Hugh White falters on China’s rise, ANZUS demise

In his Quarterly Essay Without America: Australia in the New Asia, Hugh White argues that Australia faces a future alone without the US to protect us. China will take America’s place as the dominant power. He predicts that US alli­ances with Japan and Australia will disintegrate.

This is a very pessimistic view. I share some of his concerns about our future security but I think his timelines are too compressed and I have other reservations.

First, he argues that China’s economic power is rapidly outstripping that of America, which will make China more powerful than the US. He cites a graph in the foreign policy white paper claiming that by 2030 — just 13 years away — China’s gross domestic product measured in purchasing parity terms will be almost twice as large as that of the US. He pounces on this to assert that China will soon have much greater strategic weight than the US, including militarily.

The problem with taking purchasing power parity GDP estimates at face value is that, as former Reserve Bank deputy head Stephen Grenville notes, PPP comparisons come with many caveats. He says that to compare economic weight, GDP needs to be supplemented by a measure of the country’s capital stock (the accumulated assets that support its economic capacity).

According to Peter McCawley, one of Australia’s leading international development economists, China’s capital stock per capita is no more than one-tenth that of the US. Such huge gaps in capital stock are important in measuring the economic power of the US and China and, as a consequence, their potential military power. The fact is that, as measured in current market exchange rates, US GDP is 25 per cent of the world economy and China’s less than 15 per cent. The US and its allies account for about 70 per cent of world military spending. And China’s inevitable demographic future is that it will get old before it becomes rich and truly powerful.

Second, White believes US withdrawal from the region will be so rapid that it will soon fail to retain any substantial strategic role. This will result in Tokyo concluding the US cannot be relied on any longer. He says this may happen quite quickly and the US-Japan alliance will swiftly collapse along with America’s position in Asia.

Japan will then build its own nuclear weapons, with all that implies for nuclear proliferation elsewhere in our region, including South Korea and Taiwan.

White applies the same reasoning to Australia and the ANZUS alliance, which Australia will pull out of because we will no longer be able to assume that the US would come to our aid. That is not a view that I hold: without an alliance, the Australian Defence Force would no longer have favoured access to the most advanced American weapons and intelligence.

Third, White says there is no evidence China plans to impose a harsh and oppressive hegemony over the region when it becomes the dominant power. Nor does China show any desire to proselytise an ideology or export a political system, he says.

He proposes China will aim to wield its power in East Asia the way the Americans did under the Monroe Doctrine, when he says the US “mostly did not intrude too much on the affairs of its neighbours”.

These are highly contentious judgments in almost every respect. There is every indication that China’s President Xi Jinping sees an opportunity to export into our region his superior form of authoritarian state capitalism, which he claims gets things done much more efficiently than decadent Western democracies.

And let’s remember that under the Monroe Doctrine the US seized Texas, invaded Cuba, intervened in the Dominican Republic, Nicaragua, El Salvador and Panama, and overthrew Chile’s elected president Salvador Allende. Is this the sort of “benign” hegemonic oppression we wish to see China replicate in our region?

Fourth, in an Asia without the US, White wants to see Australia double its expenditure on defence to 4 per cent of GDP to prevent China from imposing its will on us militarily.

He observes that we have never seriously considered trying to defend the continent independently from a major Asian power. This would not be impossible to do, he says, but it would be difficult and expensive.

I agree with his desire for much greater defence self-reliance. But finding an additional $35 billion a year is a far from trivial task for the commonwealth’s budget without a clear threat.

White then proceeds to raise the issue of developing a nuclear force of our own, “able credibly to threaten an adversary (meaning China) with massive damage”. He says we would require only a small force but it would need to have long-range, high-yield warheads and be very secure from pre-emptive strike. He suggests it might look something like Britain’s submarine-based nuclear force.

The problem with this is that such an intercontinental ballistic missile-firing submarine force will be incredibly expensive.

Britain’s Ministry of Defence estimates the cost of building four new Dreadnought-class submarines and operating them for 30 years to be in the order of $300bn.

In addition to unaffordable costs, if we are out of the ANZUS alliance, there is the serious question of just who would provide us with the submarine-launched ballistic missiles (which Britain buys from the US)?

And who would we turn to for manufacturing the nuclear reactors?

Besides, given White’s urgent timeframe for the collapse of ANZUS, how long would it take us to develop a nuclear weapon by ourselves without US assistance?

Paul Dibb is emeritus professor of strategic studies at the Australian National University.