Australia, China and being in or out of step

Putting China and Australia in the same sentence gets some people’s juices running. This Friday the annual Australia New Zealand Leadership Forum was to have provided such an occasion — but then Julia Gillard intervened.

Gillard’s calling an election on August 21 was the second time in three years an Australian Prime Minister squashed the forum. Kevin Rudd landed his 2020 summit on the scheduled April date in 2008, since when it has been set for August.

If August is chosen again for 2011, it might be a New Zealand Prime Minister’s turn to kibosh the forum if John Key calls an early election for fear the All Blacks will crash in the world cup.

Australian Prime Ministers kicking the forum into touch is not encouraging for New Zealand’s “most important relationship”.

It is a relationship over which China importantly looms, separately for each country and for the two jointly. The forum’s China focus was a session on opportunities for each country’s companies.

Trade is the Key government’s dominant China focus (though Key was led to wider issues in an television interview last month). Australia bothers also about the security dimension. Will Wayne Mapp do that in the defence review due late this year?

For two decades, and particularly the last decade, New Zealand has had modest defence objectives and a capacity to match. That matching of capabilities and objectives, Hugh White said in Wellington last week, was a “very good defence policy”.

The principle objective is “stabilisation”: what the forces are doing in Afghanistan, Timor Leste and the Solomons.

But will this focus be “very good policy” in 30 years? That’s the timeframe for a lot of defence equipment. Ordering the wrong expensive gear takes a long time to correct.

White, a foremost Australian defence analyst, a former deputy defence secretary now heading the Australian National University’s Strategic and Defence Studies Centre, said the trajectory of the past 30 years cannot be guaranteed over the next 30. The absence of big wars, on which the stabilisation objective is predicated — recall Helen Clark’s “incredibly benign environment” assertion — cannot be counted on.

That can be illustrated by looking ahead from 1910: two world wars, penicillin, splitting the atom and a communist Russia are some events that could not be predicted. How many in 1980 predicted the 1989 collapse of communism, a fast-enriching part-capitalist China, Facebook and a stunning terror attack on New York by militant muslims?

White argued, plausibly, that China will over the next 30 years get richer and stronger and refuse to accept United States primacy, particularly in Asia — a primacy, White said, the United States is determined to maintain.

This poses difficult choices for both, if they are to avoid conflict. Their success or otherwise at that poses challenging questions for Australia and New Zealand.

White warned against alarmism: “Never underestimate the capacity to get it right.” But he said we should also not “underestimate the capacity to take a series of small steps that could lead to conflict”. And he added that past confrontations of major powers spread around the world, as bottom-of-the-globe New Zealand found several times in the twentieth century.

This sort of thinking found its way into the Australian defence white paper in 2009, which identified China as a potential security problem. This did not go down well in Beijing and is probably a reason Australia still does not have a free trade agreement.

White identified five options for Australia in the event of tension: stick with the United States; look for another friend; take the (expensive) Swiss or Swedish option of “guarding our moat”; build a regional maritime alliance in south-east Asia; or keep its head down, like New Zealand, and rely more on multilateral solutions.

White knows New Zealand and its “unique circumstances” well. He said there will be hard choices here as well if there is real tension between China and the United States, especially if Australia — our only ally — gets caught up in it.

If Mapp’s defence review canvasses all this, it will also properly spell out the implications for what capabilities might need to be planned for.

Need it bother? Note that Mapp, as National’s MP on the late-1990s parliamentary committee on which Clark’s reshaping of the armed forces was justified, was broadly in line with the committee’s thinking (National’s official defence spokesman, Max Bradford, was not).

And note the comment of Robert Ayson, former colleague of White’s, now head of Victoria University’s Centre for Strategic Studies: “Wellington has less reason to be concerned” about the changing strategic balance than Australia.

But if we get too far out of step, how will that affect the rest of the trans-Tasman relationship? The 1980s anti-nuclear standoff chilled economic cooperation for a decade.

When the postponed Leadership Forum reconvenes, it might want to factor that in.