The five personalities of China
Business of China and Asia Society Australia
Talks / Lecture
Jason Yatsen-Li, an entrepreneur, corporate advisor and opinion-leader, explores how China’s different personalities help explain its seemingly contradictory actions in the South China Sea, climate change stance, stock market gyrations, a revolution in cross-border ecommerce and the massive One Belt One Road strategy.
For everyone interested in Australia’s engagement with China.
Jason Yatsen-Li is one of Australia’s leading and most innovative corporate advisors. Jason is currently Chairman of Vantage Group Asia, a commercial group with offices in Sydney, Beijing and Shanghai and interests in mining and resources, technology and financial services businesses in Asia. Jason is a Director of the George Institute for Global Health, Beijing-based research and policy firm China Policy and a Governing Member of the Smith Family. Jason was also past Vice Chair of the Australia-China Chamber of Commerce in Beijing, as well as formerly a director of the Sydney Institute, the National Centre for Volunteering and the New South Wales Government’s Sydney Metropolitan Strategy Group.
Prior to founding his advisory firm—Yatsen Associates—Jason was Head of China Strategy and Head of Sustainability for Insurance Australia Group, Australasia's largest general insurance company. Before that, he was an M & A lawyer with Davis Polk & Wardwell in New York and Corrs Chambers Westgarth in Australia. Jason has also worked for the United Nations and is the former Vice Chairman of the Australia-China Chamber of Commerce in Beijing. Jason speaks fluent English, Mandarin, Cantonese and German. In 2009 he was appointed a Young Global Leader by the World Economic Forum in Davos and currently serves of the World Economic Forum’s Global Agenda Council for China.
Transcript of ‘The Five Personalities of China’
Speakers: Guy Hansen (G), Jette Radley (J), Jason Yatsen Li (Y)
Location: National Library of Australia
G: Good afternoon, everybody. My name’s Guy Hansen, I’m Director of Exhibitions here at the National Library of Australia and it’s my great pleasure to be here today to introduce this event. As we begin I’d like to acknowledge the traditional owners of this land and thank their elders past and present for caring for the land we’re now privileged to call home.
Today’s talk is the second event presented in partnership with the Asia Society as part of our public programming for the Celestial Empire: Life in China exhibition. This partnership has really worked well for the Library because one of its main aims is to help build a better understanding of China and its history. And that’s really one of the reasons why we did the exhibition downstairs, Celestial Empire, is it is to introduce some very important history and cultural information about China to a broad Australian audience and I think in this goal we share a lot with the Asia Society in terms of some of the goals they have in doing public programming.
So of course Celestial Empire would not have been possible without the support of a whole lot of people. First and foremost is the National Library of China who provided us with really incredible access to their collections, allowed us to go over to China and review the material, view things and actually make a selection of material which we thought would really be of interest to people in Australia and we really are thankful to the National Library of China for doing that. And of course we’ve had a range of other partners both in the public and private sectors, Shell in Australia, the Seven Network, Wanda One, Optus Singtel, Huawei, Cathay Pacific, TFE Hotels the ANU’s China in the World Centre and the Asian Society of course have all been very helpful in presenting this exhibition. And the Commonwealth Government has been very helpful with coming up with the cash which we needed from the National Collecting Institutions Touring Outreach Program so a major grant from the Commonwealth help made this possible as well as other grants from the ACT Government as well so all of this has helped us present the Celestial Empire exhibition and associated public programs.
In today’s presentation we’re going to hear from Jason Yatsen Li, who’s going to talk about China’s different personalities to help explain how we can better understand China. Jason is one of Australia’s leading and most innovative corporate advisors with over 20 years’ experience in law, corporate finance and general management and politics in Australia, China, the USA and Europe. He’s founder of, and Chairman of, the Yatsen Group, an investment and advisory organisation with interests in China. Jason’s also worked for the UN and he’s the former Vice Chair of the Australia China Chamber of Commerce in Beijing. In 2009, he was appointed a Young Global Leader by the World Economics Forum in Davos and currently serves on the World Economics Forum’s Global Agenda Council for China. So as you can see he’s got a very impressive CV, and I think it goes on much longer, and I could tell you more but I think we’ll move into the formal part of the proceedings. So to get the ball rolling I’d first like to ask Jette Radley from the Asia Society to say a few words before we hear from Jason.
J: Thanks Guy. Just very quickly a warm welcome to you all, I just wanted to say a few words about the Asia Society. So we are Australia’s leading centre for engagement with Asia and we were established in 1997. So Asia Society aims to promote greater understanding between Australia and Asia in areas of business, policy, culture and education. We’re so pleased to be here today and to be able to support the wonderful work that the Library’s been doing with the exhibition. I was privileged to walk through it this morning with Dr Nathan Woolley, the curator and I would just like to welcome Jason up to the stage. Thank you very much.
Y: Here’s my clicker. Thank you very much, Jette, and thank you to the Asia Society and the National Library for having me here and congratulations for putting on such a wonderful exhibition, it’s really ... provides really nice context for this conversation that I’d like to have with you today about China.
Can everybody hear me okay if I ... if I wandered ‘round a bit at the back it’s all okay? If I didn’t use the mic, that’s fine? Okay. It’s always a little bit hard talking about China to audiences because you’re never entirely sure what level of knowledge people are at so I just wanted to get a sense from you guys with how much you know and is there anybody who is a China expert here from the ANU? Okay. And there are people who know very little, have travelled there but really, really ... okay. Okay, so this is what makes these things sort of difficult so I ask for your indulgence. For those who know a lot please indulge us on some of the beginner stuff and those who know relatively little please indulge us on if we do dive into [basic?] stuff. All of that said I’m not a China scholar, I come to this more from a commercial perspective as a practitioner and as an Australian of Chinese background, lived in China for a very long time.
Maybe to kick off: I’m with part of this thing called Eisenhower Fellowships a while ago, which is run by the United States Government, it’s an opportunity for people to go to the US and travel ‘round and understand that country a bit better and the Chairman of Eisenhower Fellowships at the time was Dr Henry Kissinger and at the end of this program ... it was a two-month program ... we were all given our award certificates by Dr Kissinger and there was an awards ceremony and we were all there and we were announced not by name but by country. And because I was representing Australia I was first cab off the rank, so the moderator stood up there and went ‘Australia,’ so I stood up and I was walking towards Dr Kissinger on the stage and he looked at me and then he looked back at the MC like there’d been a stuff-up and then when he realised what was going on, and I was going up and I was shaking his hand, he had this sort of sly smile on his face and as he was shaking my hand he whispered to me, he said ‘So the Chinese are taking over Australia too, are they?’
So if we start there many of you will be familiar with this particular cartoon and it dates from the Qing dynasty, the Qing dynasty as seen from Australia. And what struck me, what ... the reason I wanted to start here is if you take some of these things, somebody who will remain unnamed remarked to me sportingly, you know, ‘is this the CFMEU ad?’ A number of these themes continue now, cheap labour and the FDA, Chinese people coming here and purchasing Australian real estate and driving up the prices, the casino that is the Chinese share market, corruption and bribery in terms of overseas transactions, and number of these issues persist in the broader Australian base nowadays. I had a conversation with the director of probably Australia’s largest tourism company a while ago and I asked her what do you make of Chinese tourism? And she said look, it’s a complexing thing, of course you want the Chinese to come and if you look at this from a commercial perspective you’d see opportunity, you could sell inflatable rubber rings to the Chinese, you could sell ice-cream to the Chinese, you could sell bathing suits to the Chinese but, she said, we’re careful, we don’t want too many to descend on attractions all at the same time because it may affect the character of those attractions for other people. And so here is the ... here is the context for maybe Australia’s relations with China right now. We want the commercial opportunities that China offers us, but we are hesitant or reluctant or unsure and maybe a little bit suspicious about what it may mean, what would the character ... how will China change us particularly given its scale and its nature as a country?
This is the Goldman Sachs view of the world, it’s from a while ago—from 2007, so even before the first financial crisis—but this was the Goldman Sachs view of the world of 2050. So a way out, and what I think is remarkable about this slide is ... I mean a number of things but what’s really interesting here is not so much that China is ahead according to this Goldman Sachs analysis and it has to be tempered now with the new normal Chinese economic growth, with the revival of American innovation, but whether or not this scenario comes to pass what really struck me was the extent to which China was the largest economy. Also interesting is how other Asian countries feature here, India, Indonesia, Japan, Korea etc. So you know partly an understanding of this is where population and size of GDP realigns after the industrial revolution that put that out of kilter, really this is the realignment of population size and economic clout.
But if you take this as a starting point and you ask yourself, even if China gets to a proportion of that amount of economic power what does this mean for the world as we understand it? What does this mean for how we conduct our business? What does this mean for how we conduct our lives? What does this mean militarily and global strategic issues? What does this mean culturally in terms of the language that we are used to speaking? And lastly where’s Australia on this chart? And so we ask ourselves are we having the right debates? What is the source of Australia’s future prosperity you know and are we really thinking about this in the right way? Are we building the right industries, the right capacities and importantly the right mindsets to enable ourselves to continue to be prosperous as we go towards 2050? But what is clear is China does represent a tremendous opportunity and are we prepared as a country, do we have the right mindset as a country to really take advantage of that?
Let’s use that as a context now to launch into the five personalities. If we try to understand China a little bit better—and that is important given the role that China must play for our national future—when you look at a China a lot is at face value, at first blush, very contradictory. Take the South China Sea. China obviously wants primacy, at least in the Asia Pacific region, so logically speaking China would want its neighbours to be within its sphere of influence. It wants to be friendly with those neighbours and wants the United States ... wants to be a foil for the United States and take that position from the United States. And yet if you follow the goings-on in the South China Sea many would regard China as taking actions that are antagonistic, that are unilateral, that are aggressive and so driving those neighbours away.
In the fourth plenum of the Communist Party at the 18th Party Congress, a different take on what we would understand as the rule of law was held up as one of the central tenets in terms of China’s agenda, increasing the independence of the judiciary, improving or increasing the role that the law plays in Chinese society. And yet you’ve probably read how China has recently rounded up human rights activists and human rights lawyers. And lastly you would have seen that innovation, in terms of the 13th five-year plan, innovation has been held up as one of the central tenets of Chinese future prosperity and economic growth in the future and all over you see Ali Baba and Tencent investing billions of dollars, some $3 billion so far in the last few years, in start-ups in Silicon Valley. And yet, I think the consensus view is that there has been a winding back of internet freedoms in China recently. How do we understand these contradictions in China, and what is going on?
What we’ve tried to do with the five personalities is ... and it’s not a sophisticated tool but we offer it as some sort of a framework to help us understand some of these contradictions that we might see in China. And the five personalities, they’re not mutually exclusive. You’ll see with any complex person, different personality types will come forward in different situations. If you understand China is a very complex beast there’ll be certain decision-makers or certain government departments or certain parts of China that may exhibit one personality more than the others and that any certain situation, there may be multiple layers of different personalities coming out at the same time.
So let’s dive into these personalities and what they may mean. The first I’ve called here the self-sufficient civilisation. It might just all be called the Celestial Empire, what this exhibition is called and this finds its roots back to the thousands and thousands of years of history that China has had. But I wanted to make one point, I mean the notion of being Chinese, in terms of myself, I don’t regard myself as Chinese in the sense that I’m not a citizen of the People’s Republic of China that was founded over 60 years ago. I do regard myself as Chinese in a civilizational sense, as part of the broader Chinese civilisation and this is something—having been born in Australia and having grown up in Australia—this is something of interest to me, it affected me as a you know as a youngster growing up but something I really only understood in having moved to China and having lived in China for 10 years with my family just on a decade ago.
We, my sister and I, we knew from a young age, you know just from ... as many of you having come from many different cultures, you get things from your family you know you get pieces of whatever background you’re from from your family and the environment in which you grow up in. Similarly with us, when we were growing up we noticed things were different, we would always take off our shoes when we entered the house, we would always shower not in the morning, we’d shower at night, we would never drink cold water, we’d always drink hot water. Dad would always get into a great big argument about after taking friends to dinner about who would pay the bill. My mother ... one of her good friends is in the audience today ... would take thrift, or the ability to extract value from a particular situation such as a buffet, to tremendous extremes and this ... to my sister and I we just thought this was Mum being crazy.
Do you remember at Pizza Hut, the salad bar, how it was an unlimited salad bar and you could go you know but you could only have what you could fit into your bowl at the time. And my mum had perfected how to put as much salad into that bowl as possible, or so we thought, until we moved back to China and we found that this was actually a national sport and there’s ... actually there’s an instruction booklet on how to do this and I thought I’d show this to you ‘cause I found it very amusing. This is what we found on the internet. So essentially you take the Pizza Hut salad bowl and you fill the base with a heavy foundation and then you create the superstructure sort of around it, you create the platform to broaden the width of the bowl and you have to weigh that down for stability with you know with the pineapple pieces. And then top of that you know you add your various layers of things and up it comes.
Going back to the self-sufficient civilisation, I mean this is the view of China that China is unique and it’s exceptionalist. China does not accept norms from any other place including human rights norms because China is the source of its own norms, China is the final arbiter of its own history and it ties into what you may have read about you know the China dreaming or the revitalisation of China. What’s happening now is really just the return of China to its natural place in history and never again will China allow itself to be humiliated and bullied by other people.
Let’s move to the second personality now which we’ve called sovereign survival. So we started with the civilizational aspect of China. Now going back to the other bit, the People’s Republic of China, what this personality said is that China is really the last remaining Communist superpower so China started as a patron of the Soviet Union but with the collapse of Communism, the eastern bloc etc, it’s almost as if the patron has died but the client has taken its place and there is ... some hawks in China will often think about Russia, it’s time that Russia stepped away from Eurasia now and really let China take the reign there.
If you look at China’s view of its own national interest, I mean this is the consensus view about how China would view its national interest with political stability up the top and then beneath that you have sovereign security, territory integrity. […] So you can see consistency here between you know the first two, really but if you look at these two here and the first and the third, often they come into conflict and I think for those who’ve studied China this is the central ... I mean this is really the central tension that I think really ... that’s really sort of defining or will continue to define China for the foreseeable future. Can you be politically conservative and economically liberal at the same time? Why did this tension between on the one hand on the market and the market on the other, and the pull between those two forces and how they are resolved really is an interesting prism to understand some of the internal goings-on in China and so I mean interesting from a popular culture perspective how these you know how these things play out and where is that line that the government ... the Chinese government is comfortable with? You know there is ... whereas there is a Master Chef you know in China there is a voice in China, same format, tremendously popular but clearly there will never be a Tony Jones equivalent.
The area where ... personally I mean we’re heavily invested in this area but I find very interesting in terms of this party market divide is in the internet space and again I say one of the big, big tenets, big centrepieces of the 13th five-year plan is this notion of innovation, this innovation is being held up as the big new driver of Chinese economic growth and prosperity. And certainly if you look at some of these internet companies, Ali Baba, Tencent and Baidu, they’re up there, significant companies in terms of market cap and in terms of influence and as I said early on they’re investing heavily in start-ups not just within China but also outside of China.
Yet at the same time as we’ve mentioned before the consensus view is that there has been a tightening of internet freedom you know coinciding with a feeling that there has been a reversion back to much more conservative political ideals. And so we ask just as China is becoming more economically powerful it seems to becoming more politically conservative and more complex and how does this play out? Certainly the government is concerned about free-reigning social media simply ‘cause it’s so fast and it’s so democratic in many ways. Every person just as it is here. I was at Dubbo Zoo, Western Plains Zoo, where one of the zookeepers was taking us around the rhinoceros exhibition and he was an evangelist about horns, just absolute peril [resulting from] poaching of rhinoceros, poaching for their rhino horns and [he] went out and said right, China’s responsible for this and because there’s no internet in China nobody knows about this issue of rhino horns. So you know it’s interesting, not only is there the internet in China there is actually strong, robust democratic debate, what we would understand as democratic debate, on the Chinese internet.
This picture ... it’s from a few years ago ... was of a press conference that was held after an anticorruption official actually was found stabbed 11 times with his throat cut in his office in Hunan province, I think and after an official investigation it was announced that his death was a suicide. And then you know there was all sorts of commotion that erupted and this is his family at that press conference and this is the translated version of some of the comments that had come out. So very robust commentary, very, very robust commentary on online social media. And those of you who follow it, very recently there was a man who died in police custody just about a week ago, and you know again there was a story about how this may have happened, but he was visiting a house of ill repute and various explanations given and again the online citizenry has been up in arms.
Just as negative things are reported in Chinese social media some ‘netizens’ want to hold up what they would aspire to in terms of government leadership. This was interesting, this is Gary Locke, the former United States Ambassador to China, and this picture of him was very, very popular in the ... in Chinese sort of Twittersphere at the time. Does anyone know ... does anyone follow ... does anyone know why that became so popular?
Y: Exactly, exactly. People couldn't understand, I mean this was ... he was a former Communist Secretary and he’s carrying his own knapsack, carrying his own backpack. And similarly President Obama coming down from Air Force One, this picture went all over the place in the Chinese media as well. Anyone know why?
Y: He’s holding his own umbrella! Unbelievable! And so Chinese citizens online are very robust in terms of voicing their views and their aspirations of how they would want their leaders to behave. And so how does the Chinese government respond to this, these forces? We want innovation, we want our Chinese internet giants to go over ... go out and conquer the world but at the same time we’re not comfortable. How do we control or how do we manage the internet in China?
This is a screenshot from WeChat. I’m sure you’ve all heard of WeChat. What is interesting here is this is essentially an ecosystem, you can pretty much do everything on WeChat and WeChat’s recently announced that you can’t ... it’s restricting your ability to leave the WeChat platform and click into other platform and it made us in the company think ... we’re invested in a number of things to do with WeChat and some of these things worry us but it made us think more broadly about when you have large ecosystems underneath big companies such as an Ali Baba ecosystem and a Tencent ecosystem it actually makes the system a lot easier to control from a governmental perspective rather than having millions and millions of start-ups going and doing different things.
Let’s move now to the third personality and we’ve called this the leader of the developing world. This is the personality that sees China taking a leadership role in terms of developing nations, stated very clearly in the Copenhagen climate talks, where China basically took the side of developing nations and together to the developed nations said look, okay, you guys had your free run in terms of pollution and heavy economic development, if you want us not to do that then at the very least we expect technology assistance and financial assistance. You will also see this in China’s, I guess, investments in developing countries, building infrastructure, building markets with less of the focus on democratic institutions, human rights, the sorts of things that western investors may be more interested in terms of prid quo pros of their investment.
A related personality is the last man standing. President Obama went to Africa last year and I thought it was very interesting, it was almost as though the United States was selling itself as a better partner. I remember Obama saying you know America will make a better partner for Africa. He was obviously referring to the Chinese. But interestingly really the west hasn’t really covered itself in glory up until recently if you think of the global financial crisis, the revolving door of prime ministers and everything in Japan, the sort of ... the ... Europe grinding to a halt and its debt crisis particularly in Greece, legislative gridlock in the United States and so this personality really sees China as saying look, the west has really lost its plot and our particular brand of single-state, authoritarian market-driven capitalism is a better system. It is a better model and this is what some people call the Beijing Consensus after that book that was written. Now this has subsided a little bit recently with the revival of the American economy and Europe didn’t go to pieces and now the Chinese economy is slowing down under the new normal but the sentiment and the personality persists.
The final personality I’d like to put to you is what we call the herald of the high frontier. Now this is a positive view of China, remember the Goldman Sachs chart, where China was that far ahead. This is the personality of China that says China will be a responsible global leader, it will provide international public goods to the global community and you see this behaviour for instance in the Paris talks last year where China came out and said right, we think that all countries should revisit every years their commitment to reducing greenhouse gas emissions ... made Australia look bad. We see it in terms of China’s activities in Antarctica, the building of scientific bases etc. Always tinged with something else and so I say these personalities overlap. I’m sure China’s not building the bases in Antarctica purely to provide international public goods. Similarly China will try to explain its activities in the South China Sea through this rubric. It’s not doing it ... some may call it spin ... it’s not doing it primarily to strengthen its claims, its territorial claims there, it’s doing it to provide security of freedom in navigation, to guard passing vessels against piracy etc and certainly China had helped supervise the export of chemical weapons from Syria, provided supplies to citizens of the Maldives when they were beset by disaster etc. And so this particular personality is the very positive, the responsible stakeholder, the global leader, the responsible global leader view of China that China would put forward.
What I’d like to do now is just look at a couple of case studies of how we might apply some of this personality to the framework in understanding some of the things, some of the more topical issues that are going in China. Cross-border ecommerce. I don’t know how many of you have been following this debate recently, it’s been a big debate in terms of Chinese economy and its relationship with ... impact on Australia. Essentially what cross-border ecommerce has meant ... China has traditionally jealously guarded its borders, the market is so big and historically always traded market access for something, to tributaries, you had to come and provide tributes in order to gain market access to Chinese borders and this tremendously valuable market. Before this in order to get goods into China, unless you smuggled them in, you had to ... infant formula, for instance, drugs and medication, supplement products, you had to import them and there were very, very strict regulations. Blackmores and Swisse, in order to import their product in they had to register every SKU, every product had to go through probably about two to three years of testing, and it cost about 300,000 to half a million dollars per SKU, per product, in order ... before they could be imported en masse into China.
Then suddenly after some experimentation the Chinese launched cross-border ecommerce. The Chinese ecommerce market is about one and a half times the size of the US’s. I think we understand this, but it is a tremendously large, dynamic and robust ecommerce market in China. What cross-border ecommerce did was basically said to foreign companies you can sell your products in China, you don’t have to go through all this testing and all these regulations provided you ship it first to a bonded warehouse, a customs warehouse in China and then if the Chinese consumer orders something online, goes to that site, orders something and it’s only for personal use ... you can’t import lots of it and on-sell it, it’s only for your own personal use, you can buy those products, the companies can send them in without having to go through all the rigorous approval process that regular import ... so this is revolutionary. It wasn’t done as a favour to foreign exporters, it was done because Chinese consumers demanded it and why did they demand it? This goes to this issue of trust in Chinese society.
How many of you have heard of the case of the judge and the good Samaritan on this particular issue? [You might be] familiar with it. So this is one of the really you know things that you wrestle with and often industry can kind of ... you see somebody fall down, you see an older person fall down, generally speaking you won’t see many people rushing to their aid and it’s not because they don’t want to. The main reason why is people are afraid of liability and the way this came about was there was a case while ago where an elderly person fell, a young person came to assist them and was accused by the elderly person of having pushed them down in the first place. And there was a judge that ruled in favour of the elderly person, saying no normal person would have gone to assist unless they had a guilty conscience, and so awarded compensation to the elderly person and this was published and it outraged everybody. And it started this [idea] that, you know, if you go to assist you only bring trouble on yourself because you could be accused of something. This is a similar case where again this young person, this student, was similarly accused of knocking down the older person. It’s lucky for this student there was a security camera that caught actually what happened there so there was evidence in this particular case.
This notion of trust and the lack of trust in Chinese society firstly I think is one of the biggest issues that China wrestles with and there’s no stronger example of this probably than the infant formula scandal in 2008. It’s when six babies died and about 50,000 were sent to hospital, about 300,000 were made sick and this ... if you took this as a metaphor for trust in the goods that you are buying, what you’re feeding your newborn baby, there can’t be a more powerful or a more visceral example of this. And the link to Australia, this is why our supermarket shelves are getting cleaned out and the infant formula being sent back up to China. This is what drives this behaviour, and so cross-border ecommerce, this is why the government needed to allow this, because people just did not trust Chinese-made products, they wanted foreign product, they wanted particularly Australian product because it was considered at least to be healthy and safe, you wouldn’t hurt your baby in doing it.
This is a shot of Taobao, which is the Chinese sort of eBay, and you can see how it’s done here, for those of you who haven’t seen this before so this is the price. About 200 Renminbi, so if you divide that by five it’s about $40 per can of Bellamy’s Organic Infant Formula. If you went to Coles or Woollies this would be about $20 here. So what is happening is a lot of Chinese people ... maybe some of you in the audience who would do this ... your friends and family or people and you just go and buy it from the supermarket, you buy it from Chemist Warehouse, and you ship it up there and a lot of money is made. We had ... we actually somebody resign from our company because she said she could make more money doing this than working for us, and the figures say at least half of infant formula that’s sold in Australia was sold through these channels heading up to China.
Central to all of this again is this notion of trust so these are ... this is how advertisements for the products that were sent from Australia are done. People want to see ... they don’t want to necessarily buy them from big anonymous platforms, they want to see that the person who’s shipping them is in the store, it’s somewhere in Canberra, in Australia somewhere, this is the receipt here that you know this is then going to the store here in Canberra and actually buying it. And it’s considered to be the safest way to buy this because if you were to buy this from one of the big Ali Baba platforms or the big online retailers how could you really know that the stuff really came from Australia rather than being packed somewhere in China and sold to you. And so this personal shopping aspect has been quite a remarkable phenomenon going on even if the receipt ... you’re showing your customer that you actually bought this and this is the receipt that you used to buy it so it really came ... and so what Chinese mothers want is they want precisely the product that Australian mums will be giving their kids, they want it to come from our supermarket shelves because it’s the best way to know that it’s safe, it’s okay, I can feed my child.
These are some screenshots from a Chemist Warehouse at Hurstville in Sydney, and it’s for Swisse products, and there was a run on Swisse products, you know the supplements products, where there were shortages basically, product shortages and somebody sent a WeChat message out saying that there was a delivery coming into this particular Chemist Warehouse that day and some 500 people descended on this place to grab these products, not so much for their personal consumption but to ship them up to China. This is Jessica’s Suitcase, Jessica Rudd’s platform, Kevin Rudd’s daughter who’s a good friend of ours. She’s done something very, very smart where ... she lives in China ... we were there about the same time that she was and she started an online business which is very, very smart where she found every time she came back to Australia ... she had a number of young children and every time she came back to Australia she would pack her suitcase with products, with Australian products, that she’d bring back which she couldn’t get in China so she’s called this online platform Jessica’s Suitcase and so she offers products to other Chinese mums who want to buy the same safe, reliable, healthy organic products that she feeds her kids.
So all this goes back to this notion of authenticity and trust in terms of the Chinese marketplace. Now let’s relate this back to the five personalities and what does this mean from a policy perspective? Is it conceivable that the self-sufficient civilisation would find it acceptable that it cannot feed its own people or that its food supply is not trusted by its own people? Is this an acceptable state of affairs and what does this say for the future policy development in this area? We’ve recently in the company been investing a lot in these sorts of Australian food businesses. Are we stupid in doing that? In other words is it conceivable that the Chinese government sooner or later, really what they want to do is build up their domestic industry and they will shut the gates at some stage in the future because it is inconceivable that the self-sufficient civilisation or that the sovereign survival would allow a ... infraction on its sovereignty? ‘Cause trade is really as much about sovereignty as anything else, if you allow the foreign products in with little control and little taxing at the border, is that an infraction on China’s sovereignty?
What about the herald of the high frontier? Or the last person standing, the last man standing. For Australia in the United States ... our market is small if we want to grow our companies, you know, is it always about the United States and Europe in terms of where our companies can grow? Or is China really just making its market available and opening its market so that our companies, our world class companies and our smaller domestic home market can have a massive market in which to become global leaders, what international public goods does open access to a Chinese consumer market provide?
Just in terms of time I’m not going to go into one belt, one road very much. This is essentially ... I’m sure most of you have heard of this rate sort of going up. I'm not going to go into this in too much detail except to say that you can see again all five of the personalities reflected in this particular policy. You have the self-sufficient civilisation, you have the leader of the developing world, China, investing in these ... in its neighbours in order to develop their markets and their economies. You have a sovereign survivor, ultimately it’s to support Chinese industry in the end to I guess appease some of the ... or manage some of the internal pressures that China has.
Let me wind it up here, I think we've been going for a while and I want to bring it back to I guess Australia and saying I hope that these five personalities, they’re not perfect, some people would say there’s some other personalities that may come in. China, the trader, China, the businessperson and there’d be other personalities there but the intent has been to provide a little bit of a framework that we might be able to understand what’s going on in China and some of the contradictions with a little bit more detail but with the overall intent that as Australia I think it is so important that we depend our relationship and we understand China much better and with a mindset that not only can we teach China lots of things but we can also learn a bit from China.
I was at a healthcare forum with the World Economic Forum, and I was told by a Chinese person, we were discussing the future of healthcare, how do you get the healthcare system into a preventative mindset when you have drug companies and doctors who get paid when we get sick? How do you turn that all on its head and have a prevention [model]? And then a Chinese colleague of mine said did you know in ancient China how it all worked? In a village in ancient China doctors would get paid by each villager when nobody was sick and the moment when somebody became sick payment stopped until they became well again. Do we have lots of things that we can learn from China? Use of the older generation, grandparents to provide part of a solution in terms of Australia’s healthcare crisis, the tremendous emphasis on education which Confucian cultures have, the general respect for the older population, savings mentality in terms of national wealth. So let’s leave it there and to say this ... to make this last point I guess, when Chinese people come to Australia at what point do they stop becoming Chinese and they start becoming Australian? You know and can we begin to use this tremendous resource that we have, that is being the Chinese people amongst us, be they old migrants or new migrants, and we begin to see them as part of our national [identity] and being part of us and then helping us understand and take advantage of these great opportunities that we have with our Chinese neighbours. Thank you.
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