China-Australia ties

Witness to three decades of China’s upheavals and reforms

PUBLISHED : Saturday, 22 April, 2017, 7:51pm
UPDATED : Saturday, 22 April, 2017, 10:01pm

Geoff Raby, the former Australian ambassador to Beijing from 2007 to 2011, is an academic turned diplomat who has made a career as a “China expert” spanning three decades. Raby has witnessed great changes in Chinese society, from opening up and economic reforms, to the bloody crackdown on the prodemocracy movement in 1989 and a now materialistic society under increasingly tight ideological control and censorship. Raby is still in China where he takes an active role in the private sector and has set up a business consultancy in Beijing. He spoke to Catherine Wong.

How did you start your diplomatic career in China?

I began as an academic economist. When I applied to work for the government, the job I originally got in Canberra at the Office of Nantional Assessments was Indonesian economic analyst. But by the time my security clearances came through, they offered me the China economic analyst position instead. That was in 1984 and you must understand in those days there were almost no professional economists in Australia at all who understood anything about China. Where I had a lucky break originally was at university. I’d taken a big interest in the reform process in communist countries, particularly in Europe - Hungary, Yugoslavia, the Czech Republic. So I had a theoretical and intellectual framework with which to approach China as it was beginning to extend its reforms originally from the agricultural sector to across the whole economy. There’s an old saying that in the land of the blind, the one-eyed man is king. So although I didn’t know much about China and I’d never been there, I had the theoretical framework and experience of reforms of centrally planned economies in Eastern Europe. And that proved, initially, immensely helpful for me to help make sense of what was happening in China and to explain that to the government.

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It was also a lucky time because prime minister Bob Hawke had only been elected in 1983 and he had met early on with former Communist Party secretary Hu Yaobang and premier Zhao Ziyang. They laid out in private conversations the open door economic reform policies and how they intended to change China. Prime Minister Hawke understood immediately that if they achieved what they wanted to achieve, it would have a profound impact on Australia, so he was intensely interested to understand every aspect of the Chinese economy, economic policy reform and I happened to be the right person at the right time and at the right place. I came in 1986 to Beijing and then finished in 1991. So that was big China experience in those days. So in many ways I was the logical person in 2007 to come to Beijing as ambassador.

How did you view the major events and changes in China in that period, from the 1989 crackdown on student protestors to the opening up and reform policy?

The period before [1989] was of great intellectual optimism and excitement and I sensed that an enormous change was possible. But there was a high degree of naivety about what it would mean. And then Tiananmen Square happened … when no one really knew where things were going to end up and if the reforms were going to continue. Then Deng Xiaoping made the Southern Tour. Then you get a dash of wealth and a dash of materialism. And I think today there is a great deal of cynicism in society as people seek wealth and lose any sense of a bigger picture of what China is and what is meaningful in their lives.

How did you and the Australian government respond to the crisis in 1989? Was there a time when Canberra was worried that China might reverse its progress in opening up to the world?

Among people like Bob Hawke and others there was tremendous amount of naivety and they were shattered, utterly shattered personally by the events of June 1989. Hawke and others then wanted to fall in with the US. We were being pushed very hard to join an international sanctions regime against China. I was sent back to Canberra after June 4 to be put in charge of the process of writing a submission for the foreign minister to take to the cabinet to set out future relations with China, in particular what level of sanctions we would apply. And it was a very big responsibility and extremely high-pressured job because it had to be done under a very tight deadline. We had a prime minister who wanted to be hard and a foreign minister who I described as wanting to be firm to send a clear message to Beijing, but he was also much more of a realist in foreign policy terms. And he understood that we still had huge and potentially messy interests in China. And we should not do anything which would damage our longer term interests.

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So much to the displeasure of the United States, we brought in a very targeted and magnanimous set of measures against the police and the Chinese military. I think Australian policy was pretty much the right approach. And it was good for Australia to take an independent view from the United States that was based on our own interests.

As you made the transition from being a diplomat to the private sector, how do you see the Chinese way of doing business compared to Australian or Western companies?

It’s almost a cliché to say, but with China, relationships are central to everything you do and the foundation of how do you do business. And you have to establish those relationships and you have to take a lot of time to establish those relationships. And certainly the black-and-white contracts are really just a starting point.

Australians, like most of Westerners, think the opposite. But Chinese firms are changing, which is very interesting thing to watch. Ten years ago Chinese firms, when they went offshore, were extremely reluctant to pay fees for corporate high quality advice. They didn’t like to work with the top law firms and accountancy firms. They would much rather work through hua ren [ethnic Chinese] family relations and the back door [channels]. They always wanted to have 100 per cent ownership of assets offshore. And now Chinese are more comfortable with having less than 100 per cent, even minority stakes.

How do you view the current situation and the future for China?

Despite President Xi’s rhetoric about the importance of globalisation and internationalisation, I do feel we are in a period when China is closing up against foreigners. I don’t think it’s very much state directed, but the state is not doing anything to help promote openness and reforms of globalisation. Apart from the very superficial rhetoric, foreigners are facing a more difficult business environment than before. I think that’s partly because China has reached a level of capacity where it can do things itself that it couldn’t do before. But any sectors where China is efficient are actually quite open to foreigners - in health care, in various levels of education. I think foreign service providers are finding a very attractive place to do business. But in other areas, particularly in mining and agriculture, it’s pretty much closed to foreigners.

Is China making life difficult for foreign companies?

The other thing I think is very disappointing is the control of social media, the blocking of sites. You would think by now China could have moved beyond what is pretty crude and unnecessary censorship of social media. I don’t see any moves in China for dissent for changing the nation’s system. I think that’s largely explained because people are much more prosperous - the system has brought unbelievable prosperity. So I think it needs to be more confident in itself about continuing to be open and be less paranoid about social media, international media. It’s a big problem because China is the second biggest economy in the world. And yet its major cities are not really, genuinely international cities. And it’s not going develop soft power through state-funded activities. It develops soft power by becoming an example people want to follow. And people in the world today don’t want to be like China. China has still got a long way to travel.

I’ve been working in China for over 30 years. For 30 years, even after Tiananmen, I’ve always been an optimist about China because of the massive desire of the people here for self improvement, their hard work and very strong values around family. All of that comes together to produce the China we see today. I think those will be very powerful forces that will continue. The reason for staying on in China after 27 years of being in diplomacy was I wanted to continue to be a witness to what’s happening in China.