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US and China leadership transitions equally important for Australia

By Julie Bishop - posted Thursday, 8 November 2012


There has been extensive coverage in Australia's media of the US presidential election with significant analysis of the likely winner and the implications for Australia.

President Obama has now won a second term in a decisive victory and immediately faces a number of significant challenges including negotiating with a Republican dominated House of Representatives to avoid the 'fiscal cliff' that will see a reduction in the massive budget deficit, but could also reduce the economy by around 4% in 2013.

The global focus on the Presidential election is understandable given the United States continues to be the world's largest economy and the only super-power and as such plays a vitally important role globally.

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The United States is Australia's third largest trading partner and our most important military ally.

What is harder to explain is the lack of coverage of the 18th National Congress of the Communist Party of China that is taking place at the same time as the US presidential election.

China is Australia's largest trading partner and a rising military power in our region.

The difference between the sheer energy, hoopla and theatre of the hotly contested campaign between Barack Obama and Mitt Romney, compared with the managed, controlled and outwardly calm transition in China could not be more profound.

The US presidential candidates reportedly each spent more than $1 billion on the campaign as they criss-crossed the country attending rallies, giving speeches, taking part in nationally televised debates and generally mobilising the vote.

Television networks were flooded with advertising and there was endless polling. analysis and punditry.

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All this makes for compelling viewing. It is easy to dismiss the vast majority of the coverage as superficial entertainment in that it rarely delved into the implications of the actual policy positions espoused by the candidates.

In stark contrast the leadership of China is not contested at the ballot box but is controlled in secret within the ruling Communist Party.

Barring some unimaginable event, the Congress will see President Hu Jintao and Premier Wen Jiabao hand over to the next generation of leaders of Xi Xinping and Li Keqiang.

Superficially this leadership transition evokes far less interest than the mania of a US presidential election, but there are further leadership transitions within the all-powerful Chinese Standing Committee that could have global implications.

One of the more intriguing rumours doing the rounds in China is that the Committee will be reduced from its current nine members to seven.

This would affect the consensus model of government long adopted by the CPC which guards against individuals accumulating too much power.

As anyone who has served on a committee can attest, the smaller the decision-making the body the more likely it is to be decisive.

There is a major reform agenda for the incoming Chinese leadership and strong and decisive action may well be required to deal with the range of internal and external issues.

One of the great challenges for leaders of China is to maintain internal social stability.

This is a massive challenge given the restive population approaching 1.4 billion with wide disparities between the incomes of people in coastal regions and those in the interior.

The challenge of dealing with inequality in a society founded on the principle of communism should not be underestimated.

China is also embroiled in increasingly acrimonious territorial disputes in the South China Sea and the East China Sea.

There is significant concern that the dispute with Japan over the Senkaku/Diaoyu islands will result in military conflict.

Rising nationalism in China and Japan has fuelled this dispute which has the potential to escalate into a broader regional crisis.

The attitude of the incoming Chinese leadership is crucial to whether it is resolved peacefully through negotiation or whether it escalates.

The rhetoric from both sides has been increasingly provocative in recent months but there remains a window of opportunity for the new leadership of China and the Japanese government to avoid confrontation.

China is also embroiled in a complex dispute in the South China Sea where there are overlapping territorial claims involving Vietnam, Brunei, Malaysia, Philippines, Taiwan and Indonesia.

Again the attitude of China's new leaders will be crucial in determining whether or not a negotiated settlement can be found.

Conflict between China and any of its regional neigbours has the potential to impact on Australia in terms of trade and investment flows and our overall security.

While the US presidential election remains the most important democratic contest in the world, other leadership contests are under way that have the potential to profoundly impact on Australia's national interests.

The leadership transition in China may lack the drama and theatre of the US race for the White House, but it has important implications for Australia.

We should focus on leadership changes in our region as much as we are enthralled by the leadership contest in the United States.

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About the Author

Julie Bishop is the Federal Member for Curtin, Deputy Leader of the Opposition and Shadow Minister for Foreign Affairs.

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