Jack Waterford | Anthony Albanese, Xi Jinping meeting welcomed, but what are our priorities from here?

It is, rather, only an incidental corollary of China's decision to get a conversation going with the United States again. That the two sets of discussions followed remarkably similar lines - the US one naturally earlier and at greater length than the brief conversation between President Xi Jinping and Anthony Albanese is simply a reflection of China's willingness to accept us in our chosen role as an automatic follower of the US.

China may well have recognised that resetting Australian relations would also be in its interest. It has been openly inviting a new start, not least since Albanese won at the elections six months ago.

But while Australia was insisting on having every conciliatory word accompanied by some unnecessary belligerence, it would not have given this new start any great priority had it not seen the virtue of getting its political and trade relations with the US back on the right track.

The Western audience, not least the Australian one, has been primed in recent years to regard China as an implacable enemy, in inevitable conflict with the US over military and political hegemony in Asia. War with China over the future of Taiwan has come to be seen as likely and soon.

The militarisation of islands off the Chinese coast has been seen as deeply sinister and a sure sign of plans for aggression, just as the build-up of the Chinese navy has been read as a sign that Australia needs a fleet of nuclear submarines, and American air force bases able to strike China from the Northern Territory.

Key figures in the intelligence establishment, and unregistered lobbyists for American interests treated as Australian seek continually to dominate the local political space devoted to defence matters, and even amateur historians guarding our borders from people fleeing from war speak meaningfully of hearing the drumbeats.

Albanese has made it clear that he has no intention of rolling over on any Australian grievances in trade, nor in summarily dropping Australian defence preparations. But he has committed himself to continuous dialogue rather than name calling with most channels of communication left closed.

In looking to a reset (nothing by way of dropping any of the trade sanctions is formally on the agenda yet) he would do well to attend to a reset at the Australian end.

First, he needs a new national security establishment to advise him. Not the very right wing and very hawkish team chosen by Scott Morrison, almost all of whom give the impression of having a higher loyalty to the general interests of the Western alliance, as seen from Washington, than to Australia's own interests as a member, albeit a junior one.

It has gone without saying that the interpretation of where Australia's best interests lie has turned on the conclusion that Australia will always be better off if the US is an ally beholden to us.

Thus, the reasoning goes, we should stand beside them even when we feel that doing so serves no interest other than keeping the US national security establishment happy.

Whenever I hear this argument, I am reminded of something a senior US official remarked to me in Washington, soon after a visit to president Ronald Reagan by British prime minister Margaret Thatcher 25 years ago.

She spoke at a dinner with the secretary of defence and of state and assorted officials about Britain's long and close relationship, and bonds of kinship, with America.

Someone responded, "Yes ma'am, I can see your argument. World War I and II and all that. We do value our relationship with Britain. But when we are thinking about what is in America's national interest, we consider the position or views of Great Britain about as often as Britain, in considering its own national interests, thinks of the Isle of Wight."

Australian spooks have intimate entrée into the American national security system. They know and sometimes participate in the debates raging about responses to circumstances. So do our diplomats, regardless of who is president.

In American national security debates involving us, and some that do not, Australian players have at times attempted to line up with some of the more extreme American positions, if only in the desire to commit America to force.

We do not need our national security advisers to be tailoring their advice according to the biases, predispositions and political mischief-making of the previous Morrison government. Still less do we want their advice honed to accord with the views of some player or interest in the US national security establishment. In recent times we have had both.

In Washington, our diplomats and our embedded spooks should be voices for calm, not gloom, for caution rather than action, and for common sense rather than the tendency to see every development as part of a secret plot to catch us with our pants down. Nor should we allow a broad consensus on defence and foreign policy to mean that Albanese is bound to the often absurd, ideological and always deeply political positions of Morrison or Dutton.

Taking a more independent Australian view of our situation does not have to involve Australia abandoning its ties with the US, or with other nations in the Western alliance.

It involves understanding our own geography, including our situation in our immediate neighbourhood, our own history, culture and economic interests.

If we do not speak up for our circumstances, including listening to our neighbours, and if we do not attend to our economic interests, we cannot expect that anyone else, including the US will. When, for example, our provocative behaviour at America's instance saw China effectively exclude Australian barley from its domestic market, the US did not hesitate for a moment in taking over our position in the Chinese market.

They may have said, in some international forums, some sympathetic words about the unfairness and impropriety of Chinese actions, but it did not prevent their taking advantage of our loss.

The trade war between China and America, such as it was, did not engage Australia's interests, least of all on the American side.

In essence, Australia has been one of China's most important partners in building up China's economy to the point where it has matched that of America's. We have had a massive trade surplus providing it with raw materials.

China has used these to manufacture goods which it has exported to the world, including the US. The US, on the other hand, has built up big trade surpluses with Australia, not least from our use of its intellectual property in computers, communications and technology.

It is quite true that the US has had grievances with China over intellectual property, but they have not been ours, and, had we much intervened, we would have been sat on by both elephants, because America does not have a clear conscience in the matter.

Trump's brand of economic populism saw him galvanise a constituency angry that America (and American business) was exporting jobs as it was importing manufactured goods.

READ MORE:

He made China the chief villain and demanded concessions from them, with the general effect of increasing costs to both countries. Again, that was not our quarrel, and, on the principles involved, we would have been better supporting the free trade position, not America's.

It was in such a situation, a decade or more ago, that then prime minister John Howard insisted that Australia did not have to choose between China and the US. We could be a good friend and partner to each.

Joe Biden, for that matter, has always insisted that the US does not call on nations to pick sides. Increasingly, however, nations in the area have been pushed to take sides in the military rivalry between China and the US, as China has become bigger and more powerful, more anxious to take its place among the leaders of the world, and has started to bump against America's substantial (at this stage superior) power, some quite close to its coast line.

The problems have been exacerbated by China's development of a blue water navy, by tensions over the future of Taiwan, and fears about North Korea's stability.

As the tensions have been ramped up, the wider world has been encouraged to see a fundamental conflict between an authoritarian communist state pitched against a plucky and robust democracy, in a contest only one could win.

According to the communique Xi said that China-US relations were not a zero-sum game where one side out-competes or thrives at the expense of the other. "The successes of China and the US are opportunities, not challenges, for each other. The world is big enough for the two countries to develop themselves and prosper together. Under current circumstances, China and the US share more, not less, common interests ... The two sides need to respect each other, pursue mutual benefit, focus on the larger picture, and nurture a sound atmosphere and stable relations for cooperation."

Xi used much the same high note to insist that there were no fundamental conflicting differences between China and Australia.

Our economies complemented each other. China recognised that Australia wanted to improve and grow the economic relationship, but it seems clear, undoing some of the new trade barriers, or putting aside the irritations caused by Australia's more gratuitous criticisms is for the future. It will, however, be our own fault if we remain something sticky or smelly under the Chinese shoe.

Australia has continued to prosper from trade with China, even if China selectively imposed a few barriers designed not to hurt itself but to make Australia feel some pain.

But even if all these obstacles disappeared, which they won't quickly, we cannot pick up where we left off. That is even if America seeks to build on the new goodwill to increase its economic cooperation and trade.

The world economy is in poor shape, and some leading economies are close to recession. The pandemic is still working its effect, including in China itself. China's own domestic economy is in some trouble, and eventually, this may seriously affect demand for raw materials.

The economies of western Europe are stretched by the war with Ukraine, the more so as Europe goes into winter facing the likelihood of fuel shortages. China is beginning to recognise that it is in its interest to see that war contained, but it (and probably India) will still give assistance to Russia, even as it holds back world economic growth.

It will, in short, take China some time to be able to re-arrange its economic furniture and to crank up its economic engines. If any of the mutual rhetoric about China joining with America to cooperate on climate change action means anything there is ample scope for building up some goodwill, a return of tourism and cultural interchange, and, perhaps, some elbow over human rights issues.

But an equally substantial threat comes from the continuing military tensions. Taiwan can and should be de-escalated, both by China and by the US.

It has been primarily a war of words, even if there have been increasingly reckless demonstrations, by both sides, including, stupidly, by Australia in Taiwan Strait provocations. China cannot, and will not, interfere in the development of loose economic and political relationships in the region, whether with Japan, Korea, France, Vietnam, Thailand, Singapore, Australia and India.

It even wants to join and influence some groupings, and to involve its neighbours more in its own ventures. But pushes to make these military alliances - and an architecture which makes clear that the fear of China is its overwhelming reason for existence - can hardly reduce any Chinese fear of encirclement. China will not stop arming itself and having a bigger presence in its neighbourhood.

If we are sensible, we prepare for our own defence in proportion to how we perceive the threats in our strategic environment. But if we are to have any regard for our economy, and our relationships, we might be better focused on conflicts we can manage, rather than ones which will ruin us all.