China-Australia links and a resonance

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China’s President Hu Jintao (left) and Australian Governor General Michael Jeffery at Government House in Canberra on Tuesday.
China’s President Hu Jintao (left) and Australian Governor General Michael Jeffery at Government House in Canberra on Tuesday.

Pallavi Aiyar

The new reality for Australia is that while its military security remains linked to the U.S., its economic security is increasingly tied to China.

The complex but increasingly consequential relationship between resource-hungry China and resource-rich Australia is in the international spotlight this week. Chinese President Hu Jintao is on a week-long trip Down Under, where he will attend an Asia Pacific Economic Cooperation (APEC) summit over the weekend. This, Mr. Hu’s second trip to Australia, follows Premier Wen Jiabao’s visit to the country last year. Australian Prime Minister John Howard made a trip to China last year where he launched a multi-billion-dollar gas deal.

This slew of high-level visits is indicative of a certain amount of reshuffling of the geopolitical deck of cards that have thus far determined the course of the Asia-Pacific region.

The magnetism of China’s expanding economy has proved difficult for Australia to resist. Last month, the Australian Bureau of Statistics announced that China had overtaken Japan as Australia’s top trading partner, ending a 36-year-long run in which Japan consistently held that spot.

A Sino-Australia Free Trade Agreement is also in the pipeline and Canberra has conferred on China the Market Economy Status it so covets. The two countries have in recent years inked a series of lucrative gas and coal deals. Last year, during Mr. Wen’s visit to Australia, another landmark agreement was struck, one that opened the door to the supply of uranium to China. Canberra has traditionally been cautious when it comes to its uranium exports and has fought shy, for example, of signing a similar deal with India.

Understandably, Canberra is loathe to jeopardise the economic boom in Australia that China’s voracious appetite for energy and raw materials is fuelling.

However, beneath the economic bonhomie, China’s rise and Australia’s traditional alliances place as yet unresolved strains on bilateral ties. Earlier this year, Australia signed a security pact with Japan, only the second of its kind that Japan has entered into. Canberra and Washington have long been military allies under the ANZUS (Australia, New Zealand, United States Security) Treaty that binds the countries to go to war on one another’s behalf under certain circumstances.

Australia-India ties

Of late, Canberra has also taken to developing its relationship with India. Australia is thus participating in the ongoing joint naval exercises in the Bay of Bengal involving the navies of India, the U.S., Japan, and Singapore .

Much of this activity has been suspect in Beijing, interpreted as being aimed at the containment of China’s growing power. When Australia joined India, Japan, and the U.S. in a quadrilateral meeting on the sidelines of the Association of South East Asian Nations (Asean) Regional Forum earlier this year, Beijing went as far as issuing a demarche, a formal diplomatic communication, seeking details about the meeting.

It has also criticised plans for a three-way meeting between Australia, Japan, and the U.S. later this week on the sidelines of the APEC summit in Sydney. Beijing says these three and four-way dialogues lack transparency and is worried that their underlying purpose may be to encircle China within an “arc of democracy.”

Another concern in Beijing regarding the military pact that Australia and the U.S share relates to the repercussions of such an alliance in the event of a war between China and the island of Taiwan. America is bound to come to Taiwan’s assistance in such a scenario. The possibility of Australia joining such a war on America’s behalf remains a sticking point in Sino-Australian ties.

However, it is clear that despite its alliances with the U.S. and Japan, Australia does not speak in one voice with them when it comes to China.

In contrast to the strident criticism that Washington and Tokyo regularly level against Beijing on everything from its human rights record to its allegedly opaque military modernisation, Australia tends to use softer words aimed at reassuring rather than provoking Beijing.

Canberra has thus remained studiously ambiguous regarding its obligations to fight alongside the U.S. in the event of a Taiwan-China war. It has also refused to join its allies in their lobbying of the European Union for a continuing arms embargo against China. Australian leaders, moreover, have been at pains to stress that their accords or summits with other democratic countries do not amount to an Asian NATO and are not directed against China or any other country.

Canberra realises that it must realign its diplomacy for a better fit with the new reality in which while its military security remains linked to the U.S. its economic security is increasingly tied to China. In the need for such delicate manoeuvring, Australia, however, is not alone.

Across the region, countries including India are waking up to the requirements of a post-Cold War world, in which maintaining an independent foreign policy is the difficult priority. Thus for Australia as much as for India or China the challenge is to open up a space that would allow it to act on a case-by-case basis with a clear eye to its national interests rather than having its actions predetermined due to its membership of any particular grouping.

In the new century, Australia, for long on the fringes of international great power politics, finds itself in the geopolitical spotlight, with the centre of the world’s economic and strategic gravity gradually shifting to the Asia-Pacific region.

On the one side, Beijing is keen to push for stronger ties with Canberra. Not only are Australia’s vast resources of iron ore, coal, gas, and uranium precisely the commodities most needed by the Chinese economy, but going forward Canberra is also the power that is Beijing’s most likely ally in the region.

Unlike Japan, China has no historic animosities to overcome with Australia. Moreover, unlike the U.S. which as the status quo power sees China’s rise as acceptable only if it plays by the rules set forth by Washington, Australia has shown itself to be more amenable in giving Beijing a voice in determining the rules as well.

On the other side, the U.S. sees Australia as a traditional ally with increasing strategic importance in the region. It is to Australia, in addition to Japan, that Washington primarily looks for a force to counterbalance the rise of China. As a result, Canberra is in the enviable position of being wooed by both the East and the West.

However, the diplomatic path ahead for the country remains a tough one to navigate. On the commercial front, China may have emerged as the most important variable in Australia’s diplomatic calculus, but the U.S. remains the cornerstone of Canberra’s defence policy.

The balancing act that Australia is consequentially engaging in will be clearly demonstrable this week with the country playing host to both Presidents Hu Jintao and George W. Bush. Even as Prime Minister Howard signs mineral and energy related deals with Mr. Hu, a new defence pact with America that will reportedly give Canberra access to top-secret U.S. military technology is also likely to be struck.

How long Australia can continue this juggling of interests without being forced to choose sides definitively is uncertain. But the longer it can succeed to do so, the better the news is for all those actors in the region who are similarly desirous of de-hyphenating cooperation between countries from whole-scale alliance with power blocs.

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