14:40 GMT +321 March 2019
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    Pivot to Asia

    Australia's Attitude to Asia

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    John Harrison
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    There is a lot happening in Asia at the moment. Economic realities reflect a movement towards a multipolar world and politics are in general following in that direction. Australia, however, is not changing at all. Why?

    Jeff Schubert, an Australian visiting professor at Moscow's Higher School of Economics joins the program.

    We know that Australia has a population of less than 25 million people and is a fantastic place. We also know that the country is heavily dependent on being an energy exporter. It is the world's top ore producer and exporter, the biggest coal exporter and 2nd largest LNG exporter. A lot of these resources go to China. What we don't know is that Australia lives in a kind of state of denial as to the fact that without China, the Australian economy will experience great difficulties, whist simultaneously maintaining a strongly pro-US political course. Jeff Schubert says that there is a big debate in Australia between those who say that ultimately they must choose the US-Australia-New Zealand security alliance over China, and others who say that really, Australia's ultimate choice must be China. "If you take this second choice you have to worry that maybe China's economy will slow down and there will be less demand for certain resources that Australia exports. However it might be many decades before China needs less Australian iron ore; China may never need less Australian natural gas (LNG) because it is trying to get away from coal. Also, Australia is a very high quality food exporter, and Chinese do like Australian food. Australia is a high quality education exporter, and it is a great tourist attraction. If the present US-China trade war leads to a global recession, the fallout on Australia's economy would be severe, but nevertheless, right now, Australia looks quite comfortable….On the technology side, Australia has not become a technology innovator but it has become a technology user, so as to get the best results of the resources that it has. There might be some changes coming but they are some way off….A lot of Australians in foreign affairs and security analysts do worry about the course that Donald Trump is currently taking, and they do see the dangers. But once again, Australia seems still to be concerned with forgetting terrorism. The US has moved away from fighting terrorism, and is now talking about great power rivalry, but Australians are still locked into the idea that terrorism is the biggest threat in the world, so there is a dichotomy there and a lack of reality."

    To the question: "How do Australians react to Donald Trump?", Jess says: "They don't particularly like him, they don't see him as a particularly nice person, he has a very distorted view of the world."

    Australia is seen in some quarters as been the Big Brother of the region, going back to its late 19th century annexation of Papua and post-World War 1 occupation of New Guinea, and participation in the 2003-2017 ‘Regional Assistance Mission to the Solomon Islands'. Jeff comments: "A lot of this wasn't because of any idea or mission to support America. Australia felt that its own interests are at stake. In some of the questions, such as East Timor and independence from Indonesia, America has not been particularly supportive at all. Australia has been doing things which it thought as necessary for its own neighborhood, but that is seen as separate to the overall issue of the American alliance….There was an unfortunate comment by former Prime Minister John Howard, that Australia should be the Deputy Sheriff for the US in the region. Whilst there is some aspect of that in the minds of people, I don't think it necessarily stands up to close scrutiny. Australia has managed, at least in its own back yard, to run a fairly independent foreign policy. It's when you get further out that you get major received threats to Australia that the closeness to America distorts Australian foreign policy…. Australia depends on China for a large amount of energy exports and this is a dangerous way to go."

    Australia would perhaps benefit the most if it used its position to equally pursue relations with Africa, India, Indonesia, China, the US and Latin America, however the country has a relatively small population and market. It's not very well positioned to benefit from ASEAN, there would have to be incentives for ASEAN members to want to do business with Australia. Jeff comments: "ASEAN countries are a very diverse group. The most important country for Australia is obviously Indonesia. But Australia only really thinks of Indonesia in terms of its resort Bali, and ignores other aspects. The same thing goes for India, India is a much more powerful player, in the Indian Ocean, and China is recognizing that because a lot of foreign imports come through the Indian Ocean."

    There is a concept called the ‘China Containment Coalition (CCC)', whereby Australia along with the US, Japan and India acts to physically surround China. However there are problems with this as Australia's military is puny in comparison with that of China, and China is Australia's largest trading partner. China and Australia are geopolitically are drifting in opposite directions but both sides are establishing a relationship of economic interdependence with one another. To the question: how long can Australia realistically continue to support the CCC?, Jeff says: "I think you are referring to the Quadrilateral Security Dialogue, the idea that Australia, the US, Japan and India form some kind of security type entity. It is claimed that this would not be aimed at containing China but it clearly is. The big proponents of this are Japan and the US. Japan because a large proportion of its energy requirements come through the Indian Ocean, and then through the South China Sea. It is easy to see why Japan is interested in this. America does not want to give up its predominant role in the world and so it is easy to see why America is interested in this. India has very little reason to be interested. A tiny proportion of India's exports go through the South China Sea, so there is no real reason for India to be involved. Australia is supportive because it is supporting America, and also many Australians see that Japan is one of America's most important trading and security partners. The odd thing is though that most of Australia's exports got through the South China Sea, they actually go to China or to Hong Kong." Jeff says that there is a lot of confusion about numbers, some countries seem to have widely miscalculated the actual amount of shipping which goes through the South China Sea, and this appears to be the bane of Foreign Policy experts and economists.

    In Europe we hear a lot about the Chinese mega-projects: the New Silk Road, and the One Belt One Road strategies which now seem to be happening, slowly. To the question do Australians regret not being more closely involved with them?, Jeff says: "The amounts of money that could be possibly invested in Australia are minute in comparison to Australia's capacity. Australia's GDP is much smaller than that of China's but in terms of national wealth, Australia is probably about 10 times as wealthy as China. The wealth in terms of infrastructure which already exists in Australia is massive, possibly about $1,000,000 per person, similar to that of the US, whereas if you look at the wealth, the assets to individual Chinese, and think about the wealth of China divided by the number of people in China, this is probably about $100,000. India is probably around $100. So Australia can do things on its own. Some people have argued that Australia should sign up to the One Belt One Road initiative, and New Zealand has, but personally I don't think Australia should because I still think that the One Belt One Road is really just an idea, floated to promote China, promote energy import corridors through Asia and I think even the Chinese might be realizing that they have over-hyped it…"

    John Harrison suggests that a lot of the factors behind Australia maintaining such a pro-US foreign policy are due to cultural factors. One could say that Australian establishment culture is in fact a mixture of British and American culture. But the situation is changing, Jeff says. He points out that out of a population of 25 million, 500,000 are Chinese, born in Australia. "There is some fear in some circles about Chinese political influence in Australia…"

    Clearly Australia's foreign policy is not going to change in the near future, however the country may be forced to adapt to a new geopolitical situation in time. Equally, it may, however, think that the new multipolar world is something that Australia does not need, and hold on to the unipolar mindset indefinitely, until the countries that Australia exports to are energy-sufficient enough to cut down on energy imports.

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