Australian Financial Review

By Tom Switzer

If a week is a long time in politics, as Harold Wilson observed, then a decade is an eternity. Nothing proves this better than Australia's dramatically changing attitudes towards US–China relations. Though you'd never know it from Clive Palmer's rants against "these Chinese mongrels", we are enthusiastically interdependent with China, and this has important implications for our strategic outlook.

Ten years ago, Alexander Downer said Washington could not expect Australia to automatically side with the US if China attacked Taiwan. Speaking in Beijing on August 18, 2004, the foreign minister said the ANZUS alliance for mutual defence between Australia and the US would only be invoked by an attack on either country, "so some other activity elsewhere in the world . . . doesn't invoke [it]".

The response to Downer's remarks was overwhelmingly hostile.

The gaffe, warned defence expert Paul Dibb, had "threatened the very fabric of Australia's alliance with the US". "One rolled gold diplomatic disaster," chided Labor's foreign affairs spokesman Kevin Rudd. "Grievous, foolish, needless", slammed The Australian's Greg Sheridan.

The US ambassador slapped down Downer, making it clear he expected Canberra would help the US in any military conflict in the region. The World at Noon and Lateline rolled out Ronald Reagan's former China policy expert and Taiwan's deputy foreign minister, respectively, to condemn the besieged foreign minister. One ABC journalist even took Downer's gaffe as a sign that "Australia will choose China over the US".

It was left to the prime minister, John Howard, to calm things down. Australia, he cautioned, would work hard to resolve any conflict between China and America, because relationships with both nations were in our interest.

Changed attitudes

Fast forward 10 years. In June, David Johnston made more or less the same remarks as Downer, only this time they were in relation to any Sino–American confrontation in the region. When asked by Lateline's Tony Jones whether the US alliance "commits Australia . . . if the US is in a conflict in our region", the Defence Minister said: "I don't believe it does."

However, unlike a decade earlier, the incident sparked hardly any controversy. No front-page newspaper stories. No editorials. No ABC television and radio coverage. No prime ministerial intervention to clarify Johnston's remarks.

Whereas Downer's frank remarks in 2004 were denounced as heresy, Johnston's equally candid remarks in 2014 have gone largely unremarked.

Why? After all, the US alliance remains the centrepiece of Australian foreign policy.

Indeed, both Washington and Canberra have enhanced military co-operation in recent years, culminating in last week's signing of the Force Posture Agreement (FPA), which provides a legal basis for the presence of US Marines and US Air Force in Australia over the next 25 years.

Explaining the shift

Why the radical change in Australian attitudes? It's tempting to say that relations between Tony Abbott and Barack Obama are not as intimate as those between John Howard and George W.  Bush. But that misses the bigger story over the past decade: the rise of China, which increasingly means different things for the two nations.

For the US, its main significance is the emergence of a strategic rival; for us, it is the opportunity for a rewarding trade partnership. Australia now exports more to China than the US by a ratio of more than six to one. A recent Lowy poll regards China as "Australia's best friend in Asia" (ahead of Japan).

That might explain the cautious progress on securing the Darwin deal during the past three years. It probably also helps explain the announcement last month that, for the first time, Australian, US and Chinese soldiers will conduct a joint exercise on Australian soil in October.

The lesson here is not just that diplomats or government officials should refrain from speculating publicly on what his or her nation would do in the event of a hypothetical military conflict. It is that China, contrary to Palmer's tantrums, is more important to us than ever before.

That does not mean Australia is faced with a hard, stark choice between China and the US. It means that Canberra will need to play a more demanding diplomatic game than ever before, one that will on occasion involve the difficult feat of riding two horses simultaneously.

This article was originally published in the Australian Financial Review