China v Japan: implications for Australia?

Asia in the post-war period has been characterised by the economic ascendance of Japan and the military primacy of the United States of America. The recent rise of China calls into question both of these fundamental premises. This change in the geo-political strategic situation in Asia is reflected in the increasingly nuanced approach to relations with China and Japan by the countries of the Asia-Pacific region, including Australia.

The new security accord with Japan has been greeted with much controversy over Australia's actions and intentions of containing China. This "Cold War" language has brought back the shadows of fundamental power relations and strategic competition. With this situation between China and Japan producing a bi-polar Asia, Australia faces the dilemma of balancing its national interests in the face of this strategic competition. In balancing its interests, Australia has to take a more nuanced approach to its relations with China and Japan.

Historical issues have long existed in Sino-Japanese relations and affected public sentiment in the two nations. The strategic competition between China and Japan has canvassed the fact that both countries are becoming rivals for regional leadership, as China's influence grows and Japan seeks to play a more assertive role in regional political and economic affairs. The geo-political and power politics of competing for allies and partners through economic and political forums has developed into a strategic rivalry between the two nations.

Australia has powerful interests in securing a framework of bilateral, regional and multilateral political, cultural and economic relations with China. Both economies are strongly complementary. As a result, the trade and investment relationship is substantial and has developed well beyond its modest beginnings in the 1970s.

With an evolving bilateral economic relationship, it would certainly bring close ties between the two countries, with particular reference to China’s emerging influence across the Asia-Pacific. Australia’s strategic responses would include China’s relationship with East Asia, placing strong emphasis on the Korean Peninsula.

Australia is working towards a far more substantial investment in new forms of economic, political, social and cultural co-operation, and a Free Trade Agreement, for example, would show a strong commitment to fulfil these strategies. The Australian Government believes that a good ongoing relationship with China is useful and is willing to maintain a role in influencing China to a certain extent.

The rapid development of Japan's relations with Australia in the post-war era was based on mutually complementary trade links. Since then, the relationship has expanded to economic activities, politics, culture and various other fields. As trusted partners in the Asia-Pacific region, Japan and Australia share a common interest in regional stability and prosperity. Today, Australia and Japan enjoy one of the most significant economic and strategic partnerships in Asia. Besides the latest security accord, in July 2003, Australia and Japan concluded a Trade and Economic Framework to set directions for the future development of the bilateral trade relationship.

Rivalry could be restricted to peaceful economic competition for economic resources including markets in South East Asia. But it might also involve disputes over issues such as conflicting claims to the Senkaku Islands or maritime boundaries, Chinese moves to control the South China Sea, or the Taiwan issue. China and Japan are not each other's most important security concern at present but as close neighbours and substantial military powers; they are crucial factors in each other’s security environment. China’s testing of nuclear weapons and the increase in defence spending for Japan has been the most serious strain in the two nations’ security relationship.

Australia recognises that both China and Japan are important to its foreign policy in the region. Australia shares a growing and thriving relationship with China and a stable relationship with Japan.

Australia is very clear where its interests lie and tends to see economics and security as separate issues. It welcomes China's growth, but believes that Japan and the United States should remain influential players in regional affairs.

China's increasing role has affected the very economic and security architecture of Asia, and countries such as Australia have responded to this change. The major consequence of this change has been the strategic competition between China and Japan. Captives of history and contemporary geo-political rivalry, these important countries of Asia vie for support and influence.

These relationships are important bell-weathers of the geo-political balance of the Asia-Pacific region. From this it is increasingly clear that the balance, which was for so long focused on Japan and the US, is changing in favour of China. This is evident in Australia's growing economic and political relationship with China in terms of trade and regional affairs.

This leaves open the question of how this strategic competition between China and Japan will shape the future. On current trends, China has reasons for confidence.