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The Rise of an Assertive China: An Australian View

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Writer: Ian Hall
A very candid Australian viewpoint on the rise of China. The most recent Australian Defence White Paper reaffirmed the US alliance and Australia’s commitment to it and called for further, deeper cooperation between like-minded states in the region, including India. But there is no doubt that the emergence of a more assertive China in the aftermath of the Global Financial Crisis has resulted in the intensification of debate in Australia about how to manage relations with it and intense discussion of alternatives to the current policies of ‘congagement’ and hedging. Hugh White, in his book, The China Choice: Why America Should Share Power (Melbourne: Black Inc., 2012) argues that China’s growing military capabilities pose a significant challenge to what he calls American ‘primacy’ in the Asia-Pacific. That primacy, he asserts, rests upon the ‘hub-and-spokes’ alliance system the US created in the aftermath of the Second World War and which is looking like more of a liability than an advantage today and on America’s military might, especially its Pacific Fleet and the sizable forces it has on bases on Okinawa in Japan and in the Republic of Korea.


Australians – like most people in the region – are divided about the rise of China. At the extremes of opinion, there are, of course, fervent Sinophiles and Sinophobes, but neither have much clout. The Sinophiles are mostly on the ‘hard’ Left, but their enthusiasm for China is driven less by a commitment to Marxism or Maoism and more by a deep-seated anti-Americanism. This group welcomes the rise of China – even an assertive China – because they think it heralds the end of American ‘hegemony’ and post-Western world order. They are mostly found in universities, though they have some followers outside them, but their influence on the wider public and on government policy is marginal.

The Sinophobes, on the other hand, are a mixture of staunch anti-communists or staunch democrats and some who are simply prejudiced against China or the Chinese, for one reason or another. This group fears a rising China and wishes for stronger efforts to contain it or to promote its democratisation. There are, however, fewer of these in Australia than the extreme Sinophiles and they exercise even less influence.

The views of the majority of Australians – and the majority of Australian China watchers in government and outside it – sit somewhere between these two poles. Most Australians think the rise of China is an impressive development and that the lifting of hundreds of millions of Chinese out of poverty is a good thing for China and the world. They have some concerns about China’s government, however and about the side-effects of rapid growth, especially the impact on the environment. And they worry about the impact of China’s economic rise on their jobs and national wealth, whether in terms of the decline of Australian manufacturing caused in part by Chinese competition or in terms of an over-reliance on mining caused, again in part, by China’s demand for resources.

Most Australians hold these ambivalent views because Australia and China have few clashing interests and a number of common (mainly economic) ones. Unlike India, Japan or the states of South East Asia, Australia has no territorial dispute with China. Most Australians do not therefore perceive China as posing any kind of imminent or realistic threat. They know, of course, that China possesses both nuclear weapons and intercontinental ballistic missiles and they know that Australian cities could be targeted by Beijing if a conflict broke out with the United States. But they have faith in Australia’s long-standing alliance with the US and they believe that America would respond in kind to a Chinese nuclear attack America’s ‘extended nuclear deterrence’ gives confidence to Australia, as it does to Japan.

Australians also know that China’s conventional forces will not be capable of threatening their country for some time (if ever) and that, if Australia was called upon to fight elsewhere in Asia, perhaps in the Taiwan Straits or the South China Sea, they would likely have a choice whether to commit their forces. It is hard to imagine any other circumstances in which Australia’s conventional forces would clash with China’s anytime in the near future.

Lastly, Australians know that the rise of China is one of the principal reasons for their present prosperity. China’s thirst for Australian resources – especially iron ore – was one of the principal drivers of higher incomes and living standards prior to the Global Financial Crisis and continued Chinese demand has allowed Australia to ride out that crisis and its consequences without experiencing the deep recessions seen elsewhere in Western states.

Australians know that the rise of China is one of the principal reasons for their present prosperity. China’s thirst for Australian resources – especially iron ore – was one of the principal drivers of higher incomes and living standards prior to the Global Financial Crisis and continued Chinese demand has allowed Australia to ride out that crisis and its consequences without experiencing the deep recessions seem elsewhere in Western states

This knowledge of China’s importance for the wealth and well-being of ordinary Australians makes them feel both assured and, at the same time, a little vulnerable. Over the past decade, China has become Australia’s greatest trading partner. In the Australian financial year of 2011-12, Australia’s two-way trade with China amounted to some US$ 128 billion, significantly higher than two-way trade with the second- and third-placed partners, Japan and the United States, which came to US$ 76 billion and US$ 57 billion respectively. Australia’s trade with India is valued at only about one sixth of its trade with China. Australia is also unusual in that it maintains a considerable trade surplus with China – in 2011-12, that surplus was about US$ 38 billion.

Partly because Australia has done so well out of China’s rise, selling it the resources it has needed to fuel its economy, especially to build its infrastructure and urbanise its population, polls of ordinary Australians have consistently shown them better disposed to China than many others in the Indo-Pacific region. The Sydney-based Lowy Institute for International Policy, which regularly surveys Australian and regional opinion on foreign policy issues, found in 2012 that some 59 per cent of Australians have ‘warm’ feelings towards China. By contrast, a 2013 poll, also by the Lowy Institute, found that only 44 per cent of Indians felt such feelings towards China and other polls by the Chicago Council on Global Affairs,among others, have found that opinion elsewhere in the region is similarly lukewarm.

This is not to say, of course, that all Australians hold positive views about China. Many perceive that Australia has become overly-dependent both on the mining sector and on China as an export market. Others are concerned about Chinese investments in Australia, in mining but also in real estate and in agricultural land. And Australian politicians and analysts have repeatedly expressed alarm at actual and potential threats to the cyber-security of government and the private sector emanating from China.

 

Optimists and Fatalists

Against this background, Australian analysts’ views of the rise of China – and the emergence of a more assertive China since 2009 – fall into two broad categories: Optimistic and fatalistic. Very few, if any, analysts are out-and-out advocates of some kind of ‘containment’ of China or disengagement from China and few argue for outright ‘appeasement’. Instead, they divide into those that think that ‘congagement’ and ‘hedging’ are the best ways to persuade China to become a reliable and responsible international stakeholder and those who think that‘congagement’ and hedging are unrealistic and unnecessarily risky.

The optimists think that China’s rise poses fewer challenges, that today’s international order is sufficiently flexible to accommodate it and that the United States, in particular, will continue to play a major role in the security of the Asia-Pacific region for the foreseeable future. They argue that ‘congagement’ – a mix of mainly economic engagement and military deterrence – has worked so far, allowing China to get richer while its neighbours, especially Japan, Taiwan and South-East Asia are reassured by American security guarantees. They note China’s growing defence expenditure and its acquisition of missile, naval and cyber capabilities that could pose significant threats to other regional militaries and the US.

Reports of the pace of America’s relative decline have been exaggerated. It is also apparent that Australia needs to think beyond its traditional approach to its security, namely relying upon a single dominant power and think about more flexible and more regionally-focused partnerships with states in the Indo-Pacific, including Indonesia, India, Japan and South Korea

But the optimists also note that China has a long way to go to be a true peer competitor to America in economic or military terms and that China faces very significant challenges today and into the future, in governance, economic management and so on. Finally, they observe that China’s foreign policy is itself evolving and that it has been active in positive as well as problematic ways, for example in its commitment of resources to United Nations peacekeeping operations.

The fatalists also acknowledge that China’s rise is, on balance, a good thing, especially for those Chinese raised out of poverty in the past three decades. But they worry about the ability of the international order to accommodate China and the demands it may begin to make on other states in the region and on international institutions. In particular, they are deeply concerned about the ability of the US to continue to serve as the principal guarantor of regional security. They argue that Australia needs to break this news to Washington, which they believe is dangerously over-confident about its capacity to play the role it has played since 1945.

At present, the optimists outnumber the fatalists, despite the latter having some very eloquent and persuasive champions, among them my colleague at the Australian National University, Hugh White. His book, The China Choice: Why America Should Share Power (Melbourne: Black Inc., 2012), has done a great deal to focus the Australian debate on China’s rise and to clarify the terms of official, scholarly and public opinion on the issue.

White argues that China’s growing military capabilities pose a significant challenge to what he calls American ‘primacy’ in the Asia-Pacific. That primacy, he asserts, rests upon the ‘hub-and-spokes’ alliance system the US created in the aftermath of the Second World War and which is looking like more of a liability than an advantage today and on America’s military might, especially its Pacific Fleet and the sizable forces it has on bases on Okinawa in Japan and in the Republic of Korea. White points out that China has moved not to match the US like for like, but instead has focused its military modernisation programme on developing ‘asymmetric’ capabilities, acquiring anti-ship missiles with which to target carrier battle groups and anti-satellite weapons to attack command and control systems. These Chinese investments, he thinks, have shifted the balance of power in the Western Pacific in their favour, greatly increasing the potential costs of war for the American side and making it much harder for the US to play its traditional ‘pacifying’ role. Worse, White argues, the US can no longer rely on even its longest-standing allies to fight alongside it, if war broke out – he thinks that Japan, South Korea and even Australia would have second-thoughts about their alliances if a conflict with China loomed.

For these reasons, White thinks that Australia has a duty to go to Washington and explain that America needs, as he puts it, to ‘share power’ with China. What that would mean in practice is a little bit vague. White suggests something like a condominium, in which the US and China agree to act together as regional leaders and security-providers.

Most Australians think the rise of China is an impressive development and that the lifting of hundreds of millions of Chinese out of poverty is a good thing for China and the world. They have some concerns about China’s government, however and about the side-effects of rapid growth, especially the impact on the environment. And they worry about the impact of China’s economic rise on their jobs and national wealth, whether in terms of the decline of Australian manufacturing caused in part by Chinese competition or in terms of an over-reliance on mining caused, again in part, by China’s demand for resources

So far White’s argument has not had much influence on Australia’s strategic policy makers. The most recent Defence White Paper reaffirmed the US alliance and Australia’s commitment to it and called for further, deeper cooperation between like-minded states in the region, including India. But there is no doubt that the emergence of a more assertive China in the aftermath of the Global Financial Crisis has resulted in the intensification of debate in Australia about how to manage relations with it and intense discussion of alternatives to the current policies of ‘congagement’ and hedging.

This conversation is unlikely to stop anytime soon, but it will likely change over time because some of its underlying assumptions may well be wrong. The emergence of fatalism in Australian analyses of China’s rise is strongly connected to perceptions of American decline and to Australia’s tendency to think its international relations and its security are determined by its relations with dominant powers and little else. Both of these sets of beliefs are problematic. It is apparent that America is emerging from its economic crisis and that many of the underlying indicators suggest it will continue to grow. Of course, the political malaise in Washington will likely continue, but it looks as though reports of the pace of America’s relative decline have been exaggerated. It is also apparent that Australia needs to think beyond its traditional approach to its security, namely relying upon a single dominant power and think about more flexible and more regionally-focused partnerships with states in the Indo-Pacific, including Indonesia, India, Japan and South Korea.

The rise of an assertive China demands, indeed, not a choice between it and the US, but a more subtle approach to Australia’s relations with neighbours that it has sometimes neglected or even ignored as potential partners. It demands creativity which Australians often claim to have, but which its diplomacy sometimes failed to display and an acuity to the changing dynamics of the region.


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