Tuesday 24 May 2022 | 10:42 | SYDNEY
Tuesday 24 May 2022 | 10:42 | SYDNEY

The Australian (counter-) example


Mark Thirlwell

24 November 2011 11:35

As is now commonplace to point out, Australia's alliance preferences link it to the US, even as its economic ties with China are dense and growing. 

Since Washington and Beijing are increasingly viewed as strategic rivals, this is supposed to present policymakers in Canberra with a potentially difficult trade-off – do you cuddle up closer to your most important customer and risk losing your lovely security blanket? Or do you chance diminishing your economic welfare by sticking with your traditional allies? 

Australia's situation seems tailor-made for testing this purported pull between matters of economics and security. If one were to look only at the increase in Australian-Chinese economic ties over the past few years, then these would seem to predict that Australia would also be pulled geopolitically towards China.

Under the Howard Government, Canberra clearly remained a close ally of the US, to the extent that Australia famously earned for itself the description of US 'deputy sheriff' in the region. But after some early diplomatic pain, the same government also worked hard to keep China onside: a recurring theme in Prime Minister Howard's speeches was that Australia could maintain good relations with both Washington and Beijing (a theme that is still familiar today). Meanwhile, analysts carefully watched ministerial pronouncements for any signs that economic gravity might geopolitically tilt Australia towards China.

In the years following the Howard Government, China's relative importance to Australia as a trading partner has grown, even as that of the US has declined. Granted, the US remains a far more important investment partner. But even there, China's status as an overseas investors has risen sharply from what used to be negligible levels. And of course, at least to date, the aftermath of the GFC has served to reinforce perceptions that there has been a big shift in relative economic fortunes between the two great powers in favour of Beijing.

Yet, sitting in Europe last week, where I attended a discussion on resource security, and looking at Australia's reaction to the Obama visit and the apparent determination of Australian politicians (and several of my Lowy colleagues) to 'go all the way with the USA', it seemed pretty obvious that any simplistic prediction about a direct link between economics and security would have failed miserably. In fact, this was a trend already picked up in our polling, which clearly showed Australians becoming more, not less, attached to the US alliance, even as Australia's economy has grown more entangled with China's.

So, simple predictions based purely on the supposed overwhelming power of economic interests can end up giving you a very misleading view as to where the world is going. Or, in other words, when it comes to alliances, Australia makes for an interesting (counter-) example regarding the supposed pulling power of Chinese economic gravity. Why is this the case? I can think of at least three possible explanations.

First, what appears to be a strong consensus on the relative value of the US alliance over that of the economic relationship with China might tell us something about the ultimate supremacy of non-economic (security, cultural) ties over economic ones. 

Second, it perhaps reflects Australia's hope that, contrary to the strategic pessimists, we can continue to enjoy both the comforts of our traditional security alliances and the rewards of our dynamic new customer base.

Third, as the mining boom rolls on, it may be that Australians have grown complacent (perhaps even ambivalent?) as to the value of our bilateral economic relationship with China.

In fact, elements of all three seem to be in play. With regard to the first, it is hardly surprising that more than economics determines the health of bilateral relationships. At the same time, it seems perfectly plausible to me that there are future states of the world where Canberra can indeed maintain good relations with both Washington and Beijing. Sure, that doesn't account for all possible futures, but since this outcome looks to be the best one for Australia, it makes sense to work towards it, and to act accordingly.

Finally, there probably is a degree of complacency about our current economic circumstances, and moreover, given some of the adjustment pain involved in adapting to the mining boom along with the uneven distribution of the benefits arising from it, there is also some ambivalence there as well.

Photo by Flickr user Jason A Samfield.