Chinese investment: thinking the unthinkable is logical

That the US military commissioned a report on the likely consequences of a war with China demonstrates the need for all involved, including Australia, to find ways to reduce the risk of a clash with the main trading partner of most of the nations in the region.

With the Rand Corporation report, War with China: Thinking Through the Unthinkable, now made public, it is clearly intended to be read in Beijing.

Even a small slowdown in the rate of growth of China’s economy is enough to launch fears of dire consequences flowing on to Australia. The prospect of being drawn into a war with our main trading partner, or even having a ringside seat to such a conflict, is, as the Rand Corporation’s report warns, unthinkable.

Yet much has changed in the short time since the years of China’s “peaceful rise” under previous Chinese leader Hu Jintao.

His successor, President Xi Ji­n­ping, has brought a much more ­assertive and aggressive Chinese foreign policy, particularly by claiming almost the entire South China Sea as territorial waters.

As Beijing continues with its creation of artificial islands by pouring thousands of tonnes of concrete on to reefs and then building runways and aircraft shelters on them, the chances of its naval forces and aircraft ­running into those of the US, or China’s neighbours, increase significantly.

All of this activity, and Beijing’s scornful rejection of the inter­national court’s recent criticism of its reclamation activities, have ­created an impression China does not believe it will be challenged.

It has also created an environment where a clash could occur by accident and the situation could escalate rapidly.

Over the past two years, the US has invited China, along with Australia and a host of other American allies, to take part in its massive Rim of the Pacific naval exercise off Hawaii to increase familiarity with operating procedures and ­reduce the chances of accidents.

To the same end, the Royal Australian Navy is engaged in a program of military diplomacy, with it warships engaging in live firing exercises with their Chinese counterparts in their waters.

Chinese warships have simil­arly visited Australian ports.

That will all help, but it is not enough to be sure of avoiding what is both unthinkable and possible.