Is Labor a China flunky?

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Labor is coming into power. Perhaps the largest national interest challenge it will face, larger even than a failing economy, is how it positions Australia vis-a-vis the Pacific’s two great powers: China and the US.

How they will do so is already taking shape. The Godfather of Labor foreign policy, Paul Keating spoke Friday:

Paul Keating has mocked the Turnbull government’s “barren’’ foreign policy, which he says seeks to contain China and ignores predictions its economy will be double that of the US within 20 years.

“The foreign policy of Australia is the foreign policy of the US,” the former prime minister said yesterday. “And the US has no policy on China as it hasn’t been able to conceive of one.”

Mr Keating used an address at the second annual Sohn Hearts & Minds conference at the Sydney Opera House yesterday to argue Australia had the potential to “lock into the fastest and biggest economy in the world”, which would be worth more than $US18 trillion by 2021 — the centenary of the Communist Party’s foundation.

Instead, the Turnbull government was “freaked out” by security agencies into adopting an overly pro-US policy in Asia that was based on China accepting that the US was the dominant security player in the region.

Mr Keating said a newly powerful China was not going to be part of the US view that China should be happy to be a trading country while the US was the ­superior security power in the ­region. Instead, China had “smelled the weakness” in US power in the wake of the global ­financial crisis.

He said the US had transferred capital and technology to China in the hope that it would become a liberal democracy.

“But chances are it is not going to happen,” he said. “The big US policy punt has been a big failure.”

Mr Keating also criticised the Turnbull government’s recent moves to develop a quadrilateral agreement between Australia, the US, India and Japan, which he said was an attempt to “put a ring around” China, despite its growing economic power. “Give us a break,” he said. “This is the barrenness of foreign policy in Australia.”

He said the Turnbull government had “no policy” to deal with the rising power of China.

Mr Keating, who is chair of the international advisory council of the China Development Bank, said President Xi Jinping was ­determined to continue to grow China’s economy so it could become the world’s largest.

He said this would involve pushing ahead with an economic growth rate of about 6.7 per cent a year until 2021.

“They are going to head off the US at the pass at $US18 trillion,” he said. “China is the only country in the world which nominates a growth rate and then throws money at it.”

I beg to differ. China is clearly on a slowing growth path and, in fits and starts, will stay on it. By the early 2020s I see no reason why it will consistently outperform the US so it’ll not streak ahead.

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That said, economic power is only one and not the most important consideration. As Paul Keating says, US capitalism has failed to liberalise China. Indeed, it is presently more autocratic than at any time in thirty years. Which makes me wonder why Paul Keating is so openly scathing of the Quadrilateral.

When it was first announced, I too was against the Quad. We published against it at The Diplomat. But those were the days of the technocratic Hu Jintao and the steady Chinese liberalisation program. It was very counter-productive to the hope of a free China to “contain” it at its most laissez faire point.

But the GFC changeed all of that, illustrating very clearly to the Chinese Communist Party that centralised political control was not such a bad thing if liberal democracy could be so utterly corrupted and dangerous to the state.

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These days, Xi Jinping has returned China to a political regime more distant from democracy than at any time since the Tiananmen Square massacre. Sure, Australia has great economic relations with China. But we also know that this autocratic regime has been deliberately and tacitly undermining our democracy through corruption of the intelligentsia, lobbying and the penetration of Chinese ever more deeply into core components of Australian household wealth, namely house prices.

In these new circumstances, the Quad becomes something very different; a democractic grouping that shares dialogue designed, in part, to counter Chinese undemocratic soft and hard power. It would not be wise to target that grouping at explicit Chinese “containment” but having some kind of co-operative bulwark of shared values will be a useful counterpoint in the region. Greg Sheridan makes sense:

The answer is almost certainly no. But it leaves the question legitimately open by its weird decision not to endorse the new Quadrilateral Security Dialogue involving the US, India, Japan and Australia, which had its first meeting at senior officials’ level in Manila last week.

…The Quad meeting was something of a triumph for Julie Bishop, who for almost the whole of her time in the foreign minister’s office has been urging the Americans to conceive of our region as the Indo-Pacific. This reflects Bishop’s background as a West Australian. But it also reflects a deep, strategic understanding of the growing importance of India and the Indian Ocean to Australia. This thinking will inform the government’s foreign policy white paper to be published next week.

…The Quad was born under Abe, George W. Bush, John Howard and left-of-centre Indian prime minister Manmohan Singh.

Part of the China lobby in Australia argues hysterically that even having four democracies talking over security is somehow an affront to Beijing, as though we should be ashamed of being a democracy and must avoid ever being seen in the company of another democracy.

The Rudd government decided in 2008 to pull out of the Quad. I think it was influenced less by ideological considerations than by the fact it hadn’t invented the Quad and, like all new governments, rejected everything the previous government had done, even good things.

Surely, surely, surely Labor is not going to put Australia through this madness again just because some of the hysterical China urgers think a mere dialogue with three other democracies is somehow improper.

The worst commentary by far has come from former Australian ambassador to China Geoff Raby. He paints the Quadrilateral Dialogue in the most ridiculous and lurid terms, as though it were a formal military alliance with an binding mutual military assistance clause. This is absurd and deeply dishonest.

He portentously asks: if Australia is a member of the Quad and India and China have an escalation of their long-running border dispute, where will that leave Australia? This formulation is crackers. It would leave Australia exactly where we are now, free to do and say whatever we thought fit. But it would mean we also had one more important layer of strategic dialogue with one of the biggest and most important players in Asia, namely India, reliably predicted to be the third largest economy in 10 to 20 years from now.

By Raby’s bizarre logic, we should not engage in a structured security dialogue with any nation that one day may have a dispute with China lest Beijing construe this as offensive.

Raby’s analysis and Labor’s unfortunate equivocation over the Quad hand Beijing utterly unnecessary leverage over Australian foreign policy. One of the secrets of a good relationship with Beijing is not to make a fuss over things unless necessary. Beijing has security and other dialogues with all manner of nations. It never asks our permission, or anyone else’s. Nor should it.

By making participation in the Quad a question, dependent in part on Beijing’s reaction, federal Labor, all unintentionally no doubt, is actually inviting Beijing to veto its participation in, and endorsement of, the Quad. Labor is thus creating a lose-lose situation for itself.

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Quite right. The Quad could be many different things that help bolster democratic normatives in the Indo-Pacific without going anywhere near strategic alliances. So what’s the big deal for Labor to sign on?

Meanwhile, other Labor stalwarts are busy bashing Donald Trump. From Bob Carr:

The case for Donald Trump starts with Vice-President Mike Pence telling families bereaved in the Texas church shooting a lie so far-fetched it took skills worthy of New York’s Lee Strasberg Theatre & Film Institute.

Pence instructed the mourners that prayer, not gun control, was the answer to America’s now routine mass shootings — the most recent with eight children among its 25 victims. Earlier he had told the Las Vegas shooting survivors “the Good Book”, not bans on semi­automatics, must be their lodestar.

Trump wouldn’t attempt such clammy sanctimony. Pence is a reminder there are more sinister monsters than Trump below the surface waters of Republican politics, just as during last year’s primaries senator Ted Cruz was to some a more tactical and threatening figure of the radical right than the Donald. For his part, Pence represents the threat of theocratic politics, a repudiation of John F. Kennedy’s assertion of absolute separation of church and state, a portal to the world of The Handmaid’s Tale.

Pence, who set up his own political action committee in May, will figure big in the evolution of the Republican Party beyond Bush era orthodoxy. But George W. Bush’s recent criticisms of Trump remind us of a presidency more reckless than Trump’s may ever prove.

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And on it goes. We all know Donald Trump is a retrograde dill and the Republican Party has seen much better days. Nonetheless, the US remains the largest and most effective democracy on earth. Neither Donald Trump nor Mike Pence is going to destroy that in the same manner, way, or even in the same ball park, as Xi Jinping has just done in China. Where’s Bob Carr’s acknowledgement of the rise of Chinese autocracy? He is still busy running the Australia China Relations Institute, the very foundations of which is pro-China, seemingly with no regard for how it is run.

Indeed, and more importantly, where’s Labor’s acknowledgment of the autocratic swing in the Chinese state? We mostly we see the opposite in its behaviour:

  • lot’s of Labor corruption around Chinese bribes;
  • an open borders migration policy that has fallaciously conflated trade and immigration and that feeds the Chinese influence in housing markets;
  • no firm policy on foreign purchases of real estate;
  • lot’s of motherhood statements about Asian “centuries” and “engagement”.
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Nowhere has Labor outlined how its Asian engagement orientation works under a dominant China. Indeed, they seem worrying at odds over it, the recent internecine conflict over endorsing freedom of navigation maneuvers in the South China Sea being a case in point.

“Asian engagement” was born into a 1980s world of scattered post-colonial democracies and cleptocracies across the Asian region presenting manifold opportunities to a closed Anglo nation. That context is long gone. In its place today is a region dominated by a rising autocratic Chinese Super Power that overshadows the external relations of every nation. It may not be wise to contain it. And ideally some kind of Super Power co-ordination would be nice and should be encouraged. But we sure can’t just open our arms to an autocratic China and think that our democracy will be all right, Jack!

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.