Russell Trood (Queensland, Liberal Party) Share this | Link to this | Hansard source

Only twice over the last 500 years have there been significant shifts in the locus of global power. The first occurred during the 17th century, as western Europe rose to prominence. The second took place in the later part of the 19th century and the early part of the 20th century, as the United States rose to strength. The 21st century will almost certainly see a third great transition—the rise of Asia.

This will not take place immediately, but it has already begun and it will be at least as profound as either of those earlier eras. It will first be an economic transition, as Asia becomes the dynamic centre of the global economy. But politically, strategically and culturally, great change will confront the international community. Australia will certainly not be immune from the impact of this global shift. We should not be fearful of it. Though the change is not without perils and dangers, it is overall an opportunity to seize—provided we are prepared and willing to make the national investments.

Asia’s rise is being led, of course, by China. Its economy grows at around nine per cent per annum, and it is now the world’s largest importer and exporter of numerous manufactured goods, commodities and agricultural products. Its global currency reserves are not only massive but they are helping to finance much of America’s fiscal and current account debt, and Chinese corporations are reaching out to become truly global enterprises. Militarily, the Chinese continue to spend vast sums on the modernisation of their defence capabilities. Diplomatically, China is more actively and constructively engaged in regional and global organisations than at any time in its modern history, and its people are more mobile, travelling widely abroad for pleasure, business and education.

China’s story is important, but there is a great deal more than this to Asia’s rise. Japan, still arguably the world’s second-largest economy and with one of the world’s considerable military capabilities, is both a global and a regional giant. After a decade of stagnation its economy has returned to growth, and corporate restructuring and innovation are helping to reassert the leadership of Japanese business around the globe. India’s size, expanding military capabilities and increasingly strong global growth add another profoundly important dimension to Asia’s rise.

Nor should the contributions of other Asian states be overlooked. They have largely recovered from the devastating financial crisis of nearly a decade ago and their economies are also enjoying strong growth. South Korea is taking a course that seems likely to lead to greater independence from the United States policy in East Asia. ASEAN, after years of introspection, is once again finding the confidence to pursue greater economic and political integration, with Asia playing a pivotal role.

There is of course nothing preordained about Asia’s rise. Events could easily dictate a different course, as took place in 1997. China will have to manage numerous social, political and economic challenges if its rise is to continue successfully. The region is burdened by historical tensions that cannot be easily set aside, and several of the world’s most acute trouble spots are in Asia. It is also a matter of deep concern that relations between China and Japan are at their lowest ebb in decades. Other perils may also lie ahead, not least the outbreak of a regional health pandemic that could threaten the lives of millions. Assuming the risks can be avoided, Asia will be well on its way to being the focal point of global geopolitical affairs by the middle of this century. It will not necessarily be a politically and economically integrated Asia in the manner of western Europe. Indeed, viewed from the vantage point of 2006, this seems unlikely, despite the signs of progress in that direction. Rather, Asia’s place in world affairs will be significant for a range of other reasons, not least the following ones.

Asia currently accounts for about 26 per cent of world trade, and its proportion continues to grow. By mid-century, three of the world’s four largest economies are likely to be located in Asia—China, India and Japan—where trade, financial and to some degree labour markets will be more integrated. An increasing proportion of the world’s intellectual capital will be found in Asia, with business innovation underpinned by large investments in research and development and elite education institutions. While the US is likely to retain its position as the strongest military power through the first half of the century, that power relative to China will be eroded. Asian ideas and values are likely to be spread more pervasively across the globe as a result of the spread of Asian popular culture, business practices and more active diplomatic activities. Asia will be more self-confident about its place in world affairs and thus less likely to be sympathetic to outside intervention in those affairs. Nevertheless, I expect the United States will certainly maintain an important strategic presence in the region.

These changes will result in a profound shift in global geopolitics. If that were to occur peacefully without conflict or undue tension, it would be a considerable accomplishment since historically global shifts of such magnitude have generally been highly divisive and fractious. We may be fortunate, but it would be wise to be cautious given the extent of the change I contemplate. Australia’s national interests are directly and acutely engaged by these changes. Even if the security dangers turn out to be overstated, we have a wide range of security interests that need to be protected there. At the same time, the challenges of engaging with an economically powerful, commercially competitive, politically assertive and culturally confident group of countries with profoundly different political cultures and commitments to democracy will certainly test us.

As we all know, we are not of Asia. Our population will remain small relative to many of the most significant Asian countries. Yet geographically there is no other part of the world to which we more naturally belong, where our national interests are potentially at greatest risk but also where the opportunities to advance those interests are the most promising. Since the end of the Second World War, Australians have managed the challenge of Asian engagement with some success. I am especially proud of my own party’s accomplishments, not least the Howard government’s participation in the first East Asia Summit in December 2005. Historically, our record is a strong one. But there is hardly any reason for complacency. We will fail the challenge of Asia’s rise if we do not secure, maintain and invest in a comprehensive knowledge and understanding of the region.

Our knowledge of Asia is a significant national asset but at the moment there are some disturbing signs that we are treating it with neglect, even contempt. Over the last 15 years we have seen, as Professor Michael Wesley has put it, the silent collapse of Asian studies in Australian universities. Although the news is not all bad, a 2002 report by the Asian Studies Association of Australia identified some troubling trends. The percentage of Australian students whose studies involve anything to do with Asia is small and declining. The study of Asian languages, with the exception of Chinese, is also declining, in some cases critically. The population of people with Asian teaching and research expertise is ageing, with nearly half the population over the age of 50 and 75 per cent over 40. In recent years some of our best Asian faculty members have been lured overseas. Our expertise in important parts of the region, once so strong and of direct importance to the national interest, has declined. Indonesia and India are two cases in point. The number of Asian studies departments in our universities is contracting as are the number of research centres specifically dedicated to the study of Asia.

The steady erosion of expertise verges on a national disaster. If it continues we will have fewer people to teach Asian studies, fewer people with language skills, fewer people with Asian expertise to place in business and fewer people to provide analysis in government agencies such as intelligence, Defence and foreign affairs. These are not losses we can afford. There are many reasons for these depressing statistics, but all of us with an interest in preserving our skills—politicians, the community, governments, universities, all of us—stand charged with national neglect. There is, however, more to be concerned about in our quest for Asian knowledge than the decline of Asian studies.

Over the last 15 years there has been a decline in Australia’s diplomatic representation in Asia. Overall, the number of DFAT responsible employees increased between 1990 and 2005 in both South-East Asia and North-East Asia. When, however, we disaggregate the figures between Australia based and locally engaged staff, the picture changes. The business end of our representation, the Australia based staff, has declined in both regions. Over the same 15-year period, North-East Asian numbers have declined around about 23 per cent and in South-East Asia around 20 per cent. The loss appears to have been especially significant at several key posts. No doubt technology and other efficiencies account for some of this decline, but the trend is unmistakably down and it is a matter of deep concern.

Also troubling is Australia’s investment in research and development relative to our Asian neighbours. There is a general trend towards increasing Asian investment in knowledge; as a consequence our own strength is being eroded. The growing strength of North-East Asia is especially marked. As a percentage of GDP, China currently invests increasing amounts—now 1.23 per cent. Korea invests 2.64 per cent, Japan 3.15 per cent and Australia just 1.62 per cent.

Anecdotal evidence suggests that Australian businesses are still finding commercial engagement with Asia too hard. Trade between Australia and Asia looks strong and in some areas it is, but we still have a $3 billion trade deficit with Asia. It is easy to act as the region’s quarry, and free trade agreements may help, but in an intensely competitive environment commercial success is harder to achieve. As much as anything else there seems to be an attitudinal problem to overcome here. As the executive of one of Australia’s largest companies recently remarked, ‘If we even look at Asia our share price falls.’

Popular Australian reaction to events where Australians have found themselves in trouble in Asia—Schapelle Corby, Michelle Leslie, Van Nguyen and the Bali nine—all suggest that we have a very long way to go before we gain a satisfactory understanding of Asian law, customs and social values. It is not enough for our media just to report the sensational from Asia, whether it be a drug trial or a natural disaster like the tsunami. We need more consistent and informed media reporting: stories and material that get Asia and its customs, traditions and values into the Australian consciousness. We should do this not because we wish to emulate Asia but because we cannot hope to succeed there—we cannot hope to change the things we find difficult, such as the death penalty—if we do not know and understand.

I am the first to acknowledge that Australia has made considerable progress in engaging with Asia over the last 50 years. But I think it is at least a fair bet that it is about to become a whole lot more difficult as Asia rises. This presents us with a national challenge. We can ignore it and accept the possibly disagreeable consequences or we can seize the opportunities that accompany it. We have all the resources we need to do the latter but we had better get on with it.