Written by Ian Hall.

The Sydney Morning Herald journalist Peter Hartcher recently opined that for all Donald J. Trump’s manifest faults, the President has done one good thing: he has ‘shocked’ Australia into thinking about foreign policy more intently than it has done for decades.

Hartcher has a point. Trump’s election has certainly generated a sense of urgency. There is palpable concern in Canberra that a Presidential misstep or misjudgement could cause a serious headache somewhere in the Indo-Pacific at some point during his term. But Trump is not the only factor driving the rethinking. The other is China. The question of how best to manage the challenges it poses is forcing the reconsideration of long-held assumptions, polarising Australian policymakers and analysts for the first time in a generation.

Economic engagement with China has unquestionably had positive effects, greatly improving the well-being of Chinese citizens, benefiting Western consumers, and enriching those with access to the Chinese market. But it is increasingly clear that twenty-plus years of economic engagement have not brought about political reform or a tempering of Chinese foreign policy.

For all intents and purposes, Australia has had a settled approach to China since the late-1980s, supported by a broad political consensus. Prioritising bilateral and multilateral economic engagement, using instruments like the Asia-Pacific Economic Cooperation (APEC) forum, it also seeks to avoid public spats with Beijing over contentious issues like human rights, Tibet or Taiwan, or China’s expansive territorial claims.  The object of the exercise, so the prevailing wisdom goes, is to get the ‘economic relationships right’, because that will make the ‘politics easier in the long run’, by building diplomatic trust and – with luck – stimulating reform within China.

This approach is grounded, of course, in what Thomas J. Wright recently labelled the ‘convergence myth’, the theory that holds that economic globalisation will eventually lead to political liberalisation in authoritarian states. And it is not unique to Australia; indeed, it has underpinned most Western states’ China policies, including that of the United States, for most of the post-Cold War period.

This economic engagement with China has unquestionably had positive effects, greatly improving the well-being of Chinese citizens, benefiting Western consumers, and enriching those with access to the Chinese market. It has made Australia significantly wealthier over the past decade and a half, as its commodities flowed north to fuel China’s growth. But it is increasingly clear that twenty-plus years of economic engagement have not brought about political reform or a tempering of Chinese foreign policy. Instead, especially under Xi Jinping, the party-state has moved to tighten control at home and to assert itself more vigorously abroad. Economic development has laid the foundations for technologically enabled neo-authoritarianism, an emergent cult of personality around Xi, and carefully contrived nationalistic revanchism.

Australian policymakers and analysts are only now starting to recognise what the failure of convergence might imply. This is not to say that they haven’t been talking about China for some time. They have. But this earlier debate (prompted by Hugh White, in particular) concentrated on what China’s growing power implied for America’s position in the region, how Washington could and should respond, and how Canberra ought to react. Little attention was paid to the direct implications for Australia of the emergence of neo-authoritarianism and assertiveness.

The origins and contours of the new debate on China policy are different, prompted by issues closer to home. One is deepening concern about Chinese investment in Australia, especially by State-owned or State-linked firms in critical infrastructure. Another is the ongoing problem of Chinese industrial espionage and intellectual property theft, as well as cyber-espionage. But perhaps the most important of all is the mounting evidence of Chinese-linked efforts to secure and leverage political influence within Australia, through political donations, formal and informal lobbying, Chinese-language media ownership, university funding, and the manipulation of PRC-origin students and the wider Chinese diaspora by the Communist Party’s United Front Work Department. These issues have highlighted not just the vulnerability of Australia’s political system, infrastructure, commercial interests, defence sector, media, and universities, but have also drawn attention to the changing character of the Chinese regime and of its regional ambitions.

In response, two new approaches to China have evolved, neither dependent on the convergence myth.

The first – advocated most clearly by former foreign minister Bob Carr, former prime minister Paul Keating, diplomat-turned-Beijing-based consultant Geoff Raby, Carr’s controversial Australia China Research Institute, and increasingly by Hugh White – holds that Australia needs to accept China’s regional leadership, work with it to realise Xi’s Belt and Road Initiative and his larger China Dream, and cease behaviour that irritates Beijing. They dismiss suggestions that China’s attempts to influence both Australian politics and public debate about China’s domestic and foreign policies, arguing either that there is little or no evidence to suggest such work is done. They counsel what they call a ‘realistic’ attitude to China, focusing on its power and on the need for others to adapt their behaviour or risk economic sanctions or military conflict. Given China’s wealth and military capabilities, they argue, Australia should for its own safety and economic security avoid involvement in the territorial disputes in the South China Sea, mute criticism of China’s record on human rights, eschew deeper security cooperation with India, Japan, and the US, and loosen, if not wholly abandon, the alliance with Washington. After all, they assert, none of these so-called ‘strategic partners’ would fight for Australia if push came to shove with China, nor suffer the potential economic costs of confrontation.

By contrast, the alternative approach takes a more positive view of Canberra’s capacity to protect and advance Australia’s interests, grounded in the realisation that neither convergence nor accommodation have brought about political reform within China or the moderation of its regional ambitions. It recognises the detrimental effects that interference by Beijing or its various proxies will have on Australia’s political system and on media and academic freedom, if effective action is not taken to curb such activities. It also acknowledges that, as leading China watchers Bates Gill and Linda Jakobson put it in an important recent book, some Australians need to shake the ‘unhealthy’ habits of seeking to ‘pre-emptively placate’ Chinese officials and businesspeople, and self-censoring public comment for fear of offending Beijing. It notes – frankly and clearly – that a revanchist China is a threat to both regional peace and Australia’s security.

There are signs that Canberra is starting to embrace this latter approach, with a concerted effort being made to strengthen ties with regional security partners, involving, among other things, the low key revival of the Quadrilateral security dialogue with India, Japan, and the US. Australia is also upgrading its cyber-security and cyber-warfare capabilities, mainly to manage Chinese espionage. Finally, Parliament is due to debate new laws intended to regulate foreign lobbyists and better manage Chinese Communist Party influence.

There is however much more that could and should be done. Both diplomatically and domestically, efforts will need to be made – and made consistently over time – to assuage doubts in the region about Australia’s reliability when it comes to its approach to China. Work has to be done on improving dialogue and security cooperation with regional partners, especially in South East Asia. Australian politicians and public figures also need to speak out more loudly and clearly when Beijing tries to bully or intimidate Australian citizens or residents, or limit Australian media and academic freedom. Above all, Australians will have to come to terms with the fact that economic engagement is not the China policy panacea they have long assumed it was.

Ian Hall is a Professor in the School of Government and International Relations at Griffith University, Australia, and a member of both the Centre for Governance and Public Policy and the Griffith Asia Institute. He tweets @DrIanHall. Image credit: CC by White House/Flickr.

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