New world order: is China all consuming?

"Navigating the decade ahead will be hard, because as China’s power grows, our region is changing in ways without precedent in Australia’s modern history.”  – Australia’s 2017 Foreign Policy White Paper

Managing relations with a rising China is not simply the most-significant challenge facing Australian policymakers, it is increasingly complex and all consuming.

Current tensions between Canberra and Beijing over foreign political interference laws and China’s assertiveness in the South China Sea are an inevitable consequence of China’s rise.

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Talk of a ‘crisis’ in the relationship is overblown but there are challenges - and there is no point pretending otherwise in what is becoming an extraordinarily broad-based relationship.

Hardly a day goes by without reference in the Australian media to challenges involved in managing relations with China across a vast public policy landscape, from trade and investment, to security, including cyber-interference, to increasing tourist and student exchanges.

While Australia may not be quite as prominent in the Chinese media, regional affairs certainly are.

The two countries find themselves more and more entwined, as was addressed recently by Reserve Bank of Australia Governor Philip Lowe in a speech to the Australia-China Relations Institute.

Whether Canberra likes it or not getting China policy right will be, for the foreseeable future, the one foreign policy issue which will colour all others, including Australia’s relationship with the United States.

In fact, Australian foreign policy these days finds itself uncomfortably suspended between its security partnership with Washington and the imperatives of its economic relationship with China.


This is a awkward juxtaposition in circumstances in which relations between Washington and Beijing are unsettled over a range of issues, including trade, defence  and politics.

Coming to terms with these complexities in a way which enables Canberra to chart a relatively stable course in its China policy is central to requirements for Australia’s overall foreign policy. This cannot be emphasised strongly enough and may seem self-evident but current uncertainties in managing the relationship attest to the difficulties involved.

Perhaps I could mention I spent 10 years as correspondent in China, first with Fairfax Media and then with The Financial Times. Those assignments coincided with the beginning of China’s reforms in the late 1970s and later during the 1990s when it accelerated those reforms.

What I learned from the experience is one never should underestimate China’s ability to achieve targets it sets for itself nor how single-minded it is in seeking to achieve those targets.

That latter impulse prompts Beijing to behave in ways which will cause frictions as it seeks to advance its economic and security interests, including asserting itself in what it regards as its own sphere of influence.

Inevitably, these impulses confront an established order in which the US has assumed a dominant security position in the Pacific since the end of World War II and Japan’s defeat in that conflict.

Australia has been a beneficiary of this relative stability but it now must come to terms with disruption on a grand scale caused by the emergence of a rising power whose rapid economic development – far beyond what might have been anticipated - is re-shaping the region.

As the Foreign Policy White Paper put it “powerful drivers are converging in a way which is reshaping the international order and challenging Australia’s interests”.

“The United States has been the dominant power in our region throughout Australia’s post-second world war history,” it said. “China is challenging America’s position.”

All this might seem self-evident but it is always surprising how each new wrinkle in China’s not-so-long march to regional dominance appears to take its neighbours by surprise.


The unpredictability of a the Trump administration in the US further complicates what is proving to be a rocky transition in any case, one in which the Asia-Pacific is now a contestable space and will become more so.

Commendably, the Foreign Policy White Paper acknowledged frictions in both the US and China about how to manage relations with each other would complicate Australia’s choices.

“In the decades ahead we expect further contestation over ideas and influence, directly affecting Australia,” it said. “It is imperative that Australia prepare for the long term.”

This is sound advice with its emphasis on the need to “prepare for the long-term’’. Australia’s China relations are part of a long game and need to be viewed in that light and separated from the ebb and flow of day-to-day domestic politics.

In dealing with China, Australian policy-makers should strive for consistency in articulating concerns. China may not like forthrightness in defence of Australia’s legitimate interests in maintaining its own sovereignty and its own security but it respects firmness.

None of this means Canberra should not address concerns about China’s continued expansion in the South China Sea to advance its territorial claims; nor should the government come down lightly on foreign attempts to influence the political process.

Surveying a relationship under stress, China watchers in the academic community say there is no point shying away from the seriousness of present differences - but nor is it necessary to exaggerate tensions.


Peter Drysdale, Emeritus Professor of Economics at the Australian National University and author of a study of the Australian-Chinese economic relationship tells bluenotes Australia’s most senior politicians need to regain “control of the China agenda’’ to avoid misunderstandings and introduce some consistency into government messaging.

Drysdale sees a “structural problem’’ embedded in the Australia-China relationship due to “accelerated complications’’ in US-China relations. He has a point.

No-one pretends China’s impulses are necessarily benign - the question is how to manage Chinese attempts to spread its influence in a way which avoids unnecessary rancor.

Former Australian ambassador, now Beijing-based business consultant, Geoff Raby’s call for the Australian foreign minister’s sacking over alleged mismanagement of the China relationship fueled debate about what is going right and what is going wrong.

But former Australian officials also need to be careful about becoming or being perceived to be agents of vested interests. In Drysdale’s view the greatest risk for Australia is an erratic Trump administration undermining a rules-based international order critical to Australian security.

Canberra’s diplomatic efforts over many years have been aimed at drawing Beijing into a rules-based system and thus promoting certainty in China’s behavior as a ‘’responsible stake-holder’’.

However, what also needs to be understood is relations between Canberra and Beijing have had their ups and down over the years. These blips have come and gone.

The question is whether these latest tensions are more serious and lasting than others such as the chill which occurred after the widely-condemned 1989 Tiananmen Square massacre.

Or frictions which accompanied Australia’s support in 1996 for the dispatch of US naval forces into the Taiwan Straits after Chinese missile tests during the Taiwan election. Or then Prime Minister John Howard’s meeting with the Dalai Lama in Sydney in 2007. Or problems caused by the arrest of Australian businessmen in China.

These episodes buffeted the relationship but did not lead to estrangement. Nor are these latest tensions likely to cause lasting interruptions to a partnership which yielded two-way trade of $A174.7 billion or 23.8 per cent of total trade in 2016-2017.

That is, provided a bit of commonsense is applied to managing a relationship which will become more complex, and all consuming.


Much media attention is given to stridently anti-Australia commentaries in The Global Times newspaper, a subsidiary of The People’s Daily, the Communist Party house organ.

These broadsides should be seen for what they are: approximating a Chinese funeral in which there is a lot of banging of drums and clashing of cymbals.

More attention should be given to diplomatic interactions such as the recent meeting in Buenos Aires between Julie Bishop and Chinese counterpart Wang Yi. Bishop characterised the encounter as ‘’warm and constructive’’. Wang said “difficulties’’ remained.

What is needed is to aim for some sort of reset which would move the two countries past a difficult stage caused by a combination of misunderstanding and loose talk.

Australian officials also need to bear in mind in a region in flux Australia’s Asian neighbors are accommodating themselves to new realities – something explored from a different perspective in bluenotesrecent session with eminent Singaporean George Yeo. Old certainties such as the impregnability of a US security umbrella are past history.

Australia is operating in a much-changed environment. Stakes are high.

Tony Walker is a vice chancellor’s fellow at La Trobe University and a former China correspondent for the Financial Times

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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