China’s rise will dominate the Australian foreign policy and security agenda for the foreseeable future. While Australia has been blessed with a natural maritime border whose sea-lanes have been traditionally ruled by sympathetic and culturally aligned allies from the West, China’s revisionist path seeks to dominate the region, with increased naval power projection the cornerstone of the modernized PLA.[1] Australia’s engagement with China has changed dramatically too, from a crude view of the ‘yellow peril’ as an imminent threat through to a Sinophile Prime Minister in less than fifty years. But while economic entwinement with our largest trading partner continues to grow,[2] this route does not necessarily insure against the security implications of the future, with revisionist great powers historically ‘unsatisfied’, and the great conflicts of the twentieth century stemming from nationalism and strong cultural narratives, despite comprehensive interstate trade.[3] As such, strategic policy needs to be viewed through the lens of ‘imaginative pessimists’[4] that expect the worst, in order to prepare for the potential clashes of the future. For Australia, the implications of these clashes can best be tackled through a balanced combination of strategic ambiguity and wider program of cultural enmeshment in Asia.

In order to demonstrate the implications of China’s rise to Australia’s security and foreign policy, I divide this essay into three areas. The first is primarily descriptive, detailing Australia’s historical foreign and security relations with China.  The second part looks at the motivation behind China’s rise, and how heavy reliance on economic trade as a diplomatic and security mechanism is dangerous to Australia’s long-term interests given that China’s rise is driven by cultural values and ideas. Finally I analyse the implications for Australia, looking at current policies and providing prescription in the form of increased security independence combined with extensive cultural engagement to further embed our ‘Asian’ credentials.

Before the 1970s, China was viewed with trepidation, with crude cold-war paradigms dominating the Australian debate. Menzies, in particular, was vehemently anti-communist believing leftist insurgencies in Malaysia, Indonesia and Vietnam were Chinese aggression by proxy[5] and part of a larger ideological threat to Australia. A similarly primitive diplomatic and security framework evolved in response, with ‘forward defence’ viewed as the best way to fight the ‘yellow peril.’[6] In short, fighting offshore kept the battle away from our own immediate security environment.[7]In terms of military hardware, Australia invested in power projection capabilities in the form of aircraft carriers –  the HMAS Melbourne and Sydney – which provided Australia with an extensive expeditionary presence, as control of sea channels was viewed as the key security mechanism to contain the ‘southern thrust’ of communism.[8]

The Sino-Soviet split and increased intelligence in the region as a result of the Vietnam War eventually revealed the tenuous nature of claims regarding Chinese expansionism.[9] Consequently, the election of Whitlam in 1972 signalled a major change in Australian attitudes towards China, moving from the alarmism of the Menzies era towards a policy of engagement.[10] Whitlam importantly recognized the Chinese Communist Party (CCP) as the one legitimate government of China, forming the basis of bilateral relations that exist between the two countries today.[11] More importantly, as both Prime Minister and Foreign Minister he understood the role of dropping the overt realist perspective prevalent within US security circles, adapting an idealist foreign policy that valued shared ideas and institutions while understanding the important role of cultural sensitivities.[12] For example, while he loudly protested French nuclear testing in the Pacific, Chinese tests were met with only quiet rebukes.[13]

Malcolm Fraser emphasised realism as the broader doctrine, but kept much of Whitlam’s China policy, arguing that increasing economic relations with China was more effective than military containment of socialist countries.[14] Eventually though, it was Bob Hawke, who initiated the ‘push into Asia’, championing organisations such as APEC, and viewing wider cultural integration as essential to the long-term national interest. Paul Keating continued this process, in addition to pursuing a ‘middle power’ route, viewing Australia as a potential multilateral facilitator within Asia and pushing the idea of Australia as an ‘Asian Nation’ through ‘enmeshment.’[15] Additionally, these policies were reflected in the 1993 strategic review and 1994 defence white papers, which viewed shared interests and an Asia-Pacific Australian identity as critical to long-term strategic and security interests.[16]

John Howard’s outward rhetoric was somewhat nationalistic and Anglo-centric with defence and foreign policy highly responsive to US requests in parallel with increased economic trade with China, defined by many as a form of strategic hedging.[17] Perhaps the most underrated development of Howard’s tenure was Alexander Downer’s comments in 2004, that Australia would not automatically defend Taiwan, despite US threats of terminating ANZUS due to this by Richard Armitage in 1999.[18] Most recently, Kevin Rudd, a Mandarin speaker that specialised in Asian Studies, was expected to increase engagement with China, but instead has presided over a decline in Sino-Australia relations. A speech by Rudd in Beijing mentioned ‘significant human rights problems’[19] followed by a visit by dissident Uighur activist Rebiya Kadeer and an accompanying documentary about unrest in the Xinjiang province.[20] The arrest of Stern Hu in the wake of the failed Chinalco bid strained tensions further, with critics claiming it was a politically motivated action aimed at tempering Rudd’s brash approach to China’s internal issues.[21]

To neo-liberals, the potential security implications caused by clashes of strategic interests and cultural misunderstanding are best tackled by increased economic entwinement. Indeed, much of the post Whitlam era diplomacy has heavily relied on this perspective. Using this argument, China is Australia’s largest trading partner, which acts as a restraint against aggressive behaviour. Extending this, Australia and China have a mutually beneficial relationship, with the stopping power of water preventing traditional security issues introduced by land borders.[22] For Australia, China’s resource hunger will potentially underwrite much of Australia’s economy over the next 50 years,[23] providing Australia with security through stability. To China, Australia’s relatively small latent and military power represents no immediate threat, except when acting as a US proxy, and is a reliable exporter of the resources required for Chinese development. While China is diversifying resource needs by increasing foreign development aid and capital projects into areas such as Africa,[24] Australia is an attractive trading partner due to its stable supply capabilities. Consequently, no value exists for China to antagonise this relationship, with conflict ultimately costing more than the gains.

Unfortunately, interdependence has the potential to morph into dependence. China’s rapid development, which is expected to lift another six hundred million people out of poverty by 2050, will make resource procurement more critical and potentially politically volatile. For example, China’s domestic mining sector presently can only supply half of the forty-five strategic minerals essential to China’s growth, dropping to only six by 2020.[25] Not surprisingly, Chinese companies have been attracted to purchasing mining interests in Australia, with three notable bids recently for stakes in Fortescue, Rio Tinto and Oz minerals. But unlike many large corporate deals, the players from the Chinese side, such as Chinalco, are 100% state owned companies raising questions of their intent and independence from the CCP’s political goals. While Ross Garnaut discounts broader political interference in these companies, believing the worst outcome is influence over the price of resources[26], this larger resource dependence on Australia has the potential to create instability and misrepresentation should our ability to supply resources become constricted.[27] Seemingly minor issues of poor internal management or economic depression could potentially be misperceived as strategic moves aimed at China, which in turn could heighten diplomatic tensions. At an even more blunt level, Gartzke et al suggest that economic entwinement only prevents conflict when the costs of war exceed the costs of trade.[28] This may be problematic for Australia as the Chinese economy is predicted to have a GDP (PPP) of $38 trillion a year by 2050, while Australia’s will reach only $1.5 trillion.[29] Consequently, Australian security and foreign policy needs to explore the diversification of energy customers to hedge against this form of vulnerability. Overall, the momentum of the market and lure of profits has the potential to override the broader security concerns.

This pragmatic view needs to be accompanied by an overview of the Chinese national interest, which is fuelled by revisionism and a statist view of the nation as one organic identity, as opposed to the monolithic Westphalian system of Europe.[30] Chinese revisionism is in part based around the historical concept of ‘Nan Yang’ (literally Southern Ocean), which describes their hegemonic role in the pre-imperialistic East.[31]  Returning to this role requires ‘correction’ of past humiliation at the hands of the West, an idea that dominates the narrative behind the rise of China. Much of it revolves around the ‘unfair treaties’, signed under duress and for exploitative goals by the West, and ultimately declared void by Mao.[32] Despite its cynical use as a political tool to bond the population through common enemies,[33] it nonetheless has real power and weight within the wider Chinese population. It also helps explain why issues such as Taiwan, Tibet and even the Australian involvement in the Uighur issue are viewed so strongly, with meddling in Chinese internal affairs seen as part of continual attempts by the West to suppress Chinese national aspirations to reclaim their rightful place within the international system.

In hard power terms, China has invested heavily in a new military modernization program which projects towards the South and East, with emphasis on the South China Sea. While the PLA has traditionally been dependent on a large land based army, the new program relies heavily on offensive naval capabilities and defensive missile systems, with the territorial force shrinking by 500,000 over the past fifteen years, despite a doubling of military spending over the past five years.[34] From a strategic perspective, the establishment of a blue-water navy is most problematic to Australia whom has traditionally relied on US naval primacy within Southeast Asian sea channels. More problematic is the development of an anti-ship missile system,[35] which in theory has the capability to destroy a US Nimitz class aircraft carrier. If the Chinese technology is proven, this dramatically alters the traditional US deterrent in the area, questioning the long-term commitment of an expensive and overstretched US military. Should the US retreat it is likely the Chinese would fill the void within the sea channels of Southern Asia.

Australia’s recent security and foreign policy has indirectly addressed many of the issues described in this essay. In particular, Force 2030 was a surprisingly aggressive and forthright document that returned to balance of power logic to feed its conclusions. It relies on power projection, through a smaller and flexible amphibious assault fleet, next generation F35 attack planes, a doubling of the long-range submarine capability and a modernized network centric warfare capability.[36] At its core is ‘defence independence’ which removes Australian reliance on the US partnership for practical and diplomatic reasons and a return to the ‘defence of Australia’ or territorial protection, as paramount to the national interest. A policy of ‘calculated ambiguity’[37] reduces China’s perceived threat from Australia as a US proxy, while in practice still enjoying good US military relations. Ambiguity also gives Australia strategic and diplomatic flexibility, with both Beijing and Washington attempting to coerce Australia into firm positions on the long-term commitment to ANZUS – Washington courtesy of the ‘Armitage scenario’[38] and Beijing by offering economic carrots in exchange for the weakening of US defence ties.[39]

The implications of this changing geo-political environment will present many more ultimatums, and Australia would be served best by a document outlining neutrality on the Taiwan issue, while maintaining the principles of the ANZUS treaty. Within the Chinese narrative, the Taiwan issue is viewed as a legacy of colonial interference, with unification the final step to remove the historical injustices. Consequently, siding with China on all issues regarding Taiwan – a middle ranking trading partner with Australia, accounting for 2.8% of trade, mostly in resources such as iron ore[40] – would have huge strategic and symbolic benefits to the long-term Sino-Australian relationship. Should full-scale hostilities breakout in the South China Sea, Australia would not suffer great economic hardship, and assuming a forced reunification with mainland, much of the trade would be rerouted via a unified China. Such a policy allows Australia to remain neutral, while gaining political capital with the Chinese government by respecting and understanding the broader principle of China’s rise.

Furthermore, Australia policy makers should be advised to step back from the middle power role and avoid ‘punching above their weight.’ Such bold and assertive moves can be misrepresented within the Asian hemisphere and risk the questioning of Australian motives from the Chinese. Rather than viewing the national interest as contingent on globalisation and diplomatic posturing, Australia would be better served in the region by a reduction in middle power diplomacy, instead concentrating on reliable and diverse provision of mineral and technical resources. Ultimately, cultural misperception is our largest challenge, with loud and boisterous diplomacy encouraging the stereotype.

While the broader implications for Australian security and foreign policy are usually viewed through the traditional balance of power rubric, it is cultural enmeshment that will provide the largest advantages long-term. Australia’s biggest danger is misperception as a Western outpost, and must undertake a large-scale educational program that seeks cultural entwinement. Student exchanges of 100,000 students a year[41] are one of the most valuable existing mechanisms, while Asian studies and the teaching of Mandarin to promote bilingualism are also powerful methods to overcome the deeper distrust. Despite progress in these areas, there is no distinct policy to recognise the strategic and security value of cultural education. In 2009, the Griffith University Asia Institute released a report aimed at formulating a broader thirty year plan at a cost of $11 billion, which would develop a ‘human infrastructure’[42] capable of delivering the strategic advantages of cultural engagement and ‘Asian values’ education throughout the Australian education system. Such programs accompany hard power objectives, and ultimately are cost effective compared to their hardware equivalents as once implemented, they provide security in perpetuity. Essentially if Australia is to reinvent itself as an Asian nation, as envisaged originally by Hawke and Keating, it cannot be a transparent effort, which will be seen as condescending by the Chinese.

Alongside cultural entwinement and realignment of balancing alliances, the securitization of our mineral resources through distinct policy is critical. At present the Foreign Investment Review Board (FIRB) handles this important task, yet it is economically focused in nature with emphasis on market competition and to placate domestic concerns about job protection.[43] Furthermore, the vague definition of ‘contrary to the national interest’[44] presented in the FIRB charter must be made clearer. Clarity would help avoid accusations of racism that have been levelled at FIRB decisions,[45] which helps feed the perception of Australia as an ‘outsider’ to the Chinese. Longer-term, the functions of the FIRB need to be removed from the treasury and placed explicitly within the strategic framework, which has the dual purpose of providing transparency to China, while also removing the complexities of the current regime, which restricts more diverse foreign direct investment (FDI) competition in Australia.[46]

In conclusion, the key implication of the rise of China is how to manage the new regional order, one in which Australia has an advantage in resources, but is disadvantaged as a regional outsider. The cultural question will be the largest implication for Australia, with identity, not alliances the key barrier between true regional integration.  Questions remain about whether economics overrides culture[47] and Australia must engage culturally, while becoming more defence independent, via a policy of strategic ambiguity that maximises our relationship with both the US and China. Doing otherwise risks isolation in a region without natural allies, and one likely to be free of major US influence within the coming century.

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Further Reading on E-International Relations

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