Universal values, forbidden. The only rights recognised are the collective rights of the people as represented and operated by the Chinese Communist Party. Western constitutional democracy is the very first taboo in his list of seven. And of course, you know, that includes things like an independent judiciary. But China doesn't have one. The party controls the court system as well as everything else, and he doesn't think anybody else really is very smart to have one either. There's no such thing as independent journalism allowed. And you're not allowed to challenge or criticise the party's history. He calls criticism of the party's history, even things like the madness of the Cultural Revolution or the disastrous Great Leap Forward, which killed tens of millions. But he said that any criticism of that is historical nihilism, that’s banned too.

ELIZABETH:

So, Peter, knowing what we do about the Chinese Communist Party’s aspirations, what can we see of them manifesting in Australia?

PETER:

Well, you see it in a range of ways. You see it in the warnings from the national security agencies. In fact, in this essay, I quote the former head of ASIO, Duncan Lewis, saying that China is attempting an infiltration of our political system and our communities and the Chinese diaspora that would allow it to, quote, “pull the strings from offshore to control Australia from afar.” And the only way you’d realise that he'd wake up one day and find decisions being made by your government that are not in your national interests.

I want us to be distinct. I'm not talking about the Chinese people. We're talking about the Chinese Communist Party as a political movement to spread its influence and achieve its ambitions through operating through the Chinese diaspora around the world. And we see that turning up in many different ways in Australia as well.

ELIZABETH:

And having written this essay, what is the image of the CCP that you walk away with?

PETER:

Well, John Howard himself said just a few weeks ago. He said that the China we deal with today is not the China of even 10 years ago. And that's partly because it's just the sheer scale and power of the thing.

The Chinese economy today is bigger than the entire European Union and Japan put together. And it's ambitiousness under Xi Jinping. You know, strive to achieve, we're going to assert the party's dominance around the world as far as we can. But that's at the center and the heart of Xi Jinping project, is to assert the untrammeled power of the party across China, but also across any part of the world where it can assert power and influence. This is the problem and the dilemma for Australia.

The lesson really above and beyond all of that is that we can and, in fact, if we value our liberties, should, shape our engagement with China and not allow China to do all the shaping.

ELIZABETH:

Peter, thank you so much for speaking with us.

PETER:

Pleasure, Elizabeth.

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ELIZABETH:

Elsewhere in the news:

The treasurer Josh Frydenberg has indicated that the Australian Credential Regulation Authority has the power to disqualify boards and board directors, and may act against the Westpac board after the bank breached its legal obligations more than 23 million times. Westpac has been implicated in a failure to report transactions that include apparent funding of child exploitation, although the bank has stated its confidence in the board.

And government agencies are considering an asylum application for Wang "William" Liqiang, who said he was working in Australia as a spy for the Chinese government. Mr. Wang has provided a sworn statement to ASIO, detailing various forms of espionage being conducted in Australia, and naming other senior undercover operatives in the region. He fears he may be killed if he returns to China.

This is 7am. I’m Elizabeth Kulas. See you Tuesday.