Australia's Hard Choice Between China And US

Authored by Lachlan Colquhoun via The Strategic Culture Foundation,

Canberra has always deftly balanced between Beijing and Washington but it may soon need to choose one over the other...

Australia has always believed that it doesn’t have to choose between its economic relationship with China and its defense alliance with the United States. But 2018 is already shaping up to be the year of the hard choice.

It would be convenient for Australia if it was able to maintain its balancing act, but a confluence of global factors has stripped away the fiction that it can separate the economic benefits it gets from China and its post-World War II position as one of America’s closest strategic allies.

There is a lot at stake, including potentially Australia’s ongoing prosperity.

China is clearly not happy with Australia’s adherence to the US alliance and if it follows through on veiled threats to boycott Australian exports and limit investment, Canberra’s loyalty to Washington could come at the expense of significant economic pain.

China’s hawkish Global Times newspaper, widely viewed as a mouthpiece for the ruling Communist Party, spared no niceties in an op-ed last week that warned Australia against “interference” in the South China Sea (SCS) territorial disputes.

Australia was “kissing up” to the US and risked “poisoning” its relations with China, which could “adopt strong countermeasures which will seriously impact Australian economic development.” Australia hasn’t taken a position on SCS spats, but has said it favors “freedom of navigation” in the area, echoing the US’ position.

US President Donald Trump with Australia’s Prime Minister Malcolm Turnbull at the ASEAN Summit in Manila, Philippines November 13, 2017. Reuters/Jonathan Ernst

China is Australia’s biggest trading partner, taking around a third of Australia’s exports. The two countries signed a free trade agreement (FTA) which came into effect at the end of 2015 and two-way trade now exceeds US$110 billion a year.

Chinese students comprise 38% of foreign students in Australia and prop up the university sector with their fees, bringing in US$18 billion per year.

The number of Chinese tourists is also booming. In 2005, 4.9% of foreign visitors to Australia were Chinese, a number which had risen to 13% by 2016. Chinese investors are key players in commercial and residential property markets, and are major investors in sectors such as agriculture and mining.

So when Australia congratulates itself on avoiding a recession for the last 30 years, it owes a major vote of thanks to China.

Despite this, Australia’s position on China is often schizophrenic. While the business and financial community continue to see China as Australia’s future, the defense and intelligence establishment in Canberra take a different view.

They see China as manipulating its global networks, including via the Chinese diaspora in Australia, in support of its global ambitions which are at odds with Australia’s traditional alliance with the US.

Ethnic Chinese wave China’s and Australia’s national flags in Canberra, Australia in a file photo. Photo: AFP

From these agencies comes innuendo about Chinese “interference” in Australia, a country which has for years hosted one of the most significant US surveillance facilities at Pine Gap in the Northern Territory.

A recent ban imposed on foreign donations to Australian political parties was squarely aimed at China, and friendships with Chinese donors cost a rising star of the opposition Labor Party, Sam Dasyari, his job in December.

Driven by fear of espionage and cyber-intelligence, successive Australian governments have blocked Chinese telecommunication giant Huawei from participating in the rollout of the country’s National Broadband Network.

In December, Canberra was also poised to kill a deal for Huawei Marine Networks to lay a 4,000-kilometer submarine cable from Sydney to the Solomon Islands.

Even Prime Minister Malcolm Turnbull, who as Communications Minister was expected to overturn the Huawei ban, referred to China as a “frenemy” in comments at a public dinner last year.

Such paranoia about Chinese telecommunication companies does not extend to New Zealand, where Huawei has been a big player in new national infrastructure or in the United Kingdom, where the company is a big player in rolling out 4G wireless networks and fixed rural phone connections.

Meanwhile, Australia has spent more than US$10 billion on weapons and military equipment from the US in the last four years, according to a recent Australian National Audit Office analysis.

With Australia set to spend around US$150 billion on defense in the next decade, with big outlays earmarked to build a next generation navy and air force, that figure can be expected to rise as it further integrates into the US military supply chain with projects like the J-35 Strike Fighter.

American foreign policy, however, is fast changing under US President Donald Trump. As the US appears to shrink from the region, including through its withdrawal from the Trans-Pacific Partnership trade pact, it is creating a vacuum which poses a major dilemma for Australia.

Does Australia fill that vacuum as a local enforcer of the US alliance and forge stronger alliances with other countries such as Japan and South Korea to counterbalance Chinese influence? Or does it accept China’s increased power in the world and recalibrate 70 years of foreign policy accordingly?

The fragmentation of late 20th century geopolitics is reconfiguring the world, and as a mid-ranking nation Australia is yet to find its new place.

Perhaps the only upside to this dilemma is that the US appears to be moving away from any direct confrontation with China in the Pacific as Trump looks to forge alliances against North Korea.

US Aircraft carrier USS Kitty Hawk receives fuel from the Royal Australian Navy auxiliary oiler replenishment ship during a joint exercise. Photo: US Navy via AFP

If US-China tensions are heightened, including by allegations that China is not acting genuine in its stated intention to isolate North Korea, it would quickly bring the polarity of Australian policy into sharp focus.

The inconsistencies and contradictions, including in strategic areas, are already apparent. While Huawei is banned from major national infrastructure contracts, its handsets have been approved for use by top defense officials and diplomats, and several thousand have been distributed.

When a Chinese company, Landbridge Group, secured a 99-year lease on the strategic Port of Darwin in 2015, top US defense officials said they were “stunned” by the decision. Critics at the time contended it gave China a “front row seat” to spy on joint US-Australian naval operations.

Australian universities have received government grants to work on collaborative research with Chinese companies on technologies which could have military applications. The University of Adelaide, for example, is working with the Beijing Institute of Aeronautical Materials, a company which is a part of the Aviation Industry Corporation of China.

All of this shows that Australia’s new hardline on China is and will inevitably be compromised by burgeoning economic relations. While the economic threats from China may simply be posturing at a tense juncture, they have called out and exposed the unresolved contradiction at the heart of Australia’s 21st century identity.


Zero Point Mon, 01/15/2018 - 02:07 Permalink

As an Australian I say FUCK China. Their open buying of politicians, their secret police keeping track of "Chinese" people in Australia. Their billionaires land banking in our most expensive cities. Their hordes of bad mannered, openly racist people buying out whole suburbs. Fuck them.

Scanderbeg Zero Point Mon, 01/15/2018 - 02:23 Permalink

Yeah, fuck the Chinese. The same process is happening here and particularly in California. 

They're flooding the universities, taking over entire industries and buying up all the real estate while they rape the U.S with a $500B trade deficit.

You guys should just build Nukes so you can tell China and the U.S to fuck off along with everybody else. If S. Africa could do it I reckon Australia could build one in a few months.

In reply to by Zero Point

eatapeach shitshitshit Mon, 01/15/2018 - 07:24 Permalink

UK has nukes, thus it's a pretty safe bet that Australia and Canada do, too. It's wise to keep it quiet, though, as there's probably a slight chance Australia could survive a global catastrophic nuclear war. I still don't see why white countries (USA, Russia) want to fuck with each other. There's something rotten in governments that lead countries to war.

In reply to by shitshitshit

QueeroHedge 07564111 Mon, 01/15/2018 - 02:49 Permalink

if they're ever stupid enough to tag behind the US in an 'altercation' with China the koala plebs won't last 2 weeks.


Oh, we are!!


Australia has done everything we can for the last 100 years to piss off our militarily stronger neighbours. England used us as cannon fodder for a european war and we're proud of it! Bring it on yanks!

In reply to by 07564111

07564111 QueeroHedge Mon, 01/15/2018 - 03:03 Permalink

This is one of the things zero brain above fails to take into account.

Tables 4a, 6 and 7 in this Australian .gov Petroleum Statistics document - Issue 256 Novenber 2017…

tell why any involvement in a skirmish in the Asia Paciific will be bad news for Australia. The consumption cover ( in days )i n table 7 is more than a little interesting from a supply/strategic reserves perspective.

Sooner or later a choice will need to be made, but I think you're correct, they will make a bad choice.

In reply to by QueeroHedge

Zero Point 07564111 Mon, 01/15/2018 - 03:29 Permalink

Pfft. There's no need for me to talk up Australia militarily. A brief look at Australian military history speaks for itself. Unlike that of China, which couldn't even successfully invade Vietnam. We at least managed that for longer than China did. In fact Vietnam trounced the PLA in a matter of months, even after decades of war and being heavily engaged in Cambodia. The PLA is a joke.

In reply to by 07564111

07564111 Zero Point Mon, 01/15/2018 - 04:14 Permalink

LoL you could 'talk it up' all year and it still wouldn't rise above ground level.

Funny how it always reverts to things that happened years ago while failing to take into account the reality of today, it's this kind of stupid arrogance that will be your downfall. I also wager that your Indonesian neighbors will make life interesting for you, now that they are joining with Russia and China. ;)

In reply to by Zero Point

QueeroHedge Zero Point Mon, 01/15/2018 - 07:01 Permalink

Any of you slopes want to head south, we'll give you the same message we gave Tojo at Kokoda and Milne bay.


You are pretty thick even for an army guy. Do your eyes well every anzac day when we celebrate  the time we sent a generation of young poor men to their deaths in a European war?


Too bad we don't care as much about the present day troops as we do the ones we already disposed of maybe we'd stop proudly sending them to die in the middle east another supposedly relevant region the aus army need be. oh well at least they don't even bother to report those deaths on the news anymore that fake emotion news shite was cringey af

In reply to by Zero Point

Rabbitnexus Zero Point Mon, 01/15/2018 - 22:52 Permalink

I am a bit old now but was a reservist myself and former infantry when we made the reputation you're riding on now you LGBTQ modern faggot for Empire. You talk like a young knob.  Indonesia would not even be within our capabilities to take on directly and China is far more effective today than it was sixty years ago.  YET you go find out what they did to beat the Indians in 1962.  With a military in the previous century they used raw grit and manpower to perform miracles and then quietly withdrew having made their point.  Today they are a modern 21st century military with better missiles technology and various other edges on the US and it's increasingly farcical alliance. 

In reply to by Zero Point

Rabbitnexus Rabbitnexus Mon, 01/15/2018 - 23:00 Permalink

Go on too and put down the Indians. No doubt they're more pussies to you. More racist drivel, you ridiculous fool.  The sort of white supremacist warrior delusion you're living under was born in a world where the guns and military technology edge was purely white. That has long since gone which is why the USA has been unable to make headway against anybody in sixty years of orchestrated wars and conflicts.  The same stupid, self defeating arrogance which assumes a white man is somehow two feet taller and twice if not four times the man of any darker hued person.  The same assumption which presumes some special civilised genetics exist in their particular people or nation, despite the fact most of us are modern national inventions cobbled together from the same mixed heritage.  This sort of over confidence does not win wars.  For thousands of years men's wars have been fought and we've learned a few basics.  Besides the fact history does repeat itself in cycles and fools never learn from it anyway, over confident assumptions and over reach lose wars and Empires.

In reply to by Rabbitnexus

Ghost who Walks 07564111 Mon, 01/15/2018 - 07:49 Permalink

My Russian friend, you of all people should understand that Logistics is critical for any Invasion force. As the German Armies advanced deeper into Russia, their supply lines became very long and the Russian lines of supply very short. Eventually the Russians had a huge supply advantage, and then retook their country. The same thing happened when the Japanese advanced across Papua New Guinea, eventually they got so close to the Australian supply bases, that the Australian forces could deploy Artillery and had plenty of Ammunition and food just when the Japanese ran out of Logistical support. As the Japanese rear was their homeland and supply was via shipping, they were always subject to supply interruptions from submarines. Australian internal lines of communication cannot be sunk.

Indonesia could have 3 Million men under arms and it would only increase their problems trying to advance across a huge barren area. They also have to cover a substantial sea gap that makes their shipping vulnerable to Submarines. If you look at Australia's Submarine force rather than the number of troops, you will understand the defence strategy. Remember what happened to Napoleon's Grand Armee in Russia. No supplies.

The Indonesians are practical people and Australia has reasonable relations with them.

In reply to by 07564111

52821740 Zero Point Mon, 01/15/2018 - 07:21 Permalink

Zero as an Aussie I appreciate your fiesty spirit that's what we need in our Army. As much as I hate the fact that ZH is a cheer squad for Russia and  anti - west (why are there NEVER any articles critical of Russian action on ZH?) I think the pro Russian Troll has got a point about China.  What China was in the past it aint any longer - it is rapidly changing especially with Russia as it's Ally.

Having said that it exhibits the same bad behavior as Russia - No real Democracy.  No real transparency, chronic corruption ( at least the Chinese are superficially tackling), Systemic human rights abuses (China) permanent land grabs (at least the USA does so under the guise of implementing democracy then leaves) .

The powers that be in China and Russia are only interested in preserving their power and expanding whereas this is not possible under our parliamentry systems. 

For all the faults of the USA given the choice I'm with you.  Fuck China and their money I'd rather live in a free and open society where equality and transparency are valued. 

I'm not under the delusion we have these conditions totally but comparatively - yes. 

In reply to by Zero Point

52821740 QueeroHedge Mon, 01/15/2018 - 10:10 Permalink

Do you think if Julian did the same thing as a citizen of Russia or China things would  be  better for him? No fucking way!  after begin tortured he would just disappear or just be murdered in public.……

In reply to by QueeroHedge

QueeroHedge Scanderbeg Mon, 01/15/2018 - 02:43 Permalink

As an Australian who isn't retarded like zeropoint I thank china for their fake economical expansion that hs seen them buy massive amounts of coal/iron ore all that shit that has kept Australia's economy alive. I also recognise USA is good for nothing but puritanical religious virgins, wars where Australia is forced to send our young and poor to die for the profits of sucky american oil companies, and morbidly obese creatures. 


Oh, and your beer is piss weak and sugary, fuck all you yanks.

In reply to by Scanderbeg

52821740 QueeroHedge Mon, 01/15/2018 - 07:47 Permalink

Don't worry there's no real people from the US on ZH. They are all Russian trolls pretending to be. 

From Wikipedia:

'Former Zero Hedge writer Colin Lokey said that he was pressured to frame issues in a way he felt was "disingenuous," summarizing its political stances as "Russia=good. Obama=idiot. Bashar al-Assad=benevolent leader. John Kerry=dunce. Vladimir Putin=greatest leader in the history of statecraft." Zero Hedge founder Daniel Ivandjiiski, in response, said that Lokey could write "anything and everything he wanted directly without anyone writing over it."[20] On leaving, Lokey said: "I can't be a 24-hour cheerleader for Hezbollah, Moscow, Tehran, Beijing, and Trump anymore. It's wrong. '

In reply to by QueeroHedge

FBaggins 52821740 Mon, 01/15/2018 - 10:26 Permalink

ZH is about the only free American site to get actual facts and insightful opinions. If you are constantly brainwashed by the US jerkoff MSM that: Russia=evil; Assad=Hitler; John Kerry = smarts; Vladimir Putin = KGB greatest enemy of the world; Trump = dink; then if you are not part of the corrupt US establishment you should find ZH is so very refreshing and informative.   

In reply to by 52821740

52821740 FBaggins Mon, 01/15/2018 - 10:57 Permalink

Haha very funny.  If you believe that your either one of the Russian trolls, one of the Tylers or simply deluded.

I enjoy the entertainment value and timely stories on ZH but impartial it ain't. Actually since the US elections I now seriously entertain the possibility that it is run by the Russian state based on the content.

In reply to by FBaggins