After reading Hugh White's latest academic triumph, and closely following subsequent discussion, there are a few thoughts and observations I'd make:
1. First and foremost, the work achieved in spectacular fashion what it set out to do. That is, to translate for the Australian public very difficult and highly intuitive strategic concepts in a way that is digestible and accessible to a popular audience. When people ask me where my own study interests lie, I no longer feel the need to repeat a tiresome memorised spiel, I simply hand them a copy of 'Power Shift', and they understand what I am talking about immediately.
The essay has a central point: that China's rise has strategic implications for the region, that these affect Australia, and is therefore something we need to be thinking about. For all the subsequent debate about the various possible scenarios proposed in 'Power Shift', this message is made loud and clear, and at a timely pivot in our nation's history.
2. Greg Sheridan's piece in The Australian is important for reasons not related to his argument, but rather, how it is expressed. It underlines how difficult and traumatic the debate will be about the stark choices ahead of us. It is a debate that transcends the discipline of strategic studies, and plunges right into questions of core values and national identity. As an adolescent nation, Australia is experiencing that identity crisis as we speak.
Hugh White takes this one step further by pointing out that, not only do we have to decide what that means for ourselves, but then we have to undertake the infinitely more difficult task of persuading our American allies of the merits of our conclusions. It is highly likely that, given the scale of this challenge, we will simply throw our lot in the US, while the Americans drift into an increasingly competitive and acrimonious relationship with China. This would be a serious failure of leadership; something we need to invest in heavily to avoid.
3. I sympathise with Stephan Frühling and Benjamin Schreer's pensiveness when it comes to a Concert of Powers in Asia, as I do not feel that Asian states share core interests and priorities, as Hugh himself points out with respect to Japan (p. 31). Yet this is to overlook the simpler point, which is that if the US fails to accommodate China's growing power, then the result is an increasingly contested and hostile region. How exactly that accommodation should be made, on both sides of the Pacific, is a product of the debate Hugh White is strongly encouraging us to have. If not a Concert of Asia, then what?
With respect to armed neutrality, again that is a debate we should be having. Geography on the edge of Asia certainly works in our favour, but then, what would armed neutrality look like? If Australia lets the alliance go, we lose access to the capabilities that make armed neutrality affordable. On the other hand, a regional defence posture, if handled delicately, may allow the alliance to survive. This would promote stability and military cooperation in the region provided Australia's capabilities remained asymmetric to those of our near neighbours, Indonesia's in particular.
Armed neutrality is certainly a future option to be looked at closely, but it is hard to see how, without our present access to US technology, we could maintain an effective conventional deterrent at an acceptable cost. It is more likely that Australia would instead drift into a more pacifistic strategic posture, one which relies on remoteness alone for defence, with little capability to protect our interests beyond our shores (what Hugh White refers to as the New Zealand option). That is not necessarily a bad thing, but we should be clear-sighted as to what that would mean for us long-term.
4. Andrew Phillips makes a good case for moderating our alarm, but I disagree with his risk management assessment. For instance, I view the peaceful influence of economic interdependence much as I do the deterrent effect of nuclear weapons. The frequency of war certainly decreases in both instances, but the costs go up dramatically. The threat of a nuclear retaliation may make war five times less likely, but when it occurs it may be 50 times as devastating. This to me isn't a very good trade off. While economic integration, unlike nuclear weapons, may be seen as an intrinsic good, that does not mean that we should be thinking any less about strategic trends.
It is good to remind ourselves of what the underlying beliefs were when the 'hedging' strategy was formed. These have underpinned it to the present day. The prevailing assumption being that, as China became richer, several things would occur: (a) An educated middle class would emerge, free from subsistence concerns, demanding greater political freedom and precipitate liberal democratic reforms; (b) China, after realising the benefits of export-driven growth, would see little reason to rock the boat, and gratefully integrate itself into the American led international order, just as Japan did after its post-war reconstruction; and (c) eventually one-party rule would cause stagnation in the Chinese economy, just as it had done in the Soviet Union. Ultimately the Chinese elite would see the Washington Consensus as the only viable model for a successful capitalist system, with the government removing itself from the affairs of the private sector.
As of 2010, none of these things have happened. On the contrary, as the Chinese are becoming richer they are becoming more nationalistic, and the Chinese Communist Party's legitimacy is now reliant upon, rather than subverted by, sustained economic growth. China is integrating into the US-led order only in as much as it serves its perceived interest, but is taking an increasingly assertive line as their power grows.
Finally, China has produced a credible alternative to the Washington Consensus that has weathered the financial crisis in spectacular fashion. It is arguable that it was because of government intervention in the private sector, namely banks, that its stimulus package proved the most effectively implemented in the world. While Andrew Phillips is right that ideology is no longer driving competition, it would be an overstatement to say that China doesn't have its own attractive narrative to sell.
Given that none of the causal assumptions underpinning the hedging strategy have come to pass, it would be folly not to revisit it and judge with a fresh set of eyes whether or not in continues to serve the region's interests.
What concerns me most is that this debate may end up looking a lot like climate change. The issue becomes too hard, the concessions too great, and consensus painfully elusive. Thus, instead of working to moderate the strategic implications of China's rise, we work only to mitigate the results. The costs and risks of that latter option are far higher, and our ability to affect international events falls dangerously low indeed.
