Hugh White: Australia to become a Chinese puppet

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Via Paul Kelly:

In his just released, highly contentious but brilliant Quarterly Essay Without America, Hugh White turns the China-America debate in this country on its head by arguing, first, that the US has already lost the big strategic contest with China for primacy in Asia and, second, by documenting the consequences for Australia of living with China as hegemon, a fate the nation cannot even begin to comprehend.

…White says: “If it is going to happen, and it seems there is no realistic way we can stop it, then we must learn to live with it. Some will say it smacks of appeasement even to talk about how we should learn to live with China’s power when instead we should just be ­resisting it.” But Australia, he says, must confront the hard choices we would face.

What can we expect? White predicts China will demand no ­interference in its internal affairs; it will expect Australia to submit to its regional leadership; we should expect greater penetration into our internal affairs; China will be able to impose penalties to ensure we do its bidding; it is likely to apply economic pressure on Australia, given it has recently ­intimidated South Korea and ­retaliated against Norway; it will be far ­harder to check China’s ­investment in infrastructure, its buying of political influence via donations, its harassment of Chinese students and its influence on what our universities teach.

While it would make no sense for China to invade Australia, it would use its military to display its power — it could contest our title to remote territories or deploy forces to our small Pacific neighbours. In such a world there would be no assumption the US would come to our aid. Our military doctrine of self-reliance has never ­envisaged holding our continent alone against a major Asian power, hence the need for a vast strategic rethink.

Because White believes the US alliance system in Asia cannot ­endure, the prospect of Japan and South Korea becoming nuclear powers within the next 20 years imposes a “chilling logic” on Australia — it means crossing the threshold to be a nuclear weapons state is the only method by which Australia could ensure its security with the capability to “threaten an adversary with massive damage”.

…White’s analysis is set against the insightful article in The Weekend Australian by contributing national security editor Alan Dupont, who issued another essential corrective by warning “the looming ­challenge to Australian independence is not the US but China”.

While Dupont and White have contrasting outlooks, they share this point. The tedious mantra from progressives that Australia needs a more “independent” foreign policy by distancing itself from the US and repositioning closer to China has long been ­devoid of realistic assessment about the consequences.

The China challenge, Dupont argues, “is about how much independence Australia will be per­mitted in a Chinese-dominated regional order led by the formidable Xi Jinping”, with signs China’s willingness “to use ­coercion to achieve its dream of renewed greatness” is now “a defining feature of its foreign policy”.

The only interpretation of Xi’s vision after the recent Communist Party congress is that China now constitutes an ideological, economic and political challenge to the West on a scale without precedent and far more lethal and insidious than the old Soviet Union, with its heavily militarised but internally flawed state.

Dupont argues that with American weakness now so visible, it is highly unlikely China will settle for restoration of its leadership position in Asia but, sensing democracy’s weakness around the world, will ­directly challenge the so-called rules-based order with values that reflect its uncompromising ­authoritarianism at home.

The conclusion from Dupont’s analysis is that drum-beating progressives in this country calling for a major realignment of our policies to better accommodate China are naive, unrealistic and embracing a disastrous strategy that will diminish our country, its autonomy and its values.

My thoughts on this tend more towards Dupont than White because of economics. In my view, China is not an internally consistent state. It has exactly the same problem that the Soviet Union did and will die the same death though much more slowly. That is, it is addicted to internal debt-driven investment-led growth. The only true way out of the trap is to liberalise the economy to increase capital efficiency but that can’t be done in concert with increased political centralisation. This is compounded by a poor demographic profile. That leads to Japanese-style economic stagnation and, over the long term, means it can’t compete with the US.

That does not mean that it won’t be strong, or that it will collapse. I expect neither. But super powers do not rise out of middle income traps.

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As for the US, Trump is a passing phenomenon. It’s real risk is similar to China’s in that it must not slide further into oligarchy or it, too, will stagnate permanently.

Then there is this from the AFR:

…the latest survey results from the Scanlon Foundation/Monash University Mapping Social Cohesion program that has tracked the views of thousands of Australians annually for a decade.
The latest data shows only 28 per cent trust Canberra to do the right thing by the public, a massive dip from the peak of 48 per cent in 2009.

This year’s survey found 29 per cent of Coalition voters believe the political system needs major change or replacing, compared to 36.3 per cent of Labor supporters and 51.8 per cent of Greens.

Asked whether they agreed “having a strong leader who does not have to bother with parliament” was desirable, almost a fifth of Coalition supporters thought this was a very good or fairly good idea, almost a quarter of Labor supporters did so and 14.2 per cent of Greens endorsed it.

Almost four in every five One Nation supporters want to see Australia’s political system overhauled, while 37.3 per cent backed the need for a strong leader. Slightly more than half believed Canberra could not be trusted.

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Democracy tends to die to loud cheers rather than at the point of a gun. That is the danger for Australia from China. The rise of a strong man with overt (or covert) Chinese sympathies that misuses the dependence of Australia on Chinese wealth to charm their freedom away.

To wit, today:

The face-to-face meeting between the pair in the grounds of Mr Huang’s Mosman mansion in Sydney last October came several weeks after Mr Dastyari quit the frontbench over his dealings with Mr Huang.

It also occurred after ASIO briefed senior political figures, including from the Australian Labor Party, that Mr Huang was of interest to the agency over his opaque links to the Chinese government.

Security agencies have the capacity to use mobile phones as surveillance devices without a user’s knowledge.

A Canberra source with knowledge of the meeting said on background that Mr Dastyari blamed the US government for the scandal that earlier enveloped him and Mr Huang and said he was the subject of surveillance, including by the US government.

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We might rightly ask, whose side is Sino Sam on?

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.