Wednesdays with Bob

by Derek Rielly

  The demonstrations had begun six weeks earlier when another of Hawke’s good friends, the popular reformist Hu Yaobang, had died suddenly of a heart attack.

  Little Hu, ‘a tiny, excitable extrovert’, says Hawke, represented the liberal heart of the Communist Party. He wasn’t just about easing China away from orthodox Marxism and into a free-market economy (which even the old generals acknowledged had to happen); he wanted to squeeze corruption from the highest levels of office and loosen the binds on public criticism of the party. A hero to progressives and students; a gadfly to the hard-liners.

  In December 1986 and through the middle of January 1987, students in seventeen cities across China protested the lack of political reform. Hu, then the Communist Party’s general secretary, did little to quash the demonstrations.

  Perceived by party leader Deng Xiaoping as too bourgeois – and possibly as punishment for revealing state secrets in his conversations with Hawke (‘He didn’t tell me any state secrets,’ says Hawke) – Hu was forced to resign in 1987 and was replaced by Zhao Ziyang.

  On state television, a statement confected by the party was read, explaining that Hu had resigned after making ‘a self-criticism of his mistakes on major issues of political principles in violation of the party’s principle of collective leadership’.

  Hu’s death in April created the spark among students to start his reformist program. One hundred thousand students marched on his state funeral in Tiananmen Square. The protests continued through May and into June.

  When cables from the Australian embassy in Beijing landed on his desk, graphically describing the bloodshed in Tiananmen Square, Hawke tearfully announced on television that all Chinese nationals legally in Australia on temporary entry visas would have those visas extended for twelve months, with the right to work as well as financial assistance.

  ‘I was heartbroken and I wept,’ says Hawke, who only three years earlier had convinced Zhao of the value of the party allowing Chinese students to study in Australia.

  ‘Before I went on television, I’d just had the communication describing the crushing of some of the students. It was a tragedy. Zhao Ziyang had gone there and offered the woman leader of the students a way out. He told her, if you disperse and go away, we’ll look at your concerns. And they wouldn’t disperse. I attach a lot of blame to her for not responding positively to Zhao Ziyang. When I came off [air], the bureaucrats said to me, “Prime Minister, you can’t do that.” I said, “I’ve done it. It’s done.’”

  The decision would have dramatic political and social ramifications. Forty-two thousand Chinese students would eventually be granted permanent visas, the total number of Chinese migrants swelling to more than 100,000 after family reunions, resulting in ‘the biggest wave of Chinese migration since the gold rush of the 1850s’.

  In 2003, Monash University’s director for Population and Urban Research, Dr Bob Birrell, said, ‘Whatever way you look at it, it’s a massive transformation of Sydney, and Sydney is almost a third overseas-born now, and a third of that third are Asian.’

  Foreign fee-paying students are now a $19 billion industry, Australia’s third-biggest export after coal and iron ore.

  Cabinet papers from 1989 reveal that Minister for Immigration Robert Ray told his colleagues that allowing 16,000 Chinese into Australia would smash the yearly refugee intake of 14,000. Ray feared the decision would give impetus to other marginalised groups to seek similar visa extensions.

  ‘The Kurds, Afghans and Lebanese have already reacted with hostility,’ Ray told cabinet.

  For Hawke, China was different to the quagmire of the Middle East, with its perennial wars and ancient feuds. Like Whitlam and Fraser before him, he recognised the importance of not just engaging with but embracing meaningfully the emerging superpower. When he visited China as ACTU leader in 1978, Deng Xiaoping had just become leader of a country with a per capita income of less than US$100 a year.

  ‘Everyone’s in Mao suits. There’s no advertising. Everyone’s on bicycles. Really very primitive,’ says Hawke. ‘But, you know, I liked the people. I warmed to the Chinese people. It was a very fortunate trip because that was the year that Deng Xiaoping made what I’ve described as the most important peacetime decision made by any political leader in the world in the twentieth century [to open China to world markets], because it totally transformed China. The decision moved China to a position where it had many successive years of 10 per cent per annum real growth. Nothing like that had ever happened before in the world. It lifted millions of Chinese people out of poverty… [It] just transformed the global economy because it brought the best part of three billion people into the world global market economy.’

  The effect of bringing China into world markets wasn’t just economic, says Hawke. It smashed the Soviets.

  ‘What happened in China was the most important factor in the collapse of the Soviet Union,’ he says. ‘When I went up as prime minister, I said to Zhao Ziyang that the Soviets must be very interested in what you’re doing. Zhao pretty much said to me, “Every day, hundreds and hundreds of Soviet officials and citizens cross the border. They come and see transformation in the lives of our people. They’d go back and compare it with their sclerotic economy.’”

  When Hawke visited the Soviet Union in 1987 he told Mikhail Gorbachev, the country’s last leader before the Soviet Union was dissolved four years later, that the Chinese had got it right and the Soviets had got it terribly wrong; that economic reform had to happen before any dramatic political shift.

  ‘Socialism and market economy are not incompatible,’ as Deng Xiaoping had said.

  ‘The Chinese were concentrating on reforming the economy, knowing that social and political reform would follow that,’ says Hawke. ‘I said to Gorbachev, “You’re concentrating on political reform and your economy is just collapsing.” That was a fact. It soon collapsed. So that brought all the hundreds of millions of the Soviet Union and the Soviet empire into the global market. The other factor which is not so often appreciated was India. India had not been a command economy like the Soviets, but it was very much influenced by it. And it was only when the Soviet Union collapsed that it started to move itself towards a more market-oriented economy. So, the best part of three billion people, as a result of that decision in 1978, were brought into that market.’

  What was the mood like in 1978? Buoyant, now that the dark days of Mao’s Cultural Revolution were behind them?

  ‘Well, there was a bloody great sense of relief that the Gang of Four was gone,’ says Hawke, who had refused to visit China until the four party officials who were blamed, and tried, for the worst excesses of the Cultural Revolution were out of the game. ‘But it was too early to have any idea of the impact of what Deng Xiaoping’s decision would be. One of the decent things Fraser had done was issue an invitation to Zhao Ziyang, the premier, to come to Australia in April 1983. [When the visit took place] I’d just become prime minister and Zhao Ziyang and I hit it off immediately.’

  Hawke tells a fine story of having dinner with Zhao and former speaker of the house Billy Snedden.

  ‘I was talking to someone on my left and Ziyang was there and Snedden leaned across him and said, “Prime Minister, I think we should congratulate the premier on his use of a knife and fork.” I thought, Oh shit. I looked across the table at the Chinese interpreter. She rolled her eyes. I rolled my eyes.’

  Was that common behaviour thirty years ago? To be thrilled to see a Chinese man using a knife and fork?

  ‘No, no, no, no. Snedden was just an idiot,’ says Hawke. (Four years later, Snedden would famously die of a heart attack between the legs of his son’s former lover, who worked in his electoral office. ‘It was an adrenalin-filled evening. I’m sure the old man went out happy. Anyone would be proud to die on the job,’ said the old cocksmith’s son.)

  Hawke has said that no other national leader had spent as many hours as he did in direct, intimate discussion with the Chinese leadership. Why were you
able to conduct such direct and intimate discussions? I ask. Was it because of your straight-shooting personality?

  ‘Well, it was partly personality. We were no threat to them and they needed our great resources, our mineral resources and energy resources, as they were moving towards a highly developed economy. There was quite a natural basis for the relationship.’

  As the relationship deepened, Hawke explains, he became a conduit between the USA and China.

  ‘It was recognised that I had developed a closer relationship with the Chinese leadership than any other western leader,’ he says. ‘The United States believed that China and the Soviet were getting too close together. And so the Chinese asked me to assure the American leadership that it was an economic relationship, but that they were at arm’s length politically.’

  How did the Chinese feel about the Americans?

  ‘They were worried that there was an element within the United States which was strongly anti-China and pro-Taiwan. But they weren’t antagonistic. They wanted to be cooperative.’

  In your view, is it madness for the west to rattle its sabre over Taiwan?

  ‘The sensible people in the United States realise that China is a fact of life now. It’s the biggest economy in the world and it has an enormous impact on what happens in the world.’

  After Tiananmen Square in 1989, Hawke wouldn’t visit China again as prime minister.

  ‘Of course, Tiananmen Square ended the close relationship then, and although we [maintained] diplomatic relations, the closeness went. Then, the year after I finished as prime minister, there was a call from the Chinese consul, asking if he could come and see me. He said that he’d been asked by the Chinese government if I would go to China. I said, “Yes, of course I will,” because as far as I was concerned I was very sad about what happened but I wanted to look forward to the future. And it’s a marvellous indication of just how wise and understanding the Chinese leadership was, because I went up there and went straight to the state guesthouse, and you wait there until you’re told the meeting’s on. I was summoned to meet Jiang Zemin, who was then the head of China. And I went down and he had about half-a-dozen of his inner cabinet there. I walked in and he got up and walked across and took my hand and he said, “Mr Hawke, there’s one thing I want to say to you.”

  ‘And, I thought, Oh shit! What’s this? And he said, “China never forgets its friends. I want you to know that we regard you as one of our best friends.” They understood that I’d wept for China and I really did love the Chinese people. And so the relationship resumed then.’

  Hawke laughs at the understatement. He’s just back from a week in China, his 105th trip to the country. He’s popular among the Chinese people because, in Blanche’s words, ‘they recognised he was non-racist and had benevolent feelings toward their country… Over the decades, thanks to many television and newspaper interviews, Hawke became one of the most recognised foreign faces in China and could not walk down a Beijing lane without people shouting “Hou Ke! Hou Ke!” and calling friends to come out of houses to look at him.’

  Hawke blazes a $39 Davidoff, visibly thrilled to be out of the suit and tie and into sweats and loafers, back on his terrace awash with spring sun.

  Apart from giving speeches, I ask, what business do you conduct in China?

  ‘I represent Australian companies and I represent Chinese companies,’ Hawke replies. ‘One of the big things I’ve done in the past year [involves] a Chinese billionaire based in Shanghai – Mr Wu, from the Zhongfu Group. He took me on as an adviser and I negotiated with the Western Australian government over all that Ord River territory, which had never been developed, they’re doing a magnificent job up there.’ The Zhongfu Group plans to irrigate 13,400 hectares at a cost of $700 million. In return for the work, the company pays the state government one dollar per year rent.

  What’s it like when you negotiate with an Australian premier? Do they tremble at the thought of trying to outmanoeuvre the famous ACTU gunslinger? The man who convinced Australians to re-elect him at the height of the country’s worst-ever recession?

  ‘Ha! I don’t know about that. I get on with all governments, whether they’re Labor or not. I got on well in negotiations with Barnett, the Western Australian Liberal premier, who was very good.’

  What are the key elements of strong negotiation?

  ‘You’ve got to be direct and truthful and tell it as it is. Don’t overblow it. You want people to know that they can trust you and your client.’

  Where will China be in twenty years?

  ‘It will be the number one [world] power.’

  Can you describe what China will look like socially in twenty years?

  ‘China’s an infinitely freer and more liberal country now than it was in 1978. That will go on. I mean, this president, he’s a pretty tough guy. He’s very seriously anti-corruption, and that’s very big; [it’s] very important they absolutely get that under control. And they’ve shown a capacity to adapt to changing economic circumstances, and I think they’ll continue to do that. They’ll never go back to 10 per cent per annum real growth, but they have a bit over 6 per cent, which most countries would kill for.’

  Is there any reason for Australians, or the west, to be concerned about China’s rise? It’s obviously an opportunity, but is it also a threat?

  ‘No, I don’t think it’s a threat. The absolute condition of this period of growth has been reasonable stability. It’s no accident that this period of the Chinese economic revolution from the late 1970s has coincided with the most peaceful period in Asia’s history.’

  What do Sino-Japanese relations look like now?

  ‘Tense.’ Hawke pauses. ‘The Chinese will never forget the Second World War and there’s the [contested Senkaku] islands. But they will cope. I mean, the important relationship is America.’

  How will the decline of America and the rise of China affect Australia?

  ‘The American relationship will always remain important, but China’s our major trading partner and has been for some time now. That’s the important factor. You’re not going to just willingly and easily do things which are going to disturb that economic relationship.’

  Do you believe the Chinese Communist Party, even now, is the best government for China?

  ‘Let me put it this way,’ says Hawke. ‘I believe if you were to have a free election in China now, the Communist Party would win because the Chinese people are very proud of what’s been accomplished, as they should be … The economic growth of a dimension [unlike anything before it] and a society that took half a billion people out of poverty? Of course they’re proud of it!’

  — CHAPTER 19 —

  ROSS GARNAUT

  WHEN YOU’RE IN THE SOLAR AND BATTERY BIZ AND South Australia is faltering in its ability to deliver reliable energy and has a hundred mill to throw at renewables to fix it, well, you’re a man with his beak to the grindstone trying to get a piece.

  Hawke’s former chief economist, Ross Garnaut, AO, who would lay the foundation for most of Labor’s economic reforms in the eighties and nineties that would ensure prosperity for the following decades, is CEO of Zen Energy. And right now, Zen is locked in a righteous commercial battle with tech superman Elon Musk and his company Tesla for the contract to build a vast battery farm in South Australia.

  Zen had been working with the South Australian government behind the scenes for months trying to drag the deal over the line, and then Musk had stolen headlines with one simple tweet: Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?

  When I arrive at the Zen HQ, I tell the cab driver to wait while I re-examine the company’s address. Instead of planting me in front of an office building, I’m outside a pretty federation house backing onto parkland in the inner Melbourne suburb of Carlton. A slim woman with short grey hair and wearing a T-shirt and jeans tends to a healthy vegetable garden facing the road. In the autumn sunshine, it�
�s a picture of serenity. Zen.

  A call confirms the address. The woman in the garden is Garnaut’s wife Jayne. She beckons for me to enter, climbing out of the garden and offering a hand blackened by dirt. Garnaut, she explains, has been doing the ABC’s AM program and is on his way back from the studio.

  Jayne leads me into a small lounge room – or perhaps library is a more fitting description. Almost a thousand books are arranged on floor-to-ceiling shelves, eight shelves high, three wide. If I were to read them all, would I be as well-informed as Mr Garnaut, whose report to the Hawke government – Australia and the Northeast Asian Ascendancy – resulted in the final smashing of trade protection? Who was Australia’s ambassador to China? Whom Hawke praises as the co-architect of his government’s economic reforms?

  In a kitchen off the library and in three bedrooms-cum-offices of this little zero-emissions hive, men and women – most in the climate change warrior uniform of check shirt and jeans – peck away at laptops.

  Garnaut arrives, apologises for being late, falls into a lounge chair and asks about my book.

  Hawke. Legacy. Reminder. Etc.

  He grins. ‘So it’s about Australia’s best prime minister.’

  A week before, Hawke had described Garnaut as his ‘soul mate’ and said the pair were working on a ‘very important’ paper on global warming to be released later in the year.

  Garnaut, who is seventy years old, wears the mandatory check shirt (with an iPhone 6 and pen in the breast pocket) and dark jeans, and his crown is topped with a hairstyle that is best described as serious-economist-turned-save-the-world-energy-salesman chic.

  I tell Garnaut that on the way over from the city the cab driver had asked who I was interviewing. When I said it was Ross Garnaut, Hawke’s economic adviser in the heady days of floating the dollar, deregulating the banks and so forth, he turned to me and said, ‘Nah, mate. Wasn’t Hawke or your bloke. Keating did everything.’ Which I repeat to Garnaut.