Ever wondered what colonisation felt like? Now you know

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The Do-nothing Government has released a new Foreign Policy White Paper. Via the AFR:

The Turnbull government is warning that China’s increasing belligerence over territorial disputes and potential clash over democratic values calls for stronger efforts to maintain American presence in Asia and to bolster ties with neighbouring democracies as a check against Beijing’s rise.

Without US political, economic and security engagement in the region, power would shift too rapidly to Beijing to Australia’s detriment, the government’s Foreign Policy White Paper says as it strikes a hawkish tone about Beijing’s behaviour.

…It says the economic growth that has come with globalisation has changed power balances, with China now challenging the US as the dominant power, a status it has enjoyed since the end of World War II.<

The white paper recognises the economic benefits from China’s rise but cautions it will seek to use its newfound regional influence to suit its own interests.

It describes territorial disputes in the South China Sea as a “major fault line” in the region.

“Australia is particularly concerned by the unprecedented pace and scale of China’s activities,” the white paper says.

“Australia opposes the use of disputed features and artificial structures in the South China Sea for military purposes.

“Elsewhere in the region, Australia is concerned about the potential for the use of force or coercion in the East China Sea and Taiwan Strait.”

Sensible enough. Versus:

Forget the old advanced economies of the North Atlantic – mired in a high-debt, low-productivity, weak wages downward spiral.

The future lies in the Indo-Pacific, which within 15 years will not only be home to four of the world’s five biggest economies (China, India, Japan and Indonesia), a middle class of almost 3.5 billion people will be based within hours of Australia’s major trading ports.

That’s the fundamental economic bedrock underpinning the Turnbull government’s White Paper on foreign policy, which argues that above and beyond the diplomatic imperatives, the rise of the region’s might will create major opportunities and risks for Australian businesses and workers.

“Australia’s economy will continue to strongly complement those of a growing Asia,” the paper’s authors write. “Demand from Asia for minerals and energy – including LNG, coal, iron ore, gold, alumina, copper, nickel and zinc – will continue.

“Australia will also have significant opportunities to supply regional economies with services and premium agricultural products.”

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Not so sensible. There’s not much in terms of policy implications here. To address the binary we ought to be taking material steps to prevent the economic dependence upon China from developing further. We’re proposing to do the opposite.

It’s all kind of besides the point. At some stage when China is strong and angry enough it will punish Australia by cutting off the economic lifeline, the logical end point of our strategic bind. Until then, we appear to have lost the ability to address our own interests, anyway, given all choices are made by short-term thinking politicians.

So, on one hand we’ll carry on as the US deputy sheriff in the South Pacific and on the other be colonised economically. Adani shows how with its Chinese capital, inputs, workers and foreign profits. The only thing local about it is subsidies and hollowing out of other industries. That’s colonialism in reverse.

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I think in the end we’ll probably remain a US-aligned liberal democracy, but the danger is that the economics of it overwhelm grass-roots support for even that and we are coerced or even volunteer into Chinese autocracy.

Our danger is a soft not hard power capitulation. The White Paper does very little to address that risk.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.