From: The Australian September 18, 2010 12:00AM
Australia doesn't need to choose between the US and China, but it has a vital role to play in the region
AFTER being invisible during the election campaign, the prospect of a Rudd-Gillard rematch has put Australian foreign policy back in the news.
All the more so because the new Prime Minister's principal initiative thus far has been the domestically driven small target of an East Timor solution to asylum-seekers, a policy Rudd warned against on the eve of his ouster by his new boss.
There may or may not be a personalities crisis brewing over Australian diplomacy. After all, Barack Obama and Hillary Clinton have been an effective foreign policy team in the US even though they were bitter and sometimes nasty rivals on the presidential campaign trail.
But according to Hugh White, Australian foreign policy itself is in crisis. In his recent Quarterly Essay, White says that after 60 years of nailing itself firmly to the American mast, "[Australia] should try to persuade America that it would be in everyone's best interests for it to relinquish primacy in Asia" to accommodate China's rise, and then to agree to a 19th-century Concert of Europe-style sharing of power with China.
The Australian's Greg Sheridan has called White's essay "the single stupidest strategic document ever prepared in Australian history". Michael Danby, Carl Ungerer and Peter Khalil have labelled White a Munich-style appeaser in these pages.
Instead of giving up on the alliance in the name of accommodating China, Sheridan says Australia should double down on the alliance by offering Darwin for the US's largest military base in Asia.
Danby, Ungerer and Khalil propose that Australia commits to a campaign to transform China from a country that "summarily jails Catholic bishops and HIV activists" into a liberal democracy.
All this comes on top of last year's defence policy white paper arguing for a large-scale Australian military build-up over the next 20 years. The glib but not unfair rendering of the underlying reasoning is Australia can no longer rely on the US for its security and it cannot trust China to remain peaceful, so the time for more self defence is now.
These analyses of the US and China and what they mean for Australia cover the waterfront of policy options: side even more with the US, sidle up to China, or go it more alone.
However, they share one key assumption, namely that Australia's greatest international achievement of the past several decades -- getting closer to both China and the US at the same time -- is no longer possible.
The world is no doubt changing. But the sky is not falling.
Australia does not have to and should not want to choose between its alliance with the US and its economic ties with China. The most important foreign policy move the government can make is to ensure that it stays that way.
To paraphrase Mark Twain, news of America's demise is exaggerated. The resilience and innovation of the American economy should never be underestimated. The markets certainly don't underestimate it, if the willingness of foreigners to lend the US as much money as it wants at low interest rates is any indication.
The US economy has taken a series of body blows in the past decade. But it isn't on the precipice of a Greece-style economic tragedy. Outside Australia, it isn't obvious that any big Western economy is better placed to get through today's prolonged downturn than is the US.
Nonetheless, unless something goes horribly wrong with China's three decades and counting economic miracle, the irresistible twin forces of demography and development will result in China passing the US as the world's biggest economy in the mid-2020s.
But if and when that happens, China will still be a poor country with domestic challenges. The US's military, political and cultural power will still dwarf it.
Almost 15 years ago, former US secretary of state Madeleine Albright's description of the US as the "indispensable nation" was spot on. There is little reason to think it will be less accurate 15 years from now.
There is no denying that the US and China have real disagreements over principles and policies. But it is equally clear that they are committed to managing them down in the name of the greater good, which is increasingly closer economic ties between two countries that are already joined at the economic hip.
It is better to think of the tensions that will continue to flare up between the countries over issues as diverse as trade and Taiwan more as useful pressure-release valves than as brushfires that threaten to burn out of control.
Australia re-enters the picture because of the fundamental similarities between the US's approach to China and its own, not to mention those of Japan and South Korea, America's other leading Asian allies and Australia's closest friends in the region.
At its core, America seek