Asia Program

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Australia and the Rise of China: Strategic and Policy Implications

June 16, 2009 // 4:00pm5:15pm
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Napoleon once said, "Let China sleep. When she awakes the world will be sorry." Napoleon's option is no longer available. The People's Republic of China (PRC) is awake, and its influence on regional and world affairs has become increasingly apparent over the last two decades. On June 16, Wilson Center Australian Scholar Richard C. Smith outlined Australia's position in regard to political and strategic shifts within the Asia-Pacific region, as well as its relations with the United States, given China's growing diplomatic and economic weight.

History

Smith, who is also a former Australian ambassador to China and recently secretary of the Australian Defence Department, started by outlining the approach that successive Australian prime ministers have taken toward China. In addition to viewing the PRC as a target for Australian agricultural exports, Prime Minister Malcolm Fraser (1975-1983) viewed China much the same as the Nixon administration in the United States—as a strategic counterweight to the USSR. It was Prime Minister Bob Hawke (1983-1991) who first formulated a truly Australian approach to China, framing growing trade with the PRC, and Asia in general, as a way to offset the pain of economic reform as Australia phased out its inefficient industries.

Hawke's approach was continued under Paul Keating (1991-96), who attempted to engage the PRC and secure the continued interest of both the PRC and the United States in regional affairs. John Howard (1996-2007), aware of areas of tension between China and the United States, maintained a less strategic approach, as he attempted to manage relations between Australia's most important ally and its fastest-growing trade partner. Howard's successor, Kevin Rudd, is a former diplomat to China who speaks fluent Mandarin, although the perception that he is too close to China—during his 2007 election campaign he was labeled "the Manchurian candidate"—has proved to be a political liability at times.

Economic Relations

Australian trade has benefitted enormously from China's rise, with Australian exports to China growing 50-fold in the last 30 years and by 28.3 percent in 2007-08 alone. Australian natural resources have fuelled a Chinese economy hungry for energy and raw materials, and agricultural products to China have grown annually by 20 percent over the last five years. For Australians, however, trade in services is perhaps the most noticeable feature of their nation's interactions with China—some 127,000 Chinese students are enrolled in Australian educational institutions, amounting to some 23 percent of all foreign students in Australia. Indeed, there are more Chinese students in Australia than in any other country, save China itself. Chinese investment in Australia is also significant, amounting to AUS $35 billion by the end of 2008, representing a jump from AUS $6.2 billion the previous year. Most of this increase is the result of the decision of Chinese resource extraction company Chinalco to buy shares in the Anglo-Australian mining conglomerate Rio Tinto.

Despite these impressive figures, Smith stressed that China is not Australia's most significant economic partner. That would be to overlook the scale and depth of Australia's economic relationships with the United States, Japan, the European Union, and others. But there is little doubt that China's impact on Australia over the last 30 years, and certainly over the last decade, has been more significant than that of any other economy. In a period of sluggish global demand, the continued export of Australian goods to China, whose economy is still experiencing positive growth, has meant that Australia will not need to rely as much on the fiscal stimulus packages that other developed countries are proposing to deal with their economic problems.

Bilateral Relations and Defense

On a political level, creative approaches have been taken in some areas of the relationship, notably human rights and the handling of Chinese illegal immigration to Australia. On two occasions on which Australia specifically sought China's help—in relation to Cambodia in the early 1990s and to East Timor in 1999—Beijing proved cooperative. Especially after 1991, Australia worked hard to engage China in regional forums, an approach which the Chinese reacted to initially with limited enthusiasm. In return, China has at times been less supportive of Australian attempts to join regional institutions than Australian governments would have hoped for. In the South Pacific, PRC-Taiwan competition was generally a sticking point in Australia's relationship with China until the recent election of Taiwanese president Ma Ying-jeou, who has sought to avoid tension between Taiwan and the mainland.

Since the early 1970s, the prevailing view among Australia's strategic thinkers has been that China's military development is essentially defensive in character, and related to Taiwan. Australian defense planners are aware that as China's economic growth continues, so too does the development of its strategic weight and influence in Asia. Australians have expected that China, almost as a matter of entitlement, would modernize its military capabilities as its economy grows. Also implicit is the view that, with the possible exception of any alliance considerations that might arise if the United States became involved in the defense of Taiwan, developments in Northeast Asia were beyond the reach of Australia's defense force. This was reflected in a recent Australian Defence Department white paper, which stressed the need for strategic dialogue with China at the same time that it reiterated that Australia's primary operational environment stretched only as far as the equator.

Drafted by Bryce Wakefield, Asia Program Associate
Robert M. Hathaway, Director, Asia Program, Ph: (202) 691-4020

 

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