Australia at the crossroads

 Sydney

For decades, Australia has been known as ‘the lucky country’. At the end of the world geographically, we are separated from the global troublespots by vast oceans. We have recorded 27 years of uninterrupted growth, partly because of a surge in exports of commodities to China. At the same time, our tough border protection policies boost public confidence in, as John Howard put it, ‘who comes to this country and the circumstances in which they come’.

As a result, our politics have not been profoundly affected by the kind of populist forces dismantling established parties across Europe. Nor have we witnessed an anti-globalisation backlash. Not for us any Trump- or Brexit-like insurgencies. All this as we profit from the great China market and remain safe under Uncle Sam’s security umbrella.

However, all good things come to an end, usually sooner than you expect; and there is a growing sense that 24 million Australians on this resource-rich continent are taking comfort from our past. Simply put, we face a major dilemma: how we reconcile our China trade relations with our US security alliance.

For the past decade or so, our leaders have balanced China’s right to an enhanced regional profile with our desire for US protection. It’s a bit like riding two horses at once. When those two horses move further apart, as an assertive Beijing and an erratic America have done in the past year, that feat becomes exceedingly difficult.

For decades, Canberra enthusiastically welcomed China’s rise. Much to the chagrin of Washington, we played down human rights, joined the China-run Asian Infrastructure Investment Bank and leased the Darwin Port to a Chinese company. We assumed that the more Beijing integrated into what is termed the rules-based international order, the more likely it would become liberal and peaceful.

We are coming slowly and painfully to realise that this is not the case. Two years ago, when The Hague ruled that China had violated international law, Canberra scolded Beijing for building artificial islands, as if a court in Europe could settle the future of the South China Sea. Allegations of Beijing’s interference in our politics are growing. So are fears that communist government pressures are undermining academic freedom. Three-quarters of Australians, according to a Lowy Institute poll, say Canberra allows ‘too much investment from China’, especially in real estate and agriculture.

Anti-China attitudes are hardening. Our regulators have rejected a Chinese bid to buy Australia’s largest electricity network as well as Beijing’s plans to establish a link between investment in the Northern Territory and the Belt and Road Initiative.

Meanwhile, there is a growing awareness that Trump’s America is acting like a ‘pitiful, helpless giant’, as Richard Nixon once feared it might become. Another Lowy poll shows that only 55 per cent of Australians trust Uncle Sam to ‘act responsibly in the world’ — the lowest level recorded in polls. This month Tony Abbott — who is as pro-American as he is conservative — warned ‘the American Legions are returning home’ and called on fellow Aussies to resist adversaries in our own right.

Our history has not prepared us well. From our birth as a nation in 1901 — and indeed before that, when we were still a collection of colonies far removed from the western world — Australia has always sought a close association with a great power with which we share values and interests. For the first few decades of our existence, a declining but still formidable Britain filled that role. For the past seven decades, it has been performed by the US alone. What happens if Beijing tries to push the Americans out of East Asia, just as Washington pushed the Europeans out of the western hemisphere in the 19th century? We’ll certainly become more anxious. Hardly a day goes by without a journalist or politician lamenting about the ‘most uncertain’ times in living memory.

We’ve been here before. Fifty years ago there was widespread fear of being abandoned by ‘our great and powerful friends’, as Sir Robert Menzies called them. In the late 1960s Britain withdrew its navy from east of Suez as it moved into Europe. Nixon called on Asia-Pacific allies to take more responsibility for their security. As a result, senior Australian officials raised serious doubts about US staying-power in Asia. One minister, Peter Howson, wrote in his diaries, ‘There’ll be no white faces on the Asian mainland’ and ‘we shall be on our own’.

However, just as reports of America’s retreat were greatly exaggerated back then, so they might be today. Or so says the federal government. Even with an outsider inside the White House, the US remains the predominant power in defence, education, innovation and energy self--sufficiency. Besides, China will grow old before it grows rich; and even if Beijing can sort out its long-term demographic challenges, other big challenges loom: political, economic, ethnic and environmental.

Perhaps. But it is worth remembering that China has emerged from two centuries of weakness and humiliation, and it has mastered western technologies and economic ideas. No other nation in the region is more dependent on exporting to China than Australia. And no other nation comes close to its influence on our economic prospects than China. ‘May you live in interesting times’ is one of the more subtle Chinese curses, and in the debate over how to deal with China in the Trump era, Australian foreign policy could be heading into most interesting — and anxious — times.