Thursday, 30 March 2006
Foreign Affairs, Defence and Trade References Committee; Report
I present the report of the Foreign Affairs, Defence and Trade References Committee entitled China’s emergence: implications for Australia, together with documents presented to the committee.
Ordered that the report be printed.
I seek leave to move a motion in relation to the report.
That the Senate take note of the report.
I would like to thank the committee secretary, Dr Kathleen Dermody, Dr Richard Grant, Andrew Bomm and Angela Lancsar and I seek leave to incorporate my comments into Hansard.
The statement read as follows—
This report, the second in the committee’s inquiry into Australia’s relationship with China, examines the factors shaping China’s foreign policy and the way in which other countries are adjusting to China’s emergence and the implications for Australia. In this context, it looked at China’s relations with ASEAN countries, with the United States of America, Taiwan, Japan, North Korea and the island states in the Southwest Pacific. It also considered China’s military modernisation. I can only touch on a number of issues that were discussed in the report.
China openly acknowledges that its diplomacy must serve its economic development. Chinese leaders espouse a foreign policy that places high importance on global stability, friendly and cooperative relations and good neighbourliness. It is deliberately cultivating special relations with countries rich in the natural resources it needs to continue economic development and is presenting itself to its citizens and the outside world as an advocate for global peace. It wants to reassure the world that its ‘peaceful rise’ does not pose a threat.
Although China’s foreign policy is designed to show its friendly face to the rest of the world, fears about its future intentions persist. Some, especially those with important economic links with China, such as Australia, are keen to strengthen their diplomatic relations but are aware that the relationship is not without challenge.
China’s emergence as a major economic and political force is having a profound influence on its neighbours in East Asia. The strength of the Chinese economy and its potential economic power in the future is increasingly drawing its neighbours into its orbit of influence. With China’s emergence as a manufacturing powerhouse and untapped consumer market, countries across the Asia-Pacific region, including Australia, view China’s booming economy as a source of significant economic opportunities. The willingness of these countries to become politically closer to China in order to secure the benefits of their economic strength is providing China with considerable political leverage in the Asia-Pacific region and beyond.
Despite the clear economic compatibility and recent warm political relations between Australia and China, there are potential difficulties. Most significantly for Australia, China’s emerging influence across East Asia is inextricably linked with the influence of the U.S. in that region. As a close strategic ally of the U.S., Australia’s positive political relationship with China will be significantly dependant on how these two large nations come to terms with the shifting balance of power in the region. Along with many countries in the East Asian region, Australia shares the desire to see China and the U.S. manage their relationship in a way that will encourage a stable and economically prosperous region. Whether or not Australia can continue to develop a close political relationship with China while maintaining close ties with our foremost ally, the U.S., presents Australia with a most challenging foreign policy issue.
Australia’s efforts to balance its relationship between prospective ‘peer’ superpowers has to date consisted of maintaining the best possible relations with both nations and hoping that zero-sum choices between them will not need to be made. The future health of the relationship between China and the U.S. will have significant implications for Australia, particularly given our close strategic ties with the U.S. and the trade benefits derived from China’s economic growth.
The committee believes that Australia must maintain its current position of presenting itself as an independent country whose abiding interest is in ensuring that the region as a whole remains politically stable and secure. It recognises that a cooperative Sino–U.S. relationship is crucial to Australia’s own interests in the region, particularly with respect to the U.S.’ regional security presence and China’s economic opportunities. It believes that Australia, as a friend to both countries, should encourage them, in pursuing their own interests, to place the highest priority on contributing to the stability and prosperity of the region as a whole. The committee underlines the important role that multilateral fora have in creating an environment conducive to cooperative and friendly relations that take account of the interests of the region as well as of individual countries.
In keeping with its foreign policy, China maintains that its defence policy also looks to develop strong, amicable and mutually beneficial relations with other countries. The uncertainty of the nature and extent of China’s military build-up, however, has created an atmosphere of mistrust and conjecture and given rise to concerns about its strategic ambitions. Any steps taken by China to make its reports on military spending and capability more informative, accurate and comprehensive will at least remove the tendency for other countries to indulge in speculation.
The committee believes that Australia has an important role in encouraging countries in the region to work together to create an atmosphere that supports open discussions about regional military and strategic planning. It has recommended that the Australian government work with countries, which have a common interest in regional stability and security, in the ARF, APEC and EAS to promote confidence building measures, such as increased transparency in reporting on military spending and capability, that will contribute to greater regional stability.
The committee also notes China’s increasing importance as a dialogue partner on strategic and defence issues and the growth in the defence relationship with Australia in recent years. It believes that Australia is well placed to encourage China to adopt a more transparent reporting system. It has recommended that the Australian government use its good relationship with China, and its defence links in particular, to encourage China to be more open and transparent on matters related to its military modernisation such as its objectives, capability, and defence budget.
The committee recognises that China and Japan are two countries naturally positioned to exert great influence in East Asia. Therefore, a cooperative and peaceful Sino–Japanese relationship is vital for the stability of the region. There are, however, some deep-seated disagreements between China and Japan which flare from time to time giving rise to acrimonious outbursts and sour relations. The committee supports Australia’s current stand that the arguments are between China and Japan and that it should not interfere. Even so, the committee believes that Australia has a role to encourage both countries to engage actively in regional fora where they can meet and discuss matters in an environment conducive to the resolution of problems.
The small island states of the Southwest Pacific have much to gain from the development assistance offered by donors such as China and Taiwan. It should be noted, however, that some of the island countries in the Southwest Pacific are among the smallest and poorest countries in the world and susceptible to the influence of others prepared to use their economic leverage to serve their own foreign policy objectives.
Diplomacy and aid in the Pacific region are intrinsically linked as China and Taiwan compete for recognition, often utilising the blunt foreign policy tool of aid payments. Clearly, the political rivalry between China and Taiwan in the Southwest Pacific creates an environment where corruption or political unrest can occur.
In this report, the committee highlighted its concern about the intrusion of China and Taiwan’s political agendas into the affairs of the island states of the Southwest Pacific with the potential for their interests to override and compromise the political stability and economic development of the recipient states.
The committee recommended that the Australian Government encourage both China and Taiwan to observe international guidelines for the delivery of development assistance in their aid programs to the Southwest Pacific. It also believes that it is vital to Australia’s interest for Australia to continue to take a leadership role in the Pacific Islands Forum and to demonstrate to all its members that Australia is committed to the ideals of the Forum.
This report has highlighted the complex and changing web of relations that exists in East Asia and some of the tensions that threaten to disrupt this network, particularly those existing between an increasingly influential China and the U.S. It has shown that Australia’s interests are very much caught up in this web. To safeguard its own economic and security needs, Australia relies heavily on the region remaining politically stable and economically healthy.
The committee believes that Australia should take a lead role to ensure that APEC remains relevant and on track by revitalising the process. Having said so, the committee supports equally the work being done in other regional fora such as ASEAN, ARF and the East Asia Summit. It has recommended that the Australian government demonstrate to East Asian countries a genuine interest in and support for ASEAN and the ARF, redouble its efforts to reinvigorate APEC and remain fully engaged with the East Asia Summit. The committee believes that the Australian government should look upon these fora as complementary.
Further it has recommended that the Australia government, through its good relations with the United States, encourage the United States to use its influence more effectively in the region, and in so doing, to improve its relationship with ASEAN and its member countries.
Finally, the committee believes that Australia needs skilled and well-trained analysts with a thorough understanding of China’s security priorities and the complexities of relationships in the region. In light of the importance of East Asia to Australia and the rapid and complex changes taking place in the region, the committee recommended that the Australian Government:
- place a high priority on building-up a pool of highly trained, skilled and experienced analysts specialised in East Asian affairs, and
- review the incentives it now has in place to attract and train highly skilled strategic analysts to ensure that Australia’s current and future needs for such trained people will be met.
I seek leave to continue my remarks later.
Leave granted; debate adjourned.