Razer on neoliberalism

The decision by Labor to continue with its aggressive defence policy towards China, despite shedding Stephen Conroy as its defence spokesperson at the election, has confirmed an unusual partisan divide between the major parties on foreign policy.

The advocacy by Labor’s latest defence spokesman Richard Marles — a junior foreign minister in the Gillard government — for Australian military officers to be the ones to act upon requests by the US military to participate in patrols inside the 12-mile limit of China’s artificially built islands in the South China Sea would represent a significant change to Australia’s foreign policy.

It has, understandably, drawn instant and high-profile criticism from not just the government but also from within Labor’s own ranks, most pointedly from former leader and prime minister Paul Keating.

Keating said in The Australian:

“A decision to sail a naval vessel through a disputed area in which we know there is a risk of conflict with the forces of another power — large or small — is one which should only ever be taken by the elected government in the full awareness of the circumstances at the time.

“You don’t outsource decisions like this to a naval commander. Or even to an admiral. This question goes to the very essence of democracy and to the doctrine of civilian control of the military.”

Labor’s position had previously drawn criticism from the Coalition, and Prime Minister Malcolm Turnbull took no time in exploiting the division in the ALP, backing Keating.

“I agree with former prime minister Keating on this point, decisions of that kind should be taken by politicians,” Turnbull told press in Canberra on Tuesday. “Outsourcing that to naval officers, no matter how distinguished, misses the point.”

While Keating is likely correct in saying that Labor’s policy is wrong headed, what The Australian failed to point out is that he has spent the past nine years as the head of the advisory board of the state-run China Development Bank, the country’s main policy bank, which directs foreign investment. So he has a dog in the fight.

Keating is very proud of his involvement in the CDB and has cited its role, in but he bridled at the suggestion that this in any way shaped his views on China:

“We normally don’t spring to attention the moment a journalist drops a late email but given Mr Keating’s recent comments on the South China Sea he told me to furnish you with a reply,” Keating’s spokesperson Susan Grusovin wrote in reply to questions from Crikey.

“Mr Keating has no consultancy nor any other role with any commercial interest in China.  Nor does he have investments there.

“Mr Keating is… a member of the International Advisory Council of China Development Bank along with other international figures, such as Henry Kissinger. The China Development Bank pays Council members the most modest annual fee and airfares.

“If your line is that Mr Keating’s views around Australia’s policy towards China are in some way skewed by his financial interests, he said to let you know you are barking up the wrong tree.”

This unnecessary provocation by Labor comes amid an increasingly delicate situation in the South and East China Seas. It is now well documented that China has been building artificial islands in what has been a so far successful attempt to bolster its claims for sovereignty over the South China Sea.

[Political donations but one of many weapons in China’s arsenal]

China has also significantly increased its naval power both through the modernisation and multiplication of its naval fleet and coast guard — as well as via the effective militarisation of its vast fishing fleet, which regularly fishes illegally in others’ waters. China, of course, is not alone in illegal fishing, with many other nations with significant seafood export sectors, such as Vietnam and Thailand, also regularly caught in extra-territorial waters.

In the East China Sea, China has sovereignty claims against its long-time rivals in northern Asia, Japan and South Korea, with whom it shares centuries of enmity peppered by conflict; Japan occupied large swathes of China prior to World War II, and conflict arose with South Korea during the Korean War that followed not long afterwards.

Things took a turn for the worse this week when a South Korean patrol boat was sunk by Chinese ships it approached for illegal fishing; the country’s military have vowed to counter any further attacks.

“So far we have been very cautious using such crew service weapons but now … we will take a more aggressive stance in using them when our officers are in danger,” senior South Korean coastguard official Lee Chun-jae was reported to have said.

All of the countries that China is in dispute with are in the same bind: the country with whom they are in dispute is generally their largest, or at least second largest, trading partner. Australia is in that very same boat, boasting the most skewed trade relationship towards China of any nation on the planet.

In the South China Sea, China has had altercations with boats from Vietnam, Indonesia and the Philippines in recent years. Last year, Indonesia decided to stand up to China, blowing up a few fishing vessels.

The US has belatedly entered the fray, after sitting on its hands as China built its islands — fearing its traditional role as the Pacific’s policeman is being usurped — and failing to protect its allies: Japan, South Korea and the Philippines.

But suddenly, after winning a battle in an international court that branded China’s claims as illegal, the Philippines, under its populist President Rodrigo Duterte, is changing tack and effectively tossing its long-standing US alliance out.

The situation draws attention to the government’s lack of a cohesive, overarching policy on China that encapsulates the exquisite and historically unprecedented dilemma in which Australia finds itself. And this is another reason that Labor’s timing on this is so ill-considered.

Keating himself outlined this in an interview with Kerry O’Brien conducted on August 30, which is available online:

“Well, the fact is Australia needs a foreign policy, and it needs one urgently. Australia does not have a foreign policy – that’s the biggest problem. A lot of these humanitarian things we do, whether we’re recovering people from the Ukraine after that disaster, these are worthy things for the Australian nation, but they are not a foreign policy.

“We both need and deserve a nuanced foreign policy, which does take account of these big seismic shifts in the world. And we can’t ever be caught in some containment policy towards China, or seeming containment policy of China, to assist the Americans to try and preserve strategic hegemony in Asia, in the Pacific.”

As well as in the ALP, there is plenty of sentiment against China within the Coalition ranks, particularly in the National Party, which has been — actively, at times — against Chinese investment. And that’s just a small taste of the conflicting forces inside the government that need to somehow reconcile to a arrive at a cohesive China policy.

For now, Australia would be advised to keep well away and let its powder on the issue, if you like, dry.

This is something Keating himself recently elucidated as part of the series of recordings undertaken by the University of Technology’s Australia China Relations Institute, which former foreign minister and NSW premier Bob Carr runs — and for which he has recently been critiqued and, some suggest, compromised due to its funding by a Chinese billionaire with strong Communist Party connections.

[How Bob Carr — and our unis — came to love China (and its money)]

It’s very clear that the heft of Chinese soft power, which Australia is only just coming to understand — but which Keating surely already does — is being directed very much at the South China Sea.

In south-east Asia, Chinese money is poured into the pockets of the leaders of the poorer regional nations to fracture any joint stance on China’s naval aggression. On Thursday, for instance, Chinese leader Xi Jinping will arrive in Cambodia to promise billions more in loans and deals.

Duterte’s stance has not been triggered so much by Chinese money — at least not that we know of, and he deserves the benefit of the doubt on this — but a conviction that the Philippines should carve out an independent foreign policy.

All of this ramps up the pressure on the Australian foreign policy white paper project recently given the green light by Foreign Affairs Minister Julie Bishop but which Crikey understands was an initiative suggested by her new departmental secretary Frances Adamson.

Australians should wish them all the very best. It’s an invidious task.

Peter Fray

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