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China Concerns Spark Market Volatility; Concerns Deepen Over China's Slowing Growth; China Intervenes To Control Market Slide; China Achieved Targets In Market Intervention, Says Chinese Vice Finance Minister; China's Currency Reform Allowed Yuan To Slide; China Aims For Yuan To Make IMF Currency Basket; A Climate For Change?; Imagine A World: A Global Playing Field. Aired 2-2:30p ET
Aired August 28, 2015 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KEVIN RUDD, PRESIDENT OF THE ASIA SOCIETY POLICY INSTITUTE, CNN GUEST HOST: Good evening, everyone.
And welcome to the program.
I'm Kevin Rudd, the president of The Asia Society Policy Institute, but more importantly today, sitting in for Christiane Amanpour in the program.
I hope to cover topics close to my own heart, from the Chinese economy to climate change, before concluding with some personal observations about the
importance of sport to our various national psychologies, not least my own country, Australia, after the modest thumping we received here this summer
in cricket at the hands of the old enemy, England.
But first, to China.
Volatility has rocked global equities markets this week, with big falls on bourses across the world, from Shanghai to Sidney to the FTSE here in
Many reasons have been given, including the snail's pace of the economic recovery we've seen in Europe, now seven years after the global financial
crisis began; also, uncertainty over a future rate rise in the United States, but now, too, uncertainties concerning the future of the Chinese
Remember, it's been China since the beginning of the crisis that's been the engine for global economic growth. In fact, China alone accounting for
over one third of total global growth over that period and more than one half during the peak of the crisis in 2008-09.
But now, there are growing concerns that its economy is slowing faster than international markets had anticipated.
On the robustness of China's economic growth rate, the volatility of its stock market and also the recent devaluation of the renminbi, there is much
from The Middle Kingdom on which we should seek clarity.
Chinese vice minister for finance, Zhu Guangyao, joined me from Beijing.
RUDD: Finance Vice Minister Zhu Guangyao, welcome to CNN.
We're glad to have you on the program.
Vice Minister, the world's eyes are now focused on China's economic growth future. Now there are real concerns in the international financial
community about how slow China's growth rate will become.
So can I put this question to you?
Right now, what do you think is the speed of Chinese growth?
And most importantly, what are the new drivers of Chinese growth if the old growth model has already started to run out of steam?
ZHU GUANGYAO, VICE FINANCE MINISTER OF CHINA: Yes, thank you very much.
And everybody now, after opening up policy and the reform cannot keep this annual GDP growth about 9.7 percent for more than 30 years. Now we
particularly emphasize innovation and we do believe this is the -- represents the future of Chinese economic development with high quality.
And 2015 we think that the GDP growth will be about 7 percent.
RUDD: If you believe that China's growth rate is holding up at around 7 percent, then how do you explain the international anxiety and pessimism
concerning Chinese growth that we see around the world today?
The specific issue about stock market, yes, that's last month in China, really,
That's the stock market that more or less that we base our international experience, organized intervention. So that's -- we follow the basic three
The first T is the target (INAUDIBLE). The second T is timely. Third T is temporary. Targeted means the intervention that's to avoid panic rather
than raise the stock index.
And the second T, timely, just means that in the very big volatility, we must take action beyond just market behavior.
The third T, it means that the intervention is timely. We -- after the market stabilized, like markets play the fundamental role. In general
speaking, we thought we achieved the target and timely intervention made panic basically be controlled.
And we really believe in the relative time, the market will be back to the normal track.
RUDD: If you still see turbulence in the stock market in the future, do you believe the Chinese government, therefore, will continue to intervene
in the same ways we've seen in recent weeks?
ZHU: If that's the market, it's basically -- that's relating to the investors' behavior and big real damage to the people's confidence and not
cause panic, particularly not cause systematic risk, certainly we will let the market play the fundamental role.
And other countries, the same thing. You can see the case in U.S. In your case and the other countries.
RUDD: You've seen a lot of commentary, also, in the recent decision by the People's Bank of China to effectively devalue the renminbi, albeit by a
relatively small amount.
Do you believe this could assist Chinese exporters?
Is that the primary intent, to promote growth through greater export performance?
Or is it more that you are concerned about the ultimate status of the renminbi as a global reserve currency and therefore are throwing it more
open to market disciplines?
ZHU: Certainly we just do extreme efforts to reform the renminbi exchange regime. And you just mentioned that case of our Chinese central bank
announced the reform of for mid level price sacking (ph) up. And we do believe this is a really forward (ph) to the full market plays a role in
the renminbi price setup.
And we understand the Chinese economy not -- now as second economy in the world. And our policies certainly have that impact each other with other
RUDD: So China is still looking forward to being able to have the renminbi as part of the global basket of currencies controlled by the IMF?
ZHU: Yes, because that's just the IMF in the five years remaining for the currency basket. And we hope that exactly follows the -- invest in the
principles of criteria set up by IMF board.
We will continue our financial sector reform. We do believe the Chinese currency should be included in the special joint right of IMF basket of
RUDD: Vice Minister Zhu, thank you for joining us here on CNN.
And thank you for joining us all the way from Beijing.
ZHU: Thank you very much, Mr. Rudd.
(END VIDEO TAPE)
RUDD: China, indeed, facing formidable economic challenges right now. But China, now one of the two largest greenhouse gas emissions in the world, is
also a key to global action on a challenge facing the entire planet, namely climate change.
When we come back from the break, I speak to Lord Nicholas Stern.
He's a nationally renowned expert on the science and economics of climate change.
And then U.N. executive director for climate change, Christiana Figueres.
RUDD: Welcome back to the program.
I'm Kevin Rudd standing in for Christiane Amanpour.
2015 has been a wild, wild year of weather right around the world.
Severe flooding hit India and Pakistan earlier this month, which were in the middle of drought just two months before, while a Chilean desert region
got 14 years worth of rain in just 24 hours back in March, triggering flash flooding.
Meanwhile in the United States, snowfall in Boston broke all-time records. I know. I was there. I had to dig my way out of the house and home to get
my way to Harvard.
Well, on the opposite side of the country, drought is still ravaging California. And as for the land down under, extreme heat waves earlier
this year are likely to make the bush fire season that much worse.
And finally here in London, last month saw the hottest July day on record. And according to the U.S. National Oceanic and Atmospheric Administration,
not just London. July 2015 was Planet Earth's hottest month on record.
All this, of course, leads to the obvious question, to what extent is climate change brought about by human activity, responsible for these and
other extreme weather events?
And can world leaders agree on effective planet saving strategies when they gather this year in Paris for what the aficionados like to call COP 21,
shorthand for the 21st Conference of the International Framework Convention on Climate Change.
Joining me here on set is Professor Lord Stern. He led a British government review on the economics of climate change and is now chairman of
the Grantham Research Institute on Climate Change and the Environment at the LSE.
Welcome to the program, Lord Stern.
PROFESSOR LORD NICHOLAS STERN, CLIMATE CHANGE EXPERT: Hello, Kevin.
RUDD: Tell me, in the five years or so that we've had since Copenhagen, what's the science now telling us now that it wasn't able to tell us back
STERN: It was clear five or six years ago, just before Copenhagen, the Intergovernmental Panel on Climate Change is where the scientists of the
world get together. We're very clear that the world was warming and the action of humans in emitting greenhouse gases, particularly CO2, were the
It was very clear then. It just gets stronger and more unequivocal. There was a report last year -- they do it every five or six years from the same
Intergovernmental Panel on Climate Change. It's clear that it's happening. It's clear that we, humans, are the cause. And it's clear that if we let
it go beyond 2 degrees Centigrade, we're moving into pretty dangerous territory, because you get tipping points. It can start to run away. You
get the thawing of the permafrost and the release of methane. It could run away.
And we're really, at the moment, it seems, on a path -- and that was part of their work, the Intergovernmental Panel on Climate Change -- which is
heading for 3.5 or 4 degrees Centigrade in the next 100 years or so.
RUDD: You at the Grantham Institute recently put out a report on, given current policy by governments around the world, what is likely to be the
temperature outcome for the century ahead.
Where does that now stand?
Have you revised your figures?
How bad is it looking?
How good is it looking?
STERN: We've been looking at the promises that different countries have been making as to where they're likely to be in 2030. We're probably
coming in it at greenhouse gas emissions of around 55 billion tons of CO2 equivalent a year in 2030, if you look what people are promising, maybe a
Now that's a lot less than it would otherwise have been in so-called business as usual. That's really worth having.
But it's a lot more than what we need to be if we were going to hold to 2 degrees.
And let's remember that if we are headed for 3.5 or 4 degrees, perhaps we can shave that down a bit on this kind of path, but that is very dangerous
We haven't been at 3 degrees Centigrade average global surface temperature about to the end of the 19th century. We haven't been there for around
three million years. We haven't been above four...
RUDD: Did you say three million years?
STERN: I said three million.
RUDD: That's quite a ways back.
STERN: We have been here as Homo sapiens for 250,000. And really, our civilizations are in the last 8,000, 9,000 years, since the world warmed
up, after the end of the Ice Age.
That kind of temperature increase is pretty similar to the temperature increase that we have seen since the last Ice Age. And we know -- can see
just how radical a change that could involve. -- extreme weather events, desertification. Probably most of Southern Europe would look like the
Sahara Desert. Most of the snows off the Rockies, California's source of water, Bangladesh underwater, the poorest areas hit strongest and earliest.
These kinds of temperature increases are just enormous and would rewrite where we could live, where the rivers are, where the seashores are, what
the weather is like. The reasons we live where we are would be rewritten. Hundreds of millions would have to move. And you couldn't there would be
conflict and you couldn't turn off the reason, because it takes an awfully long time for the climate to change.
In what, 100 years, is very fast in human history. But once that started, it's very difficult to turn back.
Those are the kinds of risks we're playing for. The science is crystal clear. It's 200 years old. It's simple physics. It's telling us that
these are the risks which we face.
RUDD: Lord Stern, thank you for joining us on the program here at CNN.
STERN: A pleasure, Kevin.
Thank you for having me.
RUDD: Well, that's what the science is telling us on climate change, indicating also the dimensions of the responsibilities that governments
face at this December's conference of the parties to the U.N. Framework Convention on Climate Change in Paris.
Christiana Figueres, the executive secretary of the conference these last five years, has the unenviable responsibility, together with the host
country, France, of convincing governments around the world to put the planet first.
Christiana Figueres joins me now from Bonn in Germany.
Welcome to the program.
CHRISTIANA FIGUERES, EXECUTIVE SECRETARY, UNFCCC: Thank you, Kevin.
RUDD: Christiana, the international community looks at the climate change debate, and many people just get bamboozled, not so much by the science
these days, which becomes clearer and clearer, but by the alphabet soup that is the actual negotiations themselves.
That is, what's it all about?
So is there some way in which you can sort of cut to the chase and try and give people insight in terms of what this means in terms of future global
governance of climate change?
How is it going to work?
How would you describe it?
FIGUERES: Yes, I think there's certain core elements that are already very, very evident, even though the final text hasn't been agreed to.
The first one is certainly that this structure that is being put together is going to be applicable to all countries. Previously, it was only
applicable to industrialized countries. So that is a huge difference.
Secondly, this is going to be covering both the reduction of emissions as well as the increase in resilience to the negative impacts of climate
change, known as mitigation and adaptation, the two pillars that are now being included. Previously, we were actually looking only at emission
Thirdly, this is really being understood as not being a one shot deal, but actually as being a progressive effort where, over a certain period of
decades -- how many still remains to be seen -- we will be expecting countries to see what they put on the table now as the floor, but certainly
not as the ceiling. So we will be seeing countries progressively increase their efforts and their ambitions.
Also, there will be an element there of financial support for developing countries, because they are the least responsible and the hardest hit. And
they will be getting some support to actually make the transformation from where they are now to clean technology and clean development.
RUDD: When you go the question of what is called independent national declarations of climate change action by one country or another, of the 195
participating states, you're going to have a challenge whereby if a mass produces a result, as Lord Nicholas Stern indicated before, which it falls
short of the total amount of action necessary to keep temperature increases within 2 degrees Centigrade, what then flows in terms of the next set of
FIGUERES: Well, let's -- let's look at the -- at the numbers.
We actually have 57 of these national climate plans covering almost 70 percent of global emissions. So already, although it's not 100 percent of
emissions and certainly not 100 percent of countries, but we do have a very good sense of what is coming.
So we can project out of that, and let me give here very, very estimated numbers, because the numbers are still being crunched.
There will be -- and we have to be very, very clear and very frank about this -- there will be a gap between what these national climate change
plans are going to be putting on the table, in particular with respect to emission reductions, to where we should be, according to science, to be on
the 2 degree pathway.
The gap that exists between where we're going -- where we are right now and where we should be is about 15 to 20 gigatons of greenhouse gas emissions,
more or less, between 15 to 20.
We know that the climate change plans that we will see will probably only get us approximately 5 gigatons. So there is still going to be a 10 plus
gigaton gap that needs to be filled. That will not be filled in Paris. That will also not be in December. It will not be filled in January. But
that is why this Paris agreement is not being constructed as a one-off deal. It is being constructed, actually, as a progressive effort over a
certain period of timeframes, during which countries need, and will be able to, because of increased technology and further capital flows, they will be
able to increase their contribution to the solution.
RUDD: Christiana Figueres, thanks for joining us on the program.
And from me, good luck, God speed, on the road to Paris and beyond.
FIGUERES: Thanks very much.
Thank you for having me, Kevin.
RUDD: Coming up after the break, how big is the impact of sport on all our national psyches?
In the case of my country, Australia, the answer is bucket loads. And most recently, mainly bad. Australia's cricketers have been in a spot of Bubba
against England this summer. But an Aussie, Jason Dade,
Did manage to win this year's U.S. PGA and hope really does spring eternal. Australians do have a chance to redeem themselves on British soil, as
England gets ready to host the Rugby World Cup.
And as for my own humble, objective and utterly dispassionate prediction, well, more on that next.
RUDD: In this age of globalization, when we are all supposed to be able to suppress our baser national passions, the uncomfortable truth is as soon as
our national sporting teams set foot on the playing field, we still manage to become a bunch of Medieval primitives.
Look at the reaction to our national teams in the Olympics. Look at the U.S. hype over the victory of the women's soccer team there most recently.
Then there is Canada, which goes absolutely nuts when it's ice hockey team beats the United States. It's a bit like reliving the War of 1812.
Then, there's New Zealand, where I'm convinced every child is physically born with a rugby ball under one arm, because they really are that good.
Then there's Australia, where England just edged us out of the ashes this year. To the uninitiated, that's a cricketing trophy. Well, OK, we were
semi-thumped. Well, OK, thumped good and proper, so much so, Australia has now just entered a period of one month's official national mourning.
But it all gets a bit rough when you traipse your way through London airport this morning, as I did, on your way to do this show, and a customs
official noticing the kangaroo on my passport just couldn't help himself.
He says to me, what do you call an Australian who's good with a bat?
Respectfully, I replied, I have no idea.
He then says to me, a vet, of course.
There's only so much a former Australian prime minister can take. But hope doth spring eternal. This year's Rugby World Cup, here's my dispassionate
England will be annihilated. France, South Africa, Australia and New Zealand into the semi-finals. Australia into the grand final versus either
Leblut (ph) or the All Blacks. And Australia to win.
But of course, as sophisticated global citizens, we don't really care, much.
You heard it first here on CNN.
That's it for the program tonight.
Remember, you can watch this show, as well as all the guest hosted shows from this week, online at amanpour.com.
I'm Kevin Rudd.
Thank you for watching and good-bye from London.