Not too far back in Australian history, large amounts of anger and angst—buried not too deep in the national psyche—would have arisen if Chinese warships had conducted exercises in Australia’s maritime approaches.

Now, for the first time, China’s Navy has done just that. Two Chinese destroyers and a landing ship carried out the exercise—as legal as it was unannounced—between Christmas Island and Java, before heading out into the Indian Ocean. Little wonder the Australian Air Force ‘scrambled’ and did some surveillance.

No public anger is on show but some low-level angst is about. Rory Medcalf and C.Raja Mohan argue that China’s going Indo-Pacific and the exercise is ‘a wake-up call to anyone still doubting China’s long-term intention to be able to project force in the Indian Ocean.’

All this is vivid context for David Hale’s ASPI paper, ‘China’s new dream: How will Australia and the world cope with the re-emergence of China as a great power?’

Hale writes:

• China’s power could force Australia into a ‘crouching mode—still independent, but unable to be highly assertive against the dominant power to its north.’
• China’s new president, Xi Jinping, is set to be the most powerful Chinese leader since Deng Xiaoping. (See also Willy Lam’s fine piece on Xi’s ‘extensive and entrenched power’.)
• Canberra must prepare for the high risk that, in 10 to 15 years, the US will not be able to guarantee Australia’s security.
• Australia’s current debate is over the choices between the US and China; the future might be one in which Australia chooses India instead of China

It’s a fine and thought-provoking paper; certainly Hale’s predictions about the steep decline in US defence spending will provoke some return fire from some of APSI’s defence number crunchers (he sees the US GDP share for defence heading back to 1930s levels).

To take a measure of what David Hale offers today, look at the 2006 ASPI paper on China he authored. For instance, his description seven years ago of the new geopolitics of Asia is an excellent report card of where we are now. As a seer, Hale has good form.

The big change in tone between the Hale of 2006 and today is his pessimism about the ability of the US political system to respond. The political gridlock and budget woes produced by the Wacko Wing of the Republican Party and the Entitlement Mainstream of the Democrats could see the US slash defence spending and withdraw from East Asia:

The US won’t be able to remain a great military power without a sustainable fiscal policy that restrains health care spending. Doctors and health insurance companies will determine whether America continues to be the world’s leading military power, not strategists in the Pentagon, and the most important predictor of the global balance of power in 2030 will be America’s health care inflation rate. There’s been a sharp decline in health care inflation during the past four years, but there’s no consensus that it will be sustainable. Australia must therefore prepare contingency plans for the risk that the US will become increasingly less able to guarantee its security.

In the Q&A at the launch of Hale’s paper, one of Canberra’s strategic sages, Paul Dibb, commented that the thought of the PLA challenging the US military amounts to a Chinese ‘wet dream’, rather than a new dream. True, replied Hale, but the trend lines are taking us to a different place.

For all that and more, here’s David Hale’s speech at an ASPI lunch this week. I did an interview with David, which you can watch on ASPI’s YouTube channel.

Graeme Dobell is the ASPI journalism fellow. Image courtesy of ASPI’s Cassandra Joyce.