Dancing with the dragon: a review of “China’s Grand Strategy and Australia’s Future in the New Global Order”

Geoff Raby’s recent book, “China’s Grand Strategy and Australia’s Future in the New Global Order”, is a timely intervention. The book provides a clear-headed assessment of the choices Australian policymakers face today regarding its biggest foreign policy challenge — the rise of China. Raby argues that Australian leaders must eschew containment of China as their primary foreign policy objective. Rather, they should make decisions based on the trajectory of an emerging world order where two superpowers are engaging in strategic competition, and on Australia’s own strategic goals and constraints in that order.

Back in 2012, then Australian Foreign Minister Alexander Downer urged the Gillard government to see the rise of China not as a threat, but as an opportunity for engagement. Downer warned that, “to pursue a policy of containment towards China… would be just not a great, but a grave historical mistake and a total miscalculation… if [Australia] make China the enemy, it will become the enemy”. Former Australian Ambassador to China, Geoff Raby, in his book, arrives at the same conclusion as Downer did in 2012. Raby also advocates for an independent Australian foreign policy strategy that does not view containment of China as its primary objective.

As political relations between China and Australia deteriorate and spill over into the economic relationship, Raby’s book provides a clear-headed assessment of the choices that Australian policymakers face today regarding the rise of China. With the US labelling China as a “strategic competitor”, Australia appears to find itself in a particularly prickly dilemma, having to choose between its closest security ally, and China, Australia’s largest trading partner. However, Raby stresses that choices are never as black and white as they appear to be, and decisions must be based on the hard underlying realities that Australian policy makers face. In Australia’s case, these realities involve judgements regarding the trajectory of an emerging world order, China’s strategic intentions and capabilities, and Australia’s own strategic goals and constraints as a middle power in the emerging order.

Prometheus Bound

The book provides insights regarding these choices. First, Raby argues that China is not an expansionist power. This is not due to a lack of ambition from Chinese leaders, but rather because of the geographical, historical, and resource constraints that China faces. Unlike the US, China is situated in a region marred with conflict, with four of its neighbours — Russia, India, Pakistan, and North Korea — possessing nuclear capabilities. Domestically, China has to contend with internal security challenges that stretch over a vast geographical area, from Xinjiang and Inner Mongolia to Tibet, which makes internal stability and security a rather expensive endeavour. Moreover, a majority of China’s crucial resource imports arrive through the Straits of Malacca, a maritime choke point over which China has little strategic control.

Historically, China has had fractious relationships with several countries in its region. And despite its increasing economic might, China has few allies. On the east lies Japan, a country with which hostilities remain a living memory for many in both countries. China’s support of North Korea’s despotic regime is counterbalanced by US presence in South Korea that has persisted for over four decades. On the west lies India, an equally populous country, with which historical border disputes continue to simmer and the memory of the 1962 war between the two remains. In the north is Russia, against whom China nearly fought a war in the 1960s. Their recent cooperation remains fragile to strategic shifts. Finally, towards the south is the maritime area fiercely contested by at least seven other states.

On the resource front, China’s rapid economic growth over the last four decades has resulted in resource dependencies and new economic challenges. China relies heavily on foreign imports of raw materials which are required to meet its energy needs and sustain its high rates of infrastructure development and urbanisation. While China’s move from a low-income to a middle-income country has been rapid, China will not transition as quickly to high-income status, as it has to deal with a rapidly ageing population, diminishing returns to capital investment, and constraints to innovation.

Despite these constraints, China is already by far the largest economic and military power in its region. And China will overtake the US on these parameters over the next few decades. Rather than shaking its opaque political system, the COVID pandemic has resulted in a further consolidation of the ruling regime’s power as Beijing has managed to contain the spread of the virus and overseen a relatively fast economic recovery when compared to major countries. While there are countries in the region and beyond that may wish to protect their interests from China’s burgeoning influence, it remains uncertain whether these countries can cooperate in an effective manner.

What does Australia want?

Amidst China’s ascendancy and the resulting change in the global order, what are Australia’s own strategic goals and constraints? Raby argues that Australia’s continued prosperity as a small trading nation is significantly dependent on a rules-based international system. Australia is a high-income country with a small population, which means that it is destined to remain a middle power surrounded by countries that possess greater population and resources. Despite these power imbalances, Australian policymakers have to ensure that Australia continues to prosper, while maintaining close security relationships with larger powers, and defending its domestic institutions and values against foreign interference.

What is the best way forward for Australian policymakers given the hard realities of asymmetrical power and the diverse policy objectives that have to be attained? Raby offers a multitude of suggestions.

First, Australia needs to realise that it can no longer take for granted the comfortable assumption that the US will protect Australia from military threats.

Second, Australia needs to acknowledge that China will be the dominant power in East Asia. This means that Australia must recognise the legitimacy of China and its party-state and be willing to cooperate effectively with China across a wide array of issues, from international trade, the environment, water resources, and energy, to threats such as terrorism, nuclear proliferation, transnational crime, and militarisation of space. Attempts to diversify the Australian economy away from China will lead to a significant reduction in living standards, which may be unacceptable to the Australian public.

Third, as China continues to grow, it will naturally seek to influence the behaviour of other countries to align with its own interests. However, for Australia to effectively push back against moves that hurt its interests is to enhance its own military capabilities and strengthen its relations with other countries in the region in order to find common purpose when dealing with Chinese aggression.

Fourth, Australia must adopt a flexible diplomatic approach and work not just with countries that share its democratic values, but also with other authoritarian states that may share similar strategic interests. This does not mean that Australia has to eschew its own values, but that values should not be the determining factor when deciding who to work with.

One area of strategic importance that Raby does not stress enough is the impact of worsening China-Australia relations on Australia’s Chinese diaspora communities.

Numbering around 1.2 million, or 5 percent of Australia’s population, Chinese-Australians are being viewed with increasing suspicion in Australian society. They have been subject to McCarthyistic ‘loyalty tests’, such as those by Senator Eric Abetz asking Chinese-Australian individuals to publicly condemn the Chinese Communist Party. By alienating its large Chinese diaspora, Australia runs the risk of not only undermining its own liberal democratic institutions and multicultural society, but also of failing to take advantage of China expertise from the large Chinese-Australian community.

As US-China tensions worsen, it is in Australia’s national interest to avoid taking sides. Rather, it should adopt an independent foreign policy agenda that reduces the risk of Australia emerging as the country through which superpowers rage a proxy war. Raby’s book provides a strategic framework of a realistic foreign policy agenda that Australian policymakers can implement in the near future. It is one which hinges on a firm understanding of the changing world order, China’s ambitions and capabilities, and Australia’s own multifaceted objectives and constraints as a middle-power. The manner in which Australia responds will have profound implications for the future prosperity and security of Australians. One can only hope that the book is widely read and debated amongst the strategic policy community and the wider public.