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Allan Gyngell - NZ, Australia and China: A False Choice?

By Allan Gyngell

This speech was given at Diplosphere's panel discussion on NZ, Australia and China: A False Choice? on 22 June, at Parliament.

Many thanks to Maty and Diplosphere for the invitation. It’s a great honour to be here by Zoom but I can’t tell you how much I’m looking forward to getting back to New Zealand in person before too long.

It’s an honour, too, to be on this panel with High Commissioner Forsythe. She has given us an authoritative account of Australian policy towards China which I can’t match, so I will try to look at the issue through a more historical lens and then reflect on the future.

Allan Gyngell, National President of the Australian Institute of International Affairs

If you had given a 20th century Australian policymaker a sheet of paper and asked them to design a world that would perfectly suit their country’s interests, they would have come up with something very much like the international landscape between China’s economic reform movement in the late 1980s and the aftermath of the global financial crisis around 2010. That was a world in which Australia had an alliance with the most powerful country on earth, the United States, and a deeply complementary economic relationship with a huge and rapidly growing China. The post-Cold War world suited Washington, Beijing and Canberra equally well. As Australian political leaders from both parties regularly intoned, Australia did not have to choose between America and China, between our security and our prosperity.

But from around 2010 onwards, the global environment began to change. In essence, both China and the United States switched from being status quo powers to being non-status quo powers.

After the geopolitical disaster of the Iraq invasion and the unexpected economic collapse of the financial crisis, Americans decided they were no longer getting the returns they wanted from the international system they had created after the Second World War, and to which they had contributed so much.

The most obvious manifestation of this discontent was the 2016 election of Donald Trump. But although Trump has gone – temporarily at least – the desire for change remains. In many ways, President Biden’s ‘foreign policy for the middle-class’ is simply Trump’s America First with better manners. And the one thing that unifies a deeply divided American polity at present is the belief that ‘China is eating our lunch’, in Biden’s words.

On its side, China changed, too. In 2010 it became the world’s second largest economy in exchange rate terms. Two years later Xi Jinping became General Secretary of the Communist Party.

He turned out to be the most powerful Chinese leader since Mao, removing the term limits which had established an expectation of regular top-level political change.

China wanted a place in the international system more commensurate with its weight, and a system which carried fewer of the normative values of liberalism. From the South China Sea to the Belt and Road Initiative, its actions showed a new international assertiveness. It became more demanding of others, blunter in its response to critics, and more inclined to deploy economic coercion.

One result of this was that Australia became an early recipient of Chinese displeasure. Particular policy positions the government took on issues such as 5G, foreign interference and the South China Sea generated Chinese action against Australian exports including coal, barley and wine, although China’s continuing reliance on Australian iron ore kept trade figures high.

The Canberra interpretation of these developments has been that the Chinese reactions were completely unwarranted and that Australia has done no more than stick to its own values. I don’t think it’s quite as simple as that.

The criticisms I would make are not of the policy positions Australia has taken, but the diplomacy in which a lot of them have been wrapped. For example, perfectly reasonable Australian legislation against foreign interference from all sources was given a very explicit China focus when the then Prime Minister, Malcolm Turnbull, defended them by channelling a famous quotation from Mao, and declaring in Mandarin that “Australia has stood up”. The decision taken to ban Chinese participation in the 5G network was defensible – is it likely China would allow a western supplier into its system?- but Australia then became the self-declared missionary for persuading other countries to the same cause.

There are other examples. As a veteran of years in the Australian intelligence community I am in no doubt of the importance of the five eyes relationship to our intelligence services. But I think its extension into some other policy areas is ineffective and dangerous.

As the veteran journalist Max Suich documented recently, Australia has pretty deliberately positioned itself out in front of America’s other allies on China.

None of this is to excuse China. Its crude use of economic levers, its wolf warrior diplomacy and its petulant refusal to take up phone calls from the Australian side show that diplomacy has been missing in action on both sides.

Whatever the reasons, the result of all this is that bilateral relations are worse than at any point since 1972. It’s not clear how we extricate ourselves from this position, or indeed whether either government wants to.

Scott Morrison holds first in-person meeting with Joe Biden and Boris Johnson at G7

The clearest signal on the Australian side was in Prime Minister Morrison’s speech on his way to the recent G7 meeting. Drawing on language originally used by Condoleeza Rice, Mr Morrison called for a world and regional balance of power ‘that favours freedom’. it is hard to interpret a ‘world order that favours freedom’ as anything other than a call for a world order that weighs against China. That’s a real change in the declaratory position of the Australian government. Despite denials from all sides, we seem to be drawing steadily closer to a decoupled, bi-polar world like that of the Cold War.

Let me just end with three worries about the future.

I worry about our collective lack of confidence. This is new, and comes off the back of American unease. If we believe what we say about the value of democracy – and I certainly do – then we surely believe that our system will deliver better outcomes over the long-term and will be resilient enough to stand up to whatever challenges other systems throw at us.

Secondly, I worry about the way values – which are certainly important to us – are being interpreted through a particularly narrow lens of political systems. Our interests – including our economic interests – also have value. They enable us to fund the sort of prosperous, fair society we want to create. I worry that people who speak about the importance to Australia of a mutually prosperous trading relationship with the world’s largest economy are being accused of disloyalty to some higher national values.

Finally, I worry about the cohesion of our multicultural society in an environment where, however much the government tries to focus on the Communist Party or the Chinese government, China itself becomes identified as an enemy. Lowy Institute polling shows nearly 20% of Chinese Australians reported being threatened or attacked in the past year because of their ethnicity. That will require the most careful handling.

Terence O’Brien and I may be the only people in the room who were actually working on foreign policy and national security during the Cold War. I certainly remember the anxiety and sense of danger in those years. I keep feeling the need to remind younger colleagues that great power conflict is no small thing. All of us – big powers, middle powers, small powers – have a responsibility to take its management seriously.

Allan Gyngell is the National President of the Australian Institute of International Affairs and former Founding Executive Director of the Lowy Institute.

The views expressed in this article are the author's own and do not necessarily reflect Diplosphere's stance.

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