Speaking Of Asia

The great Aussie dilemma

Australia looks to the US for security and China for economic growth. But can Canberra depend on US leadership to check an aggressive China, which has 'different interests, values and political and legal systems'?

Long before many others cottoned on to it, the Australians recognised the importance of pairing foreign policy with economics; hence their foreign ministry is called Department of Foreign Affairs and Trade, or more simply, DFAT.

Now, after a gap of 14 years, DFAT has just released a Foreign Policy White Paper.

It is an interesting read. As a clear-eyed view of the geopolitics and geo-economics of the region we increasingly call "Indo-Pacific", this public document - there apparently is a classified version which uses more direct language - is a magnificent tour de force of what will surely be a most exciting part of the map for decades to come.

Few can question the assumptions on trade and economics that run through it. Without question, as the paper notes, within the next 15 years, four of the world's five biggest economies in purchasing power parity terms are likely to be in Asia: China, India, Japan and Indonesia.

China and India together make up more than 60 per cent of Asia's economic activity. Over the next 10 years, a billion more Asians will join the middle class, creating a consumer market larger in number and spending power than the rest of the world combined. Their choices will reshape global markets.

By 2030, the region will produce more than half of the world's economic output and consume more than half of the world's food and 40 per cent of its energy. By then, more than 600 million additional people will live in the region's cities.

All this plays to Australia's strengths. Mineral-rich, with vast gas reserves and a great farming base, service industries, world-class medical knowledge and some of the most scenic spots in the world for tourists, the continental nation Down Under, snuggling ever close to Asia, is poised to extend its quarter-century run of escaping an economic recession. Indeed, solid GDP growth is possible as it leverages its strength to meet the region's requirements.

So far, so good.

It is on the foreign policy front that I have some misgivings about the paper. Has it come a few years too late? Is it a bit wide-eyed, particularly in the blind faith the Aussies seem to place in the US? Are the solutions sought to check an aggressive China workable?

ST ILLUSTRATION : MANNY FRANCISCO

To be sure, foreign policy planning and formulation has to start somewhere. For Canberra, whose White Paper admits that "the risk of direct military threat to Australia is low", that starting point is pledging its troth firmly to America, even as it recognises there is greater debate and uncertainty in the United States about the costs and benefits of its leadership. It then "judges" that long-term interests will anchor American economic and security engagement in the Indo-Pacific.

"It is strongly in Australia's interests, therefore, to support US global leadership, including by maintaining the strength of our alliance, keeping our commitment to increase defence expenditure to 2 per cent of GDP and contributing to coalition operations in support of global and regional security," says the White Paper.

The other foreign policy planks the paper suggests are "strong and constructive" ties with China, a "balance in the Indo-Pacific" based on working closely with major democracies such as Japan, India, Indonesia and South Korea, and finally, to be a leading security, economic and development partner of South-east Asia.

If events of the past five years are a guide, some of those premises could be open to question.

It is fashionable to blame Mr Donald Trump for American "withdrawal" from global engagement. Yet, it cannot be forgotten that it was his so-cerebral predecessor as US president, Mr Barack Obama, who baulked at enforcing his own laid-down "red lines" in Syria. That key moment in history probably emboldened China to subsequently renege on its promise to him that it would not militarise the islands it had illegally built in the South China Sea, actions that went unpunished and possibly led the Philippines into its about-face on confronting China.

What is the guarantee then that Mr Trump's successors will not be substantially different? It is a question to be asked not just in Australia, but all corners of the world.

Likewise, the paper seems to carry more than a hint of nostalgia for the old policy of containment used against the Soviet Union, adapted to a contemporary context, China. Stirrings of this can be seen in the revival of the Quad, or Quadrilateral Security Dialogue, that groups Australia with the US, Japan and India. As I said in a previous column, the key to Quad's progress lies not so much in the capitals of these four nations, but in Beijing.

An aggressive and assertive China will lead the Quad to coalesce faster. Equally, though, China should be capable of splitting Quad, just as it has shown it can split Asean. For instance, would Indian ardour for Quad - already nebulous - be as fervent if Beijing offered it a fair and favourable package deal to settle their thorny and long festering border issue? And who can forget that when Quad was first mooted a decade ago, it was Australia, led by Mr Kevin Rudd at the time, that quickly pulled out of the group - then Foreign Minister Stephen Smith standing next to his Chinese counterpart as he made the announcement.

Without naming anybody, the paper notes that economic power is being used for strategic ends. That should lead Australians on to the overwhelming question: How would you behave then with a nation that buys a third of your trade, including three quarters of your iron ore exports? Or when it is your top nation for foreign student intake into your universities (160,000 last year against the 60,000 or so that were drawn from No. 2 nation, India)?

The way Australia resolves that dilemma - US for security, China for prosperity - should be one of the most fascinating studies in the years to come.

These caveats aside, it is clear that something is stirring in Australia when it comes to attitudes against perceived Chinese influence in its national affairs. A few days before he retired in May after a 48-year government career, including as intelligence chief, defence secretary Dennis Richardson revealed that espionage operations conducted by Chinese nationals living in Australia were extensive and had risen significantly.

This week, Prime Minister Malcolm Turnbull told Parliament that foreign intelligence services are involved in covert influence and interference on an "unprecedented" scale. He listed the political system, commercial interests and expatriate communities as areas targeted by these agencies as he proposed legislation that bans foreign political donations and will force lobbyists to reveal their overseas clients.

It is little surprise then that the White Paper notes that Australia and China have "different interests, values and political and legal systems" before going on to say that "friction" is inevitable.

To get a sense of the uphill task Mr Turnbull faces to staunch those breaches in his dam, look no farther than some predecessors of Foreign Minister Julie Bishop and Trade Minister Steven Ciobo, the two who signed off on the White Paper.

In June it was revealed that former trade minister Andrew Robb, who negotiated the Australia-China FTA and the now defunct Trans-Pacific Partnership agreement, picked up an A$880,000 a year confidential consultancy contract with a Chinese tycoon immediately upon leaving Parliament last year. Yesterday, it was revealed in court that no deliverables were laid down in the contract!

While there was no illegality - Mr Robb used to be a successful businessman before he entered politics - it shows, at the very least, the vast resources available with interests linked to China, this time a man who controls Darwin Port.

Likewise, Reuters revealed earlier this year that former foreign minister Bob Carr, who runs a university think-tank set up with Chinese money, wrote to his vice-chancellor complaining about a fellow academic and Beijing critic who spoke out against his department. Two weeks ago, just after the White Paper was released, Mr Carr said Australia was at risk of "incinerating" its relationship with China in a bid to impress an unpredictable America.

The Australian rubber, so to speak, hasn't yet hit the road. One indication of Canberra's determination to stay the course it has charted could come if its navy conducts freedom of navigation operations in the South China Sea, as demanded by some, including Mr Richardson. But there are as many voices that caution against the manoeuvre as back it.

Until it decides how much of its hard power it wants to project we will continue to see the softer side of Australia that is so admired around the world: a people known for their love of the outdoors, beaches and "barbies", a society that is generally tolerant of diversity and one that, during the terror attack on Sydney three years ago, reached out to its Muslim brethren to make them feel safe on public transport, thus making #illridewithyou one of the biggest trending hashtags on Twitter.

A version of this article appeared in the print edition of The Straits Times on December 08, 2017, with the headline 'The great Aussie dilemma'. Print Edition | Subscribe