Save face over China relationship

20 September 2012

Dennis Richardson, secretary of the Department of Foreign Affairs and Trade, gave the 2012 Michael Hintze Lecture for the Centre for International Security Studies. Here is an extract from the lecture.

We now live in a world in which economic power - and all that flows from it in terms of strategic capability - is shifting from the Atlantic, where it has resided since the Industrial Revolution, back to Asia.

This is the story of China's rise, which is well known and documented. China's rise was reinforced by the global financial crisis, and that crisis hasn't yet played itself out.

We are in unfamiliar territory. A world in which emerging economies are driving recovery while developed countries lag is one we haven't experienced before, and we don't know where it might lead.

We are also seeing big changes in the institutions the world uses to organise itself. But nothing is yet fixed and the system is in flux. That leaves a gap in global leadership, with none of the new powers wanting to take on the sort of responsibilities for global stability and sustainability that have been mainly borne by the US since the WWII. So we may need to adjust to a world where states end up competing less over who acts to shape the world, than over who manages to avoid the costs of doing so.

The US-China relationship will be fundamental. I believe many commentators in third countries underestimate the way in which China and the US have managed to work together. There are obvious tensions between the two and we do see strategic rivalry. But Beijing and Washington do not need to be told how important they are to each other and how important their relationship is to global and regional stability and prosperity.

We read a lot about Australia, China and the US. In Australia, it is not uncommon to see discussion about the implications of the rise of China for our relationship with the US. This often comes down to a discussion about the need for Australia to make a choice between our strategic relationship with the US and our economic relationship with China.

I believe much of the discussion is simplistic and overstated. Our alliance with the US is not up for sale. Since when does any country worth its salt auction its alliance to the highest bidder?

That aside, our relationship with the US is much more than a defence and strategic alliance. The US is our third largest trading partner, our largest source of foreign investment and the biggest destination for Australia's outward investment.

Equally, our relationship with China is more than the sum total of what we dig out of the ground and send to China to feed its urbanisation and development. It now encompasses growing two-way investment, educational and research links and people-to-people movements.

And it encompasses developing defence ties, with the Australian navy one of the few to have conducted a live fire exercise with its Chinese counterpart.

It is reasonable for commentators to speculate about choice articulated in the most stark terms. But that is not a basis for the execution of a country's foreign policy in the pursuit of its national interests. Interests may sometimes be able to be expressed in stark and unambiguous terms but the conduct of foreign policy is, inevitably in my view, pursued more often in colours of grey, than in black and white.

Today, there is a lot of public discussion about Chinese investment in Australia. But we should keep it in perspective. There are elements of the debate today that mirror the debate in the 1970s about multinationals (then largely American, British and European) and the debate in the 1980s about Japanese investment.

Being a friend doesn't mean you can't have differences of perspective. We have had, and continue to have, differences of perspective with China on human rights, some consular matters and some broader regional and global issues such as the South China Sea and Syria.

We have robust exchanges with the Chinese on these and other matters, but the discussions are always mature and sensible. There is no requirement for us to change our perspectives, which are underpinned by a mix of values and interests, because of the depth of our economic relationship. I am not aware of other serious countries doing so. Why should we be any different?

Follow University of Sydney Media on Twitter

Media enquiries: Sarah Stock, 9114 0748, 0419 278 715,