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Via The Australian:

China says reports it wants to build a military base in Vanuatu are “sheer fiction” from Australians stirring up trouble.

Malcolm Turnbull admits there is tension between the two countries, after Fairfax Media this week reported China asked Vanuatu about building a permanent military base, while Australian ministers have been refused visas to China.

Vanuatu says China has never approached the island nation about a base, which was confirmed by China on Thursday.

“Such allegation of the Australian side is sheer fiction, and Vanuatu has clarified on this matter,” Chinese Foreign Ministry spokesman Geng Shuang told reporters.

“The South Pacific island countries should not be the sphere of influence of any country.

“Enough with certain Australian individuals’ interference in others’ internal affairs.

Amen to that and right back at ya. Let’s not forget the source of recent tensions came from China not Australia:

  • It began with the corruption of Sam Dastayari which unleashed a whole gamut of revelations about dodgy dealings in various parliaments.
  • It was pushed forward with the release of Silent Invasion which chronicled all kinds of unhealthy influence permeating everything from education to business.
  • Now it is moving forward again with reassessments of our strategic roles in the Pacific and Asia, plus whatever direction the US is taking under Donald Trump.
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For too long the China debate has been dominated by apologists like Twiggy Forrest, Bob Carr, Geoff Raby and James Laurenceson. Tensions between Australia and China are long overdue. For years we’ve been sailing blindly into its sphere of influence and now, suddenly, we’re waking up. It’s a magnificent debate that should rise in volume and breadth until we settle, as a nation, on a much more considered course than hitherto’s grasping for trade riches.

My own contribution is straight forward. China is not what we hoped it would become when we took the trade handshake a dozen years ago. It is not liberalising. It is going to other way, into dictatorship. Yet it is still growing in eminence and power projection, so we are forced to construct a new way to deal with it.

China sees its role in the world as manifest destiny with a total claim over the ethnic Chinese imagination without borders. It must therefore be dealt with equally comprehensively. Our response should have three dimensions to it. The astute among you will see that these three steps actually work hand-in-glove with one another.

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First, our economy must seek balance. To achieve that we will need a raft of new policies that aim to improve Australian competitiveness and get us out from under the commodity dependence. This is necessary anyway as China slows and changes and wants less dirt. We must reform energy, banking, and real estate to lower the currency, boost productivity and move from urbanisation growth drivers to tradables.

Second, we must engage strategically and diplomatically across our entire region. ASEAN is a natural partner to hedge Chinese influence. The Quadrilateral is also useful in bringing together allies. The US alliance must be constantly tended and revitalised. The Pacific must be treated as the good friend and partner that it is with significant aid and bilateral economic exchange, not the usual afterthought.

Third, Australian politics and society must be prepared and shielded to contain excessive Chinese Communist Party influence. This can easily be achieved via bans on foreign (or all) donations to political parties and the introduction of a federal ICAC. Society, too, is easy enough to protect if we have the will. There is no need, nor desire, for discrimination. We simply cut the permanent migration intake in half. It needs to be done anyway to take pressure off the east coast crush-loading. We should eschew both the cultural chauvinists of the Coalition and the “Asianising” influences within Labor. We are a multicultural democracy with liberal Anglophone roots. Let’s accept and protect it.

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Thus, the state of affairs between Australia and China as they are is naturally one of tension. That doesn’t mean we can’t be pragmatic and friendly trading partners. Of course we can. But the period of calm we’ve enjoyed for a decade was a paid-for illusion during which we took the bribe and pretended it wouldn’t come with costs. It does. It jeopardises our democracy. It is finished. Let’s not bring it back.

Instead, let’s deal with things as they are so we don’t wake in fright one day to find the myriad children of the Lucky Country are born into something altogether less young and free.

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.