The Economics of Power Transitions: Australia between China and the United States

Abstract

This article examines Sino–Australian economic relations, and their impact on the ties between the United States and Australia. First, drawing on power transition theory, it is argued that in a post-Cold War environment, economic ties play as great a role as strategic relations in determining the orientation of third-party states. Second, it is also argued that Australia's deeper economic and commercial ties with China have usurped a role previously held by the United States. This has forced Australia to pursue a bifurcated foreign policy—one split between its economic and national security needs. Third, these deeper ties with China have generated a degree of alliance drift between Australia and the United States. As a result, there is now a significant debate in Australia over the future of both bilateral relations—even as its space for policy innovation remains limited.

Notes

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^5. A. F. K. Organski, World Politics, 2nd edn (New York: Alfred Knopf, 1968); A. F. K. Organski and Jacek Kugler, The War Ledger (Chicago, IL: Chicago University Press, 1980); Kim Woosang, ‘Alliance transitions and great power war’, American Journal of Political Science 35(4), (1991), pp. 833–850; Jacek Kugler and Douglas Lemke, eds, Parity and War: Evaluations and Extensions of the War Ledger (Ann Arbor, MI: University of Michigan Press, 1996); Douglas Lemke, ‘The continuation of history: power transition and the end of the Cold War’, Journal of Peace Research 34(1), (February 1997), pp. 23–36; Emilio Casetti, ‘Power shifts and economic development: when will China overtake the USA?’, Journal of Peace Research 40(6), (November 2003), pp. 661–675; and Steve Chan, ‘Is there a power transition between the US and China? The different faces of national power’, Asian Survey 45(5), (September–October 2005), pp. 687–701.

^6. Lemke, ‘The continuation of history’.

^7. Organski, World Politics, p. 342.

^8. Tammen et al., Power Transitions, p. 153.

^9.Ibid., p. 33.

^10. Organski, World Politics, p. 334.

^11.Ibid., pp. 352–353.

^12.Ibid., p. 353.

^13. Lemke, ‘The continuation of history’.

^14. George Duncan and Randolph Siverson, ‘Flexibility of alliance partner choice in a multipolar system: models and tests’, International Studies Quarterly 26(4), (December 1982), p. 512.

^15. Organski, World Politics, p. 338.

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^17. Kim, ‘Alliance transitions and great power war’, p. 849.

^18. A related effect can be seen in the South Pacific with respect to Sino–Taiwanese competition, see: Simon Shen, ‘From zero-sum game to positive sum game: why Beijing tolerates Pacific island states' recognition of Taipei’, Journal of Contemporary China 24(95), (2015), DOI: 10.1080/10670564.2015.1013378.

^19. A similar argument with a different framework is also put forward in: James Reilly, ‘Counting on China? Australia's strategic response to economic independence’, The Chinese Journal of International Politics 5, (2012), pp. 369–384.

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^24.Ibid.

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^27. Alex Oliver, The Lowy Institute Poll 2014 (2014), available at: www.lowyinstitute.org/files/2014_lowy_institute_poll.pdf, p.8 (accessed 6 June 2014).

^28. Richard Rosencrance, ‘Australia, China and the US’, Australian Journal of International Affairs 60(3), (2006), p. 367.

^29. Interviews with US Department of State officials, 24 October 2012.

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^31. John Howard, ‘Address to the Asialink—ANU National Forum: Australia's Engagement with Asia: A New Paradigm’, Speech Transcript, Canberra, 13 August 2004, available at: usrsaustralia.state.gov/us-oz/2004/08/13/pm1.html (accessed 5 June 2014).

^32. Lowy Institute, ‘Australia, US and China’, 2014 Lowy Institute Poll (2014), available at: www.lowyinstitute.org/lowyinstitutepollinteractive/aususchina.php (accessed 6 June 2014).

^33. Paul Keating, ‘Asia in the New Order: Australia's Diminishing Sphere of Influence’, 2012 Keith Murdoch Oration, State Library of Victoria, Melbourne, 14 November 2012.

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^38. Lowy Institute, ‘Feelings towards other nations’, 2014 Lowy Institute Poll (2014), available at: www.lowyinstitute.org/lowyinstitutepollinteractive/feelingsthermometer.php (accessed 6 June 2014).

^39. BBC World Service, ‘BBC World Service Poll: Global Views of United States Improve While Other Countries Decline, (18 April 2010), available at: www.worldpublicopinion.org/pipa/pipa/pdf/apr10/BBCViews_Apr10_rpt.pdf (accessed 6 May 2014).

^40. BBC World Service, ‘BBC World Service Poll: Views of China and India Slide While UK's Ratings Climb’.

^41. Lowy Institute, ‘Attitudes to China’, 2014 Lowy Institute Poll (2014), available at: www.lowyinstitute.org/lowyinstitutepollinteractive/china.php (accessed 6 June 2014).

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^49. Foreign Investment Review Board, Annual Report 2010–11 (Canberra: CanPrint Communications, 2012), p. xv.

^50. Matthew Chambers, ‘Chinalco trims Rio bond deal’, The Australian, (22 May 2009).

^51. Rowan Callick, ‘China and Rio in a torrid affair—Chinalco challenge’, The Australian, (13 May 2009); and Nils Pratley, ‘Financial: viewpoint: Rio can't disguise the stench of a rotten Chinese deal’, The Guardian, (22 May 2009).

^52. Phillip Coorey, ‘Chinalco question not just about investment’, Sydney Morning Herald, (18 May 2009).

^53. Michael Sainsbury and Matthew Chambers, ‘Beijing fires up at anti-China “prejudice”’, The Australian, (11 June 2009).

^54. Peter Martin, ‘Swan denies China targeted’, The Age, (4 March 2011).

^55. Fergus Hanson, Lowy Institute Poll 2012: Public Opinion and Foreign Policy, (5 June 2012), available at: www.lowyinstitute.org/publications/lowy-institute-poll-2012-public-opinion-and-foreign-policy (accessed 10 May 2014).

^56. ‘Chinese company looks to invest in WA land’, ABC News, (18 January 2012).

^57. DFAT, Australia–China Free Trade Agreement: Joint Feasibility Study (Canberra: Department of Foreign Affairs and Trade, 2005), available at: www.dfat.gov.au/fta/acfta/feasibility_full.pdf (accessed 12 May 2014).

^58.Ibid.

^59. Ashton Calvert, ‘Closing Speech at the Australia China FTA Conference—Future Directions’, Sydney, August 2004, available at: www.dfat.gov.au/media/speeches/department/040818_aus_china_fta_calvert.html (accessed 12 May 2014).

^60. Elliot Feldman, ‘China's status as a non-market economy’, China–US Trade Law: Baker-Hostetler, (21 September 2010), available at: www.chinaustradelawblog.com/2010/09/articles/cvd/chinas-status-as-a-nonmarket-economy-aaceaacaeaaa (accessed 10 June 2014).

^61. John Garnaut, ‘In trade, Australia looks to China’, Sydney Morning Herald, (9 August 2004).

^62. ‘Let's hope China doesn't sneeze’, The Courier Mail, (25 July 2008), p. 36.

^63. Source: http://blog.axa.com.au/2010/09/08/how-much-does-australia-rely-on-china (accessed 6 May 2014).

^64. Tim Harcourt, Bright Lights, Big City: Australia's Role in Urban China (Sydney: Austrade, 3 May 2010), available at: www.austrade.gov.au/Bright-lights-big-city-Australias-role-in-urban-China/default.aspx (accessed 18 June 2011).

^65. DFAT, ‘Australia's trade in goods and services by top ten partners 2013’, Composition of Trade 2013, (2013), p. 45, available at: www.dfat.gov.au/publications/stats-pubs/cot-cy-2013.pdf (accessed 13 November 2014).

^66. Greg Sheridan, ‘What if bluff and bluster turn to biff?’, The Australian, (10 March 2000).

^67. ‘China warns Australia not to side with US over Taiwan’, Agence France Presse, (5 November 1999).

^68. Yan Xuetong, ‘Best friends next door’, China Daily, (7 March 2000).

^69. For more analysis on this see: William Tow and Leisa Hay, ‘Australia, the United States and a “China growing strong”: managing conflict avoidance’, Australian Journal of International Affairs 55(1), (2001), pp. 37–54.

^70. Roy McDowall, Howard's Long March: The Strategic Depiction of China in Howard Government Policy, 1996–2006 (Canberra: ANU E-press, 2009), available at: epress.anu.edu.au/sdsc/hlm/mobile_devices/ar01.html (accessed 3 June 2011).

^71. See text of this speech in: ‘Beijing University speech by Australian Prime Minister Kevin Rudd’, The Australian, (9 April 2008).

^72. Stephen Smith, ‘Joint Press Conference with Chinese Foreign Minister, 5 February 2008’, available at: www.foreignminister.gov.au/transcripts/2008/080205_jpc.html (accessed 3 June 2011).

^73. Paul McGeough, ‘Hillary Clinton criticises Australia for two-timing America with China’, Sydney Morning Herald, (28 June 2014).

^74. Bonnie Glasser, ‘Pivot to Asia: prepare for unintended consequences’, Global Forecast 2012, (2012), pp. 22–24, available at: csis.org/files/publication/120413_gf_glaser.pdf (accessed 12 June 2014).

^75. Zhou Jinghao, ‘US containment frays China's nerves’, Global Times, (25 November 2013).

^76. ‘Obama visit to focus on military ties’, ABC News, (17 November 2011).

^77. Peter Hartcher, ‘PM had cold feet on US base plan’, Sydney Morning Herald, (2 November 2013).

^78. Jackie Calmes, ‘A US marine base for Australia irritates China’, New York Times, (16 November 2011).

^79. ‘Australia could be caught in Sino–US crossfire’, Global Times, (16 November 2011).