Australia: balancing international relations skilfully

Multi-facet and Skilfully-balanced International Relations

With that definite advantage of location, Australia is able to establish bold relations with major players of the world and avoid being hurt by feud, conflicts, and rivalries common in other continents of old civilisations. The country has been under strong influence of the UK, Western Europe, the US, and, more recently, East Asia. It must be a beneficial package of heritage containing Commonwealth, American, and Asian links while being neutral to all these stakeholders. It is thus imperative that Australia fully utilise these existing links and necessary detachments to advance its cause of progress.

A near total reliance on Britain collapsed when Britain sought an entry into the EEC and from then on spared fairly little thought of the Commonwealth, including Australia, aside from playing designated ceremonial roles. The colonial links offered soft cushions and therefore presented intangible barriers to the thinking in Australia of their realistic position in the world. When that shackles were broken by the British’s own initiative, Australia was left with a chance to examine the world again and seek new solutions. Australia became genuinely internationalised to exploit fuller benefits from its extensive links to other major players of the world. Sentiments and nostalgia of England stay well alive and are openly displayed in numerous occasions, but strategic thinking has forwarded to be sufficiently mature and pragmatic. It would simply be foolish and unfortunate if Australia failed to seek more trade, business and growth beyond the familiar British sectors and industries.

If Australia was far from previous centres of activities in Europe and the US and got its fair share of neglect, its location guarantees bumper opportunities to get right into the centre of matters in recent decades, East Asia. There is now no excuse to shirk from close connection and dealings with those Asian neighbours and new economic powerhouses. Priority has been shifted since the late 1980s, and Australia did benefit immeasurably from trade and interactions with the fastest growing economies of the world in this region.

The most profound challenge for Australia is the re-emergence of China, which entirely changes power balances and relations patterns in the region where Australia has vital interests in. Australia feels cosily comfortable with British and American presences and primacy, and it counts trade with Japanese clients from the later half of the last century very satisfying. China is something dissimilar to previous key power brokers. It is none of Anglo-Saxon, Caucasian, and Western democratic; it is not a former colony of fragmentation either. Certain ideological and cultural barriers persistently stand between the two countries, such as divergences in human rights and media freedom in which Australia has forever followed conventional ideas in the West to make patronising judgement on China affairs. Apart from the Tiananmen tragedy in 1989, which reduced former Australian Prime Minister Bob Hawke to tears in public, a few incidents in bilateral relations or in China’s behaviours also caused concerns among Australians. Notable examples include treatments of Tibetans, Fa Lun Gong followers, and one child policy. The relentless press never misses reporting on these irregularities and making a point of their moral high standards in reflection. In addition, the aggregate strength of a continent-sized China sheds a shadow in the mind of Australians in a sparsely populated country. Due to these deep concerns over security and alien norms, Australia could easily have sought help from old allies and declined close contacts with Chinese interests.

Australia did not follow that assuring and comfortable logic for good reasons. It is vital for an export nation to keep the number of major customers increase and tie up with them for stable demand. There is no obvious problem in doing normal business and trade with China; the question is rather how far Australia would go before it is steered by ideological concerns in relation to this rising power. Being neutral is extremely beneficial to Australia in doing business all rounds. In this regard, Australia has been widely regarded in China as a good friend and a reliable partner. It has made some surprise moves in recent decades, utilising its well placed position and steadily setting itself into extensive working relations in trade and business with China.

Trade between Australia and China was less than 100 million USD in 1972 when the formal relations were established. It turned around to reach 24.6 billion USD in 2005. China is the second largest export market of Australia and the biggest export market for Australia’s iron ore. Trade surplus for Australia reached over 5 billion USD in 2005, while wool export to China takes over 60% of the total export of this raw material. The Howard government signed a 25 year contract in 2002 on LNG export to China, a secured billion dollar business order. On the sideline of government-sponsored bonding, a number of large Chinese steelmakers signed a contract with BHP Billiton in 2004 to buy 12 million tons of iron ore every year for 25 years, worth 7 billion USD. As of 2005, well over 3,000 Australian companies exported to China.

For these increasingly closer links in trade and business, Australia from the 1980s has adjusted its position regarding China and made it a priority in equal importance with other major international partners. This is not done out of appeasement, as some American and Australian ideologues passionately objected to, but of fair spirit and positive attitude towards a rising Asian power while not hurting core values and interests of Australia. All those well organised protests or outbursts of concerned groups on China related issues could not shake or hijack the central foreign policies off the course, which highlight the evident mutual benefits generated from a smooth relationship with China, backed by comprehensive understanding and acceptance of reality.

With these vital interests identified and clarified, Australia has shown a hesitation in tuning strategic thinking into the US led effort to isolate or contain China. In the Pacific, the US guards jealously its sphere of influence with both air craft carriers and economic incentives. It is inevitable that Australia, New Zealand as well, comes into the crossfire of a clash between the world superpower and a large regional power. This is particularly true during the long Cold War when the Australian Navy did the dirty work for the US of submarine spying missions on China and got caught. A heightened hostility on the basis of military confrontation has, however, dissipated in the last decade, thanks to mutual good intentions in multiple fronts. The Australian position to accommodate a resurgent China as a strategic partner is hard to be swallowed by the US, which tolerates no challenge to its supremacy and is often distracted by pacifying even the slightest offence in this regard. Subtle differences often surface to the open between the official lines of the two countries. A newspaper commentary by former Prime Minister Malcolm Fraser in 1996 says it quite plainly: the US must give room to China’s rise and accept China as a great power despite overwhelming US influence around the world. From Australia’s point of view, China’s aspirations to a more assured destiny deserve some sympathies and understanding, given the country’s past historical glories and current growing weight in the world economy. This kind of rhetoric from a neutral and accommodating Australia has only been acknowledged grudgingly in the US in this new century, after no significant outcomes forthcoming from persistently coercing China into submission and hands being tied in a global “war on terror”. This lagging in understanding derives from an aggressive American world outlook of the ultra conservatives in the early post Cold War era. The more moderate Australian view of a rising China has eventually proved plausible and on the right track.

It has been chided that generations of Australian leaders and scholars looked to China with “affectionate and misty eyes”. This is not overly unlike the twists and turns in Americans’ attitudes toward China, as summarised by Paul Cohen. The Australian approach is only a more softly, softly touch, since it represents none of a condescending, commanding culture of a lone world super power. This approach is more restrained and non-confrontational, sensing that there is no cause for alarm or direct conflict, and that Australia’s hard line over proportionate reaction to events in China would achieve little, even with American consent. This pragmatic approach to focus on gains rather than forbidding dogmas and fierce denunciation towards a none-Western developing country undoubtedly draws loathing from right-wing commentators, both domestic and overseas, those taking moral high ground and spitting despise of cultures not conformed to their own.

This rationale of acceptance is taken up even by the Howard government, the staunchest supporter of the Bush administration. The stand was confirmed in government speeches, including Howard’s own, as his administration and ruling Coalition benefit most from a continuing prosperity based on surging demands from China. The recognition of China’s position in the Asia Pacific is the logical next step. Australia refused to join a secret forum in 2003 organised by the US on its closest allies’ collective responses to the rise of China. In Howard’s talks with Bush in 2005, differences caught people’s attention, in that Australia tended to emphasise mutual understanding and considered the rise of China “good for Down Under and rest of the world”, while the US focused more on crucial and strategic differences with China. Australia sees the alliance with the US as not there for a common ground in schemes against China. This caused some stirs in American strategic study institutions, as that would hint Australia being drawn further into China’s economic orbit and inclining to take a non-involvement option when the US does engage itself in a military confrontation with China, most likely over Taiwan. Since Australia’s one China policy covers Taiwan, Australian troops would have plenty of reasons not to go to battles there when the Pentagon moved fleets in first, at least not to involve themselves in combat missions. Even if Australian troops play routine symbolic and auxiliary roles, the presence of akubra hats along side GI full battle gears signals a hearty legitimising of coalition missions when American unilateralism makes international cooperation and crisis management seriously lacking. Australia would only take that path of hostility to China when strategic interests and gains are evidently at risk in a show down. That seems a predictably unlikely scenario.

Clashes of interest do exist in bilateral business and trade. Not small numbers of Australian businesspeople complained bitterly about difficulties in their investment projects in the China market, and some sold their ventures to exit due to losses. Prominent among them, giant beer makers Foster’s and Lion Nathan each claimed to have lost hundreds of millions of dollars in their “great escapes” from the competitive China market, which disappointed them immensely. The relationship between the importer and exporter of minerals is stable but not always smooth. Large buying orders create risks in demand and price setting. Australian mining giants have made fantastic deals with their Chinese customers, with fabulous earnings, especially in the most recent commodity booms. Subsequent requests on raising prices of iron ore exported to China present a particularly knotty problem. The price jumped by a whooping 71.5% in 2005, after previous significant rises of 18.6% in 2004 and 9% in 2003. These mining giants then demanded a further 20% price hike for 2006, on the ground of a near total world monopoly of iron ore supply between them and a Brazilian company. This urge for price rises also derives from a hidden fear of oversupply and dropping prices shortly after the boom. It is quite natural for a seller to grab a last chance of bargaining. Those raised prices brought extra export revenues of billions of dollars back to happy miners in Australia, approximate 1.5 billion AUD in profit between BHP Billiton and Rio Tinto from the 20% price increase alone. They pay scant attention to deep anger of Chinese steelmakers, are simply clouded by an immediate kill, and ignore the basic rule in doing steady business, mutual benefits. Well, you gain some, you loose some. Even if China in June, 2006 officially accepted this round of price rises BHP demanded, that sense of unhappiness will linger and lead to search for new sources of supply, equity control over new mines and driving price down through other means, let alone a more critical and less favourable view of existing Australian business partners. In the long run, driving a hard bargain and rash price hikes serve no purpose of sustained benefits and invariably destroy customers’ trust.

Export opportunities are not exclusive to mining sectors, but in numerous lines of production. A common phrase now is to “ride the dragon”, sustaining growth on the back of an increasingly hungry importer. The state of Victoria exports hundreds of millions of dollars of farm and dairy products to China. Short on mineral reserves, this small state has to rely on primary products and services to lure overseas customers, and China is fast becoming the largest goods export market of the state. A classmate of my son’s has his family in rural Victoria, Horsham in the west, whose property covers 5,000 acres of prime farm land, and export of grain there to China takes a large part in the total of their business. Booming tourism and export of Australian education haul back additional billions of dollars from China to Australia. Australian universities have grown a deadly habit of depending on tuition fees from foreign students to pay for upgrading and stay in operation. Although this is partially a policy issue of insufficient federal government funding, money from overseas students, Chinese in particular, make irresistible offers to those financially tight higher education institutions. Considering the size of China’s population, these inflows of bountiful revenues are to grow unabated. Australians have a particular strength in the field of professional services and enjoy trade surplus with China at well over 2 billion AUD in 2004.

It is crucial to handle the problems cautiously in bilateral relations and keep the momentum going. It is clear now that Australia can ride the tide of China growth for the near future, chiefly in receiving export earnings. This is in addition to security and regional issues, of which China plays a key role among leading countries.

The US remains Australia’s first priority in foreign policy and strategic planning, so much so that John Howard made it known that the country is willing to be the US’s deputy sheriff in the Asia branch. That slip of tongue accurately reflects the official lines and goals, though raising some eyebrows in the region. Bound by heritage, beliefs, and security concerns, Australia needs the US as a key ally as it used to pay unreserved homage to Britain. This tendency has come from a long line of interactions, starting from WWII and Japanese aggressions. It is not exactly the truth that American GIs saved Australia from Japanese occupation. Japanese attacks were half-hearted at best, and they were troubled by the tyranny of distance and extreme difficulties in coastal landing by foot soldiers, leading to the alternatives of occasional bombing and very rare midget submarine assaults. No Japanese plans came forth for an invasion, when they realised the limited capacity in their hold for ambitious and overstretched offensives in the entire Asia-Pacific. The Japanese felt desperately squeezed by large scale military campaigns elsewhere, land battles in mainland China and Indochina, and sea battles with the US in the Pacific. Invading Australia was an unlikely venture similar to Japanese attacks on the US mainland, at least in terms of distance beyond reach. Even if they took a foothold in the extreme north of Australia, they would not have succeeded in gaining any meaningful victories, as their columns would be far from any populated places of Australia and would be drastically weakened by the harsh nature. That possibility of landing campaigns was extremely remote and soon evaporated. On the other hand, the US used Australia as a support and transit base for ground and sea battles in Southeast Asia and strikes north to Japan, as well as being a refuge for General MacArthur on the run after being spirited out of the Philippines. Up to one million American GIs at one time or another stationed in Australia. This safe and massive base proved invaluable for Allies’ war efforts in the Asia Pacific.

Under a global divide of the Cold War and unchallenged US military supremacy, Australia sought American alliance as a matter of fact and considered itself lucky to be in the bind of the ANZUS Treaty. The security responsibility shifted from Britain to the US, causing minimum disturbance. Although Australia is not a NATO member, for various reasons including distance, the alliance with the Americans made it up for the absence of a membership of the European bloc. Australia thus placed itself in a favourable position, having security provided by a military agreement but evading strict rules and command problems of a gigantic military organisation. The unified command under NATO does not apply to this corner of the earth, while the US takes on increasingly global obligations and pacifies challenges elsewhere. Australia enjoys the shield of an American protection and contributes to certain overseas missions of American directing, but its positioning provides it with flexibility in seeking its own interests and developing strategies of its own, not being overly hampered by declared commitments to a military alliance. This treaty of half a century faces growing uncertainty over its extended application into Asia at the behest of the US, and over missions which involved territories far away from Australia and go beyond original intentions in the treaty.

This flexibility does not indicate that Australia is leaving the US camp; on the contrary, Australia shows publicly its enthusiasms and conviction to US led missions, especially under a conservative administration. I was told by some Melbourne Aussie friends that their close relatives served in the Special Forces and went into covert missions in Afghanistan and Iraq along with the Americans. Bilateral relations are particularly cosy and camaraderie. Australia is one of the few countries which agree to be partners in the US missile defense systems, which places the country in potential dangers of being the first targets of future military conflicts. The Bush administration created special visa categories for Australians entering the US, giving them rights to roam across, work and live unrestricted in that traumatised country post September 11. Considering ultra sensitive issues of screening foreigners and homeland defense, Australians received extra care and special treatment as a reward for their long standing closeness to the psyche and doctrines of the US. In the face of authoritarian or “failed” states, the two countries share common views and issue similarly worded statements. Even in private conversations, Australians often passionately echo their American cousins on serious international issues, such as Islam.

There are equally quarrels of diverse natures between the two countries, on issues such as trade, international cooperation, climate change, nuclear disarmament, and, more recently, on dealing with Asia’s rising giants. American companies are in general welcome to invest in Australia, as the country needs foreign investment as the US does. This, however, often causes serious concerns and uproar about American invasion and domination in business, takeovers of local market shares by American corporations, and in the culture sphere almost everything American. Major companies have key American investors, and many Australian brands people have known when they were little are in fact from production lines controlled and managed by American multinationals. A tricky issue is American subsidies to agricultural exports. A few farming families I came to know complained openly about impossible competition with their American counterparts due to heavy government subsidies in the US, while they enjoy none of similar benefits from the Australian government.

Despite these rumbling quarrels, Australia remains a loyal ally of the US in so many fields. As countries like Libya buckles under American isolation strategy and many small European countries compete for American aids at all costs, the alliance Australia has with the US is in little danger of breaking. No one, politician or ordinary Joe, is foolish enough to throw away such a cherished, solid relationship with the sole superpower in the world. That would be suicidal and against basic instincts of human nature. The question is to what extent this country seeks to play the role of a deputy sheriff and does not shirk from that risky duty. Divergences from American agendas bound to occur.

Asia has become a place vital to Australia’s future. A trident policy stand is established, after much agonising, in which Australia moved from one leg support of Britain to two leg support of the US and the UK (Europe), and then to the current triple support. It was frankly hard for Australia to regard its closest neighbours in equal terms, either from the fact of poorer conditions there or from a deep fear of this small European settlement being swamped by inflows of Asians. Giving Asia a serious thought was impossible when those countries struggled with their abject poverty and were merely colonies of Western powers. Only with demonstrable sustained economic growth in East Asia, in emerging dragons and tigers, that Australia tempted to break away from an absolute and exclusive Western focus.

Sensibly, Australia turned to deal with them on more equal terms and has eventually developed its policy into taking Asia as the place to belong to. This is the location that binds. The continent of Australia is not going to drift to the Atlantic, and long distance flights are not to diminish the significance neighbouring lands pose. Isolation could instill a spirit of barricading against poorer, underdeveloped Asian economies, as the “white Australia” policy indeed intended to do, but a flourishing region nearby offers new and abundant business opportunities not to be lightly ignored and dismissed. Fast narrowing gaps in economic strength and living standards between Australia and East and Southeast Asia eventually convinced the country of their geographical advantages in a new era. Even the key issue of security can now be seen from a totally different angle, as stable and mutually beneficial bilateral relations with Asian countries prove rather enhancing Australia’s security and reducing tensions and hostility deriving from contempt and misunderstanding.

Labour governments began to incorporate Australia more with the region closest to this country, and the shift of policy focus led to the forming of a new perception, for Australia to be recognised an Asian country, in order to be legitimately “living in the fastest growing part of the world”. That might sound rather radical to some, dragging Australians to have a leap of faith. From Australia’s deep cultural heritage and mindset, it is a bit awkward to accept this extraordinary drift from the comfortable hug of Anglo-Saxon traditions. In terms of strategic positioning, this is not a surprise or a rushed move, but a reality to be admitted long time ago. In two decades, Australia fostered admirable stable relations with major Asian economies and made clear of its intention to stay in the right place. Even Australian Socceroos entered the Asian Football Confederation to compete with teams of more numerous Asian countries for a place, rather than with neighbouring Pacific island countries. Major targets of foreign policy in this region include India and China, but also old connections of Japan and Indonesia. Australia has ventured to get close to the ASEAN, a regional bloc related to Australia’s core concerns, especially trade and security. It has obtained a status of dialogue partner, similar to Russia, China and the US, being relevant major powers but not Southeast Asian member countries. Australia even sponsored the idea to form the APEC, the regular forum of Asia Pacific leaders. With persistent efforts, Australia has established frequent security, business, economic, and political contacts with those Asian countries key to its future development.

This shift is reflected in an acute sense of learning things Asian. Australia can rightfully benefit from its internal multiculturalism and external neutral approach to Asia, as it is much less perceived in that region as an intimidating and patronising partner as the US is. Open dialogue and constant interactions with Asia provide Australia with a unique capability to blend in. The learning of Asian ways and cultures for doing fair business is most impressive in the recent two decades. In one instance, Mr. Kevin Rudd, the Labour shadow minister on foreign affairs, had a lengthy interview in 2006 with a Hong Kong TV host on WTO and trade issues. The interview was conducted in Putonghua throughout, during which Mr. Rudd displayed his perfect Chinese expressions and was fluent on choices of word regarding specific and complex trade issues, so much so that his Chinese host lost points with his own heavy southern accent and frequent confusing phrases. Mr. Rudd’s outstanding performance on this occasion of course derives from his previous work experience in China and close contact with Chinese counterparts. If Labour were in office, Australia would have had a foreign minister talking straight like a native Chinese. This to a certain extent illustrates the depth of learning in recent times, for Australia to shift some of its attention and energy to East Asia, the place needing greater effort on cooperation and holding the key to identify Australia’s destiny, in particular for being recognised a regional power, despite its small population.

It is not easy to convince Asians of this country being one of them. Besides vigorous regional rivalries among existing powerful players, Australia’s connections with European and American powers warrant certain suspicions from neighbouring Asian countries. Is this country a Trojan horse or vanguard force of powers of other oceans? How deep Australia is allowed to get involved in regional affairs? Will it become a dominant force in handling relations and start to give directions? The military of Australia certainly got involved in numerous missions in the region, from the Korean War on. On the other hand, the good deeds of Australia are aplenty, in peace keeping, relief and aid. On balance, Australia is a harmless regional power, benign and voluntary. Unlike the rise of certain big powers, such as Germany, the US, or China in future, Australia, with its medium size and stable democracy, causes no stirs and attracts little attention of “coming threats”. Those big powers came to the world stage with a big bang and would inevitably cause a rebalancing to the existing orders. Repercussions warrant concerns as each move made means a counter response to be rendered, in order to minimise losses or secure shares. When things come to a head, force has to be employed to solve conflicts and quarrels in a straightforward way. That is why big guys tend to reflex their muscles in political, economic or military forms and tend not to mediate or negotiate. Unilateralist tendency and interventionism are in the blood of big powers, especially in the veins of the super power.

At the other side, small and medium sized countries tend to rely on international bodies to operate, one of them being the UN. These platforms are the best for initiating solutions to conflicts, and small participants can at least have some say and a role to play here. They make contributions to negotiations to reach desired outcomes, rather than through bilateral bargaining or horse trading deals those big powers prefer to undertake outside international bodies. Australia is in this camp of middle powers favouring robust multilateral systems and coalitions for solutions and settlements, despite its shared historical experiences with and heavy reliance on Anglo-Saxon powers. The country has been an excellent contributor to these international organisations and is active in the UN on numerous issues. Its commitment, neutral stance, and eager participation have earned it much respect, trust and admiration. Unlike the UK, or to a lesser degree Canada, Australia can make its points known without being seen as merely a mouthpiece or agent of the US. Even with John Howard in office, the most fervent US ally by far, equivalent of Sir Menzies to Britain, so to speak, Australians regularly show their differences from the Americans at the UN. This is a happy legacy of the British rule, since Australia under Britain initially kept distance from the emerging power of the US, and when the US became the super power Australians remain inclining to the British traditions in the face of overwhelming American culture invasion. Fortunately, Australia has no global ambitions, rather than its unending effort to exert and radiate good will. Those ambitions related to the region and nearby countries are chiefly for stability and economic advancement which set safe barriers for Australia. A clear and unchallenged Australian dominance in the region is either unintended or unrealistic. Even its deputy sheriff position is not agreed upon domestically, and it is quite clear to all that Australia prefers endorsements and resolutions of international bodies. This standing will minimise suspicion or hostility of certain Asian countries toward Australia.

Some indications of Australia’s limited world ambitions are that their leaders lack world standing and politicians are obscure. This is basically a reflection of national characteristics, being modest, less sophisticated, and fiercely straightforward. The downside is that average Australian political leaders run state affairs and primarily focus on local and national matters. Within a rare breed of egalitarian society, this is what they are required to do, and ventures across the world and global diplomacy are certainly not their cup of tea. Leaders and top civil servants are perhaps not with best qualities, being exceptionally intelligent or super bright in international dealings. An overly ambitious Paul Keating once lamented this paucity of world class leaders and desired to lift his world standing, but was roundly accused of losing touch with his own people. However, the plus factor of this apparent mediocrity is that they make fewer gigantic mistakes. In contrast, the US has so-called best of the best in their political and economic circles, and they are never shy of boasting this pool of superior genes. Talents match world ambitions of a super power, and those lucky selected found a centre stage for executing their master plans. In the end, these incredibly intelligent people made a lot of messes in the past and dragged others down along the way. The best of the brightest the US had, the blue blood elites starting with Robert McNamara and his “Whiz Kids”, conceived and conducted the Vietnam War and lost to guerrilla wars and crudely equipped Vietnamese army. The best brains of the country got their wishes of high flying and crashed spectacularly during the tech bubble burst and corporate scandals. The cream of the nation’s elite was there to wage wars on false information and defend their innocence against charges with more pretences and brilliant spins.

Along with blending in, power shift and deputy sheriff duty, the military of Australia plays a vital role in keeping a visible presence in the region and getting recognised. This recognition depends heavily on the real military strength of Australia in the south Pacific. In hardware, Australia has demonstrated its might with awesome air and sea capabilities. A ready air projecting power is to display a much needed military deterrent to other countries in the region. Several squadrons of F/A-18 Hornet jet fighters and F-111 fighter bombers are constantly deployed. To offset upgrading effort in other Asian countries, mainly in purchases of Russian Sukhoi jet fighters, the air force sought to get the delivery of more advanced American next generation F-35 joint strike fighters, costing tens of billions of US dollars. This ambitious grand plan was temporarily thwarted in 2006 due to multiple technical problems associated with the selected fighter model produced by Lockheed Martin. The hotly promoted model is claimed by some as too expensive to maintain and even becoming obsolete quickly, and the issue of obtaining next generation jet fighters remains on table. The air force could turn to American F-22 Raptor, already in service in the US, as an option. To keep aerial surveillance over vast land and sea territories of Australia, the air force deploys early warning recon planes purchased from Boeing. Also crucial are a number of long range air refueling planes in service. These recon, strike, intercept and refueling planes are the most advanced in the region where Australia has large stakes and leave neighbouring Asian military forces well behind. This strike force thus constitutes a firm guarantee of national security and air defense. The priority is on quality, not quantity, since the defense policy may project that once a large scale air invasion is on with hundreds of enemy aircraft, that will be the time to call an all out war and invoke mutual defense agreements with the US. Short of that disastrous scenario, advanced jet fighters, though only at a number of 100, will be sufficient to deter potential intruders and accomplish designated missions. A related issue of concern is that all these hardware and upgrading come from the US, paid by Australia’s military budgets. Lacking manufacturing capabilities, Australia provides research and maintenance technology and products by defense institutes and corporations. This would mean budget restraints on making more expensive future purchases and a shortage of local supplies.

The navy is the central part of Australian defense force since early times. As a land surrounded by water and a British tradition of overseas expedition, Australia has maintained its admirable maritime capabilities and owned fleets of significance. The navy had in early years cruisers and destroyers for undertaking tasks given by the British Empire and for protection of ports and shipping lines. The navy even had a few light aircraft carriers, prominent among them “Melbourne” after the Pacific wars. Their air strike capacity was not comparable to formidable carrier fleets of the Imperial Japan, but seriously intimidating to then inadequate Asian naval forces. With the carrier “Melbourne”, the Australian navy enjoyed numerous advantages in high seas of the region. Curiously, that only operational Australian aircraft carrier was bought, after being decommissioned, by a Chinese company and moored at a Dalian port for some time. It was speculated that this purchase perhaps facilitated a learning platform for future locally made Chinese carriers. The navy today is filled with frigates, guided missile frigates, and submarines, replacing previous heavy cruisers and destroyers. The size has shrunk but capabilities enhanced. As it is not war time and there is a genuine lack of world ambition of the US calibre, the Australian navy has commissioned no aircraft carrier after “Melbourne” was discharged. Instead, frigates hold helicopters, rather than jet fighters, to carry out tasks of recon, attack, and rescue. The shipyard in Williamstown, Melbourne, continues to churn out guided missile frigates and other ships with advanced equipments, for the navy and for export. One issue of concern is that the navy, as well as the air force, relies overwhelmingly on advanced technologies shared with the US under bilateral agreements, and there is every possibility that the latter would wield the carrot of this sharing to urge Australia into future missions it feels reluctant but unable to decline, such as naval maneuverings against China or India.

With self-production capacity of major modern warships and close relations with American and British fleets, the Australian navy has maintained its capability of defending national waters and shouldering international obligations, including troop delivery in East Timor and blockade in Iraq. The key issue of security in the Asian region is calmly and confidently dealt with, on the basis of an effective long range strike force. If Australia is small in population, the military forces have displayed an image larger than the country’s, through past successful military missions, advanced hardware and combat systems, and sheer martial professionalism.

Australia has turned its location from an initially remote, insignificant continent away from world centres of activities in modern times into a place full of advantages and potential in the 21^st century. This location, once despised and cursed, still binds, bringing unforeseen benefits to this essentially bountiful country. Fundamental shifts in external circumstances are economic rising of East Asia and prosperity of one generation, roughly the time span of economic reforms and opening in China after the tragic 1989. Intelligent foreign policy making by consecutive Australian governments grasped opportunities arising from this momentum trend of shift, wisely realigning relations with three key stakeholders, the UK (EU), the US and Asia. Standing firmly on its unique location of this vast continent and handling relations with required understanding, Australia has markedly enhanced its chance as a favourite long term winner.