Illustration: Simon Letch.
China’s supernationalist daily paper, the state-owned Global Times, ran a cartoon to commemorate Malcolm Turnbull’s visit to Beijing last week.
A kangaroo extends a paw for a friendly handshake with China, but, sweating, it looks anxiously over its shoulder as a dark shadow falls on the scene as Uncle Sam looms.
This plays into the idea that Australia has to make a choice between China and the US, that there is necessarily a trade-off, that we can’t have both.
It’s an idea that runs deep through Australian commentary, too. As rivalry between China and the US intensifies in the Pacific, must Australia choose between its biggest trading partner and its security ally?
The evidence to date is that Australia is not on the horns of a dilemma but balancing profitably between the two power poles.
Australia has the close attention of both the current superpower and the potential one. Both are courting Australia’s favour. This puts Canberra in a much stronger position than if it had the interest of only one.
Australia is intensifying its relationships with both countries at once; economically, politically, in people to people contact, even in the realm of defence. Indeed, it’s hard to imagine what more Australia could hope for.
Some Australians, practising the old pre-emptive kowtow to Beijing, have spent years routinely predicting dire consequences if the Australian government got “too close” to America or dare breathe a word of criticism of China.
Governments Labor and Liberal ignored this craven advice. Labor under Julia Gillard agreed that Australia would host a rotating deployment of US Marines.
The Liberals under Tony Abbott and Malcolm Turnbull have objected firmly and publicly every time China took action that destabilised the Asia-Pacific – when it abruptly declared an Air Defence Identification Zone, for instance, and when it built islands on atolls also claimed by other countries.
China’s reaction? Relations thrived, even as Australia’s relations with the US continued to go from strength to strength.
China has invested more money in Australia than any country in the world, other than America.
Last year, direct Chinese investment in Australia increased by 60 per cent to $15 billion, according to a report by KPMG and Sydney University. The US response? To compete for attention.
Last week the US ambassador to Australia, John Berry, gave a speech pointing out that American firms have invested as much in Australia’s LNG sector as the US spent on the moon landing project – $US100 billion in today’s dollar equivalent.
“The return on this investment will be Australia’s emergence as the world’s largest LNG supplier by 2020,” said Berry. He also drew attention to the fact that, looking at the total stock of foreign investment accumulated over the last century, the US remains Australia biggest foreign investor.
In trade, too, China has granted Australia more privileged access than it has to any other country, as former Trade Minister Andrew Robb has noted. The China Australia free trade agreement gives Australian firms unparalleled access to everything from wine to healthcare.
Of course, Australia has had a free trade agreement with the US for a decade.
The eminent US anthropologist Samuel Huntington, author of The Clash of Civilisations, predicted that Australia would be a “torn country”, forever wrenched between its Western history and its Asian geography. How’s this prediction looking a couple of decades later?
Australia continues to intensify its defence alliance with the US and, under Labor, even added a new clause to the ANZUS treaty, a clause which declares that the treaty not only covers conventional defence but also cyber attacks.
Has this constrained Australia from deepening its relations with China and, indeed, the rest of the region?
Of course not. Australia conducts annual defence manoeuvres with Singapore, Thailand, Japan, Malaysia and, last year, for the first time, China also joined annual defence exercises with Australia.
On another key measure – trade – Australia is actually more deeply entrenched in the Asia-Pacific than most Asian nations themselves.
The economist Tim Harcourt of the University of NSW points out that of Australia’s exports, 80 per cent go to countries in the APEC group. For comparison, only 40 per cent of China’s exports go to countries in this group, and 65 per cent for Thailand and 75 per cent for Singapore.
Even on the evidence of the past week, China continues to show every favour to Australia. Malcolm Turnbull became the first foreign leader to be hosted at consecutive banquets by both the Chinese Premier and the President, officials said.
Why is China so ready to cater to Australia? Australia has committed to assist China as well as the other big economies of Northeast Asia, Japan and South Korea, in maintaining food security, energy security and mineral security. This is a vital point.
Another reason is that China is a country with few real friends in the world. It is at odds with most of its neighbours over territorial claims. It has no clash of vital interests with Australia and every reason to be on close terms.
And it has no expectation that Australia will back away from its US alliance. A leading Chinese strategic analyst, Yan Xuetong, has even gone so far as to predict that “the core of competition between China and the US will be to see who has more high-quality friends.”
It’s possible that Australia could one day be forced to choose, but only if China and the US break out into open war, which could be catastrophic.
As both countries are committed to avoiding war, however, it’s unlikely that the situation will ever become so dire. Australia is balancing the two intelligently. Long may it continue.
Peter Hartcher is international editor.