The Australian model: Navigating the US–China divide with Malcolm Turnbull 11/5/2026
Chatham House, London with Ben Bland
Watch the video here: The Australian model: Navigating the US–China divide with Malcolm Turnbull
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BEN BLAND: Let's start with the meeting that's happening later this week between US President Donald Trump and Xi Jinping in China. It's often said that if you're not on the table, you're on the menu. So, is that the case for the rest of us, in Australia, in Europe as these two great superpower leaders meet in Beijing later this week?
MALCOLM TURNBULL: Well, I think potentially. There is a sense of a G2 developing in the world. There shouldn't be. The Europeans could certainly play a bigger role than they do. But I wouldn't take that analogy too far. Every country - all of the so-called middle powers, which I guess means everyone that isn't one of the big two - or Russia perhaps is in a league of it’s own - is in a position to assert its own sovereignty and should do so.
BEN BLAND: And what's your sense of where US-China relations are heading under the current president of the US and Xi Jinping?
MALCOLM TURNBULL: Well, it's very hard to say where Trump's coming from. Kurt Campbell has got a good piece in Foreign Affairs today, which many of you will have read, I'm sure. He just makes the point of how unpredictable Trump is. And that's a feature, not a bug. He sees unpredictability as part of his strategy.
I think the trade war gambit was repulsed by China because they responded with bans on the export of magnets, rare earths, and other critical minerals. So, I would say at best, the US-China rivalry is essentially a draw. But at that level - where Trump thought he had an ace up his sleeve - the recent events in the Middle East, the Gulf of Hormuz closure, the war against Iran, all of this has certainly advantaged China. We can’t pretend anything else.
In energy - and I’m the President of the International Hydropower Association and a number of my colleagues are here today - in the energy sector we see this as absolutely advantaging China because it is the dominant producer of the means to generate renewable energy. The message every country takes out of the blockage of the Straits of Hormuz is: we must become less dependent on imported energy sources, fossil fuels in particular.
How do you do that? Well, you take Donald Trump's advice and drill, baby, drill. But what if you haven't got anything to drill into? That’s not going to work for you. Everybody's got access to sunshine, some more than others. Everyone's got access to wind. We are in the hydro business, everyone's got access to gravity and water pretty much. So you're in a position to achieve a lot of energy independence with renewables, and countries are doing that. A great example is Pakistan. In 2020, solar power was 3% of its energy mix. Today it's over 30%. This is what everyone in the data center business is talking about - if you’re walking about speed to power, the way you do that is with renewables plus storage: batteries for short periods, pumped hydro for longer periods.
BEN BLAND: I think we're going to go into a bit more depth on China and potentially on energy later, but I want to try and stick with the US now because I think it's really important for us all to try and make sense of what's going on in America, especially the extent to which these are short-term personality-driven changes or something deeper. Starting with the personality and President Trump himself. Obviously you had a very early phone call in his presidency that was quite difficult back then, but looking back now almost 10 years, what's your sense on how Donald Trump has changed as a leader and in terms of his impact on the world over that decade?
MALCOLM TURNBULL: Well, first time round, Trump did not expect to win the Republican nomination and he did not expect to win the general election. No one else really expected him to either much. So he was quite unprepared to be President. He had no transition team going on and he pulled together an administration which included many capable people, but they weren't all totally 100% loyal to the Trump doctrine, whatever that is, again I would say Kurt Campbell said this today, so I’m quoting his piece, but MAGA is more of an attitude than a strategy. There weren’t rock solid Trumpites.
Second time round, he had four years to prepare. Heritage did a whole plan policy document for him - Project 25 - and his team is much more cohesive as a result because the single most important criterion for being chosen was loyalty to Trump. But he's still the same person.
I think he's more capable of implementing his will because there are not as many people, if there are any people, saying, “Stop, this is a mistake.” Now, somebody in the administration is briefing all of that out to Jonathan Swan and Maggie Haberman in the New York Times in that piece you've all read, which looked like it was potentially dictated from somebody who didn't agree with attacking Iran. But he is able to proceed without countervailing forces in the administration. That's the big difference.
BEN BLAND: And there's been explicit talk now from several key people within the administration about rejecting the concept of a rules-based order and international governance in favor of national sovereignty and national power. How far do you think that reflects a deeper shift in the US both within the Republican Party and potentially within the public or electorate at large to a different view of how America should operate in the world in the longer term?
MALCOLM TURNBULL: There's no doubt that Trump believes might is right. He's never made any bones about that. I had a piece in Foreign Affairs nearly a year ago now and I quoted a tweet of his which had said: “My rule is he who has the gold makes the rules.” That's Trump's view of the world. But it's also the view of the administration. This is not just Donald Trump the big ebullient real estate developer taking this view. You look at the National Defense Strategy. This has come out of the Pentagon bureaucracy. It says the” international rules-based order is a cloud castle abstraction” or, less politely, “BS.”
Now that's amazing. Think of this: the international rules-based order was established after the Second World War with American leadership. This was the rules based order that America built and, until very recently, was saying the maintenance of which was the single most important foreign policy goal.
And now you have America saying: “Forget about it. That's BS.”
On the other hand, you've got Xi Jinping and Wang Yi the Foreign Minister saying the international rules-based order is vital, multilateralism is important. So it's a world turned upside down in some ways.The great revisionist power that China was said to be is now the major power that is seeking to uphold the rules-based order. Hence you get the question: what do the rest of us do? This is where I think it's really important that countries like Australia and the UK, Europeans, Canadians of course, stick with those values. There's no point us walking away from that. Mark Carney’s speech in Davos really set that out in a very compelling and eloquent way. It is harder for Canada pretty much than any other middle power because they're so dependent on the US, they’ve got over 70% of their trade with the US, but nonetheless what's the alternative? Do you float along, just like mice dancing under the feet of the elephants hoping you don't get squashed? You’ve got to work together and there are examples of how you can do that.
BEN BLAND: Before we get to some of those examples, I just want to push a bit more on the sense of where the US is going. Do you think this shift outlasts Trump himself or outlasts the Republican Party being in power in the US? Do you think there's something more enduring here or should we be patient, wait a couple more years and see what we get in the US?
MALCOLM TURNBULL: Pretend it's all a bad dream, go back to sleep and it'll all be better in the morning? I don't think so. I think there has been a big change in America. I think “America First” has struck a chord. If the next president were, for example, a Democrat, and stood up and said, “America is back” as Biden did after he won in 2020 I think the rest of the world would be pretty skeptical. They'll say, “Okay, we'll wait and see.” A lot of what Trump did in term one, Biden did not roll back. And I think the same will happen with Trump 2.0.
Certainly, I can't imagine the next president is going to be as mercurial or as charismatic as Trump is. Trump has an ability, unique, I’ve never known a politician anywhere to have the ability to make his own weather as Trump does. His ability to move the attention of the public and the media from whatever is not working out for him to something else is unequaled. He is incredible like that. I can’t imagine his successor will have that ability. But the core framework of MAGA - the philosophical framework, the attitudinal framework - is going to still be very influential.
BEN BLAND: And for US allies like Australia and the UK and our European partners, who are so deeply embedded practically but even psychologically in the US alliance system, how do we start to go about this process of diversifying away from the US while still keeping the US on side as much as possible? How can we do that? Because it seems pretty difficult to do both things at the same time.
MALCOLM TURNBULL: Well, it's not a question of either/or. People often say to Australians …they used to say this to me when I was in office and they say it to the current prime minister… “What's your choice between China and America?” Well, we don't have to make a choice. We have our principal trading partner in China, our principal security partner in Washington. We want to be friendly with both capitals. We have to manage that relationship. There's a lot of hedging going on, and I think the key messages for everyone are greater independence and greater self-reliance. We talked about energy earlier, but the same applies for defense and trade. You cannot assume that the United States that we were used to for many decades is going to come back to us.
And by the way, this is not a criticism of the United States. Trump says this, just take him at his word. If you read their National Defense Strategy, they basically say the United States has been providing free security to the rest of the world, has been taken advantage of, and the rest of the world has got to stand up and do more for themselves. We can't just treat that as windy rhetoric. We've got to assume that it means something. And that's the bottom line.
BEN BLAND: And you obviously played a role when the TPP trade agreement fell apart because Trump withdrew. You played a role in helping turn it into what became the CPTPP, which is a real mouthful, so I don't know if we can blame you for that.
MALCOLM TURNBULL: I will name the guilty man, because he confessed. It was François-Philippe Champagne, who was then the Canadian Trade Minister. He actually said when he was in Sydney recently with Mark Carney he said that…we did keep the deal, I'll just tell the story about that. So basically Trump pulled out the deal, it was dead. In fact, this is not all Trump. I'm not sure there were the numbers in the Senate to ratify it anyway. Obama was really worried about whether he could get….
BEN BLAND: Hillary Clinton had said she would pull out as one of her election commitments ….
MALCOLM TURNBULL Exactly, but Trump was the President, so he pulled out, but it was probably dead from an American point of view anyway. We wanted to keep going with it. I was mocked and derided by my political opponent, Mr. Shorton, who said I was on a vanity trip, a vanity exercise. Anyway, actually at dinner, Lucy and I had dinner at our home in early 2017 with Shinzo Abe and his wife Akie. Shinzo, good friend, sadly assassinated as we know. But we had dinner and over that dinner we basically talked and persuaded Shinzo that we could keep going with the deal without the Americans and that's really what made it work. Then obviously we had to persuade other members, so that's what kept the deal going.
But as to the CP, which stands for Comprehensive and Progressive, two utterly meaningless adjectives, France Philippe said that at the very end of the negotiations, and the Canadians by the way, were in and out and in and out. That's another story. But we've actually finally got to the point with the Canadians where we said, and we were calling it the TPP 11. We said, "Look, we don't care whether it's the TPP11 or the TPP10 at this point we're over it. So you just just tell us that's it because we're going on anyway. Thankfully they got back on the bus. But François-Philippe said “oh I had orders from Ottawa”, they wanted him to insert these adjectives — “Comprehensive and Progressive.” Everyone initially said, “No, that's ridiculous.” Then he said he thought if he went back without getting it approved they'd ask, “Did you really push for it?” So he thought I’d better raise it again. And to his horror, everyone agreed because by that stage we'd all had enough and just wanted to finish the deal. So we lost one country and acquired two useless adjectives.
BEN BLAND: Are there any lessons from that about how middle powers can coordinate effectively? Because the rules based order was built, backed by unipolar power from the US. So what did you learn from that experience. It is one thing to talk about middle power cooperation but actually putting it into practice was hard.
MALCOLM TURNBULL: The TPP was a really interesting situation because you had this big trade deal and it was very ambitious. It was comprehensive and progressive but we didn’t need to add that into the title. So it was very ambitious. It had been a key element in American policy, it was the key part of Obama's so-called pivot to Asia, and assumed that when the Americans were out of it it was dead, but we were able to keep it together. There were countries that were worried it would offend the Americans and we just kept on saying “look out of the room out of the deal”. And then the other argument we used to people who are worried about offending the Americans, we said, "Look, from the Americans point of view, if we delay this for another six months, this deal will just be a pile of papers in a lawyer's office? All the momentum will be gone. If we keep it going and enact it and ratify it, they've always got the option of rejoining in practical terms. No one's going to say no to them. So, you're effectively giving them a free option." And I remember, and Lucy will remember, I said this at a Governor's conference in Washington and made this point to them, and the whole room went “yeah that's absolutely right”. That argument was a good one.
The lesson is: you can do things.
What's the alternative? The alternative is do nothing and just follow Truth Social while trying to hang onto the tail of the elephant as it stampedes through the jungle.
BEN BLAND: I think you're describing a lot of European foreign policy right now.
MALCOLM TURNBULL: The Europeans are a classic case. I don't want to criticize the UK, they were very kind to have us here. But I think the Europeans…and this is obviously not what Emmanuel Macron wanted to do…but that very obsequious performance at Turnberry last year was clearly a terrible mistake. Europe ended up with a very asymmetric trade deal in terms of tariffs and, shortly thereafter, threats to invade Greenland. So, the point isTrump is a tough guy. He's a strong guy. He is a bully. I'm not saying that as a criticism of him. It's like saying the Pope's a Catholic. That's how he operates. He wrote a book about it. So, if you give in to him, if you become an obsequious sycophant, then he will take advantage of that. If, on the other hand, you stand up to him, then he will negotiate.
There was a guy that some of you may remember him, a great New Zealander called Sam Chisholm. He ran BSkyB here for quite a while. Sam was a very colorful - I wouldn't say he was a mogul because he never owned any of the businesses he ran - but he was a very successful guy. And Sam many years ago, I had an altercation with him and at the end of it he said: “I am a bully. My approach is: I bully everybody I can. On the rare occasions I meet people I can’t bully, I befriend them and negotiate with them.”
And I thought, well, that's very honest. That's a very honest description.So, it's true in the playground, it’s true at the G20, it’s true at the United Nations, it’s true at any level of life, you've got to stand your ground.
BEN BLAND: And just to be clear, Chatham House does not endorse bullying. It's against our corporate anti-bullying policy, which you can read on our website.
Just on AUKUS, which is this deal by which Australia is working with the US and the UK to acquire nuclear-powered attack submarines at a cost of upwards of US$250 billion.
You've said that you're worried the AUKUS deal means Australia will lose both security and sovereignty. So, what are you worried about with AUKUS, and what should Australia be doing instead?
MALCOLM TURNBULL: Well, I worry we won't get any submarines. It's a submarine deal with no submarines. In a nutshell, those people who are interested in this will know I've written and spoken a lot about it. But to cut to the chase, AUKUS has two pillars.
Pillar One is about submarines. Pillar Two is about other things.
Nothing is going on with Pillar Two. No money has been spent on it. It should be good — US, UK, and Australia working together, there is very little happening there, that's a missed opportunity. There’s not much contention about that.
Now, on Pillar One, what do the Americans get? They get US$3 billion from Australia to support their shipbuilding programs. They get a naval base, submarine base, and a dockyard in Perth of enormous value to their navy.
Their plan is to rotate some attack submarines, Virginia-class submarines, through Perth.
Australia is meant to get three, and possibly five, Virginia-class submarines, several secondhand ones with at least 20 years of life left, and others, the balance being new, from the US.
But the US is not producing enough Virginia-class submarines for their own needs.
What I'm saying is absolute fact. You can read about it in Senate Armed Services Committee etc so this is not my opinion. They’re producing about 1.2 submarines a year, they need to be producing 2.0. They've had a goal of getting to 2.0 per year for quite some years, but they've never been able to lift production above about 1.2.
The Congress, when it authorised the AUKUS arrangement, legislated that no boats , submarines are called boats, can be sold to Australia unless the president certifies that the sale of it will not degrade the undersea capabilities of the United States.
It is generally accepted, and Admiral Caudle, the Chief of Naval Operations, repeated this the other day in testimony, that the Americans have to get to 2.33 boats being delivered per year for them to be able to meet Australia's needs. They're basically producing half as many, and the first one is meant to be delivered in 2031.
If you go back five or six years, they were proposing a gradual increase. But now because it has just bumped along the bottom, and they've now got the SSBN’s, their Columbia-class - the equivalent of your Dreadnoughts - to build. To get to 2.33 [boats per year’] you’re talking about a vertical takeoff [in production], which simply isn't going to happen.
So, I don't think we'll get any Virginias. I don't think we can complain because the Americans will say: “We've been completely upfront with you. We told you about this. You knew the risks. You took it on.” It was a terribly bad deal. A really stupid deal.
People used to say, “Oh will Donald Trump won't like it.” I said, “Trump will look at it and say: ‘Wow. How did that guy Biden do a deal as good as this? These Australians are amazing. Any more deals I can do with them? They've got so much money and so little sense.’”
Now, the partnership with the UK is the second part of it, and that is to design and build an SSN - an attack submarine - which will effectively be the successor to the Astute class. Again, the UK shipbuilding industry, particularly the submarine industry, is in absolute disarray. I think of the Astute-class boats that are currently in service with the Royal Navy, only one of them - HMS Anson - that can really go to sea. The chances of the first of those boats being delivered, whether built here or built in Adelaide by 2040 is just so low.
But it's a great deal for the UK. Why? Because they get lots of money from Australia.
Essentially, I think AUKUS is a huge wealth transfer from the Australian government to the US and the UK.
America gets a base. You could argue that's good for our security, or you could argue it's not.
The UK gets lots of lovely money.
And what I'm saying about the problems with the UK submarine industrial base is not controversial. The House of Commons recently produced a report on this. You can imagine they were pulling their punches, because it's a government controlled committee, you can still see even there it's a sorry mess.
So, what should we do? Well, we shouldn't have canceled the deal with France.
And what should the UK do? I think what the UK should do is go into a partnership with France.I know that's contrary to political instincts, but France on the other hand does have a new SSN — the Suffren class — and they are delivering a new one every 18 months to the Marine Nationale. It is a better size, it is a smaller boat, but very capable. It's more affordable and a smaller crew.
And you’re talking about what does Europe needs to do, Europe needs to be able to defend itself against Russia, which clearly it can if it gets its act together.
An obvious solution, if I was Keir Starmer for example, and I wasn't preoccupied with leadership issues… a state of mind I'm not unfamiliar with…I would be focused on doing a deal with France on submarines. Because what Europe needs is to have some common defense platforms rather than everyone trying to do their own thing.
I've often said I can bore for the world on submarines, so I hope I haven't bored you. Forgive me.
BEN BLAND: And obviously the desire for Australia to improve its defense capabilities is in the long term about China. Taking a step back, every super power has its own flavour, its own way of doing things. What kind of power do you think China will be in the coming years, especially in Asia in the Indo-Pacific. How will it differ from those who have come before it as regional dominant powers?
MALCOLM TURNBULL: I don't see China invading Australia for a start. I’m not lying awake at night worried about some sort of kinetic attack from China.
The Americans have obviously been concerned to protect Taiwan, but no one really knows where Trump is on that. He said conflicting things. He gave an interview with Bloomberg the year before he was re-elected President in which he said Taiwan was indefensible and then berated them for stealing America’s semiconductor industry. He might be right about the first, he’s certainly not right about the second, they didn’t steal anything.
The problem is you don’t know. In the world of defence, we talk about what is a threat. A threat is the combination of capability and intent. Capability takes a long time to put in place. Intent can change in a heartbeat.
From our point of view, we need to be able to defend ourselves as best we can and that means to increase the price of anybody seeking to coerce us. That's why you need long-range strike [capability].The old air-sea gap that people used to talk about with Australia in the 80’s isn’t really relevant anymore. There is a powerful argument, not one I share I think we should have submarines, but there is a powerful argument and it is well held in the United States and you can read about it in the Congressional Research Service big papers on AUKUS, that Australia should not have any submarines at all. We should rely on the Americans to do the submarining for us and instead invest in long-range strike capabilities, long range bombers, missiles and so forth. One way or another, to sum it all up, what do small countries do?
Go back to Lee Kuan Yew said in the 60’s. Lee Kuan Yew once quoted the Chinese proverb: “The big fish eat the little fish and the little fish eat the shrimps.” He said if we are a shrimp, we have to be a poisonous shrimp so nobody wants to eat it. We have to combine with other shrimps and smaller fish and protect ourselves from the big fish. That's ultimately what we have to do.
BEN BLAND: And Australia, obviously like a lot of countries in Europe as well, has gone through a shift in its China policy from sort of a naive optimism to sort of a very heavily securitised response. Do you think Australia's got the balance about right now with China between the economic interconnections, but also the willingness and ability to push back when sovereignty and other questions are threatened?
MALCOLM TURNBULL: I think the current government's got the balance right. I thought I had the balance right when I was in government. I obviously I wouldn't have taken the approaches I did if I didn't think it was right. I thought, with respect to my successor Mr. Morrison and his defence Minister Peter Dutton, I think they overdid the bellicose rhetoric.
You can be strong and take a principled position that your counterparty doesn't like, but you don't have to fling it in their face or be rude about it. I'll give you again an example of this: when we made the decision, or announced the decision, that we were not going to allow Chinese vendors - Huawei and ZTE principally - into our 5G network, that was a decision we took on a technical basis. The Americans did not ask us to do it. In fact, we were ahead of the Americans and the UK.
Again, I won't bore you all with the details of that. But once we had made that decision, we announced it in a very low-key way. We briefed Beijing a good 10 days beforehand, we briefed our allies well in advance, we briefed the company well in advance so there were absolutely no surprises, and we didn't want anyone to be offended. And we were saying this, we're not accusing you of doing anything, this is just risk management.
I think the way you've got to deal with these issues, and I've had these discussions with Xi Jinping about this. There are levels of trust. There are things you would say to your wife or your husband that you wouldn't share with your children. There are things you'd say to your children you wouldn't say to your friends, and there are things you'd say to your friends you wouldn't say to your colleagues at work. In our relations we’ve got different layers of trust.
With 5G, getting back to capability and intent, do I lie awake… does the company that dominates your 5G environment, do they have great capability to create issues for you? Yes, unquestionably.
Do I worry about the malign intent of the Kingdom of Sweden vis-à-vis Ericsson? No I don’t. The Swedes terrorized Europe in the 16th century and 17th century, but I think their days of seeking global domination are over, thank heavens.But am I entirely sure about China? Perhaps not so much. So that's just a risk management issue. And again, depersonalize it. But don't get sucked into that lure from right-wing media to get into China-bashing. There's no point doing that. Absolutely no point.
The Americans can get away with it because they're America. But a country like Australia or the UK doesn't need to do that. The China-scare stuff, you should just stay well clear of. And it was catastrophic politically for the Liberal Party. At the last election it really hurt the Liberal Party in a number of electorates where there were large Chinese communities, or Australians of Chinese heritage communities. And there are a lot.
In Australia — what are we, 27 million people now? There's at least one and a half million Australians of Chinese heritage, two of whom are two of our four grandchildren. So in a multicultural society you've got to speak respectfully about people of every background.
BEN BLAND: I'm going to come to the audience in a second, so put your thinking caps on. Last question for me was just a follow-on really about energy and China's role in new emerging green technologies and renewables. Obviously, as you said earlier, one reaction to the energy crisis stemming from the Strait of Hormuz is double down on renewables. But we know that China has really the lead in terms of cost and quality across wind, solar, EVs, batteries.
And there are plenty of people in Australia and in Europe and in the US saying we need to worry about this, we need alternatives. But as we face a squeeze on our energy prices and availability, what's the greater evil in a sense? Do we have to just accept China's role in these green supply chains and go for lower-cost energy, or is there something else we can do to find a more balanced approach?
MALCOLM TURNBULL: If you're like India and you've got the scale to develop your own solar panel industry - as Lucy and I have visited some of the Adani Group's solar factories in Gujarat - you can do that.
Are you ever going to make solar panels in Australia at commercial scale? I doubt it. Our contribution is more likely to be in technology. In fact, the PERC technology which is essentially at the heart of the solar modules that are in pretty much every solar panel nowadays was developed at the University of New South Wales by Chinese and Australian researchers, led by Martin Green, Andrew Blakers and others. So no, I think China is really providing the world with the opportunity to successfully address global warming.
And tariffs - we can do that, Americans do that. A solar panel in America costs about three and a half times what it costs in Australia because of the tariffs. But people are still doing solar, still doing a lot of solar.The key thing you need is storage. This is one area where hydro becomes very important because you can buy a lot of batteries, but obviously they don't last forever. They've got a limited lifespan, and they're more effective for short periods.Pretty much every country in the world, almost without exception, can do pumped hydro. You don't need a lot of water and you don't need a lot of land. You just need effectively a bathtub at the bottom of the hill and a bathtub at the top. And it doesn't have to be that big. Snowy 2.0, which is a gigantic project that's about three-quarters built now in Australia has got 350 gigawatt-hours of storage. It will enable it to generate 2.2 gigawatts, that's the capacity, 2,200 megawatts, for a week without repumping. That's a hell of a battery.
But a smaller project like the two that Lucy and I have been working on developing: one 8 million cubic metre reservoir on top of a hill, 400 metres above the lower reservoir, will give you 770 megawatts for 10 hours. So that's 7.7 gigawatt-hours. It's like one 50th of Snowy 2.0.
But an 8 million cubic metre dam? That's 40 hectares at an average depth of 20 metres. Forty hectares is 100 acres. That is not a lot of real estate. In Queensland they call that a farm dam. So there's enormous opportunities.
Sarawak Energy is a huge hydropower producer and is pioneering floating solar. If you've got a big reservoir and you can put a lot of solar panels - which you buy from China, fair enough - on that, that means when the sun is shining you're dispatching your electricity from your solar panels and you're keeping your hydro power for the times when it is most valuable. Because the great thing about hydro is you can turn it on and off. That's what you need.
The Times here in London last week had an editorial which said Britain needs nuclear power to back up wind. Well, that's rubbish. You can argue you need nuclear power -I'm not saying you don't - but if you want to back up wind or solar for that matter, you need something you can turn on and off. So a gas peaker can do it, a battery can do it, hydro can do it. But the best thing is to have something that soaks up the surplus power on a sunny day or a windy night and then plays it back into the grid when energy prices are high.
BEN BLAND: Great. So yeah, time for your questions. Just raise your hand and tell us your name and any affiliation, and please, a question not a statement.
Yes, we've got one at the back there.
AUDIENCE: Hi, thank you for that. That was really interesting. My name is Katherine Watson, I'm from Flint Global. You spoke about Australia and other countries not having to make a binary choice between the US and China, but I feel like the US is kind of forcing that a bit at the moment. We've seen the “poison pill” clauses in trade deals with various Asian countries to not do trade deals with China. They've got various rules and pressure on markets to effectively block Chinese imports. And then we're seeing China introduce its own regulations that would penalise companies that move their supply chains away from China. So my question is: do you think Australia, the UK, Europe can continue the hedging and balancing act, or do you think it will actually have to make a choice? And then you also said Australia's security with the US, economics with China - what choice would Australia potentially make?
MALCOLM TURNBULL: If the Americans said, for example, “You've got to stop exporting iron ore to China,” there's no way any Australian government would ever agree to that. Western Australia would secede for a start so you’d have a smaller country. I think the Americans have, in my experience, been most concerned about transshipment. So they were concerned about, if they were putting tariffs on Chinese products, they were concerned about them being effectively exported to America via Australia. So when I secured an exemption from the steel and aluminium tariffs back in 2017-18, one of the things Trump and his colleagues - Navarro and Lighthizer in particular - were most concerned about was transshipment. And we said, “Yeah, sure. The only steel this exemption applies to is steel made in Australia.” But I agree, it is tough. You're going to be confronting difficult situations.
AUDIENCE: Hi. Malcolm, Latika Bourke from The Nightly.
You will obviously have seen the result in the Farrer by-election, and I wonder what you make of that and if it says to you anything structural about the long-term future of conservative politics, not only in Australia but globally and for your own party.
MALCOLM TURNBULL: Well, that's a big question., I simply make this point: I think the Liberal Party in Australia has made a very big mistake by going further and further into the populist right-wing culture war stuff that does well in the Australian equivalent of GB News - which is sort of Sky News After Dark in Australia. That sort of angertainment media ecosystem.
That move has been happening pretty much since I was defenestrated in 2018, and it intensified under Mr Dutton. And the problem is that the more you move into that space occupied by the far right-wing protest party - One Nation in Australia, Reform in the UK - the more you validate them.
This is the trap for conservatives. It's the trap for the Liberals in Australia. You are not going to outflank Pauline Hanson on immigration, because whatever your policy is, it's never going to be enough. So I think that's the lesson. I've been warning, as Latika knows this, she's an Australian journalist, a very distinguished one, I've been making this point for some years, but the chickens are really coming home to roost there. You've got to make a case. You cannot outflank the right-wing protest party, in my view on the right.
AUDIENCE: As you said, trust in the US as security guarantor will never really rebound to the same level. Given that complete domestication of military capability is essentially impossible, do you believe middle-power military production collaboration with Japan and Korea to a much greater degree than it is now is the only alternative? And do you think it would be worth angering China over this?
MALCOLM TURNBULL: Well, I think all the countries - there are a lot of historic issues between South Korea and Japan, as you know. So that's a relationship that's not without its considerable difficulties. But you're already seeing a lot closer cooperation on defence within our region. Australia is acquiring military capabilities from South Korea, and of course we've just signed an 11-ship deal for the Mogami frigate with Japan. So the connections are greater. But there isn't going to be an East Asian NATO.
The Europeans have got the ability, if they get their act together, to defend themselves. No question about that. Russia has the GDP of Italy. It's obviously got nuclear weapons.But Donald Tusk said, “Why do 500 million Europeans need 340 million Americans to defend them against 140 million Russians?” So yes, get their act together. That's why I made the point about submarines. If you're going to have…does it make sense for two European powers, both of which have naval nuclear propulsion, to be building their own boat? It makes much more sense to collaborate. France didn't take the peace dividend,the UK did, after the Cold War…so its nuclear deterrent and nuclear capabilities are greater, and of course they're sovereign.
So yes, you can do that. And making yourself independent of American supply chains is something that should be a goal. Again, this is not me being anti-American or anti-Trump. JD Vance, in an interview with Politico last year, said Charles de Gaulle was right. Can you imagine what the ghosts of John F. Kennedy and Lyndon Johnson were thinking then? He said de Gaulle was right because he insisted on France maintaining its sovereignty. And he said it is not in America's interest for the Europeans to be permanent vassals of the United States.
So people will say America is not as reliable an ally as it was. That's true, but that's not an accident. The Americans are saying: “You, our allies and partners and friends, have got to do more yourselves.” We cann’t just assume this is all an accident or windy rhetoric. We do have to do more to develop our own capabilities and work together with supply chains that are less likely to be subject to leverage. Trump makes it very clear that he has no qualms, that if you are dependent on them, your dependence becomes a liability. Mark Carney made that point more eloquently at Davos.
AUDIENCE: David Crow from The Sydney Morning Herald and The Age in Australia. I wanted to get the conversation back to China actually, because I wanted to mention to you Malcolm the G20 in China in 2016 where you met Xi Jinping in that bilateral meeting on the sidelines of the G20. I remember hearing at the time about those conversations and the message to Xi Jinping about the trap he was getting into with the rest of the world,
MALCOLM TURNBULL The Thucydides Trap?
AUDIENCE Yes. So here we are 10 years later, almost to the year. Do you think that the Taiwan Strait is now more dangerous, more exposed to a conflict because of what you've seen with Xi Jinping over the last 10 years? Or do you think it's the same now as it was then?
MALCOLM TURNBULL: Well, a couple of things have changed. China's military capabilities have been considerably enhanced through their investment. They now have a navy that is bigger than that of the United States. They've got a shipbuilding industry that is several hundred times bigger than the United States. The United States, of course, its magazine depth has been seriously depleted in the Iranian conflict and with the support they've given Israel as well. So 10 years on, is China in a better position to forcibly take Taiwan than it was? Yeah, no question. No one would argue with that.
Is it likely to? No, I don't think it is. My view is that Xi Jinping wants to reunite Taiwan with the mainland without force. He wants to win without fighting. And I think that is quite feasible. Trump is not sending signals…I mean Biden said unequivocally that America would fight to defend Taiwan. Trump has never said that. The only thing he said, as far as I'm aware, about Taiwan was in that Bloomberg interview where he said he thought it was indefensible. He said it was 70 miles from China - which is more than 70 miles - but the point was nonetheless valid.
Again, this may be a straw in the wind but I just throw this out as a thought. A very senior Chinese official said to me a while ago: “You should never forget that every soldier in the People's Liberation Army is somebody's only child.” A conflict could involve tens, maybe hundreds of thousands of casualties, that's something to reflect on.Now, that may be regarded as a naive comment, but I was struck by it.
I think there is every prospect… if there hadn't been the crackdown in Hong Kong, then Xi would be able to say, “We can do a one country, two systems type of deal.” The problem is that that's no longer open. So I'm not sure how they get there. But you look at the KMT - the Kuomintang, the old Chinese Nationalist Party - their rhetoric is all about dialogue. Their leader has just been on a visit to Beijing. So I think a conflict is unlikely. But China is in a much stronger position to wage it now than it ever has been.
And again, I made this point in the piece I had in Foreign Affairs last year. If you think about a naval war in the Pacific - horrible prospect though that is - and assuming it doesn't go nuclear, in which case who knows where we all end up if any of us survive it, but if you have a conventional naval war in the Pacific and there are many losses to both navies, which navy will be able to replace its sunk fleet quickly? Only China. Trump likes to talk about who's got the cards. I don't think Trump imagines that he has a huge number of cards when it comes to Taiwan.
BEN BLAND: I've got a final question just about how we can try and make sense of this very confusing and fast-changing world. You've been a lawyer, a banker, a tech entrepreneur, a politician. Which of those lenses helps you understand the world we're in the most? And what do you think actually is the most dangerous perspective of all those different occupations?
MALCOLM TURNBULL Which is the most dangerous? Unquestionably politician.
BEN BLAND: But which is the most helpful? Like when you sit down, are you going through the numbers thinking what makes a profit? Are you thinking what's the best argument to win the case? How do you actually make sense of the world given all the different things you've done?
MALCOLM TURNBULL Look, I think all of them. I have had a varied career. That just demonstrates I can't hold down a job, I suppose. Or that I'm unemployable. Or I get bored quickly, as one of my colleagues used to say. But politics is ultimately where you're dealing with these big issues. You're dealing with issues at a national level or global level. Obviously being Prime Minister of Australia, you get to sit at the same table as the G20, as the President of the United States and the President of China. But they have a role and responsibilities and capabilities that vastly outmatch Australia's or the UK's nowadays for that matter. But yes, politics - it's a derided profession, but nonetheless an honourable one.
BEN BLAND Great. Well on that happy note we will draw things to a close. Please join me in a round of applause for Malcolm Turnbull.
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