Transcript: ‘China’s AI Revolution under Xi Jinping’ – Kevin Rudd’s ANU CIW Lecture, 2026

And it will deal with the nerdier subcomponents of the ideology of new quality productive forces within China’s new Marxist approach to economic management.

What I propose to do in the time available here, so that we have time also for discussion, is to provide a summary version of where this subject of China’s embrace of AI fits within the overall framework of China’s economic strategy, and where it fits more broadly within China’s national and global strategy. So why don’t we take it in those terms, and then let’s move to question and answer a little later into the evening. Xi Jinping — for those of you who have read his stuff, and I made it my business to read all of his stuff when I, at the tender age of 59, decided to do a DPhil at Oxford and produced a book called On Xi Jinping, having studied for four years his ideological framework — and if you read Xi Jinping’s ideological framework carefully, in a country which takes ideology seriously, my three-line summary of the ideological changes he’s brought about in the Chinese system are as follows. Number one, Xi Jinping deliberately set out to move the center of gravity of Chinese politics towards the Leninist left.

The Three-Dimensional Ideological Shift

More power for the party. Two, he also took a deliberate decision, probably from the Nineteenth Party Congress in 2017, to move the center of gravity of Chinese economic policy towards the Marxist left. And three, throughout this period, we see a parallel shift in China’s approach to its foreign policy and national security policy by moving its center of gravity towards the nationalist right. And if we are to make sense of the Xi Jinping ideological project, it actually is reflected in these three dimensions. People often say to me, here we are in the twenty-first century, why does ideology matter?

In a Marxist-Leninist system, and certainly in the Chinese political system of which I have been a student for now fifty years since I arrived here as a 17-year-old, which makes me about 49 now — I didn’t do maths — is that this system in China, both from the inception of the Chinese Communist Party in 1921 through to the success of the Chinese revolution in 1949, through the rigors of the Great Leap Forward and the Cultural Revolution and the self-inflicted damage which was occasioned by both those disasters in modern Chinese history, through to the rise of Deng Xiaoping in the post-Mao period and the heralding at the beginning of the period of reform and opening, through to Xi Jinping today — each of these epochs within the Communist Party’s history and policy and performance has been heralded by shifts in ideology. Ideology, if I could put it into these terms, constitutes the headwaters of change in a Marxist-Leninist system, which is then in turn translated into policy over time, and which in turn is changed into forms of behavioral change within the various instruments of the Chinese party-state and the broader Chinese society.

I think it’s useful, before we begin to look in detail at what’s evolving within Chinese economic policy and technology policy, to understand the ideological frame within which all this rests. As part of the nationalist vision for China, Xi Jinping, upon taking power at the end of 2012 as General Secretary of the Party, and then as President of the country in March of ’13, took his colleagues across Tiananmen Square from the Great Hall to the National Historical Museum, or what used to be called the Museum of Revolutionary History, and then took them to an exhibition of China’s humiliation at the hands of the British and the French in the Opium Wars. And that is where he pronounced for the first time to the Chinese nation his vision for what is called the “great rejuvenation of the Chinese nation.” And this has been his galvanizing nationalist ideological project now for the better part of a decade or more. And in its subsets, it is about this.

How does China now move from being a country and an economy which is a middle-income economy — by some measures an upper-middle-income economy, by others a lower-middle-income economy, depending on where you’re looking at the geography of the country — and how do we bring China to advanced economic status by the time of the centenary, the founding of the People’s Republic in 2049. That is his galvanizing mission. And if you look, therefore, at the various instruments of policy which have unfolded since then, each relates back to that fundamental nationalist purpose. When you look at China’s concept of its own national power, in order to give effect to the great rejuvenation of the Chinese nation, power itself is defined by a Chinese concept called “comprehensive national power.”

And if you look at it carefully, it is a concept, or a macro concept, of power which builds within it many, many subdivisions. It is not just classic military power, as in a nineteenth-century realist view of the state. It is also about economic power, trade power, the power of capital, as well as the power of technology. It is also about the fundamental underlying resources of the country. It is about how that power is deployed in the world.

China’s Economic Ideology: From Mao to Xi

And comprehensive national power is invariably measured in relative terms against China’s assessment of the power of other states as well, principally the United States of America, but also American allies in the region and the world as well. So the Chinese approach to the implementation of this national vision for national rejuvenation is driven by this broad concept of national power, zonghe guoli, within which the economy looms large. It is not an exclusive measure of power, but it is a dominant measure of power. This brings us to how China’s economic policy has then unfolded in the period since Xi Jinping took office. When Deng Xiaoping decided to change China’s economic course at what is usually called the Third Plenum of the Eleventh Central Committee in 1978, he did so in a deliberate and ideological fashion.

Under Mao Zedong, the principal ideological challenge of the Chinese party and people was to continue class struggle at home and abroad. This gave rise ultimately, in a most extreme form, to the Cultural Revolution. But it placed at an absolute premium an equality of classes, and therefore Mao’s determination never to allow the emergence of a bourgeois class in China, which would supplant either the proletariat, or the ruling working class, or their self-designated representatives, the Chinese Communist Party, as the Leninist party. For Mao, growing the economy — while it may have been a real concept within classical Marxist economics — frankly did not occupy the first priority in his list of priorities. It was always about class struggle.

It was always about ensuring that the purity of the revolution, which they’d won through blood and effort in ’49 after twenty-eight years of civil war, was to be preserved as an ideological project. The problem was, by the time Mao died in ’76, the country was broke. If you speak to Chinese ministers and leaders at the time about how they financed, in hard currency, their first travels to the United States, it’s a searing tale, in fact, of how empty the coffers had become by that stage. And so Deng Xiaoping looked at this. And by the time we reach the Twelfth Party Congress in 1982, he takes Mao’s definition of the core mission of the party about class struggle and turns it on its head.

He says that in the party’s ideological definition, the fundamental challenge of the party at this stage in history, since 1982, is to unleash the factors of production in order to give rise to national wealth, and in order to therefore afford the Chinese people a better living standard and to release them from poverty. If you want to therefore trace the ideological wellspring from which the period of what we loosely call “reform and opening” came, it is that congress of the party, the Twelfth Party Congress, and the resolution it adopted, formally changing the party’s central mission — or, to use Marxist language, the “core central contradiction” — around which the party would organize its future efforts. And from 1982 to 2017, that remained the central galvanizing ideological project of the Chinese party-state. As a consequence, over that period of time, you would have seen, with some interruptions, average double-digit growth through the ’80s, the ’90s, and into the most recent decade as well. And China moved from an economy which, as of the end of the Cultural Revolution, was an economy of the same GDP in aggregate size as the Australian economy, to then become the second largest economy in the world.

When Xi Jinping became leader, he initially embraced this vision. If you look carefully at the party congress which brought him to power in 2012, the resolutions which followed that embraced this reformist vision — that is, a greater role for markets, both at home and abroad, in unleashing the factors of production and unleashing wealth for the Chinese people, and to raise living standards and also to grow the economic power of the nation. Deng Xiaoping saw these and said, we need to ensure that these, in fact, continue to deliver wealth into the future. But when Xi Jinping looked at these, by the time we got to 2012, 2013, he said, yes, let’s double down further on the market. But then something difficult happened within Chinese financial and economic system management around about 2015.

The 2017 Ideological Pivot

For those of you who studied it closely, in 2015 there was a significant domestic financial crisis within China. There was a run on the stock market. There was a panic in the property market. And as a consequence, people’s shareholdings lost much of their value. It was around about that time — and remember, we’re also existing in the long afterwash of the response to the global financial crisis and financial markets globally out of control — that you see a deep, deep reappraisal by Xi Jinping on the economic pathway forward.

And as a consequence of that, what Xi Jinping then did, by the time he got to the Nineteenth Party Congress in 2017, was to look back at the origins of the Deng reform and opening period and then readjust the party’s ideological mission. This never makes it into the newspapers. It’s dull ideological news. It’s what theoretical nerds like yours truly trace and examine in order to see where the origins of policy change lie. And if you look carefully at the text and the resolution of the Nineteenth Party Congress, thirty-five years after the Twelfth Party Congress back in 1982, what Xi Jinping said was — Deng Xiaoping said that the central challenge for the party in the future was to unleash the factors of production to grow wealth for the Chinese people.

What Xi Jinping said is that this model of economic growth has become unbalanced, and it is producing inadequate results. And we might say, what does that mean in real language? What Xi Jinping was signaling was that the time for the supremacy of the market, and the way in which the Chinese socialist market economy by that stage had been conducted, had come to a close. And it was time for the party-state, through a rejuvenated Leninist party, to resume direct intervention into the running of the economy. And you begin to see, from that stage, the dial shifting fundamentally.

If you look at the barometers of change, you see, for example, a rise once again of the centrality of central planning, and a relative decline in the significance attached to market disciplines in themselves. You see the rehabilitation of state-owned enterprises as juxtaposed against private sector corporations, which by that stage were already being deemed to have become too big, and therefore too large for the party to control. And in terms of the income disparities which have been generated over thirty-five years through the period of reform and opening — when Deng said, “it is glorious to be rich,” when Deng said, “it’s fine for people to get rich first, others will then get rich later” — Xi Jinping, instead, his response to that was to say, we are now heralding a new era of “common prosperity.”

So the juxtaposition between these parameters of economic policy then became clear. That is why I’ve said in my opening remarks that Xi Jinping deliberately, ideologically, at that congress chose to move the center of gravity of the party’s economic policy towards the Marxist left. And right now, here we are almost ten years on from that. We are in the long economic shadow of that ideological decision taken back then. I’ll leave to one side the relative impact of COVID, which disrupted everybody’s economy and most particularly the Chinese, given that’s where COVID came from in the first place, in Wuhan.

China’s Economic Slowdown

But if we were to extract the COVID factor from China’s economic performance and ask ourselves, what has growth been like in the period since the ideological change? Even on the official numbers, average growth has reduced to around about 5% from double digits. And independent economic analysts would say that in the last five to six years, despite the nominal figures — the official figures, I should say — being registered around 5%, the real figures are, in fact, closer to 2% or 3%. We might say, why is that the case? The core reason why that is the case is that you had a fundamental recognition on the part of the private sector that they had to begin to trim their sails, that the private sector was no longer going to be allowed to run triumphant across the Chinese economy, as Xi Jinping feared that these companies had become too large for the party itself to control.

You will recall that it was not long after that that you saw the largest platform companies, called pingtai jingji or the pingtai gongsi, a number of their chief executives being hauled in and reprimanded, disciplined, and in some cases temporarily disappeared, as happened, for example, with Jack Ma from Alibaba. And the message to the body politic, and the message to the corporate body politic, was this: understand now, my friends, in the private sector, you are now working within the remit of party control. As opposed to the previous thirty-five years, where it was indeed glorious to be rich. The impact this has therefore had on private sector behavior in the period since COVID — and there was evidence of this even prior to COVID, in the period ’18 and ’19 before COVID broke out in ’20, and certainly once COVID restrictions were lifted by the time we get to ’22 and ’23 — this long afterwash of the effect of this deep ideological change in the way in which the party views the role of the private sector. How do we best diagnose it today in terms of the data?

If you were to look today at the most recent data produced on the Chinese economy, both from the official numbers and from the unofficial analyses which look at different matrices through which you analyze growth — point one, private domestic consumption within the Chinese economy is flat. And representing such a huge slice of GDP, if you have a flat performance from your domestic consumers, let me tell you, it’s very hard to reconstitute the growth numbers from the other drivers of growth. And the reason for that is consumers, having been through COVID, but consumers also having seen other things happen in the economy and becoming more cautious about their futures, have now begun saving again at record levels. Savings ratios in the Chinese economy have gone up as private domestic consumption numbers have headed in the reverse direction.

So private domestic consumption, a major contributor to economic growth in any economy either emerging or developed, has now, for the better part of half a decade plus, been flat. Second, private fixed capital investment, a second big driver of growth in most economies, also flat. The reason there is self-explanatory, because the private sector — the individuals I referred to before, who were investing big in their corporate futures in the past — were now receiving different signals from the party center about their future. A third driver of growth normally in any GDP matrix is private residential construction. The residential construction sector in China in the last six years has imploded completely and continues to be in recession.

This has had profound roll-on effects for the rest of the economy. First of all, back to the good old consumer: most consumers had put their savings into investing in residential construction, buying their classic investment property, only to see the value of those investment properties collapse, often to zero. The second consequence of the collapse of the private residential construction sector has been through local government finance-raising — local government taxes and local government revenue-raising. This was the sector which generated most local income growth for the state. And therefore, you’ve found in recent years Chinese local governments often not capable of paying the salaries of their workers.

So the profound implications of a private residential construction sector collapse continue to work their way through the Chinese economy today. So what, therefore, against those measures, is working in order to keep growth north of zero? There are two answers to that. The first is net exports. And if you look at China’s export performance around the world — in the United States, though that is now declining because of the tariff wall which has been constructed defensively in response to it.

In Europe, where at present a tariff wall has been contemplated but not yet executed, and in Southeast Asia — China, in the last twelve months, has generated a $1.2 trillion trade surplus with the rest of the world. This is the most powerful engine room today remaining in the Chinese economy, and that is net exports. And therefore, the critique of it that you hear in the United States and in Europe and elsewhere is that China, because of suppressed or depressed domestic demand, is maintaining its production levels and, in fact, exporting that at subsidized prices to the rest of the world, thereby disrupting global supply chains and global production, and causing the reverberations we see today in German manufacturing and the loss of jobs in that sector and across industrial Europe. This, however, is a single driving force in China’s current economic performance.

The Techno-Industrial Strategy and AI

The other one is investment by the state — public investment in Xi Jinping’s techno-industrial vision for the country’s future. This brings me to the question of how Xi Jinping views his techno-industrial vision for the future. Artificial intelligence, in the Chinese context, and looking carefully at the way in which it’s reviewed in their ideological and policy literature, is seen as an overwhelming positive for China’s aggregate economic competitiveness and future in the world. Whereas in this country, and around the democratic world, there is an emerging parallel debate about the risks presented across the spectrum by artificial intelligence — risks to individuals, psychosocial risks, employment risks, the security risks which arise from agents escaping from the sandbox of the type that we have seen most recently. This is not prominent in the Chinese literature.

What is prominent in the Chinese literature describing the AI revolution is how this will turbocharge China’s economic growth into the future. In Marxist economic theory, the view is we have four factors of production: land, labor, capital, technology — and now a fifth, as of 2019, data. There’s an early recognition that data of itself becomes a new latent force to drive the economy forward. With the arrival of artificial intelligence, of course, there is an ability now to harness data for extraordinary economic applications across all industrial sectors. And if you read carefully how Xi Jinping conceives of this, he sees artificial intelligence and the algorithms alive within it, together with other new advanced technologies, as now providing this turbocharging device to lift total factor productivity across the entire economy, in every field of endeavor.

And that is why, in large part, they are doubling down on this so hard through this massive campaign of public and publicly directed investment in this sector. In fact, if you read the literature, they fully recognize, as Marxist economists, that the traditional advantage of liberal capitalist economies in the past has been their relative efficiency in the allocation of resources. However, they believe they now possess a unique opportunity, as a centralized state, to deploy the new algorithmic powers available within artificial intelligence across the total production spectrum, and not just in goods, but prospectively in services as well. This brings me to a broader point of why Xi’s literature on what he calls “new quality productive forces,” driven by artificial intelligence and other advanced technologies, represents for them not just a means by which to catch up with the United States across the AI stack, not just to keep pace with the U.S.

And the collective West in terms of where artificial intelligence has reached, but to now “leapfrog” the West — which is the term now used in the literature — and to achieve what is also described as a “paradigm shift” against Western economic models. The conundrum faced by Marxist economists since the relatively humorous Adam Smith sat on the docks of Glasgow to observe merchants loading and unloading goods from the North American market, from which he ultimately devised The Wealth of Nations, his theory of price being determined in a marketplace by supply and demand — Marxist economists have long recognized, including in China, that this has been a remarkably efficient allocative mechanism for scarce resources within an economy. In large part, that explained also why Deng Xiaoping opened the door to price-based market economics in the period of reform and opening that I’ve described before, between 1982 and 2017. The invisible hand, as described by Adam Smith, working mysteriously in an economy, allocating resources where there was an accentuation of demand or a problem of a depreciation of supply, and so prices — the most efficient price being set.

The “Visible Hand of the State”

And this presented a conundrum for Marxist economists from the very beginning, and Chinese Marxist economists as well. But this is where the literature becomes sharp and real in the current debate. If I read it carefully, what the party is now saying in its theoretical literature is that, quite apart from increasing total factor productivity within the Chinese economy as a consequence of AI and other advanced technologies, what we are looking at, much more broadly across the entire economic paradigm, is a superior macro allocation mechanism for resources within the economy, which will be algorithmically driven. No more invisible hand of the market. The explicit term now used in the literature — the Chinese Marxist literature, the Chinese ideological literature — is the “visible hand of the state.”

And therefore, the paradigm shift which is now emerging in the literature, at least, is: we, in socialist China, believe that through the arrival of this enormous change-generating set of forces, of which artificial intelligence is the core, we now have at our disposal, for the first time in economic history, an alternative to the free market for the efficient allocation of resources. This is one of the reasons why I believe we should take ideology seriously, because all this is in the ideological literature — not yet in the policy literature, and not yet, frankly, as adopted by firms or corporations or state entities in the real marketplace. But as I said before, my observation of ideological change in China over the last fifty years is that ideological changes occur at the headwaters, and they feed into policy changes and behavioral changes later on. And that, my friends, is where Xi Jinping’s definition of new quality productive forces, including artificial intelligence, now stands: A, catching up with the United States and surpassing it in terms of total factor productivity growth, thereby turbocharging China’s current low growth levels into a new level of high growth. And then secondly, engineering, parallel to that, a game change, a paradigm shift in terms of the ultimate economic orthodoxy which distributes resources efficiently within an economy.

The Private Sector Conundrum

There’s one conundrum, however, which even the ideological literature of the Chinese Communist Party recognizes. And that is that AI and innovation, writ large across the advanced technologies, is primarily, but not exclusively, happening in the Chinese private sector. And so therefore, how are we going to square the circle? We need the innovation and the enterprise and the expertise and the cutting-edge technological skills of this sector on the one hand. But on the other hand, we don’t want to return to the ideology I have just put into the past, which allowed this class of individuals within the country to become ever so powerful.

And if I read the literature carefully, that is where the debate right now within the party stands, seeking to square that circle between these competing tensions. Liu He, in the last Xi Jinping administration, famously said that the Chinese private sector represents 90% of innovation. It represents 80% of employment growth. It represents also 70% of contribution to overall Chinese taxes. The ideological and political and policy dilemma, therefore, faced by the current administration is how to reconcile those tensions.

Ideology in one corner, and in the other corner, the self-interest of a private sector wishing to maximize profits, who will not necessarily find their daily inspiration to get out of bed and to invent new things through having read another volume of Xi Jinping Thought. To conclude, the reason why this debate is important, and why I thought of making it the centerpiece of what I said in this lecture this evening, is because where the Chinese economy goes now fundamentally determines the future of Chinese power in the region and the world. And Xi Jinping has made an enormous bet on his techno-industrial strategy. He has said that this will transform China’s economic paradigm. He has said that it will also lift, in time, China’s at-present languishing private domestic consumption within the economy, and that when the private sector gets on board, it will also contribute to a further generation of fresh levels of growth in private fixed capital investment.

And thereby, the growth conundrum that he’s confronted over the last decade is changed and solved as a consequence of his betting big on a techno-industrial strategy. Final point is this: how do you pay for it? Always an important question in politics, always an important question in government wherever you are. And the answer so far is, we, in China, can navigate this period ahead on the condition that we are continuing to harvest a trillion-dollar-plus surplus in our export relations with the rest of the world, in the hope that the rest of the world doesn’t construct tariff walls in response to our subsidized industrial strategy. So that is vulnerability number one.

Vulnerability number two is the Chinese consumer, who, remember, I said before, is saving more and more and more, so that the Chinese savings ratio is now reaching levels which we didn’t think were possible anymore. Because Chinese savers are not investing in the property market anymore, because fingers have been burnt comprehensively, and because the stock market is not seen to be sufficiently stable or predictable in terms of providing a return. These are staying in very low-interest-earning deposits in the Chinese banking system. And it’s that enormous volume of individual Chinese citizens’ bank deposits, which are being drawn upon by the Chinese state through a series of loan instruments — local, provincial, and national — in order to give effect to the techno-industrial strategy that I referred to before. Is that sustainable over time?

Perhaps. But that’s part of the big bet which Xi Jinping has made. So how will this turn out? I’m not sure. But I think the beginning of wisdom, and our analysis of these things in Australia and elsewhere in the world, is to understand clearly what China’s strategy is.

I thank you for your time.

Question and Answer Session

UNIDENTIFIED SPEAKER: Thank you very much, Dr. Rudd, for your remarks this evening. We have a few minutes for questions, and I have received a great many questions from the audience via the app.

AUDIENCE QUESTION: Do you think Xi Jinping’s clipping the wings of the private sector is sustainable, given that technology is now the key driver of national power and geopolitical primacy? Will he inevitably be forced to change policy, change course on this?

KEVIN RUDD: I think until 2024, he thought that that was not necessary — that is, to re-embrace the private sector. But as the domestic economic data continued to head south, what you see in ’24, culminating in an important meeting in the Great Hall of the People, I think from memory in January or February of ’25, when he brought all the private sector heads in to meet the party leadership — and you may recall the footage with Jack Ma from Alibaba sitting tactically to the far right of the screen, not in the center — that was the first recognition that we, despite our ideological resolution of 2017 about the need for the state and the party to reengage and to intervene in the market, and to take what Xi Jinping has described as a position of “top-level design,” dingceng sheji — that by the time we get to 2024, effectively some seven years later, and again quarantining out the COVID period, there is, I think, a come-to-Jesus, come-to-Marx moment in the middle of all of that, which is, this isn’t quite working.

And so the re-embrace of the private sector begins in January of ’25. It is matched by the passage through the National People’s Congress, either last year or early this year, of the so-called Private Enterprise Law, in order to provide more robust legal underpinnings for the rights of the private sector and the economy. And most recently, there’s been a further meeting of the Chinese party leadership with the private corporate leadership of the country. So I think there is a change in Xi Jinping’s sentiment. You can see that reflected by the meetings I’ve just referred to, by the legislative initiatives which have been taken.

The open question, however, is: does the private sector yet believe it?

AUDIENCE QUESTION: You provided us with a historical perspective on the CCP’s major ideological shifts, from class struggle in the Mao era, to the unleashing of market forces under Deng, and later a return to the visible hand of the state under Xi. Now, these shifts, as you noted, have been accompanied — or were accompanied — by top leadership change. Can we expect another ideological turn or course correction post-Xi? Or is Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era firmly entrenched in the system for decades to come?

KEVIN RUDD: Certainly more entrenched than the thoughts of Kevin. Mine will not sell nearly as well. The difficulty of answering that question is to be honest about our assessment of how long Xi Jinping will remain leader. Xi Jinping is 73 years old. He’s in good health.

And he will come up for reappointment at the Twenty-First Party Congress in October next year, at which stage he’d be 74 or thereabouts. I would think, health factors not intervening, that Xi Jinping will see no grounds to remove himself from the central political scene, and as the party’s paramount leader, until well into his eighties. And there’s precedent for that. Mao was active as a political leader until his death, and he was 86. Deng Xiaoping had his last major outing as a national political leader when he was 88, when he undertook his Nanxun, his southern expedition, to reconstitute the embers of reform and opening following the implosions which came with Tiananmen in 1989.

So the idea of a paramount leader being actively in harness until your mid-to-late 80s is well within precedent range. So therefore, the question becomes more difficult to answer if we are, therefore, projecting — and what will China be like by the time we get to, say, 2042? I can’t predict that. But I think Xi Jinping’s plan would be to stay in power as long as possible, and to bring on a new generation of party leaders who, in the main, have had their ideological nurture period in the period since Xi Jinping first took office, back in 2012. And so therefore, what then becomes the action and the reaction at that point?

Difficult to predict.

AUDIENCE QUESTION: Turning to Australia-China relations now. What are your views on the relationship and where it’s heading? Do you think that we’ve found the right balance between engagement and securitization?

KEVIN RUDD: Well, the beginning of wisdom is always to know what China’s own strategy is.

I mean, this is not the sound of one hand clapping. I mean, international relations is the sound of at least two hands clapping, or multiple hands clapping. China is not a static power. It is a dynamic power. China is becoming objectively more powerful and projecting its influence into the region and the world through all the instruments of power that I referred to earlier in my remarks.

So that is a reality. So it’s not as if we are here acting in isolation to that reality, nor are we acting in isolation to what other friends, partners, and allies in the United States are doing elsewhere in the region. Look at Japan, look at Korea, look at the Philippines, and look at other economic and strategic partners such as India. Second point is, where I think the current government in Australia, the Albanese government, has got it right, has been its conscious decision to put the megaphone away. The megaphone got a lot of use in the period that Scott Morrison was Prime Minister.

I’m not sure that that actually produced any sensible outcome for anybody. I’ve never been a fan of using the megaphone, if you want to actually bring about material change in a given relationship, including that with China. And so therefore, I think that has been useful as a starting point. Secondly, if you look at the fact that the government succeeded in removing the various levels of trade embargo which the Chinese had imposed, that required a lot of deft work on the part of Penny Wong, in particular, to ensure that that was properly executed, and it was.

Thirdly, we’ve done all that at this time when — including my own period concluding in Washington as Australian ambassador to the United States — when we have legislated through the United States Congress and executed the AUKUS agreement for the investment in a new flotilla of nuclear-powered attack submarines for our own national security purposes, which China does not like or support, despite the fact that China itself has a formidable fleet of nuclear-powered attack submarines itself, as well as ballistic missile submarines. As I said, sound of two hands clapping, not just one. So if you put all those factors together, in terms of some of the harder decisions which have been taken on the national security front, where the economic relationship has stabilized to, and the fact that the megaphone in both capitals has by and large been put away — against most national measures of countries around the world managing their relationships with Washington and managing their relationships with Beijing — I think the government here deserves some considerable recognition for its positive achievement and effort. And it stands in positive contrast, I think, with many other countries around the world.

UNIDENTIFIED SPEAKER: And on that note, please join me in thanking Dr. Rudd for the 2026 GW Annual Lecture.

Closing Remarks

KEVIN RUDD: Folks, you’re all friends of the Australian National University. I am too, even though I’m from Queensland. And, yeah, I just got here by accident. You don’t have to be a Rhodes scholar to work out there’ve been a few problems at Mill here recently at the ANU.

This is a fantastic university. This is a first class, world class university. So it’s time, I think, just for everyone just to put all the bullshit away and just get on with the business. That’s why I’m delighted that we’ve got Gordon at the helm. And this university, anchored in its statute, anchored in its mission, and anchored now in its leadership, is going to surge ahead.

Now let’s get behind the new leadership. Thank you very much.

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