Kevin Rudd: Australia’s incoming ambassador to US says balloon saga threatens push to ease tensions with China

The incoming Australian ambassador to the United States, Kevin Rudd, has warned the Chinese balloon saga has created new "diplomatic clouds" that put at risk recent efforts to ease tensions between Beijing and Washington.

In a speech in Brisbane on Wednesday, Rudd also warned against expecting any "softening in China's ideological cleavage with the west".

Rudd, a former Labor prime minister who remains as president of the Asia Society until late next month, emphasised that he was offering "personal reflections" which "do not represent the views of the Australian government".

But given he is due to take up his diplomatic posting within weeks, Rudd's views are likely to attract attention in Washington and Beijing.

Delivering the inaugural China Matters Oration at the University of Queensland, Rudd reiterated his view that "we are now indeed living in what I have called the decade of living dangerously".

He said the Chinese Communist party appeared to have abruptly changed course on Covid-19 policy because it "feared that not doing so would threaten its unofficial social contract with the Chinese people".

It also worried that a structural slowdown in growth could undermine China's long-term strategic competition against the US, Rudd said. Those factors made it essential to "return to economic growth at all costs".

"While there has been much internal criticism for how the abrupt change to Chinese Covid policy was made, we should not conclude as a result that Xi Jinping is in real and immediate political danger," Rudd said.

"We should never forget that Xi's control of the hard levers of power across the party's security, intelligence and organisational apparatus continues to be near-complete."

Spurred by the "new urgency of its economic growth imperative", China had attempted to make changes to its international relations in the wake of Xi's meeting with the US president, Joe Biden, on the sidelines of the G20 summit in November.

Rudd said those efforts included Xi's renewed contact with heads of government around the world, particularly European leaders, to promote Chinese trade and investment opportunities.

Xi had also reined in "the polarising practice of 'wolf warrior' diplomacy seen over the last five years toward US partners and allies around the world, as Beijing embarks on a new approach in the short-to-medium term to accommodate its immediate economic growth agenda".

But Rudd predicted none of those shifts were likely to result in China changing its current military posture regarding the US, Japan and Taiwan.

He said China retained its long-term strategic objective of increasing its power relative to the US "to make it possible to secure Taiwan by force at a time of Beijing's choosing".

He said these structural tensions would "likely manifest in continued and increasing Chinese air force crossings of the median line in the Taiwan Strait; so too with Chinese intercepts of US and allied reconnaissance flights over the South China Sea".

"But nonetheless, prior to recent developments over the interception of the Chinese balloon over the United States, Beijing had begun to moderate its political relationship with Washington."

This was meant to pave the way for a visit to China by the US secretary of state, Antony Blinken, to continue talks on putting in place "protections" or "guardrails" to manage growing strategic competition.

But Blinken postponed this month's trip after the detection over US territory - and later shooting down - of a high-altitude balloon that American officials said was a Chinese surveillance device.

"While Beijing's objectives may have been limited in scope, both sides appeared to have agreed not to allow their relationship to continue to freefall for the near term," Rudd said.

"At least that was the case until the extraordinary events of February. As of today, it remains unclear if and when the diplomatic clouds may clear to the extent they would enable the return of Secretary Blinken to Beijing - and the extent to which bilateral political resolve remains to find new mechanisms to stabilise the relationship as envisaged last November."

Rudd is due to take up his posting as ambassador to the US at a time when Australia is planning the most substantial overhaul of its defence capabilities in decades, even as it tries to "stabilise" its previously frosty relationship with China.

On Tuesday the Australian prime minister, Anthony Albanese, received the report of a defence strategic review, which is widely expected to see Australia acquire longer range missiles and attempt to project power further from its shores.

Australia is also finalising the details of its plans to acquire at least eight nuclear-powered submarines with help from the US and the UK under the Aukus deal.

The head of Australia's nuclear-powered submarine taskforce, V-Adm Jonathan Mead, revealed on Wednesday that he had handed his recommendations to the government "earlier this year". A joint announcement by Albanese, Biden and the British prime minister, Rishi Sunak, is expected next month.

Australia's deputy prime minister, Richard Marles, told the ABC the government's response to the wide-ranging defence review would be released "weeks" after the initial Aukus announcement.

Marles also said he planned to introduce legislation to "remove any doubt" that former Australian defence personnel must maintain their country's secrets. It follows a review into concerns about China's attempted recruitment of former fighter pilots.