Australia walks the Chinese tightrope

Chen Yonglin. Picture / Reuters

Chen Yonglin is a man out of time. A decade ago, when the world was divided between two great ideological camps, Canberra would have trumpeted the defection of a communist Chinese diplomat bearing tales of espionage and spy-rings.

But not now. Chen, who slipped away from his job as first secretary at the Chinese Consulate-General in Sydney on May 26 to seek political asylum in Australia, has become an embarrassment. So have the three other defectors who have surfaced since Chen's bid became public, relating similar claims of spies and human rights abuses.

Canberra's dilemma is that China is now one of Australia's most important economic partners - with a free-trade agreement being negotiated - and is increasingly crucial to the nation's strategic future.

Complicating this is the balance Australia must find between new ties with Beijing and its alliance with the United States, and the domestic sensitivities it is trying to soothe concerning trade and China's human rights record.

Simply, the Government must find a way of allowing Chen to stay in the country without offending Beijing, while at the same time convincing a sceptical public that its muted response to Chen and the claims of the other defectors has not been influenced by its ambitions to move closer to China.

A great deal has to do with face. It is a fact of life that countries spy on one another and that China has an active network trying to ferret out military, economic and technological secrets in the West. Time has reported that the number of FBI investigations into alleged spying by Chinese agents in California's high-tech industries is increasing by as much as 30 per cent a year. It has also been claimed that Beijing has stolen nuclear secrets from Canada, sensitive data from French auto-parts manufacturer Valeo, unpatented research from Swedish universities, and industrial secrets from Britain and Germany.

Australia could be seen as another potential target because of its strong research base and its close economic, security, intelligence and military ties with the US, including its participation in the Son of Star Wars missile defence programme and its planned acquisition of cutting-edge technology such as F35 fighters and Aegis air warfare destroyers.

The Australian newspaper reported that such was the level of concern that the Australian Secret Intelligence Organisation had set up a counterespionage unit whose main targets included Chinese agents. The newspaper's sources claimed that the number of Chinese spies operating in Australia now outnumbered those of the Soviet Union at the height of the Cold War.

Prime Minister John Howard does not need this kind of attention on China, a fulcrum of his foreign policy mantra that alliance with the United States does not damage engagement with Asia.

While enjoying considerable support, Beijing has a range of vocal critics in Australia concerned at human rights abuses and, more pragmatically, at the potential impact of the proposed free-trade agreement. Trade concerns run from an expected tsunami of cheap manufactured goods to the unbridled theft of intellectual property.

Beyond this is the complex interplay of domestic politics and international diplomacy straddling the three-way relationship between Canberra, Beijing and Washington.

While a poll by the Lowy Institute for International Affairs showed, for example, that 72 per cent of Australians supported the US alliance, more felt positively about China than they did about the US. More than 50 per cent approved of free trade with Beijing but only 33 per cent supported the new trade pact with Washington. But the poll noted: "Whether the imbalance in our feelings towards the two great countries will survive China's growing diplomatic and strategic power, and whether positive attitudes towards a free-trade agreement will survive a more public debate, remains to be seen."

This uncertainty is reflected far more in the diplomatic balancing act Canberra is now attempting between Washington and Beijing. Helped greatly by improving relations between China and the US, Australia has managed to quieten many of the tensions of the past decade and to boost trade with China, improve diplomatic relations, and even increase military contacts.

But the strength of the US alliance remains a constant thorn. Writing in the Australian Journal of International Affairs, Richard Woolcott, one of Canberra's most distinguished former diplomats, warned that Asia still perceived Australia as America's "deputy sheriff", with an assertive and intrusive style of diplomacy.

Professor Jia Qingguo, associate Dean of Beijing University's school of international studies, and graduate student Zhong Tingting, also warned of potential problems in a paper prepared for the Committee for the Economic Development of Australia. While welcoming a new pragmatism on both sides that greatly improved relations, they said friction was inevitable in areas ranging from commodity prices to ideology - and, importantly, the American alliance.

"The close Australian-US military relationship may constrain and even damage China-Australia relations in the days to come," they said. "As China continues its rise, the US Government becomes increasingly wary of its implications. More likely than not it is going to take measures - economic and military - to hedge the perceived threat from China. When it does so, it is likely to ask Australia to do certain things that are likely to damage its rapport with China."

There is no doubt that the US alliance will remain at the heart of Australian diplomacy for the foreseeable future and that the two militaries will become even more closely entwined. The war on terror, Iraq, and Australian support for pre-emptive strikes, Son of Star Wars and the proliferation security initiative - which could see naval blockades of missile shipments - have already sent ripples through the region.

A paper by Dr Rod Lyon, senior lecturer in international relations at the University of Queensland, suggests the alliance may impose even more obligations on Australia as the US works to create a network of security partnerships to replace the Cold War-era alliances.

Lyon's paper, published by the Government-funded Australian Strategic Policy Institute, says the new partnerships must be "proactive rather than defensive", willing to act rather than just react: "This doesn't mean that we must always be committed to pre-emptive war but it does mean that we will often need to act to prevent adversaries from threatening us."

Lyon says the partnerships will allow greater direct use of force and will become akin to fulltime enterprises rather than insurance policies for a rainy day.

"Because of the increased blurring between peace and war, they must work overtly to shape the security environment towards certain objectives, helping to offset the vulnerabilities of weak states, and pre-empting and preventing emergent threats," he says. "Such shaping can't be short term and transitory. On the contrary, it might well be an activity that never ceases."

None of this sits well in Beijing. On a visit to China, Defence Minister Robert Hill was told of Chinese concerns about increased military co-operation between the US, Japan and Australia, and Beijing's fears that this could develop into a policy of containment by the West.

Canberra is treading a very delicate line.