Xi Jinping and the Return of Ideological Man: JG Crawford Oration 2022

Xi Jinping and the Return of Ideological Man:
Implications for US-China and Australia-China Relations

CHECK AGAINST DELIVERY

It's good to be back at the Australian National University, just as it's good to be back at the Crawford School of Public Policy. 

I remember being here in 2010 as Prime Minister opening the new JG Crawford Building. I am proud to have made some contribution to the extension of the study of public policy here at the ANU during my term as prime minister. 

Many proposals were put to me back then on how best to celebrate Canberra's centenary in 2013. There were proposals for new public parks, new public statues, and a range of other investments in political vanity. I am proud that it was my decision to allocate $112 million to this university to build the physical infrastructure of three institutions; the National Security College; the Australian Centre on China and the World; and a further extension of the Crawford School of Public Policy campus. 

The reason for that is that I have always valued the contribution of the academy to public policy and public life. And given the particular role of the Australian government in the establishment of the Australian National University under the Chifley government, I believed it was important to continue to make a substantive investment to this effect. 

The title I have chosen for the 2022 Crawford Oration is: Xi Jinping and the Return of Ideological Man - Implications for US-China and Australia-China relations.

The reason I have chosen to begin with an analysis of Xi Jinping's ideological worldview is that this worldview fundamentally shapes Xi's approach to domestic politics, economics and the future direction of foreign and security policy.

It had become unfashionable within China analytical circles over a number of decades to pay close attention to the internal ideological debates within the Chinese Communist Party.

I fully understand the reason for this. In large part, it's because Deng Xiaoping himself, in launching the period of reform and opening, told the Chinese Communist Party to "cease and desist from continued theoretical debate" - or "buzhenglun".

This, of course, followed the tumultuous decade of the Cultural Revolution when China discussed little else other than ideology. At the conclusion of that debacle, Chinese politics and economics lay in total disarray. Indeed, the legitimacy of the Party itself had virtually cracked as people's livelihoods were cast aside in the name of Mao's purist pursuit of a form of Marxist-Leninist utopia.

It's important to note, however, that when Deng launched the post-Cultural Revolution era of Chinese politics, he did so on the basis of two documents: the first was the Party's historical resolution of 1981, which provided the Party's formal analytical conclusions on Mao's previous political excesses; the second, in 1982, was the 12th Party Congress, when the Party formally redefined the ideological parameters for China's future reform program. 

The first of these documents warned the Party that Mao had fundamentally erred from 1956 onwards by ignoring the Party's collective leadership which already back then had determined that the future priority of the CCP was to enhance the economic development of the nation. Instead, at least according to the 1981 resolution on party history, Mao returned to "class struggle" as his central priority and, as a consequence, unleashed the terrors of the Anti-Rightist Movement of 1958, the human catastrophe that was the Great Leap Forward of 1958-1962; as well as the Cultural Revolution itself (1966-76). It was this 1981 document that concluded that Mao's repudiation of the principles of collective leadership had resulted not only in one-man rule, but also rule for life, as well as the cult of personality. 

At the Party's 12th Congress in 1982, Deng Xiaoping effectively redefined what Marxist Leninists call "the principal contradiction" of the Party – repudiating Mao's return to class struggle and instead reasserting the 1956 ideological orthodoxy which placed central emphasis on the development of the factors of production. 

Indeed, within the Marxist-Leninist lexicon, under Deng, unleashing the factors of production was to become the Party's central challenge, thereby relegating what Marxist-Leninists also call "the relations of production" (i.e. class) to a secondary consideration. 

Deng's further ideological innovation at this time was to define China's current period of development as belonging to "the primary stage of socialism." This, in turn, enabled Deng to argue credibly that during this primary stage, the overwhelming responsibility of the vanguard party was to unleash the factors of production in order to improve the people's livelihood. And furthermore that this would be the case for "dozens of generations" before the need arose to politically reconsider the need to redistribute wealth in the name of the "relations of production" – or, as we would describe it today, class inequality. 

The reason I emphasise these two documents is that they underpin the ideological foundations of the subsequent 35 years of China's political, economic, and foreign policy development - through until the 19th Party Congress in 2017. 

In domestic politics, there was an unprecedented level of political experimentation prior to the catastrophic events of Tiananmen in 1989. 

And while Deng decisively ruled out any political usurpation of the central role of the Leninist party through his brutal measures taken in 1989, his designated successors Jiang and Hu continued to implement a long-term series of so-called "political reforms". These included experiments in local-level democracy and straw ballots within the Communist Party for the election of its own leadership elites, as well as a proposal in 2002 to allow private entrepreneurs to join the ranks of the Party itself.

Within the economy, we are all familiar with the period of reform and opening when, bit by bit, market forces were slowly introduced into the allocation of resources across the economy, in stark contrast to the decades of stifling central planning that had preceded it. 

Furthermore, the unleashing of market forces at home saw the rapid rise of the private sector at the expense of the state-owned sector.

This was reinforced by a new direction in Chinese foreign policy under Deng that placed China's domestic economic development at the absolute centre of Chinese international relations.

In short, Deng Xiaoping made foreign policy the servant of China's economic reform program at home and China's growing economic globalisation abroad. 

China took a deliberate decision to work within the framework of the US-led international economic system. And after it succeeded in securing membership of the World Trade Organization in 2002, China triggered the next 15 years of spectacular economic growth when its access to both to US, European and other markets became complete. It was during this decade-and-a-half-long period that China, in effect, became the world's factory.

As a result, Chinese foreign and security policy throughout this period adhered to the underpinning Deng Xiaoping doctrine of "hide your strength, bide your time and never take the lead." This was subsequently referred to as Deng's Diplomatic Guidance Notes. These were referred to repeatedly by both Jiang Zemin and Hu Jintao in discouraging China's international policy elites from becoming prematurely assertive.

My overall argument is that it was the ideological resolutions of 1981 and 1982 which established the political framework within which the subsequent policy revolutions unfolded across domestic politics, the political economy, as well as foreign and security policy. It created the China with which we all became familiar over nearly four decades. 

The rise of Xi Jinping represents a deep departure from these long-entrenched ideological norms. 

In domestic politics, this process began soon after Xi Jinping's appointment as general secretary in November 2012. 

In July 2013, Xi delivered an extraordinary speech at a national conference on Ideological and Propaganda Work which outlined the absolute centrality of Marxist-Leninist ideology for China's future. Xi recounted at considerable length his view that the collapse of the Communist Party of the Soviet Union, and subsequently the dismemberment of the Soviet Union itself, began with ideological rot. Xi's diagnosis of Soviet collapse gave rise to his instruction to the Party's central apparatus, from the very beginning of his period in power, to embark upon a program of restoring political and ideological rigour to everything that the Party did. 

At a practical level, Xi sought to reassert the central role of the Party across the entire fabric of public administration, displacing the role of economic technocrats in the State Council with new Party-led leading groups, which increasingly usurped the traditional policy roles held by non-Party bureaucrats. It also saw the reassertion of the role of the Party in the military, the academy, and what passed for China emerging civil society. 

The reassertion of the absolute, central role of a Leninist Party has been the hallmark, therefore, of Xi's political rule since the get-go.

In many respects, it is summarised by Xi's rehabilitation of an old Mao Zedong axiom: "It doesn't matter whether it is North, South, East, or West; or whether we are speaking of public administration, the military, commerce, the academy or society, the Party rules over all."

On economic policy direction, this move to reassert the centrality of the Party was to come later.

In fact, in the earliest stages of Xi Jinping's administration, there was an effort to sustain the market-based reform program initiated under Deng, Jiang and Hu. This was reflected in the decision document of the Third Plenum of the 18th Central Committee held in 2013.

This was the document that famously stated that the market should now become the principal mechanism for the allocation of resources in the Chinese economy. 

At the time, many analysts, including myself, concluded that this represented the conclusion of the Party's decades-long debate between pro-market and pro-planning forces within the CCP. Indeed, this had formed the centre ground of Chinese wider economic policy debate over the previous 35 years. Inch by inch, the pro-market faction of the technocratic elite had prevailed over the planning elite. As a consequence, they created the policy and economic space for China's rising entrepreneurial class to develop the mega-firms that we began to see dominate the Chinese economy during the first decades of the 21st century.

However, as we have tracked through our own research at the Asia Society analysing the implementation of the 2013 decision document, it was almost immediately beset by multiple levels of political and bureaucratic resistance. While the document was never repudiated, it was never really implemented.

It contained sixty sets of separate recommendations covering the entire spectrum of Chinese macro and micro economic reforms - around the central organising principle of the market. But in almost all respects, it ended up as a dead letter.

Passive inertia, however, was soon replaced by active political opposition after China's own homegrown financial crisis of 2015. It may be recalled that during August of that year, Chinese equity prices collapsed, resulting in massive Chinese state intervention in the Shanghai, Shenzhen and Hong Kong exchanges in order to put a floor under share prices. This intervention failed. And there was genuine fear at the time that a much-anticipated systemic financial collapse had finally been triggered by a stock market bubble. As a result, Xi, in my judgment, began to lose political confidence in the competence of his own economic leadership team led by reformist Premier Li Keqiang.

By 2017, a much more fundamental reappraisal of the role of the market in the economy had begun in the 19th Party Congress Work Report of that year delivered by Xi himself. 

This was Xi's first work report to a Party Congress. 

Therefore, its language was parsed carefully.

The fundamental significance of the 2017 Congress report was the ideological surgery it performed on Deng's original 1982 decision on the ideological priority to be attached to the unfettered development of the factors of production - and Deng's continued relegation of the relations of production. 

In the 2017 Congress report, Xi effectively overturned Deng's long-standing ideological orthodoxy in the economy. 

Instead, Xi declared that the Party's "central contradiction for the new era" was one that now required action to correct "the imbalances in development" that had occurred as a result of Deng's unfettered reform agenda in the past. 

At a basic level, this ideologically authorised political and policy intervention in the economy to deal with obvious imbalances in environmental sustainability. 

At another level, it authorised policy efforts to improve social and economic equality – not just the final elimination of poverty (which Xi Jinping had determined to be his number one priority prior to the centenary of the Party's founding in 2021) but also the wider redistribution of wealth across the economy as a whole under his new ideological rubric of "common prosperity."

However, at a more fundamental level again, Xi's Congress report authorised more widespread political empowerment of party ideologues to intervene in China's overall economic policy settings in support of a free market, the role of the private sector, as well as the accumulation of individual and corporate wealth.

All these ideological redefinitions occurred as of late 2017.

However, the political environment within which this new, more Marxist ideological direction for the Chinese domestic economy was to be implemented was complicated almost immediately by President Trump's decision to launch the US-China trade war in January 2018. This trade war would rage for the next two years, at least until an interim agreement was finally signed in the White House in January 2020, although each of the protectionist measures imposed then remains in force today. 

The impact of Trump's trade war in 2018, coming almost immediately on top of the Party's ideological decision in 2017 to turn the clock back on Deng's market reform program of the previous 35 years, was to cause Xi to double down in his support a more protectionist, mercantilist and state-driven approach to China's future economic management.

It was from about this time, for example, that Xi Jinping began to embrace: new doctrines of "economic self-sufficiency"; new forms and a more gargantuan scale of state industrial policy; and what would soon become known as China's new ideological orthodoxy of the so-called "dual circulation economy".

The latter, in particular, was ideological code language for an approach to the economy whereby China, in the future, should no longer be dependent on the international market for the importation of any of its essential needs. But at the same time, through the maximisation of its own exports, Beijing's parallel objective was to cause much of the global economy to become increasingly dependent on China itself, thereby enhancing China's international political, economic and diplomatic leverage 

My overall argument, therefore, is that a combination of self-initiated ideological change, reinforced by Xi's political response to China's changing international circumstances, produced an even more potent cocktail of economic policy retreat from domestic and international market principles - which in turn further legitimised the return of the state to the absolute centre of the Chinese economy.

Parallel to these changes in ideological direction in Chinese domestic politics and economics, Xi also signalled as early as 2014 further changes in the formal direction of China's foreign and national security policy.

This was the Party's Foreign Affairs Work Conference of November that year, where Xi declined to restate the long-standing orthodoxy of Deng's Diplomatic Guidance Notes, including its core principle of "hide your strength, bide your time, never take the lead." In place of this guidance, Xi, at around this time, informed the Party that their new guidance was to "strive for achievement." This was ideological code language for China now actively changing the international status quo. 

While the full text of the Foreign Affairs Work Conference remarks has never been revealed, the limited excerpts which were provided through the People's Daily nonetheless underscore the sharp nature of the change in China's foreign and security policy direction that had now been embraced under Xi Jinping's leadership.

In these remarks, he spoke directly of the need for: "a new type of great power relations"; "a new type of international relations"; and, on top of that, more ominously, "an unfolding struggle for the future of the global order." 

These statements all preceded the decision by China's national security policy establishment to commence a program of island reclamation in the South China Sea from 2014 and 2015. It also heralded a more assertive, and in certain places, confrontational foreign security policy posture in China's dealings with its neighbours: with Japan, the Republic of Korea and Southeast Asia over conflicting territorial claims in the South China Sea, and with India.

It was also from about this time that we began to see new forms of Chinese "wolf warrior diplomacy" in capitals around the world, as China sought to leverage national governments to adopt a more compliant approach to China's foreign policy requirements. 

In summary, therefore, what we've observed over the last decade is a new ideological direction in Chinese public policy.

I have described this fundamental ideological change in three parts: first, Xi's decision to move Chinese politics back towards the Leninist left; second, his decision to move the centre of gravity of Chinese economic policy more towards the Marxist left; and third, to incrementally move assertive Chinese foreign and security policy posture more to the nationalist right. 

These three fundamental ideological changes, which we have seen unfold over the first 10 years of Xi Jinping's administration, have now been reinforced by the new language of Xi's Work Report in the 20th Party Congress delivered in October 2022. 

I have written on this elsewhere. But, in summary form, what we see in the 2022 report is a further entrenchment of Xi's Marxist-Leninist ideological settings. 

For example, the term "struggle" itself is used an inordinate number of times. The reassertion of a more Marxist approach to the economy can be found not only in the born-again role of the Chinese Party, state and state-owned enterprise sector (most particularly in technology innovation) but also in a deepening of the income redistribution agenda through the pre-existing common prosperity agenda – as well as new and as-yet-unspecified provisions on "the regulation of wealth accumulation." 

Most importantly, on China's international agenda, the 20th Party Congress report no longer refers to "peace and development being the overall trend of our times."

Consistent with the Deng Xiaoping ideological framework outlined above, this phrase had been a standard feature of all previous Congress reports going back to the 12th Congress back in 1982. 

Its code language was clear: the Party had assessed that there were no major wars on the horizon that could potentially involve China, therefore enabling the Party to concentrate fully on the central task of economic development. 

Importantly for our purposes here, that phrase no longer appears in the 20th Party Congress report of this year. 

Instead, we see warnings to the Chinese system about China's increasingly serious and grave strategic environment and on the need to prepare for "dangers in peacetime", as well to make preparations for "the gathering storm."

Furthermore, the PLA is specifically enjoined to "prepare for war" as well as parallel injunctions to make further preparations for its combat forces, resources and operational readiness.

In other words, Xi has put his country on a new national security footing. 

In overall terms, what Xi has done in the 20th Party Congress Report is to double down on the ideological directions conveyed to the Party and the country on domestic politics and foreign and security policy settings that he first began outlining as early as 2012/2013 - and on economic policy settings since at least 2017. 

The biggest qualitative change, however, in Xi's ideological language in his 2022 Work Report lies in his formal assessment of China's deteriorating external environment and the preparations that now must be made in order to meet the dangers he believes China now faces in the decade ahead. 

US-China Relations

So what does all this mean for the future of US-China relations? 

I argue that the underlying structure of US-China relations is shaped by three factors: first, the current state of the balance of physical power between Washington and Beijing; second, Xi Jinping's new strategy of assertiveness since 2012; and third, the US decision to respond to China's change in strategic capabilities and intentions through a new, bipartisan doctrine of "strategic competition."

On the first of these factors, the balance of military power across the Taiwan Strait has been moving in China's favour for some time. The reality, however, is that neither China nor the United States (including within that equation Taiwan's own national defence forces), at present, has an overwhelming preponderance of force that would remove the strategic risk of failure in the event of a general war. 

As for the balance of economic power, China, according to purchasing parity pricing, has long been the world's largest economy. Measured by GDP at current exchange rates however, it remains the world's second-largest economy. Whether or not China can close that gap in the decade ahead will depend very much on Beijing's future growth rates, given the major headwinds that the country now faces. These include the significant ideological adjustments to the traditional Chinese growth model that have now been introduced under Xi's tutelage.

As for technological power, there are different arguments around the ten principal categories of strategic technologies which China itself identified in its "Made in China 2025" strategy in 2015. But in terms of core technologies, it is generally argued that China is closing fast, although the gap in the most advanced categories of semiconductors (i.e. three to six nano-metres) still remains somewhere between three to five years.

On Xi's newly assertive strategy towards the United States, the ideological underpinnings for this approach have been outlined in my earlier remarks. Xi calculates that he can now leverage Chinese power more in changing the international status quo in a direction more accommodating of Chinese national interests and values. He also calculates that the US and the West is in stark decline, summed up in his ideological aphorism on "the rise of the east, and the decline of the west."

On American strategic response in the form of "strategic competition", the Biden administration has been adding to this framework first laid down in 2017. 

We have seen it in Secretary of State Blinken's China Strategy launched in May 2022 in his address to the Asia Society in Washington.

We've seen it in National Security Adviser Jake Sullivan's National Security Strategy released in September 2022.

We've also seen it with the National Defence Strategy of October 2022. 

But beyond these strategic framework documents, we have seen material changes in American substantive action towards China across the board. This has included a tightening of the Chinese foreign direct investment regime in the United States through a series of amendments to the CFIUS; the new Chips Act to subsidise the American semiconductor industry; and most significantly, the 7 October imposition of comprehensive American export bans on semiconductor sales to China in order to contain China's future technological advance.

In other words, notwithstanding the rolling distractions of the Russian invasion of Ukraine, the United States has succeeded so far in rolling out a comprehensive set of policies and operational procedures to put flesh on the bones of the doctrine of strategic competition. More is to come. 

Plainly, both sides are engaged in a strategic competition as to which country emerges as the preeminent regional and global power by mid-century.

It doesn't take a lot of deep analysis of Xi's mission statement of "the great rejuvenation of the Chinese nation by 2049" to conclude that this means China is once again resuming its status, as it had in the middle Qing period, of being the preeminent regional and global power. 

Furthermore, Xi Jinping has made plain that national rejuvenation cannot be achieved in the absence of reunification with Taiwan.

Therefore, whether we like it or not, we are already on a 27-year timeline between now and when Xi has decreed Taiwan must return to Chinese sovereignty, peacefully or by force, in order to celebrate the completion of Mao's revolution by the centenary of the establishment the People's Republic in 2049.

We now live, therefore, in dangerous times.

Within the framework of this strategic competition, it's therefore important to examine the question of whether this competition can be managed or unmanaged. 

Prior to the Xi-Biden summit of November 2022, we had five years of unmanaged strategic competition. By that, I mean there have been no effective rules of the road, no strategic guardrails, and a bilateral relationship increasingly in freefall - without any bilateral mechanisms in place to effectively manage destabilising incidents along the way. We saw this most spectacularly in terms of China's live-fire drills over Taiwan following Speaker Pelosi's visit in September.

The problem with unmanaged strategic competition is that it is dangerous.

There is a real and living danger that it can result in war by accident - namely accidental incident, escalation, crisis, conflict and war. We have seen this script many times over in the uglier chapters of the history of international relations. 

It's for these reasons that for the last 18 months, both in the United States and in China, I have argued for an alternative strategic framework of managed strategic competition.

This argument is based on the premise that neither side, at least at this stage, is prepared to roll the dice in support of war by design against one another over the question of Taiwan. That logic is anchored in the reality that both sides currently regard such an undertaking as too risky. In other words, they might lose. 

Based on this, the challenge right now is to reduce the risk of war by accident for the short-to-medium term.

There are three elements to the concept of managed strategic competition. 

First, agreeing on principles and procedures for navigating each other's strategic redlines (over Taiwan, the East China Sea, the South China Sea, the Korean Peninsula, cyber and space) that, if inadvertently crossed, would likely result in military escalation. This would mean contracting strategic guardrails around each. Or, if you like, basic rules of the road. 

Second, mutually identifying the areas of nonlethal national security policy — foreign policy, economic policy, technology development (for example, over semiconductors) — and ideology where full-blown, albeit non-lethal, strategic competition is accepted as the new normal.

Third, deploying sufficient political and diplomatic capital to define those areas where continued strategic cooperation (for example, on climate change, global financial stability, nuclear non-proliferation and global public health) is both recognised, encouraged and embraced. 

All three parts of this overall concept of managed strategic competition would need to be embraced within a joint political framework. 

The importance of the overall outcome of the Biden-Xi Jinping summit in Bali at the margins of the G20 was that both Beijing and Washington appear to have taken their first tentative steps towards some form of managed strategic competition.

Both sides have now spoken about the need to stabilise the relationship.

On the American side, American officials have repeatedly referred to the need for a form of "managed competition", the identification of "redlines", and the construction of "strategic guardrails" around the relationship.

The importance of Bali, however, is to identify some of the changes in the language used by Xi Jinping.

Xi, for the first time, has referred to the need to put in place "new protections" around the relationship in order to prevent crisis and conflict.

He has also spoken for the first time of the need to put in place "a security safety net" underneath the relationship for the same purpose.

Equally importantly, Xi Jinping has authorised "strategic communications" between both sides to this end.

In operationalising this approach, Secretary of State Blinken is now scheduled to visit Beijing early in the new year.

Most importantly, the new language used by the two leaders in their respective readouts from the Bali Summit authorises their most senior officials to begin constructing the precise forms of strategic guardrails they will need for the future - to manage the most contentious security policy challenges in the relationship.

It remains to be seen whether this approach succeeds. But the bottom line out of Bali signifies that both sides have decided, for the short-to-medium term at least, to "put a floor" under the relationship, to stop the "freefall", and to begin to construct some basic protections around the concept of strategic stability.

However, it would be foolish to conclude, at least from the Chinese perspective, that Xi has therefore shelved his aspiration to retake Taiwan. Nothing could be further from the truth. In fact, his language on Taiwan in the official readout from the Bali Summit is arguably more hardline than before.

It remains my conclusion, therefore, that beyond the short to medium term, China still remains on track to enhance its military preparedness, as well as its financial, economic and technological preparedness, to take action against Taiwan from sometime in the late 2020s or in 2030s - when Xi, of course, still aims to be in power.

We, therefore, need to be very clear-eyed about the distinction between short-to-medium-term stabilisation arrangements on the one hand; and medium-to-long-term preparations for potential conflict.

The only way to avert medium-to-long-term conflict is for there to be an effective US, allied and Taiwanese deterrence – militarily, technologically, financially, economically and, of course, in foreign policy and political terms as well.

Australia-China Relations

So where does all this leave the future of Australia-China relations? 

As can be seen from the above, this is not an independent subject in its own right. There are multiple variables at play, some of which are well beyond our control. 

The Australia-China relationship is deeply impacted by the changing dynamics of the US-China relationship – which directly affects not only Australia but also many other countries more geographically proximate to China than Australia. US treaty allies Japan, Korea, the Philippines and Thailand come quickly to mind. The US-China relationship also impacts those 140 countries around the world for whom China has already become their largest trading partner.

Furthermore, the future of Australia-China relations also is very much affected by China's changing ideological direction under Xi Jinping.

Just as the Australia-China relationship is also impacted by the increasingly bipartisan US doctrine of strategic competition that has emerged over the last five years. This, in turn, will also be shaped by future developments in US domestic politics – including the outcomes of the 2024, 2028 and 2032 presidential elections and whether these produce more isolationist Republican candidates for the presidency than has been the traditionally the case in pre-Trump America. 

There is often a tendency in this country to see the Australia-China relationship in isolation.

This is analytically flawed. We are not Robinson Crusoe on this. Most countries are experiencing similar challenges. And many are subject to the range of variables I have described above. 

That is not to say that Australia does not have autonomy or agency in shaping our own future. We do. But in executing this agency, we must be deeply mindful of the constraints which exist in the operating environment in which we live, work and have our national being. 

I do not intend to use this opportunity to reflect at length on the rhetorical excesses of the Morrison-Dutton duumvirate on the China relationship. 

It suffices to say that, notwithstanding the increased difficulties imposed by Xi Jinping's foreign and security policy assertiveness within our own region (including with Australia itself), simply engaging in rhetorical overdrive did nothing to produce a substantive national China strategy - let alone an effective, policy or operational response to meet the China challenge.

In large part, the morality play of Morrison's and Dutton's often competing megaphone diplomacy on China was directed at the internal politics of the Liberal and National parties on the one hand (i.e. who could sound most hairy-chested on China); and a ham-fisted effort to wedge the Australian Labor Party as somehow being soft on China on the other. On this latter question, Morrison and Dutton failed spectacularly as demonstrated by the outcome of the last election.

What the Albanese government has sought to do is take down the temperature of the Australia-China relationship.

This has been matched by a similar change in the rhetorical tone and temperature towards Australia in Beijing,

Both sides have decided to put the megaphone away. This is a healthy first step in restoring some level of stability and even normality to the diplomatic discourse between Beijing and Canberra. 

This has made possible the resumption of ministerial engagement between the two sides – particularly between the foreign and defence ministers – which put to an end the three-year ministerial freeze.

Furthermore, with Prime Minister Albanese's meeting with President Xi in Bali, we now have resumed head-of-government-level contact between the two sides after a six-year hiatus.

Nowhere in the half-century-long history of the Australia-China bilateral relationship has there been such a political freeze on contact between the two sides.

This was unhealthy for all concerned.

The achievement of Prime Minister Albanese and Foreign Minister Wong in the first six months of their term in office has been to stabilise the relationship along these lines. Given where we'd been in the past, this is no small feat.

However, the work ahead of the new government and their counterparts in Beijing is formidable.

China's trade sanctions against Australia remain in place. And as I've argued elsewhere, it will be an important symbol and signal from the Chinese side to use the celebration of the 50th anniversary of the establishment of diplomatic relations on 3 December for China to draw a line under the past by removing these sanctions.

That would pave the way for the resumption of normal diplomatic discourse across all the substantive questions which currently confront the bilateral relationship.

This includes China's increasingly assertive behaviour in the Southwest Pacific.

It includes China's posture towards our strategic partners in Japan and India.

It includes China's aspirations to join the Trans-Pacific Partnership.

It includes our common concerns for effective global action on climate change.

It also includes the continued incarceration, on political grounds, of a number of Australian nationals, including the Australian journalist Cheng Lei.

Indeed, the early release of Cheng Lei as part of our 50th-anniversary celebrations would cast a significantly positive light on the overall relationship for the years ahead. 

The good thing is that we now have a restoration of a political relationship capable of addressing each of these substantive challenges. 

We should not underestimate the difficulty involved in each of them. 

In navigating them, as I have long advocated in my dealings with the Morison government, including early one-on-one conversations with Prime Minister Morrison himself, I think any Australian Government should bear in mind five fundamental principles in governing the shape of the Australia-China relationship. 

First, our unapologetic commitment to universal human rights, anchored in international law;

Second, our unapologetic support for the US alliance, though not as a form of automatic compliance with every element of American foreign policy;

Third, maximising economic engagement between the two countries to our mutual advantage, including the resumption of normal tourism and student flows;

Fourth, maximum collaboration with China through global institutions such as the G20. APEC and the UN on climate change, global economic stability, nuclear non-proliferation and future pandemic management; 

Fifth, when we do need to part company with China, do so in partnership with friends and allies. It's always safer to hunt in packs.

Conclusion

The next five years will very much shape and arguably determine the future stability of the Indo-Pacific region. 

It will determine the success or otherwise of US efforts to deter China from taking medium-to-long-term action military action against Taiwan.

It will determine whether or not China can reinvent its own domestic growth model, given the slowing in Chinese growth which has occurred over the last several years, driven by a combination of ideological, demographic and pandemic-related factors. 

But it will also be shaped by the policies adopted by third countries, including Australia. 

If we fail to navigate the next five years carefully, there is a grave risk that by the late 20s and the early 30s, we could well find ourselves on the cusp of armed conflict. 

It is easy to use the term "armed conflict." 

But when we begin to imagine the scope of a possible war between China and the United States over Taiwan, the strategic, economic and human cost of such a conflagration is likely to be of an order of magnitude not seen since the Second World War. 

It is one of the reasons why all three countries – China, the United States and Australia – must apply every effort for all our futures that there is indeed a peaceful, prosperous and sustainable future for us all.

The alternative is too catastrophic to contemplate.