China-US Détente and Australia's National Interests

Address to the Australia-China Economic Trade and Investment Expo (ACETIE) 2024 Main Forum, Melbourne, 19 September 2024

It is obvious that Australia-China trade and investment, hugely beneficial as it is to both our countries, and which this annual Expo event does so much to promote, can only flourish in an environment of reasonably tension-free geopolitical stability. It remains extraordinary to me how many in high political places in Australia – and those in the bureaucracy who advise them, and in the media and think-tanks who seek to influence them – seem indifferent to that reality.

Too many of these players seem to think that there is something to be gained, and nothing to be lost, by creating an environment of exaggerated fears and threats, talking the language of strategic competition and confrontation rather than cooperation, and while not (in most cases) actively promoting outright war, are all too willing to accept it as the price that might have to be paid to achieve the kind of order they favour.

I don’t wish to suggest that there are no grounds whatever for concern about China’s international behaviour, and I will spell some of them out in a moment. But they should not be wildly exaggerated, and should be tempered by a willingness to understand some of the explanations for why China acts as it does, and also a willingness to acknowledge the extent to which US attitudes and behaviour have been contributing factors.

From the US – and from those in Australia who think of its interests as being indistinguishable from our own – what needed is above all is a willingness to step back from demanding recognition of America’s continued primacy both regionally and globally, with Washington now seeing just about every arena as a zero-sum struggle for dominance. It should be recognized that much of China’s dramatic military build-up, and far more assertive international behaviour in recent times – while some of it certainly justifies push-back – is no more than can and should be expected of a rapidly economically rising, hugely trade-dependent regional superpower, wanting to claim its own strategic space, and to generally reassert some of its historical greatness after more than a century of wounded national pride.

From China, some restraint is also unquestionably required. It has stepped back in recent times from the most strident manifestations of its wolf warrior diplomacy, hostage diplomacy and aggressive trade restrictions, obviously having found a lot of this unproductive or counterproductive, and it has significantly re-engaged with the Biden Administration. But Xi Jinping’s rhetoric – the uncompromisingly Marxist-Leninist and nationalist foundations of which have been particularly well documented by Kevin Rudd in his capacity as a lifelong China scholar – continues to jangle nerves.

Legitimate concerns about not just China’s rhetoric but its behaviour extend to its international law-defying territorial ambition in, and militarization of, the South China Sea; its repeatedly stated determination to unify Taiwan with the mainland, not excluding the use of force, in a context where its repressive actions in Hong Kong have made reunification on a "one country, two systems" basis a nonstarter; its continued assertiveness on other territorial fronts with Japan and India; its efforts to increase its presence and influence in smaller but strategically significant regional players, including the Solomon Islands, Papua New Guinea and Timor Leste; and its transition from a bystander to regular spoiler role in the United Nations Security Council and other multilateral contexts. Above all, there is anxiety – compounded by Beijing’s manifest determination to challenge the nature and extent of the US security presence in the region – about the very significant expansion and modernization of its military, including nuclear, capability.

None of this in itself poses any direct threat to Australia. Not only has there never been any suggestion of China having designs on our territory, but physical invasion has always been wildly implausible logistically and will remain so. The ‘Red Alert’ Age & SMH front-pages of March last year, with their portrayal of Chinese fighter planes headed towards us, was irresponsible scaremongering of the worst and most irresponsible kind – and, quite apart from anything else, once again acutely discomforting for the more than a million Chinese-Australians who constitute a huge national asset for us in our dealings with the region.

What does pose a risk to us is a major war erupting between the US and China, which is certainly not inconceivable over Taiwan, and Australia joining in on the US side, under pressure from Washington and out of a misplaced sense of optimism that by doing so we will be buying lifetime insurance protection from our great and powerful ally. Quite apart from the prospect of massive strikes on the increasing number of major US military installations on Australian soil, the economic impact of severing overnight all links with our major trading partner would obviously be catastrophic. It is desperately important, not just for us but for the region and the whole world, that such a meltdown be avoided.

What is needed more than ever now is for China and the US to step back from the brink, and embrace and sustain over time the spirit of détente which, which dramatically thawed relations between the US and Soviet Union. This would involve both sides living cooperatively together, both regionally and globally, respecting each other as equals and neither claiming to be the undisputed top dog. Such an accommodation is not the stuff of fantasy. The détente negotiated by Richard Nixon and Leonid Brezhnev lasted through the 1970s. It delivered major arms control treaties and the Helsinki Accords. This was renewed by Ronald Reagan and Mikhail Gorbachev in the 1980s. It’s the approach to superpower coexistence always championed by the late Henry Kissinger, in what remains the most admirable and untarnished part of his legacy, and which he was clearly pursuing in his well-publicized last visit to China in July last year.

Australia is not condemned to being a bit-player in this enterprise. We are at most, like nearly all our regional neighbours, a middle power, but one that has enjoyed in the past a reputation as an energetic, creative and effective diplomatic actor, offering constructive solutions to the resolution of complex international problems. Our voice in this respect will be best heard, as it has been in the past, if we maintain a fierce sovereign independence in our decision-making, not allowing either our alliance relationship with the United States or our enormous economic dependence on China to cloud our judgement about what is in our own and everyone else’s best interests. To be seen as either side’s patsy is to condemn us to diplomatic impotence and irrelevance.

Some of the messaging from the Albanese Labor Government, is consistent with this approach, particularly from Foreign Minister Penny Wong, with her statements that we should ‘not waste energy with shock or outrage’ at China using its great and growing strength and international influence to advance its national interests, but rather ‘cooperate where we can, disagree where we must, [and] manage our differences wisely’. And in being very explicit that Australia’s national interest lay, above all, in our living in a multipolar region, one ‘where no country dominates, and no country is dominated … and all countries benefit from strategic equilibrium’.

But there is also a lot of messaging, emanating from the Defence and Intelligence side of the government, that conveys a quite different picture, above all our wholehearted embrace of the wildly expensive and sovereignty-challenging AUKUS submarine project and dramatically increased US military presence in Northern Australia as a ‘central basis of operations’ in the region -- which have made it increasingly hard to resist the impression that we have, all the balancing rhetoric notwithstanding, already unequivocally picked the American side.

The stakes for Australia in all of this could hardly be higher – as they are for others in the region who really are trying to navigate a course between the US and China, and whose real national interests lie in not taking unequivocal and irreversible sides, but maintaining close and mutually beneficial relations with both the neighbourhood giants.

It’s an issue also, of course, where the stakes could hardly be higher for all those in our business and professional community engaged in trade and investment with China. But one on which the voice of this community has been muted. You do have influence, and may I respectfully suggest that it’s more than time for you to seriously try exercising it.