It was a lively evening recently at Hurricane’s, the new Australian ribs joint in Beijing, with pin-up snowboarder Scotty James charming a large crowd of excited young Chinese as the snow swirled around outside—a seemingly good omen for the approaching 2022 Winter Olympics.

Former South Australian Liberal senator Sean Edwards was also there, promoting his Kirrihill Wines at the Australian Chamber of Commerce event.

The Chinese ambassador to Australia, Chen Jingye, meanwhile stressed at a rare press conference last week the value of the ‘pragmatic cooperation and exchange between the two countries and the benefits for both sides’. The $124 billion commodities export trade to China will play a big part in delivering a budget surplus ahead of schedule. Tourism continues to rise, while student numbers, already probably at maximum sustainability, hold at a high level.

This ‘pragmatic’ course is one long sought by Australian political leaders and diplomats dating back to Gough Whitlam and Stephen Fitzgerald. And it’s clear, including from such evenings in Beijing, that it continues to have strong value for Australia.

Yet today there’s an increasingly dark flipside—albeit one that some of those same leaders feel we shouldn’t dwell on. They believe that if we can’t change China in any way, best to look to its bright side, notably its benefits for us, and focus on amplifying them.

The crucial presumption that lies behind this supposed pragmatism is that China’s rise in all spheres—to dominate the region, and probably also the world—is inexorable, and that our interests determine that we respond to this inevitability in the way that works best for Beijing, which will reward us commensurately.

This inexorability is perceived by the Chinese Communist Party as a form of fated correction to the ‘century of foreign humiliation’ that has for its 70 years’ rule comprised the core of Chinese official history, a victimisation that the party presents as unique and uniquely cruel despite the experiences of neighbours such as Korea and Vietnam.

But just as that history—judged to have started with the Opium Wars with Britain in the 1840s—might profitably be revisited in a more nuanced manner, so might China’s future prospects be viewed in a more cautious way.

Much is made of the imminence of China’s overtaking the US as the world’s biggest economy. Yet China’s economy is slowing inevitably as it matures and the population falls, and as it resists liberalising reform, while the US—in part because, as in Australia, its migrants constantly transfuse fresh life—is back on an upward track.

And the personal battle to ‘get rich before growing old’ remains palpable in the People’s Republic of China. On the International Monetary Fund’s list for 2018, the US’s GDP per capita was 8th highest and the PRC’s was 67th (Australia was 10th).

ANZ Bank chief economist Richard Yetsenga, probably Australia’s best regional financial analyst, believes ‘it will be very difficult for China to become the world’s largest economy by 2030. Even reaching that milestone by 2050 seems ambitious.’

Another reason for caution in assuming China’s rise is inexorable is that the over-ambitious project that has for 70 years driven the CCP remains mired in trouble—transforming a diverse, pluralist empire-turned-republic into a unitary, ethnocentric nation-state.

Consider the borderlands.

Xinjiang, China’s largest region, has become a vast encampment where Beijing is battling to replace local and religious identities with those of the Han majority and of the party itself. Tibet appears placid, but as soon as the venerated 14th Dalai Lama dies and the party—avowedly atheist—appoints a successor, that will change. Hong Kong has made abundantly clear its distaste for the PRC project. And Taiwan is preparing to vote on 11 January, likely indicating the same suspicion that Deng Xiaoping’s ‘one country, two systems’ formula has already morphed into one country, one system.

Strategically, China’s capacity continues to grow as it increases its spending on security at home—where CCP general-secretary Xi Jinping’s insistence on ‘cyber sovereignty’ is reaping rewards in ubiquitous surveillance and control—and abroad, emboldened by its South China Sea success.

Yet as leading Sinologist David Shambaugh has pointed out, although China now has a global footprint, it still lacks both long-range military power-projection capacity and friends and platforms, such as the 38 allies and 400-odd bases the Americans can enlist.

Beijing pushes ahead with its brilliantly conceived Belt and Road Initiative, but the relationships thus derived remain essentially mechanistic, and will wilt if its ambitious promises are unfulfilled.

Canberra, looking around our region, sees other countries similarly placed, engaging with China as opportunity permits, while retaining some rhetorical and policy differences, and maintaining optimum links that can be preserved with the US given Trump’s distaste for allies, especially those with ‘unfavourable’ trade balances.

China relates at the institutional level with Australia, as with other countries, via a series of tests. We agreed China is a ‘market economy’ to qualify for negotiating a free trade agreement, although that took 10 years. We have more recently failed to permit Huawei to take a central role in our 5G platform, and have declined to sign Beijing’s Belt and Road agreement—thus remaining stuck in diplomatic purgatory, with these tests constituting a constant rebuke.

China itself, demonstrating a degree of agility, has meanwhile gained ground in building greater leverage within Australia by redirecting much of its efforts from Canberra towards state and local governments, universities and corporations. Canberra has rightly acted to limit interference, although influence-building, which is pervasive and well funded, remains of course completely legal.

At the national level, China is waiting out an Australian change of direction, with top-level visits on hold and politicians such as Andrew Hastie and James Paterson banished until they ‘genuinely repent and redress their mistakes’—in CCP-speak, produce self-criticisms.

The use of the word ‘repent’ points helpfully to the extent to which the CCP under Xi has become more palpably a religious rather than a purely political institution. China continues to change rapidly, with its own former pragmatists—including those in the Ministry of Foreign Affairs—losing the limelight to true believers, to party activists.

This, combined with Xi’s insistence that ‘north, south, east, west, and the centre, the party leads all’—resulting in China engagement equating necessarily to party engagement—makes it impracticable for countries like Australia to develop all-embracing plans for their China relationships. China is simply changing too fast, as its demands of partners keep shifting and growing.

As the party-state promulgates its own values globally, especially through multilateral bodies led by the UN, so it becomes inevitable that countries and other entities that relate to it will elide their interests with their values, seeking to pursue both rather than leaving the latter at the diplomatic doorstep. Recent Pew Research Center global polling indicates that citizens worldwide are already shifting their views of China as it changes, and are seeking to have their own values represented in the way their countries relate with it.

What this means for our politicians and diplomats will continue to be determined case by case. They must work out, for instance, whether to ameliorate the fate of accused Australian ‘spy’ Yang Hengjun by confining conversations with Beijing to the private route or to pressure the PRC by speaking openly. But one presumes the trend will persist towards politicians and diplomats voicing such concerns publicly, as the PRC persists in its course towards more single-minded, more personal and more centralised governance—and appears more impervious to discreet negotiation.

We are already learning to live with inevitable tensions at this institutional level, while continuing to seek to engage personally, culturally and commercially—as exemplified at that successful Scotty James evening in Beijing.

The main pieces still missing, at the Australian end, include building a better understanding of China’s history and its current course, and greater support for the many strands among our own large ethnic Chinese citizenry to participate more fully in our institutions. But we are not suffering because of the lack of a ‘you beaut’ catch-all plan for the relationship. Such a supremely optimistic leap is likely only to end up frustrating everyone.