2019 China Special Edition About Asia Society Australia For over 60 years globally, and over two Our mission is to prepare Australian leaders and the community for deeper and sustained engagement decades in Australia, Asia Society has with Asia. been building bridges of understanding Asia Society Australia is a centre of Asia Society – between leaders and change-makers of a preeminent global non-profit organisation Asia, Australia, and the United States. dedicated to Asia, founded in 1956 by John D. Rockefeller 3rd, with centres in New York, Hong Launched in 1997 by then Prime Minister John Kong, Houston, Los Angeles, Manila, Melbourne, Howard, Asia Society Australia is the leading national Mumbai, San Francisco, Seoul, Shanghai, Sydney, centre for engagement with Asia, with a centre Tokyo, Washington DC and Zurich. in Melbourne and an office in Sydney. We are a Across the fields of arts, business, culture, education not-for-profit, non-governmental and non-political and policy, Asia Society provides insight, generates organisation empowered by leading Australian ideas, and promotes collaboration to address and regional business, government, education and present challenges and create a shared future. cultural institutions. asiasociety.org/Australia This series was made possible through the “Desai-Oxnam Innovation Fund” established by the Asia Society to celebrate generosity and almost 40 years of combined service of former Asia Society Presidents Dr. Vishakha Desai and Dr Robert Oxnam. The 2019 edition is supported by the Victorian Government. 2019 China Special Edition About Disruptive Asia Disruptive Asia is a thought-leadership The Asia debate has long ceased to be the exclusive intellectual domain of the foreign policy project by Asia Society Australia, and business elite. Asia’s ascendancy and the launched in 2017 to celebrate Asia resulting geopolitical, geoeconomic, demographic Society’s 20th anniversary in Australia. and social shifts affect virtually all facets of Australian life. It presents – through long-form essays – new Disruptive Asia is a humble attempt to re-start the perspectives and policy recommendations on conversation about the impact of Asia on Australia how Asia’s rise is impacting Australia’s foreign and our place in the region, and to expand and bring policy, economy and society, and how Australia together the community who debate these issues. should respond. As always, we welcome your feedback and Disruptive Asia deliberately looks at both external contributions. aspects of Australia’s relationship with Asia (foreign policy, business connectivity, international education) and their domestic implications and Philipp Ivanov manifestations (community relations, leadership Chief Executive Officer diversity, education settings and capabilities). Asia Society Australia The views expressed in this publication are the authors’ own and do not represent those of the Asia Society. Copyright © Asia Society Australia 2019 | Volume 3 | Publication Date: 2 December 2019 ISSN 2209-9778 Contents Foreword 2 Drawing a red line at 33 PHILIPP IVANOV an extradition treaty JULIA BERGIN Bounded engagement: 3 Charting a new era in Speak truth to China without 37 Australia-China relations shouting BATES GILL SAY BOON LIM Chinese investment and 7 Australia and the BRI: Cooperate, 41 Australian infrastructure: compete or challenge Broadening the concept, JANE GOLLEY, JAMES LAURENCESON and our minds STUART FULLER Australia and Xinjiang: How to 45 deal with the new ‘Unfreedom’ Economic bondage: Time to 11 MICHAEL CLARKE apply a ‘small-yard high-fence’ strategy Adaption challenge: Australia 50 and the new geo-economics NEIL THOMAS JAMES BOWEN Step-up with Beijing in the 16 Why universities should invest 54 Pacific on climate change more to support Chinese and development students DERMOT O’GORMAN FRAN MARTIN White Paper trails: Why defence 20 How philanthropy can provide 59 cooperation still matters a new path for engagement BRENDAN SARGEANT JOHN FITZGERALD Digital China: Has Australia 24 Living with China 65 been spooked? PHILIPP IVANOV GREG AUSTIN Contributors 70 Trusting Chinese Australians as 28 partners in managing a rising Acknowledgements 74 superpower JASON YAT-SEN LI Disruptive Asia 01 Foreword Dear Asia Society Australia Members, Supporters and Friends, In 2019, the Disruptive Asia series focuses on the People’s Republic of China. We examine the boundaries and parameters of our engagement with China under President Xi Jinping. A China that is a rising global power, more active and assertive in its foreign policy, economic diplomacy and the projection of its power abroad. A China faced with a slowing and changing economy and strategic and economic pressure from the United States and its allies. A China that is more authoritarian and less tolerant of dissent and critical questioning at home and abroad. Our series explores how Australia can engage with China, focussing on the critical areas of the bilateral relationship – trade and investment, education, law enforcement, technology, philanthropy, developmental assistance, human rights, social cohesion, and the protection and empowerment of our Australian-Chinese community. The series provides a contextual brief and practical, implementable ideas to Australian government, business, education and political leaders, and our community at large. This year we were pleased to engage Dr Bates Gill, Professor of Asia-Pacific Security Studies at Macquarie University, as a co-convenor and advisor of the China Special Edition, with Greg Earl continuing as Editor in Chief. Philipp Ivanov Chief Executive Officer Asia Society Australia 02 Asia Society Australia BATES GILL Bounded engagement: charting a new era in Australia-China relations There is no viable alternative to continued engagement. This is certainly true for Australia, but it is also true for China. It has to be said, but few wish to: we are transitioning the possible for Australia-China relations to steadily to a new and more difficult era with China. Laden with narrow as each side rethinks the value proposition of contradictions even in the best of times, it is clear the relationship. In short, we should be preparing for Australia-China ties will become more challenging in a protracted period of “bounded engagement.” the years ahead. We can expect the parameters of Disruptive Asia 03 BOUNDED ENGAGEMENT: CHARTING A NEW ERA IN AUSTRALIA-CHINA RELATIONS Neither side can afford to close off the relationship. But beyond economic engagement, Australians Engagement remains in our best interests. But the cannot ignore China’s growing influence as a political setting in which engagement occurs will be less and security actor in our region and around the expansive and open-ended than in the past. globe. Keeping lines of communication open and clearly signalling Australian concerns, even on The question for Australians is, what should highly-sensitive issues, will become more important, “bounded engagement” look like? In this more not less, in the years ahead. In this sense, “negative constrained atmosphere, what should be the rules engagement” – consistent messaging and push-back of engagement with China to best realise Australian when Chinese actions impinge on Australian values and interests? Where are opportunities for values and interests – is just as important as engagement in this environment and where are “positive engagement.” the risks? We should also recognise that engagement is not Asia Society Australia will tackle these questions a one-way street. While China is obviously the far in this year’s Disruptive Asia series. Our expert larger and more powerful player in this partnership, contributors, drawn from across the country, it needs Australia too. Australia will remain a key take up critically important and complex areas of source of raw materials, agricultural products, and Australia-China interaction - including trade and higher education and an alluring destination for investment, education, countering crime, technology, investment. Moreover, owing to its close alliance philanthropy, developmental assistance, human relationship with the US, Australia will remain a rights, and more. They propose how Australians country of enormous political, diplomatic, and can make the most of them even as they security interest to China. narrow in scope and become more precarious, even contentious. In addition, as Beijing seeks to expand its role As we enter this next phase with China, three key Talk of “decoupling” in and around the Indo- principles should guide our thinking. from the Chinese Pacific and promote its economy may be First, there is no viable alternative to continued socioeconomic model, possible for some engagement. This is certainly true for Australia, but it will work hard to gain it is also true for China. The basic economic data countries, but makes Australia’s respect, if alone tells a powerful story: one-third of Australian no sense for Australia. not approbation, which exports by value go to China. means pursuing a full spectrum of engagement activities in this country. Education, tourism and immigration On the one hand, this can be a problem as Beijing aims to influence Australian debate in ways we But it is not just about resources and energy exports. find unacceptable. On the other hand, it is an Education and tourism are growing as a proportion opportunity to engage and contest the Chinese of Australian exports to China and with them comes authoritarian political and economic model, a field increased