Sounds of Summer: Australia-China policy PRINT FRIENDLY EMAIL STORY
The World Today - Wednesday, 31 December , 2003 12:00:00
Reporter: Graeme Dobell
HAMISH ROBERTSON: And now, as part of the ABC's summer season, we present a Current Affairs special.
There's a broad consensus that the leading challenge for the Asia-Pacific region in the coming decades will be how to handle the phenomenal rise of China. For Australia, as a partner of the United States, that raises questions and opportunities in the context of our alliance with Washington and our relations across East Asia.
These issues were given dramatic expression by two different presidents on two consecutive days in Canberra, as Graeme Dobell now reports in this analysis of Australia's relations with China and with the United States.
GRAEME DOBELL: Two remarkable days in the Australian Parliament ?day one in the House of Representatives:
ANNOUNCER: Honourable Members, Honourable Senators: the President of the United States of America.
GRAEME DOBELL: And the next day, the same scene, with a different leader:
ANNOUNCER: Honourable Members, Honourable Senators: the President of the People's Republic of China.
GRAEME DOBELL: The speeches to Australia's Parliament on consecutive days by China's Hu Jintao and America's George W. Bush show that history sometimes does come with its own symbolism ready written: on one day the President of the world's reigning great power; and the next, the President of Asia's coming great power.
The most surprising aspect of the George Bush address was the listing of Australia and a number of other Asian states as "allies" in keeping the peace in the Taiwan Straits, by implication, helping to prevent any thrust by China at a Taiwan which Beijing always describes as a renegade province.
GEORGE BUSH: America will continue to maintain a forward presence in Asia, continue to work closely with Australia. Today, America and Australia are working with Japan, the Philippines, Thailand, Indonesia, and Singapore, and other nations to expand trade and to fight terror, to keep the peace and the peace in the Taiwan Straits.
GRAEME DOBELL: Perhaps uncomfortably for Australia's leaders, particularly on Taiwan, Mr Bush asserted that Canberra and Washington share the same agenda in dealing with China. Whatever views Australia may share with the US, the tone of their expression is different.
In welcoming China's President, Australia's Prime Minister John Howard pointed first to the extraordinary changes in the recent relationship between Beijing and Canberra.
JOHN HOWARD: It would be no exaggeration, Mr Speaker, to say that ten years ago an event such as this would have been seen as not only unlikely, but indeed highly improbable.
GRAEME DOBELL: Mr Howard emphasised the distinctive and different traditions of China and Australia, and also what he calls the "maturity and commonsense" involved in the way the two countries deal with each other.
And this was the closest Mr Howard got to the Taiwan issue in the Parliament:
JOHN HOWARD: It is self-evident that the relationship between Australia, the United States and China respectively on a two-way basis our relationship with the United States and then again our relationship with China will be extremely important to the stability of our region.
Our aim is to see calm and constructive dialogue between the United States and China on those issues which might potentially cause tension between them, and it will be Australia's aim as a nation which has different, but nonetheless close relationships with both of those nations to promote that constructive and calm dialogue.
GRAEME DOBELL: The Chinese response on Taiwan came in nearly the last paragraph of the speech by Hu Jintao, almost as if it had been inserted as a direct response to the US President.
Certainly, President Hu used the exact same phrase as President Bush talking about peace in the Taiwan Straits, but arguing in relatively non-inflammatory language by Beijing standards that the only threat to peace came from independence forces in Taiwan.
HU JINTAO (translated): The greatest threat to peace in the Taiwan Straits is from the splitist activities by the Taiwan independence forces. We are firmly opposed to Taiwan independence. The Chinese Government and people look to Australia for a constructive role in China's peaceful reunification.
GRAEME DOBELL: While the Clinton administration hailed China as a strategic partner, President Bush came to office describing China as a strategic competitor. The challenge of terrorism has muted that view, but still the Bush administration argues that the only possible great power conflict that can be imagined in today's world, is over Taiwan.
The head of Washington's Economic Strategy Institute, Clyde Prestowitz, a councillor in the Reagan administration, says US policy could create a hostile China as a self-fulfilling prophecy.
CLYDE PRESTOWITZ: At the moment we have the seventh fleet in the Pacific, which patrols sometimes the Taiwan Straits. We fly spy planes along the Chinese coast regularly every day.
We have been supplying Taiwan with weapons far beyond what I think any fair interpretation of the Shanghai communiqu?would say was legitimate. We're building a nuclear missile interception system in Alaska, ostensibly to protect against rogue nations, but everybody knows it's really aimed at China.
All of those actions send a signal to China that the United States thinks China is the enemy. My concern is that if you keep acting like China is the enemy, China might begin to believe that it should be the enemy, and hence the self-fulfilling prophecy that I hope we can avoid.
GRAEME DOBELL: The Australian Strategic Policy Institute says a clash of aspirations between China and the US is the biggest long-term threat to peace in Asia. The Canberra think-tank says the risk of war is not high, but is real and significant. The Institute's head, High White says that a conflict over Taiwan would present Australia with one of its toughest ever choices.
HUGH WHITE: In the event of conflict between the US and China over Taiwan, the United States would very strongly expect a substantial Australian military contribution. And because it would be almost entirely an air and maritime war, they'd be looking to Australia to contribute air and maritime forces.
I think it would be most likely that we'd offer maritime patrol aircraft, perhaps destroyers, possibly submarines, and those are all capabilities that we have available and which could make a useful contribution.
GRAEME DOBELL: But such a commitment would deeply damage Australia's standing across East Asia, not just with China, according to Professor Stuart Harris, a former head of Australia's Foreign Affairs Department.
STUART HARRIS: The consequences of actually siding with the United States against China would be not great for the United States. China will always need the United States. They'd be horrendous for us, and I don't think people realise just what legacy of bitterness we would leave with China, and a lot of countries in the region who would be on China's side anyway. So it would be very damaging for us for a long time.
GRAEME DOBELL: How would it be horrendous for Australia in the region beyond China?
STUART HARRIS: I think many of the countries in the region look at Australia in terms of how well it gets on with China. They're sympathetic to China over Taiwan, because this is a self-determination argument for countries that have lots of similar problems in their own borders.
They believe in China's right to sovereignty over Taiwan, and we would, firstly be conflicting with that, but secondly, the mere fact that we're in (inaudible) with China would in fact mean that we're not getting on with China, whereas they think they have to and they think we should be able to.
GRAME DOBELL: The strategic speculation reflects the economic reality that China is a new engine of world growth. China is clearly the coming power, and the numbers just keep climbing. Long Yong-tu is a former Deputy Trade Minister, and China's chief negotiator at the World Trade Organisation.
LONG YONG-TU: Friends of China now consume 25 per cent of the steel of the world, 40 per cent of the cement of the world. China is the biggest producer, biggest consumer and biggest importer of steel products.
And telephone subscribers now in China is over 400 million and mobile phone users over 200 million, internet users over 60 million, overtaking the United States. It's the biggest market of telecommunications. So, this is all very attractive figures for our audience because they see great potential of the Chinese market.
GRAEME DOBELL: Success, of course, brings its own problems. The tensions between Beijing and Washington have moved beyond geo-politics, with America's trade deficit with China in 2003 set to go above US$120 billion.
The Bush administration is putting considerable muscle behind its argument that the Chinese currency is under-valued, because it's been pegged at around 8 Yuan to the dollar since 1994.
But Beijing is refusing to unpeg its currency, arguing that its developing economy couldn't cope. Trade expert, Yong Long-tu argues tat China's strength is based on significant domestic factors, not its currency.
YONG LONG-TU: I think we're not competing because of our so-called undervalued currency. We're competing with the rest of the world with a comparatively low labour cost market, and because China has a huge pool of labour resources to tap.
For instance, we have to transfer 100 million labourers from rural areas to the city, and that gives us a big source of labour force, and that can keep the Chinese labour market relatively competitive for a long time to come.
We're competing basically on that basis. And also the labour quality in China is also good. Every year we have 2 million university graduates. So that can keep the labour market in high quality.
GRAEME DOBELL: A former Australian ambassador to Beijing, economist Ross Garnaut, says China might be ready to float its currency in about five years time, but at the moment, the US is overstating China's economic power. Professor Garnaut says China has been doing well, while the rest of the world has done poorly, but China's economic strength is still relatively modest.
ROSS GARNAUT: There's no doubt that China has been the engine of world growth over the last few years, but people who extrapolate these last few years into the future, as some are doing at the moment, are taking a few things for granted.
The exceptional growth of China's foreign trade can't continue at this rate. It's not sustainable. China's imports so far this year have grown by 40 per cent in US dollars. Well, that's just colossal for a big economy.
Over the last three years virtually all of the growth in world exports has come from China, and a quarter of the growth in world GDP has come from China.
GRAEME DOBELL: Given the sorts of growth figures that you point to, since '96, why shouldn't outsiders start to get very excited about China, and start to assume that that sort of performance can be maintained?
ROSS GARNAUT: Well, my worry is that external perceptions have always been very volatile about China. Our perceptions overdo it in both directions.
When things are not going quite as well as they have on average since the reforms began, people get apocalyptic and start talking about the collapse of China, well, that's just unrealistic, and when China's doing a little bit better than average, like now, they build that up into a story of China being the solution to all of our problems.
The problem with the volatile perceptions, both when they're good and when they're bad is that they're not realistic. The truth is that since the reforms began 25 years ago China has moved pretty steadily, much more steadily than the external perceptions.
When the rest of the world gets overexcited it can pump in too much money too quickly, and you can start to get booms that are not sustainable. That ends up not being good for reform or for growth.
GRAEME DOBELL: The old joke goes: where does a 500 pound gorilla sit?
Answer: anywhere it wants.
So, how will Australia deal with two giants in the Asia Pacific?
The set of issues I put to the former head of Foreign Affairs, Professor Stuart Harris and Hugh White of the Strategic Policy Institute.
Professor Harris says Australia's pragmatic approach to China will be deeply influenced by changes in US thinking.
STUART HARRIS: I think that depends a lot on where the debate within the United States goes, on China. I mean, there are still very strong anti-China lobbies, groups of one kind or another, some of whom have a very visceral fear of China, some just have a dislike of China because of various reasons ?that it's affecting their labour supplies, or it's affecting the treatment of particular religious groups, or whether it's just human rights generally.
But there's also that strong belief by some in the United States that this the only country that's ever likely to challenge the United States, and we better do something about it now, before it gets so big that we can't do anything with it. To be perfectly honest, I think it's past that point anyway.
It is past the point where they can do very much about it. And it's not just in a military sense, I think China is building up a degree of political and economic strength that is starting to become difficult to ignore, and people in the region are starting to recognise that.
GRAEME DOBELL: Hugh White, it's certainly true that it's becoming very difficult to ignore China. How do you see the region, and Australia starting to work through that significant new presence?
HUGH WHITE: I think the really dynamic fact about China, which if you like, is moving us all ?the Americans and Australians and others ?on past that old cycle of sort of, romanticism and then anxiety, what's moving us past that is the sheer brute fact of China's growing power.
That's economic of course, first and foremost, but it's also increasingly reflected in a more sophisticated technological and educational base, and as Stuart said, a very significant application of their capacities, diplomatically and politically in the region.
And I think it's this which is, if you like, really at the heart of the development of America's attitude towards China on the one hand, and the region's attitude on the other.
We're all trying to come to terms with what it's going to be like to live with a China which is a very large and powerful country indeed, and this is a new phenomenon. If you like, the growth of China's power is the most substantial big strategic phenomenon of the post-Cold War era.
And I think, looking back decades from now, we'll see that as a bigger development in our strategic environment even than terrorism. It's the thing that will really change the way the international system works.
Now, for all of us in the Western Pacific, in our different ways, we all want to find ways to work with China, and we all hope the United States finds a way to work with China, and I think you get a very ready consensus in the Western Pacific that the best outcome from our point of view, is one in which the Americans remain very influential and if you like, keep the peace in the region, but they do that in a way which gives China plenty of space to stretch its legs and feel that it can accept the status quo.
The risk is that in America there are people who don't think that way. There are people who think that China should be confronted, both because it's powerful and because it's not a democracy.
GRAEME DOBELL: As you say, Australia doesn't have that, perhaps depth of debate about China that you find in the US ?you don't have the blue team and the red team arguments that you see in America. Does that give Australia any more options in the way that it works with China and with the rest of East Asia?
HUGH WHITE: We certainly, I think, have an almost subconscious national consensus that we want to get on well with China. There's really no analogue in Australia to the sort of anti-China lobby which is such an important part of the US debate.
But I think the other side of that coin is that we haven't really made up our national mind about this. The way that the US and China work together is going to be a critical factor in our future strategic environment, but there is no Australian consensus on how we want that to look.
GRAEME DOBELL: What would an Australian consensus look like on China?
HUGH WHITE: My guess is that it would look like a desire to see a condominium, in effect, between the US and China, in which the United States does give China enough space to become an increasingly influential power in the Western Pacific, as it is already doing, but that the United States also remains engaged and the Chinese don't try and push the United States out, but in the end accept and even welcome America as a continuing strategic presence in the region as well.
GRAEME DOBELL: Stuart Harris, South East Asia has decided to an extent, on how it's going to deal with China, because it is setting out to create an East Asian community linking ASEAN and North East Asia. Is Australia going to be able to find a role in that process of creating an East Asian community?
STUART HARRIS: Well, I think we may well do, but with difficulty over a period of time. I mean, I think we've not given enough attention to what this does imply.
We've not given enough attention to the fact that we should be working a lot harder with the Asian region, not talking about whether we're choosing between Asia and the rest of the world, because I think there are a lot of things to overcome apart from that, in the relationship with Asia, and I suspect it's not easy for it to be undertaken in the next few years.
But I think in the longer term, particularly if we do maintain a good relationship with China, and there is no disturbance in the China-US relationship that is sufficient to make that a very difficult and hostile relationship. And I think there's no reason why we shouldn't be able to make quite a useful contribution and be accepted more readily in the Asian region than we are at present.
Now I think the powers that be will say we are readily accepted ?I think that's talking in terms of a historical position that's?historical circumstances, rather than historical position?I think that the way the region is changing so much, that we are easily likely to be left behind, and I think that is the worry.
It does very much depend on the China-US relationship anyway, and unlike you, I think that's really something that provides ground for a bit of optimism. I mean, I think the Chinese have started to come to terms with the fact that America is going to be the hegemon for quite a while, and that it isn't necessarily all that bad, and particularly if it's operated as it is currently operated.
I think a lot of lessons have been learned by Bush and some of the people at least around him, about China, and I think a lot of lessons have been learnt by the Chinese leadership about how they can get on with the United States and how that can advance their interests and not necessarily to conflict.
HAMISH ROBERTSON: Professor Stuart Harris, of the Australian National University, and also Hugh White, of the Australian Strategic Policy Institute, were both speaking to Graeme Dobell.
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