Australia as powerbroker in Sino-American ties

Australia as powerbroker in Sino-American ties

While the recently signed free trade agreement will inevitably draw Australia and China closer together, Australia stands to gain significant political and economic clout in the region – if it plays its cards right.

China and Australia recently signed a free trade agreement (FTA) – ChAFTA – which will significantly reduce tariffs across a range of industries in both countries. Barring two controversial issues, the treaty represents a huge opening for Australia in the 21st Century.

Australia should recognize that ChAFTA is more than a simple FTA. Rather, it represents an opportunity for Australia to take on a bigger role in shaping the Asia-Pacific order – if future governments can play their cards right.

Australia is frequently said to be caught between the US and China, with the former representing its security ties and the latter representing its economic ties. Australia’s economy is as much linked to China’s (Australia’s largest trading partner) as its security is linked to the US.

Caught in the middle

Australia is, therefore, in the peculiar situation of having fostered extremely close (and almost equal) ties with two geopolitical rivals. This squarely places Australia in a position of power as a ‘facilitator’ in the region and as a ‘broker of friendship’ between the US and China.

Canberra’s geographical proximity has given it a real understanding of the political dynamics in the Asia-Pacific – while it remains an important player in US foreign policy around the world.

Analysts have often pointed at the tug-of-war nature of this triangular relationship. However, the real problem has been that Australia has so far refused to act as this ‘bridge’. Instead, it has often chosen to toe a line which balances the US against China. Rather, Australia needs to shift its mentality and embrace this new role. After all, if things were to go sour between the US and China, Australia stands to lose the most: its economy would crumble while its security policy would be in ruins.

The statistics clearly demonstrate the potential for this pivotal Australian role: 77% of Australians view China as ‘more of an economic partner’ compared to only 15% who see it as ‘more of a military threat’. This is in stark contrast to 52% of Americans who believe that China is a ‘major threat to the well-being of the US’.

Conversely, a senior colonel with the PLA expressed confidence that ‘Australia is a country that understands the situation [in the South China Sea] and we saw them join the Asian Infrastructure Investment Bank (AIIB)…They don’t necessarily do whatever the US wants.’

Balancing Relations and Strengthening Ties

Herein lays the key for Australia’s future foreign policy choices. It must act in support of its own well-being without appearing to favour one party over the other. China already accepts that the US is a key military partner for Australia. While Australia continues to pursue these security ties, ChAFTA’s signing and its decision to join AIIB provided key opportunities for Australia to see eye-to-eye with both its partners.

Australia has made some efforts in this respect. Exercise Kowari for example, was a trilateral military exercise involving Australia, China and the US. While small in nature, Australia should continue to facilitate similar exercises.

Canberra’s next challenge will be to help address the underlying issues surrounding the TPP, which is not fully aligned with Australia’s interests. Eventually, as it gains trust from all sides (reciprocity goes a long way in international relations), Australia could be the key to solving disputes in the South China Sea.

This will require making decisions which will sometimes upsets both parties. However, the rewards of successfully doing so will be unmatched. Australia has already demonstrated its ability to successfully lead in world affairs, such as during its chairing of the G20 and as a member of the UN Security Council.

With some diplomatic talent, Australia’s role in the Asia-Pacific could stand to be its greatest work yet.

Categories: Asia Pacific, Politics

About Author

Nicolas Jenny

Nicolas Jenny specialises in European and Asian political risk analysis. He has lived extensively throughout the region and speaks English, French and Mandarin. He holds a double master's from Sciences Po Paris and Fudan University and a BSc in politics from the University of Bristol.