Strategy the key to long-term China-Australia relations says outgoing ambassador

Australia’s outgoing ambassador to China, Dr Geoff Raby, remains exceedingly optimistic about China’s long term future, but says Australia has a long way to go if it hopes to continue sailing along on the Middle Kingdom’s coat tails. He spoke to Sophie Loras about the highlights and challenges of his four and half year post in Beijing as he wraps up a 30-year career in the public service.

In his four and half years as Australian Ambassador to China, Dr Geoff Raby has watched bi-lateral trade between the two countries balloon from being worth around $60 billion to over $100 billion, he’s witnessed China take centre stage as it hosted its first Olympic Games and a World Expo, and has taken diplomacy to new levels as he mediated the relationship through the strained and troubled period of 2009 commencing with the release of Australia’s defence white paper, Chinalco’s failed bid for a major share in Rio Tinto and the jailing of Stern Hu.

Since the ‘80s Dr Raby’s optimistic views on China have remained contentious and in many cases, borne true. He has not shied from speaking out on his views on China, on China’s investments into Australia, nor of Australia’s lack of vision when it comes to aggressively pursuing it long-term relationship with China.

Dr Raby’s long career in China began in 1985 when he was posted in Beijing as the China Economic Analyst for the Office of National Assessments during a time when few people knew about the Chinese economy.

“I knew about the Chinese economy but really didn’t know anything about China – so it was quite an important trip for me and certainly was an eye opener and one that I will never forget,” says Dr Raby of his first trip to China, where the dynamism and energy left a first impression that has remained with him today.

“They were very different days then than they are now, but even so with people walking around mainly in blue and green clothing it still felt an incredibly exciting, fascinating place to be in and I guess I just felt that I wanted to learn as much as I could about China and experience as much as I could, and I still feel that today,” says Dr Raby.

It was that fascination that continued to draw Dr Raby back to China, with a five-year stint with the Australian embassy between 1986 and 1991 as China began its engagement in economic reform, and which was subsequently overshadowed by the events of Tiananmen Square in June 1989.

It was a pivotal moment in China’s global engagement, and equally, for Dr Raby and his career as a China expert. Following global condemnation and the international feelings that China had returned to its dark ages, Dr Raby famously contradicted world opinion when Australian Ambassador David Sadleir backed his judgement by delivering Dr Raby’s speech to the Hong Kong press club in late 1989. In the speech, Dr Raby predicted China’s economic reform would continue, that the open door policy would continue – “because they really had no option,” and that after the trauma of the events of 1989, there would be a period of introspection followed by a reinvigorated reform drive.

“That is certainly what happened,” says Dr Raby. “It maybe took a bit longer than I expected, but when Deng Xiaoping made his famous trip to Shenzhen in the Spring of 1992 that signalled that the reform programme was not only going to continue, but be invigorated and extended and taken to a much higher level… at that time when I made that prediction, that speech in late ’89, most people were very critical of it.”

He hasn’t always got it right. In 1995 Dr Raby famously predicted that Shenzhen, as China’s first special economic reform zone, would never work. In 2010, the once southern coastal fishing village celebrated its 30th anniversary as a Special Economic Zone and today boasts Mainland China’s highest GDP per capita.

“As I say, you win some and you lose some,” says Dr Raby who remains positive about China’s future.

“China has far, far exceeded my wildest optimism and expectations. So I guess today, whilst recognizing that there are all sorts of risks to China’ s future growth and prosperity, I think one can confidently expect that China’s economy will continue to substantially expand and to grow and will double its GDP this decade and double the next decade so in 20 years time I think we can remain fairly confident that China’s economy will be at least four times bigger than what it is today.”

Dr Raby describes his role as Ambassador as an essential role “…in providing stewardship and guidance to the bi-lateral relationship and of course, over those years, the bilateral relationship has just gone from strength to strength, particularly driven by the commercial dimensions of it,” he says.

The biggest challenges to the job have been helping the Chinese to understand what Australia thinks of the relationship, “…and why we are important to the relationship especially beyond just resources and energy – which are so dominant and so obvious,” says Dr Raby.

Challenges for Australia have included getting the attention of the Chinese decision makers and recognizing that the world has woken up to China. That Australia will need to remain diligent if it hopes to stay at the forefront of other countries as everyone fights for a piece of the China pie.

“We have to be very agile, adept and skillful in our advocacy and our diplomacy to capture people’s attention and get them to understand why they should spend time on Australia and why Australia is important to their interests,” says Dr Raby.

Equally, Dr Raby says, Australia too, has a long way to go in understanding the importance and significance of China. And that Australia needs to be more assertive about how it wants to engage with China in the long-term.

“My main concern is that we are not prepared psychology and in a policy sense to come to grips with the scale of China and we don’t think in a big and long-term way about China in the same way that China thinks about itself and the rest of the world,” he says.

“Everything we do with China will happen on an enormous scale whether tourists or students or investment or the extent to which we become dependant on the Chinese market and all of this will be something that will be quite new in Australia’s historical experience and something I think we need to have a lot more public debate and discussion within Australia.”

“We can have a very positive and forward looking policy framework or we can be swept up into it and be rather passive.”

Dr Raby chastises Australian businesses for not looking beyond the bright lights of Shanghai and Beijing – reminding businesses that China’s second and third-tier cities present untapped opportunities in a range of sectors including the obvious areas of resources, energy and agriculture, but also in the service sector – tourism and education and beyond that, financial services, architectural advice services with China’s rapidly growing cities and a whole range of urban, environmental type of service industries.

I just think the opportunities are endless. And my main thing I think about China and Australia, is we are only limited by our own imagination.”

Having visited all of China’s 31 provinces, Dr Raby sees his role as Ambassador as having strongly reoriented Australian thinking to second and third-tier cities in China.

“I think the Chinese also appreciate that I have put so much effort into understanding the breadth and extent of China’s economic development.”

He says Australian businesses make three key mistakes when engaging in China. Firstly, that they don’t come to China often enough; Secondly, restricting themselves to Beijing and Shanghai; and finally, not properly grasping the significance of relationship building in China.

“It’s understanding the importance of building relationships and seriously working on that. There is a tendency for CEOs of Australian companies, if they do come to China, to fly in and fly out in 48 hours. I know they are all very busy but in China you do need to actually spend time on the ground building those relationships and then continuing to nurture the relationships once they are established,” he says.

“There is, I think far too much tendency to think you can just turn this on and off as you wish, and so I guess all that can be summarized as failing to take a long-term and strategic role in the relationship.“

Dr Raby also believes there should be much more substantial Chinese investment flowing into Australia.

“Certainly we need to have much greater Chinese involvement in Australian infrastructure – how do we add value to our resources trade with China – finding the mix of policy to have China build enough roads and rails in Australia… and I think we have to be very visionary about how we look at our resources whether food sources or energy and how China participates in the value chain and we are not forever in the position of sending off unprocessed raw material.”

Australia should also be positioning itself to better accommodate currency flows.

“I certainly think financial flows are going to be extremely important and there is going to be a big opportunity for us to be at the forefront of currency swap.

If we get the currency part of the relationship right – that is going to make for a very big development in the relationship.”

While Dr Raby’s posting has been dominated by commercial issues during his tenureship, he will long be remembered in the Chinese artistic community as a patron of the arts and culture. His legacy for establishing the successful Australian Writer’s Week in Beijing remains a highlight of his ambassadorialship.

“It’s important that we are able to, through a whole variety of artistic forms, to express ourselves and learn about ourselves. But it’s been of particular importance to me because I’ve seen the cultural dimensions of the relationship as a very important part of overall diplomacy,” says Dr Raby.

“It’s important that China and Chinese people hear Australia’s voice however that is expressed. We have a unique and very important voice. And if China hears our voice and understands that we have something original to contribute beyond that in conversation about where we are going, where the world is going, China will listen to us, not just in the cultural sphere but in other areas.”

In terms of predictions for China’s long-term future and political stability, Dr Raby says only time will tell what is in store – and it would be naïve to assume that as China continues to prosper economically, that its social and political systems will converge into more western styles of governance also.

“Quite clearly the biggest unanswered question for China, the region and the world beyond, is how China’s political development will unfold and it’s an experiment we’ve never seen before. I’m not sure what points of reference we have to try and think about the future and the development of China’s political system,” he says.

“We shouldn’t just assume that because China grows richer, the middle class becomes more affluent, the Internet expands, people travel more, that somehow China will naturally evolve to form a critical and social organization that we are familiar with in the West. I just feel that while I can’t predict what it will look like, I think it will have very powerful Chinese characteristics and it will be something that is largely sui generis.”

As Australia’s longest serving Ambassador to China, Dr Raby now intends to resign from the Department of Foreign Affairs and Trade and remain in China when he completes his posting in August.

“I couldn’t think of anything more fun than what I have done for the last four and half years,” says Dr Raby.

“The great thing about Beijing is that you have to deal so much with China – which is why you are here and it’s very interesting, but also the huge number of Australian businesses coming through all the time,” he says.

“I’ve been blessed to be left alone pretty much and get on with the job. I came knowing how quickly these postings are and I was determined not to waste a minute of it. And I don’t think I have or will until I walk out the door.”

*Dr Raby completes his post in August and will be replaced by Frances Adamson.

 

 

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