Why Penny Wong is absolutely right about China

Australia may be backing the wrong horse in the global economic race.

Australia may be backing the wrong horse in the global economic race. Photo: TND

Throughout history, every 300-600 years great empires have changed. The Greeks once dominated, as did the Romans, the Persians, Chinese and a few others have all taken a shot at being the ‘greatest empire’.

For about the last 600 years, European/Christian cultures have dominated global commerce and politics, if not as a single collective unit, then certainly as a broad culture.

Over the most recent period, the single dominating economy and culture has been that of the United States. But it has already begun to change.

With the vehemently anti-China Donald Trump now President-elect of the United States, now is a very good time to ask – as Labor’s foreign affairs spokesperson Penny Wong did on Tuesday  – “Where and how does Australia position itself?”

Penny Wong fears a plebiscite would unleash hate speech. Photo: Getty.

Penny Wong raised the question many are asking. Photo: Getty

Why now?

Post World War II, the US was locked in a battle with the Soviet Union as the world’s two superpowers slugged it out. From 1991 onwards the US stood on the summit of human importance, looking down upon all they surveyed.

But in 2008 US hubris caught up with our American friends. The global meltdown hit at the same time China readied itself to stand once again on the world stage – as it had centuries before.

Little noticed in the West, President Xi of China announced the country’s ‘One Road One Belt’ policy in 2013, right when the West remained introspective, dealing with the fallout of the financial crisis and ‘Great Recession’.

Our politicians, media and commentators hardly noticed ‘One Road One Belt’ and certainly did not grasp the epoch-shifting moment in time for what it is.

This policy represents a multi-trillion-dollar infrastructure investment financed through China’s Asian Infrastructure Investment bank.

Just this week we saw the first Chinese cargo ships dock at the new Gwarada Port built in Pakistan under this policy.

The new Beijing to Afghanistan railway is open. New pipelines, roads and rail a stretching out connecting China, South Asia, Iran and East Africa, with afterthoughts into Europe and nothing into Australia or the US.

China is not returning, it has returned. Whilst not No.1 yet, the trajectory is clear. China will soon return to a global dominant economy as it once was.

Holding Australia back

As the US starts to shrink, China starts to rise, begging the question: Are we living through the seismic shift to see China growing to dominate global commerce, not for a decade or two, but for a few centuries?

Human history would suggest we are at exactly that point in time.

Why was Australia late to sign up to the Asian Infrastructure Investment Bank? Because the US asked us not to.

Mandarin speaker Kevin Russ was lampooned when he talked up Australia-China relations

Mandarin speaker Kevin Rudd was lampooned when he talked up Australia-China relations.

Why have we not engaged with the One Belt One Road policy? Because the US has asked us not to.

Why have we not evolved our own position on China’s actions in the South China Sea? Because the US has asked us not to.

Why were we in Iraq? Because the US said so. Why were we in Afghanistan? You guessed it.

Should we not have a better reason to do or not do things than ‘Because the US said’, particularly when we are already eight years into the US decline?

But for Australia it is not just about resetting with caution a US policy, it is about engaging with Asia, or perhaps even becoming Asian.

An uncomfortable partnership

Australia’s fraught relationship with Asia traces its way back to the xenophobia that has existed since English settlement.

We resented the Chinese growing rich by selling us barrows and pans in the gold rush of the 1850s. We hid in fear from the “yellow peril”.

Even today we blame the Chinese for inflating our housing prices when data shows restricted supply, low interest rates and nearly three decades of economic growth have done that. Not China.

Even with a growing proportion of Australians coming from Asian heritages we still find it hard to see ourselves as an Asian nation.

BEIJING, CHINA - 2016/01/18: AIIB logo on its headquarter in Beijing financial street. The Asian Infrastructure Investment Bank (AIIB) officially launched on January 16, 2016. The AIIB is expected to lend $10 billion-$15 billion a year for the first five or six years and will start operations in the second quarter of 2016. (Photo by Zhang Peng/LightRocket via Getty Images)

Time to refresh our view of the Asian Infrastructure Investment Bank. Photo: Getty

I am not saying that we should immediately turn our back on the US. We should maintain a strong relationship with their economy and politics, but be cautious of the military manoeuvres that will be in their interest, but perhaps not ours.

We should also refresh our view of the Asian Infrastructure Investment Bank.

We should also ask how Australia’s food production, education, mining, financial services and related industries could plug into the One Road One Belt policy.

And perhaps, in this time of epochal shift, we could look at our multicultural country and ask ‘are we not ideally placed to be a translator between two great worlds as the empires shift’.

Could we be the hinge through which this change happens, or will we cringe at the bottom of the world hoping it all goes away?

Andrew MacLeod is a visiting Professor at Kings College London, a Vice Chancellor’s Distinguished Fellow at Deakin University and a Non Executive Director of US, UK and Australian companies. He can be followed @AndrewMMacleod

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