Wednesday, 17 April 2013

China or America? No need to decide just yet

After New Zealand Prime Minister John Key returned to New Zealand following his recent trip to China, early reports suggest tourism and increased bilateral trade were at the top of the agenda. Both these aspects will be crucial for a long-term healthy Sino-NZ relationship, and both are expected to grow appreciably.

And yet, across the Tasman Sea, Australian Prime Minister Julia Gillard also visited China in April returning with a markedly different story. While her delegation did discuss increased economic ties, what sets her visit apart from Mr Key’s is the announcement of a new “strategic partnership” with China.

This strategic partnership is more military in nature than economic, which should not surprise close observers of the Asia-Pacific. Because given Australia’s large economy, strong military, and their strategically important geographical location, it makes sense that Canberra would find closer military ties with Beijing attractive, and vice-versa.

             NZ PM John Key meets new Chinese president Xi Jinping

Ms Gillard suggested a three-way joint military exercise schedule between China, America, and Australia, saying “I am committed to a relationship which goes well beyond the economy … Defence cooperation, which is already far broader and more effective than I think is generally understood, will grow.”

China continues to play an important role in supporting global economic growth and the most significant development in Asia is likely to remain the ascendancy of new credit channels in China. Beijing is reaching out politically and economically to Asia-Pacific countries who are only too happy to return the favour to attract the deep pockets of Chinese investors.

The nuanced histories of some Pacific nations are particularly open to the Chinese charm offensive. Yet because China is still a unique mix of democratic economics and top-down authoritarianism, which seems to be working absolutely fine for Beijing, the political histories of Australia and New Zealand have certain built-in limitations to bilateral engagement with China.

For instance, while New Zealand’s current political relationship with the United States is only slightly warmer than in decades past. Yet both cultures share cultural characteristics and political traditions. China’s politics and culture on the other hand are new and fresh for New Zealand and might still take some getting used to.

Australia too is culturally closer with both New Zealand and the United States. But the lucky country is located geographically nearer to the pulsing Chinese hub in the heart of Asia. For this reason Canberra’s foreign policy must include greater concentration on the changing dynamics in South and East Asia to stay ahead.

And both New Zealand and Australia’s dependence on trade by sea necessitates a deeper interaction in Pacific affairs than their isolated geography might predict.

So whichever empire controls the sea lanes has been a critical ally of Wellington and Canberra in the past; the United States presently holds that mantle. But Canberra especially must keep its options open as China begins to experiment with a blue-water fleet.

In regards to the American ‘pivot’ to the Asia-Pacific officials in China, perhaps correctly, look at the new and refurbished relationships emerging between Washington and many Asia-Pacific nations and nervously point out a containment strategy in progress.

To those in Beijing, their push to secure sea lanes for safe trade and the resources they desperately need for further growth is being countered by an aggressive Washington. The United States, late to the game in the region, has moved to counter Chinese growth rather than work with it.

A Chinese military training ship at a dock in Sydney, Australia - 
Dean Lewins/Australian Associated Press, via European Pressphoto Agency

The view from the United States sees a rising China as a potential threat to American interests and to Washington’s long-standing domination over the Asia-Pacific’s crucial trade routes. Their competition fuels a race for influence in the region which is in all truthfulness quite reminiscent in flavour of Cold War containment geopolitics.

Canberra finds itself juggling between China’s proximate rising power, and the United States as a more distant but strong power. One is a massive trading partner, while the other is the world’s preeminent military power. The choice is complicated.

Australia, as Hugh White correctly pointed out recently, has become a political prize to be won by either Beijing or Washington, but not both. In a smaller, but still significant, way New Zealand is also a trophy to be won in this zero-sum game.  

As a result, both Wellington and Canberra are caught in the middle of a much larger tugging match.

The question of siding with American or Chinese influence used to be like answering the first few prosaic queries in Who Wants To Be A Millionaire. Now, each power has good things to offer the Pacific and the choice is more intricate.

And yet perhaps, as shown in Ms Gillard’s recent China visit, there is still significant room to manoeuvre between the two powers for maximum benefit. Nothing needs to be decided immediately, no existential enemy exists requiring a rushed decision. Although neither Beijing nor Washington will be happy, Canberra can afford to play those competing powers off against each other for a while longer.

New Zealand Prime Minister John Key also showed that the competition between China and America can effectively be bypassed when discussing economic cooperation.

There most certainly are security worries in the Asia Pacific, but many of these are hypothetical at best and camouflage Australia and New Zealand’s true potential to trade healthily with both, rather than either, America and China.

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