Originally published in The Australian Financial Review on 22 June 2021

Australia came away from the G7 meeting in Cornwall comforted by the support of others. But joint statements tend elegantly to fudge differences and do not absolve us from reaching our own conclusions and crafting our own strategies.

Australia’s China policy cannot simply sit in the slipstream of US or G7 policy. We have our own distinctive interests to protect and advance. That demands clear-eyed thinking about what China is and is not.

The starting point of foreign policy is to take the world as it is. China is a one-party Leninist state led by a party absolutely committed to its retention of monopoly political power. That is unlikely to change in our lifetime, and nor is it likely that China will lose its position as the largest or second-largest economy with a matching military capacity. This was the essential message of Singapore Prime Minister Lee Hsien Loong to our PM.

None of this makes China our enemy. It does not have designs on our territory. To the extent that China seeks to covertly influence our decisions or to infiltrate our institutions we have the capacity to deal with that and we are doing so.

China is the strategic competitor of the US but that does not automatically make it the strategic competitor of Australia. We would like to see the US retain its position as the pre-eminent global power but that does not mean that any country that seeks to dislodge the US from its perch of primacy is our adversary.

So if China is not an enemy, adversary or competitor of Australia does that mean we can be relaxed about its strategic ambitions? No. For Australia, the strategic rub arises from China’s ambition to become the predominant power in the Indo Pacific, if not beyond.

China cannot win the battle of ideas in well established democracies like Australia.

China wants to reach back to the Middle Kingdom where harmony was a hierarchy with China at its peak. Other states knew their place and they would quickly see the logic of not acting in ways that ran counter to China’s interests. For China, the future is the past, broken only by a century of humiliation and four decades of extraordinary economic catch-up.

The pull of the Middle Kingdom is not an ideological long march. Ideology does play an important role in the thinking of the Chinese Communist Party. But it relates more to the role of the party, its leadership in reversing the century of humiliation and its claims to legitimacy than to any ambition to crush democracies. These will be large themes during the carefully planned celebrations of the Party’s centenary on July 1.

Yes, China wants to make the world safe for autocracies. But this is essentially a defensive interest. China cannot win the battle of ideas in well-established democracies such as Australia. If this is an existential threat then it is also a phony war. The West’s greater democratic challenge comes not from China but from the urgency to renew our capacity to deliver liberty, prosperity and social stability. President Joe Biden understands this.

Australia does not want to see a return to the Middle Kingdom because we have no interest in being a tributary state. That is why balancing arrangements such as the Quad (US, Japan, India and Australia) are important. They help blunt the recreation of the Middle Kingdom. They offer a platform for pushing back when China’s behaviour crosses the line in terms of coercion or breaches of international law and norms.

The Quad and a more China-focused G7 signal that China must be both engaged and constrained. It cannot be ignored. It cannot be decoupled from the global economy. Nor can it be excluded from the search for solutions to big global challenges such as climate change, pandemics and the proliferation of nuclear weapons.

China’s pragmatism seems to have deserted it for now. Its wolf-warrior diplomacy is completely counterproductive as diplomacy but plays to a domestic audience. China also has its own version of neocons who believe the time has come for China to use its power more overtly to secure its goals. The risk of overreach is high.

In China and Australia domestic compulsions are playing a large role in the execution of foreign policy. Ours are easier to see than in the opaque Chinese system.

Australia cannot change China’s calculations but we can do more to set out how we see China, where we differ and where we can work together.

Holding true to our values is a given, not a strategy. We need a clearer sense of what we want from the relationship and how we might get there. The diplomatic ball is never only in one court.

Peter Varghese is the chancellor of the University of Queensland and a former secretary of the Department of Foreign Affairs and Trade.