Man at work: Rudd walks Asian tightrope
By Tanja Vestergaard
LONDON - Under the new premiership of Kevin Rudd, who came to power in November
last year after winning a landslide election, Sino-Australian relations are
growing closer - strategically and economically.
Rudd's visit to China last week, his only stop in Asia as part of his first
world tour, served to carve out Australia's future relationship with the Asian
giant setting the stage for an era of what Rudd has termed "true friendship"
defined by constructive engagement delivered with a frank openness that does
not rule out criticism. Rudd's accession to power has been widely welcomed in
Notably, his Mandarin language skills and his position as a former diplomat in
Beijing have made him more amicable to improving
relations with China. Meanwhile, the importance of maintaining healthy ties
with China has been put into relief by the pivotal role played by the China's
inexhaustible demand for resources fueling Australia's ongoing commodities
boom, a key driver of the country's buoyant economy.
During Rudd's visit to China, following stopovers in the US and Europe, his
capacity to engage in effective diplomacy with China, drawing on his solid
diplomatic career, was put to the test. As the first political leader to pay
China a visit since authorities launched a heavy-handed crackdown on unrest in
the autonomous region of Tibet last month, Rudd faced significant pressure to
raise the issue while at the same time attempting to avoid jeopardizing vital
economic and business interests. His visit was not dominated by a strong focus
Rudd succeeded in cementing already close ties with China despite airing vocal
criticism of the government's controversial human rights record. He thereby
heeded calls to openly address the issue of Tibet, which many countries have
sought to circumvent in the name of maintaining healthy trade relations with
the economic powerhouse as the country seeks to use the upcoming Beijing
Olympics to showcase its rise to great power status.
In a much-cited speech given at Beijing University, Rudd spoke out against
China's human rights record and crackdown in Tibet, skillfully adopting an old
Chinese term alluding to Australia's position as a "true friend" (zhengyou),
"a partner who sees beyond immediate benefit to the broader and firm basis for
continuing, profound and sincere friendship". As a result, Rudd redefined the
rules of engagement, refusing to placate the Chinese government by silently
accepting its policies on all counts while simultaneously emphasizing the
importance of the Sino-Australian partnership.
In this respect, the Chinese official media has chosen to overlook his critical
stance on issues ranging from development, to the environment and human rights,
moving instead to enthusiastically embrace the new Labor government's offering
of "true friendship".
Rudd's skilful maneuverings, based on his experience with the ways of Chinese
diplomacy, as well as its growing importance as an ally in strategic and
economic terms, have afforded the new prime minister a chance to put the
Sino-Australian relationship on a new footing as the importance of the Asian
power continues to grow in regards Australia's foreign policy. As indicated by
its first half a year in power, the Rudd government may, however, faces some
hard choices in formulating policy as moves to elevate close relations with
China may well come at the price of weakening other bilateral ties in the
Asia-Pacific and beyond.
Asia on the ascendant in Australia's policy
When the new Labor government under Rudd took power in Australia in November
2007, some observers held it to be a watershed in Australian politics, spelling
an end to the 11-year rule of John Howard and his prioritization of the
long-standing alliance with the United States and the United Kingdom in foreign
policy in favor of a greater Asian focus. While Rudd has not forsaken
long-standing ties with the US despite his critical stance on issues such as
the environment and troop deployment to Afghanistan and Iraq, he has indeed
sought to direct Australia's foreign policy further towards Asia, holding China
as well as India to be "core parts of Australia's economic future".
Strategic dialogue launched
As part of efforts to build closer bilateral relations, the two countries
launched the first round of Sino-Australian strategic dialogue on February 4-5,
ushering in a new era in bilateral ties. This saw Australian Foreign Minister
Steven Smith meeting his Chinese counterpart Yang Jiechi in Canberra where the
former expressed support for China on a number of counts, including strategic
relations in the Pacific and the environment.
The strategic dialogue was in fact launched prior to Rudd's accession to power
by his predecessor John Howard and Chinese president Hu Jintao, who agreed on
the measure in Sydney last September. The diplomatic forum has been embraced by
Rudd and paves the way for long-term engagement as China has taken on a key
role in Australia's foreign policy, with its energy diplomacy having tied the
respective economies closer.
It is already set to be followed by a second round later this year and mirrors
similar dialogues that are currently taking place between China and the US,
albeit in the economic sphere, and between Australia, the US and Japan focusing
on defense and strategy, with the latter seeing India invited to partake last
year. The Sino-Australian strategic dialogue holds the promise of further
deepening of ties between the two nations. It, however, also presents a new set
of challenges as improving ties with Beijing may adversely affect Canberra's
relations with its key strategic ally the United States and its long-term main
trading partner Japan, as well as clouding prospects for its stated goal of
improving ties with India.
Dispelling China's encirclement fears
Sending a clear signal to its long-term alliance partners the US and Japan,
Australia used the first round of strategic dialogue to assure China that it
will no longer participate in the quadrilateral strategic dialogue involving
India that was launched last year. With this significant shift in policy, the
Rudd government effectively narrowed down the forum to its initial trilateral
This strategic grouping, counting Australia, the US and Japan, known under the
heading of "the Arc of Democracies", came to fruition at a security forum held
in March 2006, attended by US Secretary of State Condoleezza Rice, then
Australian foreign minister Alexander Downer and former foreign minister of
Japan Taro Aso. The US has long viewed China as a "strategic competitor",
pursuing a policy of establishing bases on its periphery in the Asia-Pacific,
including in Japan on the country's doorstep.
The trilateral security grouping has not surprisingly been viewed by China as a
means of containment, with the Beijing government repeatedly criticizing such
US foreign policy moves as emanating "Cold War mentality". The 2006 tripartite
strategic dialogue was followed by the signing of the bilateral Japan-Australia
Joint Declaration on Security Co-operation in March 2007, coming at a time when
the Japanese government, then under the leadership of hawkish prime minister
Shinzo Abe, was bent on a policy of normalization in foreign policy.
Japan's move to sign a strategic military partnership agreement with Australia,
its only comprehensive security agreement besides its long-standing security
pact with the US, was viewed by China as seeking to extend what was widely
considered as a containment doctrine, thereby intensifying the country's sense
of encirclement. Given preceding events, the Chinese political leadership was
naturally irked by the move of the trilateral security grouping to invite its
long-term rival in the region, India, to join talks in 2007. Beijing castigated
the move to include India as yet another bid to balance its rise to great power
status in the Asia-Pacific and beyond.
Considering India's legacy of non-alignment and commitment to strategic
autonomy in foreign affairs, it is doubtful to what extent it would have been
supportive of firmly establishing itself as part of such a framework in any
case. However, the symbolic move - coming after the US concluded the
controversial 2006 nuclear agreement and the new Framework for US-India Defense
Relationship the previous year - did not elude Beijing.
Given such concerns over the past years, China has every reason to approve of
the budding Sino-Australian strategic dialogue as it serves to assuage Beijing
that a solid encirclement campaign spearheaded by the US, including India, will
not win the unconditional support of Canberra. Such prospects are in any case
increasingly mediated by China's growing importance for its long-term strategic
competitors, having grown to become the largest trading partner of all the
countries included in the so-called "Arc of Democracies".
The price of improving ties with China
In establishing closer relations with China, tensions between the Asian giant
on one hand and the US and its key Pacific ally, Japan, on the other in terms
of trade and strategic relations have presented Australia with a challenge.
The US has long been Australia's key ally, a partnership that has been cemented
under the Liberal John Howard government, with Australia deploying troops to
both Afghanistan and Iraq to assist in its ally's "war on terror", in
consequence spurring consternation in various parts of the Pacific. Rudd has,
after coming to power, reaffirmed Australia's close relations with the George W
Bush administration, albeit advocating a softer and more multilateral foreign
policy stance than that of his predecessor.
Under Rudd's rule, Australia faces the task of balancing its national interests
between its key strategic partner, the US, and what has grown to become its
most important trading partner, China. The country has notably emerged as a
major market for Australian raw materials, notably minerals and petroleum, with
Western Australia supplying some 40% of China's iron ore imports.
China has as such gained increasing influence in Australia as evidenced by the
recent acquisition of mining multinational Rio Tinto by state-owned Aluminum
Corp of China (Chinalco) orchestrated in coordination with US-owned Alcoa Inc
in what was China's largest-ever foreign investment. The move prevented
Australian-based mining giant BHP Billiton from acquiring it, triggering signs
of an emergent economic nationalism in Australia, whose Treasury subsequently
launched a set of principles to guide foreign investment in the country and to
pre-empt this from becoming overly concentrated in one sector.
The establishment of closer ties with China may come at the price of concerns
of economic nationalism at home, while being balanced by its pivotal role in
strengthening the economy. This is also the case in the realm of foreign
policy, where the price of closer ties with China may be inadvertently
weakening ties with India in strategic affairs, and potentially with Japan.
Australia and India: Trade over strategy
The Rudd government immediately showed its face as regards to prioritizing
between Asia's two giants - China and India - in the sphere of strategic
relations, announcing in January that Australia would scrap a deal that was
signed by the Howard government in August 2007 concerning the sale of uranium
The new Labor government rejected the deal on the grounds that India was not a
signatory to the nuclear Non-Proliferation Treaty (NPT), returning to
Australia's long-term stance on the issue following the Howard government's
departure with this position. The volte-face by the Rudd administration on the
sale of uranium to India came as a significant loss to India's energy security
needs given that Australia holds the world's largest reserves of uranium,
amounting to some 40% of supplies worldwide.
The move has further created a hindrance to India's ability to gain approval
for the US-India Nuclear Agreement at the International Atomic Energy Agency
(IAEA) and the Nuclear Suppliers' Group (NSG). The promulgation of non-nuclear
proliferation and disarmament is likely to take on greater importance in
Australia's foreign policy under Rudd's leadership. Australian Foreign Minister
Steven Smith has expressed a greater commitment to such a policy agenda,
calling on various countries to ratify the Comprehensive Nuclear-Test Ban
Treaty in order to bring it into force. Australia's potential push to take on a
leadership issue in this area meanwhile precludes the use of uranium exports as
a means to establish closer relations with India. While Rudd has recently
reiterated that both China and India are "core parts of Australia's economic
future", such choices are set to alienate the latter, thereby making it a
challenge to nurture a close relationship, at least as regards high politics
and strategic relations.
Australia's stance has in this respect relegated the process of deepening
bilateral relations to the sphere of trade, at least for now. Growing ties have
been made manifest in this area, with total trade increasing by 32%
year-on-year reaching US$10.6 billion) in 2007 alone. India has come to take
the place as Australia's ninth largest trading partner, while Australia is
ranked as India's tenth largest.
Australia has so far shown its willingness to further improve ties in this
sphere. Australia's Trade Minister Simon Crean held discussions with his Indian
counterpart Kamal Nath in January, expressing Canberra's interest in having
India join the Asia-Pacific Economic Cooperation forum and launching
preliminary talks on negotiating a free-trade agreement. A feasibility study on
this will be launched in New Delhi this week. The question remains as to
whether Australia will succeed in establishing a comprehensive bilateral
relationship with India given its reservations in the strategic sphere.
Australia and Japan: A fading alliance?
Increasingly close ties between China and Australia have grown to become a
cause of real concern in Japan - a key ally of Australia - with fears being
that the long-standing alliance may fade as a result. In the realm of strategic
affairs, the Australian prime minister has made clear his opposition to the
landmark bilateral security pact struck by the Howard government and Japan last
The move came after North Korea moved to conduct its first nuclear bomb test in
October 2006, followed by China firing its first anti-satellite missile in
January 2007, raising concerns of stability in the region and China's growing
military might. The defense agreement effectively made Australia Japan's
second-most important defense ally after the US. The deal inked between the two
countries paved the way for increased cooperation in the areas of joint
military exercises, counter-terrorism and intelligence sharing and was widely
considered a step towards containing China by Beijing despite Japanese and
Australian claims to the contrary.
Meanwhile, China has also replaced Japan as Australia's largest trading
partner, taking away its long-term predominance in this area. Australia and
Japan are nevertheless planning to commence free-trade talks, but bilateral
tensions have increased in recent months as the Rudd government has taken a
lead in seeking to halt Japanese whaling in Antarctic waters.
The whaling issue took on prominence in the international media in January when
dramatic scenes came to the fore as a Japanese whaler kidnapped environmental
activists who had been chasing it, inflaming anti-Japanese opinion in
Australia. Adding to already strained relations, the Federal Court of Australia
that month passed a ruling holding that the annual Japanese whaling fleet had
breached the Environment Protection Act by hunting whales in the whale
sanctuary in Australia's exclusive economic zone and Antarctic Territory, which
is not recognized by the Japanese.
Such incidents have helped to create a constructive environment for the planned
commencement of free-trade talks between the two countries. Rudd's decision to
not include Japan has not gone unnoticed; Japanese media and officials have
lamented it and being echoed by the Australian opposition. Such moves spurred
Rudd to hastily schedule a visit to Japan in June before participating in the
G8 summit there in July. However, the Australian-Japanese friendship has been
significantly closer in the past and Rudd is set to face challenges as he seeks
to balance Japan's long-term importance with the ascendance of China on the
foreign policy agenda.
The Pacific: an 'arc of instability'
In Australia's traditional sphere of influence in the Pacific, China has taken
a growing role as it has come to be one of the focal points for
Chinese-Taiwanese rivalry and the checkbook diplomacy that has followed in its
wake. China's aid diplomacy in Pacific countries, such as the Solomon Islands,
Papua New Guinea, Fiji and Samoa, has come under criticism for fueling
corruption and, in some cases, fomenting political instability and ethnic
violence. For example in the 2006 Solomon Islands election that saw
anti-Chinese riots and the disposal of the prime minister.
Ensuring stability in the Pacific is set to remain high on the foreign policy
agenda of Rudd, as it did during Howard's term. His Labor Party, immediately
ahead of winning the 2007 elections, held that instability in various Pacific
islands, including East Timor, the Solomon Islands, Fiji, Tonga and Papua New
Guinea, made for an unstable neighborhood, coining what has commonly come to be
known as Australia's "arc of instability" instead as its "arc of
Rudd has, however, made it clear that he hopes that his administration can
reverse criticism leveled against his predecessor in regard to his
interventionist policy aimed at addressing high levels of crime, corruption and
ethno-political tension in a bid to prevent states from failing. Such policies
have over time earned Australia a tag as the "regional sheriff of the Pacific".
Rudd has launched a bid to revive relations with the Pacific, undertaking in
March of this year a charm offensive to Papua New Guinea and the Solomon
Islands after bilateral relations had soured under the Howard government.
During the visits he made pledges of fresh aid as mutual conciliatory measures
materialized, declaring at the end of trip that relations with the Pacific were
"back on track" and vowing to host the Pacific Islands Forum in 2009 for the
first time since 1994.
While Rudd's style may be more conciliatory than that of his predecessor, his
stance so far does not signal any major changes in foreign policy. His
willingness to intervene in the region when deemed necessary was proved at an
early stage. He quickly reinforced the Australian-led International
Stabilization Force (ISF) in East Timor in February, paying two visits to the
nascent nation after renegade soldiers attacked its political leadership,
shooting and severely wounding President Jose Ramos-Horta and raising questions
of long-term stability there anew.
Pragmatism replaces ideology
Australia's foreign policy under Rudd will be characterized by continuity as
well as change, with China's growing importance for the country in economic and
strategic terms propelling the adoption of a pragmatic approach.
While not undermining long-term strategic frameworks on which the US's
hub-and-spokes diplomacy in the Asia-Pacific was built, China's emergence as a
great power in strategic and economic terms in the region is set to test
foreign policy concepts taken for granted during the Howard administration.
In the face of growing Chinese investment in Australia accounting for its
resource boom, it can no longer necessarily afford to spearhead an ideology
deeply cemented in the Pax Americana as promulgated by Howard. However, this is
not tantamount to placating the wills and whims of the Chinese government as
made manifest on Rudd's world tour this April, with the newly coined "true
friendship" seemingly being characterized by equal measures of frankness and
friendliness, which may help to dispel concerns among domestic critics of China
growing economic influence.
The Rudd government nevertheless faces a balancing act as it integrates its new
ally China into its foreign policy framework while seeking to define what is in
Australia's national interest. This question is set to reverberate in the
formulation of policy in years to come and has also emerged domestically in
recent months, with the government potentially facing a wave of economic
nationalism as China continues its unbridled resource diplomacy in Australia by
way of fueling its breakneck economic growth.
Tanja Vestergaard is a research analyst with the Country Intelligence
Section of Global Insight where she covers the Asia-Pacific. Prior to joining
the company, she has worked for the Danish Foreign Ministry, the Danish Embassy
in Beijing, China, and the London-based International Institute for Strategic
Studies. The views expressed in the article are her own. She can be contacted