China in Australia's future



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Professor Hugh White - China in Australia's Future

Those attending CEDA's State of the nation have heard predictions that a power struggle between China and the United States was likely and that it poses significant risks for Australia's economic prosperity.

Australian National University Professor of Strategic Studies Hugh White told State of the nation attendees that the rise of China and America's response would "change Australia's international situation in ways that will be fundamental to our future economic prosperity".

Professor White highlighted that we have lived through the most peaceful 40 years in modern history and that Australia has got used to taking for granted that the international situation posed no serious constraints - but said that that optimism may be punctured.

China's rise and America's response raises very serious issues for our economic prosperity. America has been the dominate power in Asia since the Vietnam War and America's position as leader of Asia has been uncontested, Professor White explained.

However, he said while he believed China also wanted peace, the rise of China means they no longer believe the US can be the only dominate power.

Professor White said at the very least China will want equal placing.
The important question he said was, if China wants a bigger role and the US wants to stop them, how does it end?

He highlighted that if anyone thought that they would launch into a strategic competition without thinking about where it ends, they hadn't read enough history and he said it was huge risk to Australia "not only because it was happening right on our doorstep but because it was between our biggest ally and our biggest trading partner".

Professor White predicted that "some time in the next few weeks the Australian Government will announced a program of significantly enhanced military cooperation with the United States to support United States forces in the Western Pacific.

"The most likely form of this will be in the prepositioning of military spares and stores in Australia to support US military operations in the West Pacific, it may also include expanded training and exercise facilities in Australia and there's a chance, just a chance, it might actually include the basing of US forces in Australia - most likely marines."

He said this would probably be couched as two old friends working together in isolation and nothing for anyone else to worry about, but it would signal Australia's support for the US.

The big question he said was how would China react?

"I know they're not going to like it and I think there is a very clear risk they will respond and I do hope our government has thought of this."

Professor White said the government had probably thought there is not much China can do because it relies on trade with us, as much as we do with them. However he said this underestimated their options and our vulnerabilities.

He said one possibility is that China could direct investment away from Australia.

"The welfare of a very large number of Australian companies now depends on the increasingly slender chances that we can preserve the kind of peace and stability in Asia that has made the growth in our markets in north-east Asia possible, we can't take that for granted," he said.

Click here for the full audio.

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