Questions of what to do about China dominate the Australian foreign policy and security discourse. Viewpoints within Australia’s China debate can be divided into four broad categories: balancers, hedgers, engagers, and reformers.

Two relatively straightforward questions should be asked about how present-day Australia should understand and respond to China. First, how much does the character of China’s regime matter? In other words, is it essential to understand the nature of the domestic Chinese system to explain China’s actions internationally, or is China acting sufficiently similarly to a normal rising power? Second, should avoiding a policy overreaction or underreaction to the threat potentially posed by China be Australia’s first (albeit not only) priority? These two dividing lines manifest in distinct ways in Australia’s foreign policy agenda and diplomatic playbook for dealing with China.

Balancers

Balancers, labelled because their worldview aligns most closely with international relations theories of balancing behaviour, analyse major powers primarily as unitary actors, focusing their attention to the changing balance of power within the international system. The Balancer’s analytical frame centres on power-based strategic competition, in which the rising power seeks material and strategic advantage vis-à-vis its rivals, seeking to maximise its power in order to build a favourable security environment. Balancers view the dynamic between the rising power and established power(s) as inherently prone not just to competition, but conflict. While the rising power’s internal composition is not ignored by Balancers, it is not essential to their analysis—the changing balance of material power and the enduring interests of all major powers to seek security and power are considered sufficient to inform policy.

In the Australian context, Balancers assess that a rising China represents a clear threat to the national interest, given Australia’s alliance with the United States and general preference for the post-war order developed under Washington’s leadership. Balancers worry about emerging security deficits between China on one hand, and the United States, Australia, and other like-minded states on the other. They worry further that Beijing has revisionist intentions and seeks to make unacceptable changes to the regional security order and the international system, using aggressive means if necessary. Balancers are thus more concerned with an underreaction to the China threat and argue that countering China’s rising power in the region ought to be the Australian government’s central concern, including via policies to neutralise or reverse the growing security deficit. Moreover, adopting the logic of the deterrence model, Balancers see value in policies to deter revisionist behaviour, and are sceptical of the potential for cooperative agreements as a means to achieving a stable security equilibrium. Balancers concede that a “deterrence-first” view may come at an economic cost given Australia’s high degree of trade dependence on China, but not only do they regard such a trade-off as worthwhile, they perceive economic dependence to be another source of vulnerability that requires mitigation.

Hedgers

Like Balancers, Hedgers tend to employ a unitary actor framework to analyse great power politics. They also focus their attention on material power balances and the inherently competitive and possibly conflictual relationship between the rising power and established, status-quo preferring states. They agree with the basic logic of the security dilemma in diagnosing inherent insecurity as motivating powerful states in their quest for greater power and control over their security environment.

Where Hedgers differ is on what to do about it. Hedgers emphasise the devastating wars that often erupt during power transitions. To Hedgers, the increasing ambitions of the rising power are normal, and are less likely to reflect an inherently aggressive and revisionist intent. Moreover, from the point of view of a non-major power like Australia, Hedgers wonder whether the established power will retain the capacity and resolve to fight. The spiral model thus anchors Hedging logic: the catastrophic prospect of a major power war, and/or concerns over the reliability of the established power to fight one, pose a relatively greater risk to most other states than the rising power turning out to have, and acting upon, unacceptably revisionist intentions. The significant costs of war also mean Hedgers are relatively more optimistic about the potential for cooperation with the rising power, given it will rationally also want to avoid the worst-case scenario.

Hedgers therefore worry more about an Australian overreaction to the China threat and argue that efforts should be made to accommodate Beijing’s interests and work towards a cooperative outcome. Hedgers do not deny that a rising China will act in increasingly assertive ways and that it poses some threat to Australia’s security, but they diagnose these threats as more likely to be sourced in genuine insecurity and the natural expansion of interests that accompany greater power, rather than genuine revisionism. They can imagine a stable security equilibrium that is mutually acceptable to both China and Australia. Under conditions of mutual insecurity, major conflict (whether intended or not) becomes a real risk. Were it possible, Hedgers view favourably some kind of “grand bargain” that accommodates the core interests of both sides. In the absence of such a bargain, the next best alternative is a hedging policy in which Australia looks to engage and wherever possible accommodate Chinese interests as a way of mitigating the risks of spiralling conflict, while simultaneously readying its own defences as a prudent hedge, without wholly relying on the United States.

Hedgers are not sanguine about China’s rise, and they readily acknowledge the leverage China has to impose costs on Australia. But this only contributes to their belief that Australia’s national interests are best served by eschewing deterrence model logic that would only provoke Beijing into wielding power more frequently, and instead focusing on constructive engagement. As a non-major power Australia must be willing to make concessions—especially on issues peripheral to core national security interests—for the greater good of avoiding total war, maintaining a degree of regional stability, and thereby safeguarding other national interests.

Engagers

Engagers share with Hedgers the view that an overreaction to the China threat, and the risks and consequences of major power war, are the relatively greater concern. Their analysis shifts emphasis, however, departing from the unitary actor framework, and conceiving of states as complex polities beset by cross-cutting interests that are capable if not of transformation, then at least of cooperation and restraint when faced with a certain set of incentives. Engagers start from the premise that the construction and maintenance of broad and deep economic and social relationships, committed and nuanced diplomacy, and inclusive institutional engagement are the only viable pathway to creating a stable region.

The original Engager position embodied the widespread view across the West going back as far as the 1980s that welcoming China into the international institutional order—in particular its membership within the World Trade Organization—would empower and entrench an internationalist domestic coalition who would keep China on a trajectory that welcomed further integration into a rules-based system. Theoretically, Engagers have great sympathy for the “capitalist peace” argument, in which economic development and free markets sufficiently entangle states’ interests by creating strong internal constituencies against war, thus reducing the incidence of armed conflict.

Engagers are not blind to the acceleration of authoritarianism inside China over the past decade, and readily acknowledge Beijing’s poor behaviour in some domains, including unconscionable human rights abuses and repression at home, and rule-violating behaviour abroad, such as island building or cyber-attacks. Nevertheless, the Engager’s position is that Australia has little choice but to continue to prioritise commerce and diplomacy as the primary basis of its dealings with China, because the alternative would be both too destabilising and dangerous in terms of regional security, and impose unacceptable economic costs on the welfare of Australians.

Engagers consider Chinese government decision-makers to be responsive to domestic political pressure, thus creating scope for positive engagement strategies. Engagers continue to assess that the complementarity of the two economies creates powerful incentives for Beijing not to allow security concerns to disrupt commercial ties too greatly since the resulting costs on China’s economy would be too high, politically, for a government that relies heavily on economic performance as the basis for its domestic legitimacy. A critical factor is the rapidly expanding Chinese middle class, the logic being that this increasingly affluent constituency will be reluctant to sacrifice its material comforts to fight a major war. Australia’s service exports in particular, such as education and tourism, and the cultural and person-to-person links these create, raise the prominence of Australia in the daily lives of Chinese people, elites in particular, and cultivate both a less illiberal and more market-based mindset, and a reservoir of political goodwill, that can shape Beijing’s behaviour on the international stage. Engagers do not deny the need to maintain a military, nor that China poses some security concerns for Australia, but they judge the costs of a militaristic overreaction to the threat as the relatively greater risk. Engagers see China as more than just its party-state, and worry further that an overreaction could inflame both nationalism in China and, since they also view their own country in non-unitary terms, racial politics in Australia.

Reformers

Reformers believe it is essential to unpack the black box of the Chinese party-state to understand Beijing’s intentions and its behaviour. What distinguishes Reformers from Engagers is that they consider the particular characteristics of China’s model of political order and economic organisation as fundamentally incompatible and irreconcilable with a China acting abroad over the long-term as a constructive presence within the established international system. Reformers do not see China accepting an international order that prioritises not just rules and institutions but is distinctively—at least relative to previous orders across history—liberal in character.

The distinctive assumption of the Reformer perspective is that China’s international actions are not those of a nation-state, but the Chinese Communist Party (CCP), which is motivated both by the need to maintain political control and ideational legitimacy using whatever means necessary, and by a nationalist narrative—fomented by the CCP—of restoring China to its rightful place at the apex of an international hierarchy. They highlight that the CCP explicitly views Western values and liberal democracy as a direct threat that could undermine the current Chinese political system, and Reformers therefore place a high degree of emphasis on the incompatibility of the two political systems, which precludes China from being a status-quo power.

The political logic of Marxism-Leninism wrapped up in a nationalist ideology sees Reformers conclude that Beijing is inevitably revisionist in its approach to international relations, and therefore Reformers are relatively more concerned with an underreaction to the threat this poses to Australia’s national interests. Consequently, Reformers subscribe to the logic of the deterrence model of the security dilemma, accept the likely economic costs of this position, and generally agree with Balancers that the scope for cooperative agreements is limited.

While less commonly stated explicitly, one possible implication of the Reformer ideal-type perspective is that the only long-term systemic equilibria that would meet Australia’s national interests involve either the material collapse of the People’s Republic of China, such that it would lack the capabilities to continue its challenge to the system, or a fundamental political transformation of China’s model of political order.

Most contributors to the China debate likely see themselves not fitting neatly into the four ideal types. We expect most observers believe, for example, that both power and ideology matter, and that Australia needs to balance somewhat but should not give up on engagement entirely. All hope for a change in China’s behaviour as it affects Australia even as they advocate for different directions for Australian policy. Moreover, we readily concede no single set of factors is sufficient to answer Australia’s China question. Nevertheless, in a complex and contingent world, even if “everything matters,” actual policy choices involve trade-offs, and there are stark differences over what ought to be done.

Darren J. Lim is a Senior Lecturer in the School of Politics and International Relations at the Australian National University. He completed his PhD and Master of Public Affairs degree at the Princeton School of Public and International Affairs. He researches and teaches in both international political economy and international security.

Nathan Attrill holds a PhD from the Crawford School of Public Policy at the Australian National University. His academic research focus is the political economy of development in China’s provinces and Chinese foreign policy.

This is an edited extract from Lim and Attrill’s article in the Australian Journal of International Affairs titled “Australian debate of the China question: the COVID-19 case.” It is republished with permission.