China's Rise and the Passing of U.S. Primacy: Australia Debates Its Future

When China surpassed the United States in 2007 as Australia's largest trading partner, Australian strategic planners were confronted with a strategic dilemma unique in the country's history. In the past, Australia's key ally was also its major trading partner. Canberra now must fashion a strategic policy to take into account that this is no longer the case and that its major ally and economic partner are great-power rivals.

Australia Debates China's Rise

Australia has engaged in two debates about how to respond to China's rise. The first took place within government circles in 2009 during the drafting of the defense white paper released in May that year.¹ Both the Office of National Assessments and the Defence Intelligence Organisation reportedly offered the view that China's military transformation was primarily defensive, being largely in response to U.S. naval power in the Pacific, and was also commensurate with China's status as an emerging great power.² But this view was countered by senior officials in the Department of Defence who saw China's military modernization as posing a potential challenge to Australia's security interests. The latter view prevailed. It is now known, thanks to WikiLeaks, that then prime minister Kevin Rudd also shared such reservations about China's rise. Five weeks prior to the release of the white paper, Rudd reportedly told Secretary of State Hillary Clinton that integrating China into the international community should be pursued by multilateral engagement, "while also preparing to deploy force if everything goes wrong."³ Rudd also foreshadowed the report's focus on naval capability in "response to China's growing ability to project force." The 2009 defense white paper concludes:

China will also be the strongest Asian military power, by a considerable margin. Its military modernization will be increasingly characterised by the development of power projection capabilities. A major power of China's stature can be expected to develop a globally significant military capability befitting its size. But the pace, scope and structure of China's military modernization have the potential to give its neighbours cause for concern…[China's] modernisation appears potentially to be beyond the scope of what would be required for a conflict over Taiwan.⁴

The white paper proceeds to recommend the largest peacetime defense expenditure since World War II and lists as future procurements three air warfare destroyers, eight frigates, and twelve conventional submarines.

Australia's second debate over the strategic implications of China's rise was initiated in 2010 by Hugh White, former deputy secretary for strategy and intelligence in Australia's Department of Defence. White penned a provocative essay challenging the fundamentals of Australian strategic policy over the past 40 years,⁵ followed by a series of op-ed essays in leading newspapers as well as journal articles.⁶ "A decade or two from now," White argues, "America could very easily be locked in a struggle with China for regional leadership, or slowly withdrawing from Asia."⁷ In such circumstances Australia would have five alternatives:

We can remain allied to America, seek another great and powerful friend, opt for armed neutrality, build a regional alliance with our Southeast Asian neighbours, or do nothing and hope for the best.⁸

White's essay is grounded in classical realism generally and the so-called billiard ball theory of international relations in particular. His basic unit of analysis is the state. States are differentiated only by power and their interaction in the international system. However, White depreciates balance of power theory in his analysis to explain China's rise and the response by the United States and regional states. Instead, he argues that economic power is the prime component of national power:

In the long run, economics is what counts in power politics. National power has many manifestations—military, political, cultural—but only one ultimate source. No country in history has exercised great power without great wealth, and the country with the most wealth always ends up with the most power. The wealth that matters is the...