Australia's new reality is a Xi Jinping-led Asian order

Last Updated:2017-10-16

By Geoff Raby

When Xi Jinping walks out on stage at the much-anticipated opening of the five-yearly Party Congress on Wednesday, it will be a triumphal moment for him. Over the past five years, Xi has transformed China at such an astonishing pace that most analysts and policy advisers are running to keep abreast of it all.

While little is known about the all-important changes in the top leadership to be announced, one thing is certain, the Congress will be a celebration of Xi's leadership. Xi has already declared that the target of China's becoming a "moderately prosperous society" by 2022 has all but been met.

At over $US8000 ($10,000) per capita, China is now at the higher end of the World Bank's middle income economy range, and some 40 per cent of that was added during Xi's tenure. China's economy is well advanced in rebalancing with nearly 70 per cent of GDP growth coming from consumption, compared to just 40 per cent when Xi took over, and services now account for more than 50 per cent of GDP. Over the next five years, these trends will only become more pronounced.

Centralising power

Xi has also transformed domestic politics. He has successfully centralised power, dispensing with collective leadership which began with Deng Xiaoping's return to power in 1978. He has established his authority over the organs of state security, propaganda and the military.

He has taken control of economic policy-making out of the hands of the Premier and State Council. He has used the anti-corruption campaign to clean up the party, tighten discipline and dispatch political opponents.

He is the leader among equals in the strongman, autocratic, authoritarian club which includes Putin, Erdogan and others. But unlike any of them, Xi commands a powerful, strong and dynamic economy.

Whether we like it or not, and mostly we don't, Xi Jinping will be the single most important influence shaping the region over the next five years. Xi Jinping will have a profound effect on the regional order and stability, and consequently on Australia's security and fortunes.

The congress will confirm that Xi has made great progress towards realising his guiding policy of the "China Dream" – "China's great rejuvenation", making China a respected and influential member of the international community.

The Belt and Road Initiative, so blithely dismissed by Australian policy makers, will be applauded as evidence of this achievement, as will the frequency of Xi's international travel, the number of major international meetings hosted in China, the creation of the Asia Infrastructure Investment Bank and so on.

By any measure, this is a full agenda of achievements. China's standing in the world – be it economic strength, political influence or military power – has risen dramatically under Xi.

Asia's new order

This is the new order in Asia. It is no longer emerging, it has arrived. Under Xi, China's foreign policy has become confident, assertive and muscular. This is the world Australia's foreign policy makers must now learn to live with.

China is already the dominant power in the region and the US, while militarily massively superior, is not going to change that. A relatively diminished US in the region is the context in which our foreign policy needs to be developed. This should be the starting point for the Foreign Policy White Paper.

The uncertainty and timidity with which Australia is responding to China under Xi Jinping is because policy is premised on strategic mistrust – hence the confusion we had over AIIB membership and in responding to Xi's BRI. But it has never been explained what strategic threat China poses.

Stop looking over our shoulders

When China proposes initiatives and seeks leadership positions on key issues, which it will do increasingly under Xi in his next five years, Australia needs to approach these on the basis of strategic neutrality – be open-minded about whether it is in Australia's interest to support them or not, and to do so without looking over our shoulders at the US's position.

If China is, in fact, a threat to regional stability, then it follows that we need to build relations with our neighbours in ways that add weight to ASEAN and our own standing in the region. Canberra needs to develop a consistent hedging strategy with south-east Asia which we have so far neglected to do.

Certainly, the fact of our close relationship with the US is a major asset we can bring to the table as long as we are not seen to be the US's spokesman in the region. We need our own voice and standing, even though on many occasions it may be much closer to the US's than China's. But it needs to be seen and understood as genuinely our own voice. Interoperability between the Australian and US militaries may make sense, but it does not require interoperability of our foreign policies.

Diplomatic execution key

The Prime Minister's initiative to host an ASEAN meeting in Australia is an excellent one. It is to be hoped it is not derailed by trying to bring in the US in some formal capacity. We should, of course, keep the US fully briefed before and after the meeting.

Australia has been absent from regional leadership for too long. The last time was in 2002 when Australia initiated and led the creation of the Bali Process on People Smuggling. The Rudd government tried with an attempt to create a new regional security forum but, as so often with that government, the intention was sound but the execution wanting.

Australia should seek to again provide regional leadership to advance our interests. To do so will require patient, committed and consistent diplomacy led by the Prime Minister as Bob Hawke did when establishing APEC and Paul Keating did when lifting APEC to a leaders' summit, or, on a wider canvass, Rudd did in helping to create the G20.

Sympathy should be extended to those loyal public servants drafting the government's White Paper on Foreign Policy. Australia's interests will be advanced if they were to advise Australian ministers that for Australia's security and prosperity they will need to work closely with regional leaders they don't like because they don't share the same values. Meanwhile, take careful note of the power and authority of Xi Jinping at this week's congress.

Geoff Raby is Chairman and CEO of Geoff Raby & Associates and a former Australian Ambassador to China.

This article first appeared in the Australian Financial Review: