Video: Kevin Rudd on How China Is 'Learning the Difficulties of Handling a Market'


Asia Society Policy Institute President Kevin Rudd speaks with guest host Ian Bremmer on Charlie Rose, July 10, 2015. (17 min.)

At the end of a week that saw China’s stock market rebound modestly after losing some $3 trillion in value since mid-June, Asia Society Policy Institute (ASPI) President Kevin Rudd said on Friday, July 10, that the Chinese government “is learning the difficulties of handling a market in very turbulent circumstances.”

“The economy’s in transition,” said Rudd. “They’re heading in the direction where they say the market will be the central organizing principle for economic behavior.” Rudd spoke during an episode of Charlie Rose that was guest-hosted by Ian Bremmer, Eurasia Group president and ASPI’s Harold J. Newman Distinguished Fellow in Geopolitics.

“With the objective of raising living standards elsewhere in China where you’ve still got hundreds of millions of people still in poverty, the main name of your game is to complete the development of your economy,” said Rudd. “If I were [President] Xi Jinping, the thing I’d be most engaged on is the sustainability of the [economic] growth rate at 7 percent.”

Below are more excerpts from Rudd’s remarks.

On market forces vs. one-party rule in China:

Our Chinese friends are dealing with something unique in history. That is, they are seeking to prosecute a series of market-based reforms in the economy — which as you know has the effect of disseminating information right across society — while maintaining the fabric of a one-party state. And we, looking across the collective West, would say, “Well, that’s not actually sustainable long term.” Xi Jinping’s determination out of the Chinese Communist Party is to prove that he can ride against what we would describe as the inevitable forces of history. And so they have embarked on what is historically, in my judgment, a unique experiment where you’re going to have this consistent, difficult interrelationship between a state apparatus which wishes to maintain political control and, on the other hand, realizes that the optimal use of the resources of the Chinese economy lies in letting the market rip.

Denuclearizing North Korea:

Here in the U.S., we’re focusing on the Iranian nuclear negotiations. These are significant. But let me tell you: if they’re resolved and resolved successfully, I believe the lens will increasingly go on to what’s happening with the North Korean nuclear weapons program. This is a state which has already got sufficient nuclear material to manufacture up to five or ten bombs. Secondly, it has quite significant rocketry. Thirdly, it’s in the business of trying to miniaturize weapons to put them on the ends of rockets. If you’re sitting in South Korea, Japan, or, in a larger radius, the United States, [and] they manage to perfect ICBM technologies, then frankly this looms as a much more acute strategic threat for the wider region than perhaps even does Iran. So as this unfolds over time, I believe there’s going to be an increasing basis for strategic cooperation between the United States and China on how do you achieve the denuclearization of North Korea.

China, the U.S., and the South China Sea:

The photographs and the footage posted by, I think it was CNN, coming off the back of aerial surveillance by the United States of China’s land reclamation activities in the South China Sea, have, I think, taken the debate about China here in the U.S., and [about] America’s relationship with China, out of the think-tanks and much more into the main street, as people see things which they believe and are concluding will impact the overall direction of the relationship. My argument is you need a framework for this relationship, which can manage these sorts of very large differences and incrementally resolve them over time, and at the same time place primary emphasis on what you can do together in the world.

About the Author

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Joshua Rosenfield is Director of Content Strategy with the Asia Society Policy Institute. He is based in New York.