Canberra flounders as Beijing keeps calling the shots

Last Updated:2018-04-10

By Geoff Raby

If anyone had been in doubt, the past few weeks have demonstrated once again how fundamentally Australia's geopolitical and strategic environment has changed and the extent to which this has been shaped by China. It has also highlighted Australia's strategic confusion over how to respond.

President Xi Jinping was at the height of his powers and unchallenged in the exercise of his authority in the recently concluded National People's Congress. Completing his appointments of trusted advisers and supporters to senior offices, which began at last year's 19th Party Congress, he appointed Wang Qishan as Vice-President. Over the past six years, Wang has led Xi's anti-corruption campaign, which has routed most political rivals.

In another unconventional move, Xi also appointed his chief economic adviser, Liu He, to the position of Vice-Premier. Together with Li Gang, appointed to head the People's Bank of China, the top echelons of economic policy advice are now occupied by English-speaking economists educated in the US. In the 1970s and '80s, diplomats in Beijing would rue the fact that China's economic policy elite were educated in the Soviet Union. A joke is now doing the rounds in Beijing: when the elite were educated in the Soviet Union, Beijing's relations with Moscow were terrible and now it's the same with the US when the elite have been educated there.

At the NPC's conclusion, Xi's speech contained one clear and menacing message that dominated China's state-controlled media coverage. Taiwan is part of China and Beijing will not countenance any attempt by Taiwan or foreign powers to support Taiwanese independence. While this is not a change of policy, the way it was stated and the profile given to it in Xi's final report was.

In case anyone was in doubt about the message and Beijing's resolve, two days after Xi's speech, China's only aircraft carrier, the Liaoning, was sent through the Taiwan Straits. While the renovated Ukrainian ship might be no more than amusing target practice for the US Navy, the symbolism of this should not be missed.

Stern message

The last time an aircraft carrier fleet sailed through the Straits of Taiwan was in 1996 when former US president Bill Clinton wanted to send Beijing a stern message in response to the provocative launching of several missiles in the direction of Taiwan. While it is inconceivable that the US could repeat the exercise today, mainland China can now do so with impunity.

Significant movement has also occurred in recent weeks over North Korea, without apparent US leadership. First Seoul and Pyongyang reached a Winter Olympics' rapprochement, which led to Donald Trump's surprise announcement that he was prepared to meet with Kim Jong-un, without a clear precondition of an unambiguous commitment to forego its nuclear weapons program, which was a big concession to the North.

In another surprise, Kim turned up unannounced in Beijing - his first visit there since becoming leader five years ago. Beijing may have been playing catch-up after the announcement of the possible Trump-Kim summit, but by the time the Xi-Kim meetings were revealed to the world, China was clearly on the front foot again over the Korean Peninsula.

At the same time, trade tensions between China and the US have escalated to unprecedented levels. Xi has made it clear that China will match US unilateral tariff increases. In the face of US behaviour, Xi has no domestic political option but to respond like for like, while also attempting to claim the high moral ground by initiating action in the WTO.

The next time Australia's Prime Minister and Foreign Minister feel inclined to give China a lecture on abiding by the rules-based international order, they might wish to bear in mind that the WTO is one of the most important rules-based international bodies and a cornerstone of Australia's economic security and prosperity.

Trade measures

Trump's unilateral trade measures against China not only threaten to undermine the multilateral rules-based trading system, but, if allowed to continue, could also harm the economies of China as well as the region as a whole, including Australia. With seemingly no regard to, nor consultations with, its allies in the region, the America's trade actions will win it few friends. In this respect at least, the US is behaving like an unreliable ally.

When stability in policy making is required in such challenging times, Trump extraordinarily sacked his secretary of state and his national security adviser. While some might welcome John Bolton's return to the centre of action, to use the hackneyed phrase of Washington neo-cons, there are now no adults left in the room. Bolton prefers war over diplomacy. Are Australia's security and foreign policies now going to be so closely aligned with the US?

Australia's ambassador to Washington, Joe Hockey, likes to begin his speeches in the US by reciting how Australia has been in every war alongside the US since the start of the last century. Bolton knows us well and will already have us marked down as participating in the next conflict. Paul Keating has long warned about the dangers for Australia in the US tag.

In a recent speech in the US, Kevin Rudd urged his audience of future US military leaders to accept the reality and inevitability of China's dominant influence over the East Asian region and to begin to develop strategies with which to manage China's behaviour in ways that better align with regional objectives of peace and stability, including regional security architecture.

It is in this light that another major development in the region should be viewed. Whatever the public statements of the recently concluded ASEAN-Australian Leaders' meeting, beneath the surface it was all about the rise of China. And while the reliability of the US as an ally may not have been discussed, it too would have been on everyone's mind. Ten years ago, holding such a meeting in Australia would have been inconceivable in diplomatic circles. Managing China's rise has made it not only possible but necessary.

Closer engagement with ASEAN in this way should be developed as a cornerstone of Australia's hedging strategy towards China – both with ASEAN as a whole and with individual members, as we have also recently begun to do with Vietnam. It is a far better option than the poorly conceived quadrilateral dialogue where Australia aligns itself closely with China's strategic competitors, which China inevitably views as containment and to which it will respond accordingly.

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: