Economic recovery is too important to leave to the national security hawks

Some thinking and advocacy on the need to balance different interests when formulating foreign economic policy for the post-COVID recovery

After a few days of meetings in Canberra with various academic, industry and government experts in the trade, international economic and security policy spaces I thought I would sit down and share some preliminary thoughts in the form of this brief LinkedIn article.

First is that Australia, unlike many other advanced industrialized countries in Europe and North America, is currently poised to benefit from an economic recovery as the last of the country’s lockdowns has ended and as our hemisphere begins a prolonged period of warmer weather. By the time climatic conditions return that bring with them an inevitable rise in cold and flu cases, chances are relatively high that the world will have one or several proven and effective vaccines developed in places like the United States, GermanyChina and possibly the United Kingdom.

Second is that China will be of fundamental importance to the recovery not only for Australia but for the Asia or Indo-Pacific region and the world economy more generally. This presents a bit of a conundrum for Australia in particular, given the fact that political relations are at an all-time low and that this is starting to have important economic repercussions that could seriously endanger our economic recovery and in no small way the country’s future economic prosperity.

This does not mean we need to roll over and play the submissive junior partner in this relationship, since that also would be counterproductive given the important cultural reality that China and the Chinese leadership only respect those that are willing to be as tough as they are. Standing up to China is as important as getting on with China, so the issue is really how to do this. The answer is quietly and resolutely, without political grandstanding and without going out of our way to add insult to injury.

I have long said that China takes a very pragmatic approach to its relationship with Australia and in fact all liberal democracies that it has a trade, investment and geopolitical relationship with. China takes what is wants and leaves the rest. It has no truck, broadly speaking, with the values that we try and impose upon it, it just wants the economic benefits that are to be had. We need to take the same approach. Of course, we can also apply political pressure in connection with issues we care about such as human rights and improvements more generally to the rule of law in China. But this does not need to be done in a way that endangers the economic relationship. This is a realization that the Clinton administration came to about 18 months into office, and anyone that wants to put a values-based diplomacy before a country’s economic interests is living in an alternative reality. The preponderance of historical evidence is overwhelming on this point.

Another important point to remember when contemplating the relationship, we wish to have with China and with the outside world more broadly is that there can be no national security without economic prosperity. The reason why the United States ultimately prevailed over the Soviet Union, and the reason why the Allies defeated both Nazi Germany and Imperial Japan was because of the Allies’ vastly superior economic resources. Any policy that critically undermines economic prosperity is likewise anathema to any notion of long-term and sustainable economic security. Our national security experts, who are no doubt providing advice that they see as well-founded and logically sound, and who are certainly acting in what they reasonably and loyally perceive to be the nation’s best interest, are nevertheless limited to a narrow view of what constitutes this interest, what threatens it, and how to mitigate such risks. During the Cuban missile crisis, Kennedy’s military advisers only gave him two options: 1) bomb and invade Cuba, 2) launch a pre-emptive nuclear strike on the Soviet Union. We can now appreciate how deficient that advice was, and we can be grateful that Kennedy sought a political solution to what was ultimately a political problem, ignoring the advice of his generals.

In the same vein, as we start to appreciate that we are living in a world of heightened geopolitical tensions brought on by new and renewed military confrontations, we need to keep an eye on the bigger picture, the broader notion of national interest, and a world where peaceful co-existence and mutual prosperity are the ultimate objectives of foreign policy. And more importantly we must insist that our political leaders do the same. As someone recently wrote in the context of Vietnam’s similarly tricky relationship with China, if our leaders cannot walk the tightrope between standing up to and getting on with China, then they don’t deserve to be our leaders.

Originally published on LinkedIn, 12 November 2020.