What the Government should do in regard to China policy following the 2013 Federal Election
30 July 2013 at 22:44
Some Australian commentators claim that Australia is at a cross roads, and that it is unprecedented that its largest trading partner is not its closest ally.[1] In fact, its major ally and largest trading partner are engaged in a Cold War power struggle. They go on to say that solving this ‘unprecedented’ situation is Australia’s greatest foreign policy conundrum for at least the next decade.[2] However, Australia’s situation is not unique, neither in the region nor in its own history. By considering the recent positions of the major political parties this essay will examine Australian and Chinese foreign policy in relation to the importance of the Australian-Chinese relationship and whether we need to choose between China and America. Lastly, I shall recommend strategies for the Australian government to implement regarding its China policy. The overarching foreign policy aim for both the ALP and Coalition is serving Australia’s national interest, which can be broadly broken down into four main goals: maintaining the territorial integrity of Australia, including the safety and security of its society and economy; ensuring regional stability and preserving the existing regional balance of power; the sea lanes that make up the arteries of international trade remain open; and responding to new security threats.[3] Included in the last goal are terrorism, international crime, unregulated population movement, and quarantine. The ALP’s foreign policy has a history of multilateral engagement as its tool to meet its aims, from Garth Evans under Hawke-Keating, to Rudd, Australia has stressed the importance of going through multilateral organizations, such as the G20, or APEC when engaging in dialogue with a great power. This is because it believes the influence of middle powers such as Australia is magnified in a multilateral setting, and helps constrain the ambitions of greater powers. The ALP has, since Hawke-Keating, sought to emphasize Australia as an Asia-Pacific nation, rather than just a western one. With Kevin Rudd replacing Julia Gillard as the leader of the ALP in late June 2013, it is easier to predict what Australia’s policy towards China will be if the ALP wins the election, as they will probably be similar to the policies Rudd pursued when he was Prime Minister between 2007 and 2010 and then Foreign Minister between 2010 and 2012. During this period, he was the most influential person in Parliament regarding foreign affairs[4], and with a diplomatic and academic background on China, Rudd has a deep understanding of Chinese culture. In his first term, he characterised Australia’s relationship with China as ‘Zhengyou’ (a true friend who can criticise). Rudd said that as a Zhengyou "The best way to prosecute our relationship with China is to be broad-based about it and not to pretend problems do not exist when they do… At the same time, [we should] not regard those problems as impeding the development of the rest of the relationship."[5] The Rudd Government used its Zhengyou status (real or imaginary) to raise several issues with China, something its predecessor never did. He mentioned human rights abuses in the 2008 speech in Beijing; in 2009, Chinalco was blocked from buying Rio Tinto; the Defence White Paper named China as a threat and Rebiya Kadeer, the exiled Uyghur leader was allowed to attend the 2009 Melbourne International Film Festival. Each event displeased the Chinese, yet despite this, trade between the two nations continued to grow, fuelled mainly by Chinese need for raw commodities. The Coalition takes a pragmatic view to foreign policy, having a history of separating politics with trade. Australia was trading with the PRC under Menzies, at a time before it granted diplomatic recognition, and even while Australian troops fought and died in Vietnam - which was justified as an attempt to stop Chinese aggression - Australia was selling wheat, wool and steel to the PRC[6]. Under Howard, the Australian Wheat Board was embroiled in scandal for bribing officials of Saddam Hussein’s regime. The Howard Government made a conscious effort to shift Australian foreign policy away from the multilateralism of the Hawke-Keating government and ‘compartmentalise’ Australia’s relations with individual nations. Coalition governments also have a history of publicly appealing to ‘Australian values’, i.e., western values we have adopted from the English and share with the Americans. The flipside of this is that this often exacerbates xenophobic and racist undertones in Australian society against other cultures. Tony Abbott has a history of being an anglophile, stating on several occasions that Australia is firmly part of the Anglosphere, most notably in his autobiographical book Battlelines.[7] When making a speech at the Heritage Foundation in Washington DC he said “few Australians would regard America as a foreign country”[8] Tony Abbott has already hinted at what the Coalition’s China policy will be. In the same speech he mentions “Australia’s foreign policy should be driven as much by our values as our interests.”[9] Abbott has also stated he will tighten foreign investment laws, stating that no Chinese State-owned Enterprise would be allowed to invest in Australia under an Abbott government, appealing to Australian, western values.[10] However, if his party does win government, Abbott will be just as pragmatic as his predecessors when it comes to trade, maintaining the rhetoric for his domestic audience. What are China’s foreign policy aims? China’s over riding aim is stability and legitimacy of Communist Party rule. Due to the lack of democracy, the Party does not rule by direct mandate of the people, but as a continuation of the ancient ‘mandate of heaven’, enjoys by Chinese Emperors. The main key to keeping this mandate is through providing economic prosperity for the people.[11] This has, in turn provided for the economic prosperity of almost every other country in the world, including Australia. To put China’s importance to Australia’s economic health into perspective in 2005 “…a ship load of iron ore was worth about the same as about 2,200 flat screen television sets. Today (2010) it is worth about 22,000 flat-screen TV sets – partly due to TV prices falling but more due to the price of iron ore rising by a factor of six”[12] Almost 30% of Australia’s exports go to China.[13] The other method utilised in creating stability is the promotion of Chinese nationalism. China is in the unique position of having (in one form or another) existed for 5,000 years. For most of this time China has seen itself as the ‘Middle Kingdom’, the centre of gravity for the whole world and its people as innately superior. Other entities around its periphery acknowledged this by paying tribute. This belief was destroyed with the ‘Century of Humiliation’, in which China was subjugated to foreign powers, which, according to the Party, only ended with the Communist victory in the civil war in 1949. The Party has set about recreating the previous mentality as the basis of China’s social cohesion. Like other forms of nationalism, modern Chinese nationalism has lead to xenophobic undertones, and belief that China needs to be more aggressive and influential in foreign affairs, as its power rises.[14] Xi Jinping was elected Secretary General[15] of the Chinese Communist Party in November 2012 for a ten year term. His political slogan ‘The Chinese Dream’ is, like all political slogans, more style than substance. However, it ties in with the Party’s goals, envisioning “…a mighty nation reclaiming its rightful place in the world, not just economically but politically and culturally too.”[16] He has taken a hawkish stance on most foreign policy issues, notably with Japan over the Diaoyu/Senkaku islets and with Vietnam, Malaysia, Brunei and the Philippines over the South China Sea. This hawkish stance is making every country in the region uneasy, and pushes them closer into the US camp. Xi predicts that China will become the chief military power in the region by 2049[17], a sign of how advanced the US military is compared to every other nation on earth. Like the Emperors of old, the Secretary General wields enormous power and influence on the direction of the country, however he does so within Party limits. Likewise, in Australia, the Prime Minister is the most powerful actor in the making of foreign policy, but is not the only actor. As stated earlier, Australia’s US/China ‘dilemma’ is not unique. “Australia is strikingly different from any country in Asia. But we are not uniquely different: no more different from China is Indonesia; no more different from Japan than is Malaysia; no more different from the Republic of Korea than is India.”[18] India, Singapore, South Korea and Taiwan are all part of China’s geographical periphery. All have the United States as their major security partner and the PRC as their major economic one and they manage to juggle the two. Indeed, the latter two states owe their existence to American military support against the Chinese. Australia has even traded with China in a time of war, though it is hard to see that happening again. As China becomes the regional hegemon, it is well within its realpolitikal rights to exercise both its hard and soft power[19] in influencing other states, including Australia. It will be up to the Australian Government on how to respond. Australia’s foreign policy towards China following the 2013 election should be a continuation of Australia’s foreign policy towards China in the 5 years preceding the 2013 election. To achieve its geopolitical objectives, Australia needs to persuade other nations in the Asia-Pacific to encourage China to participate in regional forums, by convincing the Chinese it is worthwhile to do so, as China is easily powerful enough to ignore multilateral organizations. Because other nations in the region are facing a similar conundrum regarding China, Australia’s middle power status will be enhanced if it presents a united front with these nations, when negotiating with China. At the same time Australia needs to continue its annual bilateral talks with China. The Howard Government made great use of its bilateral relations with China, which have been strengthened under Gillard-Rudd. These talks should be used to raise issues that affect the relationship by both sides in more confidential and relaxed settings, with more time dedicated to the meetings than are afforded in a multilateral setting. For those who claim Australia needs to choose between China and the US, Australia has made their intentions clear on whose side they are on, supporting the US ‘pivot’ to Asia, which includes, amongst other things the stationing of US Marines in Darwin, with 60% of America’s naval vessels deploying to the Asia-Pacific by 2020[20]and the continued American use of secret facilities on Australian soil. Australia needs to continue to support the US in geopolitics, as the US is not only culturally and historically similar to Australia, it is also best placed to help Australia meet its four main foreign policy goals.[21] One thing both sides of politics need to agree on is that Australia is on the wrong end of the mining boom, though exports are still strong[22], and will remain so for fifteen years[23]. It is predicted that China’s urban population will increase by 326 million people[24], a number greater than the entire population of the United States. This urbanisation will still require Australian commodities to meet energy needs and to construct “28,000km of commuter rail and erect 20,000-50,000 skyscrapers.”[25] Yet as a nation we must find ways to diversify our economy.[26] To do so, we need to attract Chinese investment in non-commodity sectors, as well develop industries and services to meet the wants of China’s growing middle class. The Asian Century will offer golden opportunities for the Australian economy. Australia’s tourism industry, for example, should refocus its energies and target the Chinese to visit Australia. Australia’s education sector, despite the dip in revenue in 2009-2010 due to publicised violence against Indians has enormous potential to attract students from wealthy Chinese families, and train Australians in demand skills. The manufacturing sector in Australia cannot compete with labour intensive, low priced goods from China and need to find niche markets, as Chinese technology is still playing catch up in several areas. The manufacturing sectors of China’s south east Asian neighbours have responded to this challenge by becoming “…manufacturers of component parts assembled in China”[27] Turning Northern Australia into ‘Asia’s food bowl’ has been mooted by the Coalition, and while unfeasible with current technology,[28] it displays that the parties are thinking of ideas to diversify. Australian states should increase their own relations with China. Though section 51 of the Constitution grants the Federal Government exclusivity in foreign relations, nothing is stopping the states from setting up permanent trade missions in key Chinese cities, and sending regular delegations to visit stakeholders. These relations would be purely economical, in line with the Coalition tactic of compartmentalising relations. What ever the eventual economic diversification plan is, it should be used as a blueprint in the near future regarding Australia’s economic relations with India and Indonesia, which are both on track to enter the top half dozen economies by 2050, thanks to their massive populations. The rise of China does present some challenges to Australian foreign policy. They are not unique, however; and with opportunities that will emerge in the Asian Century, Australia is well positioned to continue its economic prosperity. Each party in Australian politics has developed their own methods of participating in foreign affairs and that diversity brings strength of imagination. Australia has decided the alliance with the United States is its number one strategic priority. China needs Australia almost as much as Australia needs China, and it would be foolish for them to deliver some sort of ultimatum to the Australians to separate from the Americans - that would severely impact on the economy of both nations, and shatter the illusion of China’s ‘peaceful rise’. If the United States and China do for some unforseen reason go to war in the future, Australia, and every other country in the region, will have a lot more to worry about than flat screen TVs. FOOTNOTES

[1] See for example Hugh White, Power Shift: Australia’s Future between Washington and Beijing, Quarterly Essay, no39, 2010 [2] Ibid [3] Nick Bisley, Never having to chose: China’s rise and Australian Security in Australia and China at 40, 2012, University of New South Wales, Sydney, p67-68 [4] Julia Gillard was a self confessed novice at international relations, preferring and being more comfortable with the domestic responsibilities of the Prime Ministership [5] Kevin Rudd in Phillip Coorey’s How zhengyou Kevin is keeping everyone happy, 11April 2008, Sydney Morning Herald, http://www.smh.com.au/news/world/how-zhengyou-kevin-is-keeping-everyone-happy/2008/04/10/1207420587841.html [6] James Curran, The world changes: Australia’s China policy in the wake of empire in Australia and China at 40, 2012, University of New South Wales, Sydney, p28 [7] Peter Hartcher, On the road to China, no Damascus conversion, 15 May 2012, Sydney Morning Herald, http://www.smh.com.au/federal-politics/political-opinion/on-the-road-to-china-no-damascus-conversion-20120514-1ymw4.html#ixzz2Ye9GXp00 [8] Tony Abbott, Address to the Heritage Foundation, Washington D.C., 2012, http://www.tonyabbott.com.au/LatestNews/Speeches/tabid/88/ArticleType/ArticleView/ArticleID/8816/Default.aspx [9] Ibid [10] Tony Abbott, Address to AustCham Beijing, China, 2012, http://www.tonyabbott.com.au/News/tabid/94/articleType/ArticleView/articleId/8818/Address-to-AustCham-Beijing-China.aspx [11] Rowan Callick, Party Time: Who Runs China and How, Black Inc, Collingwood, p13 [12] Glenn Stevens, The Challenge of Prosperity, Address to the Committee for Economic Development of Australia (CEDA) Annual Dinner, 29 November 2010, http://www.rba.gov.au/speeches/2010/sp-gov-291110.html [13] Hannah Beech, How China Sees the World, Time Magazine, 17 June 2013, New York, p23 [14] Martin Jacques When China Rules the World, 2nd Edition, Penguin, London, p533 [15] For a description of the different titles and powers office bearers in Chinese politics have see Susan V. Lawrence and Michael F. Martin’s Understanding China’s Political System, Congressional Research Service Report for (US) Congress [16] Beech, How China Sees the World, p21 [17]Ibid p20 Ross Garnaut, Australia and the Northeast Asian Ascendancy: Report to the Prime Minister and the Minister for Foreign Affairs and Trade, 1990, Second Edition, Australian Government Publishing Service Canberra, p 319 [19] Hard power does not necessarily have to be direct military conflict, it includes posturing and participating in arms races, along with the recent phenomena of cyberwarfare. See Zachary Keck’s The Hard Side of Soft Power, The Diplomat, 24 July 2013, http://thediplomat.com/the-editor/2013/07/24/the-hard-side-of-soft-power/ [20] Beech, How China Sees the World, p22 [21]For an analysis of American importance to Australia’s foreign policy goals see George Friedman, Australia’s Strategy, Stratfor, 22 May, 2012, http://www.stratfor.com/weekly/australias-strategy [22] Kevin Rudd in Martin Parry’s Australia at cross roads as China boom ends, Fox News, 11 July 2013, http://www.foxnews.com/world/2013/07/11/australia-at-crossroads-as-china-boom-ends-pm/ [23] Wayne Swan in Australian (sic) ‘well placed’ for transition, Sky News, 17 July 2013, http://www.skynews.com.au/topstories/article.aspx?id=888757 [24] Jacques When China Rules the World, p539 [25] Ibid p541 [26] Chris Bowen in Bowen says China boom end a challenge, Sky News, 18 July 2013, http://www.skynews.com.au/topstories/article.aspx?id=888971 [27] Michael Wesley, Australia and the China boom in Australia and China at 40, 2012, University of New South Wales, Sydney, p200 [28]See Rob Law, The only way is up? The northern Australian food bowl fantasy, The Conversation, 18 March 2013, http://theconversation.com/the-only-way-is-up-the-northern-australian-food-bowl-fantasy-12573 and Bill Bellotti, Can Australia really feed Asia? The Conversation, 21 April 2013, http://theconversation.com/can-australia-really-feed-asia-13626