This coming weekend, Australia will host the Asia-Pacific Economic Cooperation (APEC) Leaders Summit, which first began in 1989 as a regional forum on economic issues. Foreign officials have already spent several days in Sydney discussing the 2007 agenda, which is dominated by climate change, trade, and security. But so far the biggest story has been George Bush’s itinerary: The U.S. president arrived early and will be departing halfway through the leaders conference, so as to prepare for the 9/11 anniversary and the Iraq report from General David Petraeus. To critics, this offers more evidence that Bush has neglected Asia.

In fact, some of the highlights of recent U.S. diplomacy include the strengthening of America’s relations with China, Japan, Australia, Vietnam, and India. In tandem with Prime Minister Junichiro Koizumi, Bush produced historic levels of U.S.-Japanese collaboration and encouraged Tokyo to move away from its postwar passivity. At the same time, Bush deepened U.S. engagement with Beijing. For the most part, he has stood athwart a rising tide of anti-China sentiments in Congress.

Such sentiments may seem odd to Australians. Even conservative Aussies take a relatively favorable view of the East Asian giant, as I learned during a visit to Sydney this past April. While Bush gets on famously with Australian Prime Minister John Howard, and while the ANZUS alliance still forms the bulwark of Canberra’s defense policy, there are understandable reasons why Americans and Australians approach growing Chinese power differently.

Without much fanfare, Australia is nearing the end of its 16th consecutive year of unbroken economic growth. The boom began in 1991, thanks to the liberalizing policies of a center-left Labor government under Prime Ministers Bob Hawke and Paul Keating. Starting in 1983, the Hawke-Keating regime floated the Australian dollar, slashed tariffs, deregulated the financial markets, cut taxes, and overhauled the wage structure. Since 1996, the boom has been sustained and enhanced by Prime Minister Howard, head of the center-right Liberal Party, with trade expansion, a revamped tax system, the elimination of Australia’s debt, a reformation of workplace law, and a guarantee of official independence for the Australian Reserve Bank.

"China’s progress is good for China and good for the world." -Australian Prime Minister John Howard

The X-factor in recent years has been a spike in global commodity prices. Mineral-rich Australia depends heavily on the extraction and export of natural resources such as coal and iron ore. China is now an eager customer for these minerals, and its voracious appetite has provided yet another jolt to the kangaroo economy.

It is important not to overstate that jolt. John Edwards, chief economist at HSBC Bank Australia and a former Keating adviser, has observed that “Australia’s direct dependence on China is quite small. Even by 2005 exports to China accounted for just 2 percent of Australian GDP, far less than the export exposures of Korea, Japan, Taiwan, or Southeast Asia to China.” Toward the end of 2006, Edwards reckoned that “neither China nor the commodities boom has been central to Australia’s economic performance in the first decade of the 21st century. They may well matter a great deal in the next five years, but they haven’t mattered much in the last five.”

Either way, as Howard pointed out in a September 2005 speech to the Asia Society in New York, “Australia’s trade with China has quadrupled in the last decade, and China is now our second largest merchandise trading partner.” His comments included a mild rebuke to China’s critics: “As China assumes a greater strategic and economic weight in Asia in the 21st century, it will inevitably place some strain on the international system. But to see China’s rise in zero-sum terms is overly pessimistic, intellectually misguided, and potentially dangerous. It is also a negation of what the West has been urging on China now for decades. China’s progress is good for China and good for the world.”

Since the prime minister made those remarks, Sino-Australian commercial links have grown even closer. Late last month, the Australian Bureau of Statistics released data showing that mainland China had officially surpassed Japan to become Australia’s biggest trading partner. “Last November, combined China and Hong Kong trade with Australia passed Japan to take top spot,” Craig James, chief equities economist at Commonwealth Securities, told the Australian Associated Press. “Now China holds the number one position in its own right.” He predicted that Australia’s “trading, cultural, and political relationship with China will grow more and more important in coming years.”

Australia’s primary export market is still Japan. But as Edwards, the HSBC economist, noted, “China has decisively overtaken the U.S. as Australia’s second biggest export market, and at the same time China has become the epicenter of East Asian growth.” Though Australia still runs a trade deficit with China, it appears miniscule when compared to the massive U.S. trade deficit. No wonder: The Australian economy is far more export-oriented than is the U.S. economy. As a result, Americans seem more anxious about China’s bulging economic muscle than do Australians.

A 2006 Chicago Council on Global Affairs poll found that a plurality (49 percent) of Americans regard the U.S. and China as “mostly rivals,” and that 58 percent trust China “not at all” or “not very much” to act responsibly in the world. By contrast, a 2006 Lowy Institute poll reported that 60 percent of Australians trust China “somewhat” or “a great deal” to act responsibly. Australians expressed notably warmer feelings toward China than did Americans. In the 2007 Lowy survey, Aussie attitudes toward China had cooled a bit. Even still, a majority (51 percent) of Australians are either “not very worried” or “not at all worried” about “China’s growing power."

"You never find any public criticism of China in this country,” says Carl Thayer, a political scientist at the Australian Defense Force Academy. He quickly admits that is an exaggeration, but stresses that Australia boasts “a legacy of goodwill toward China.” And “there’s no Taiwan lobby.” Indeed, “The worst nightmare” for Australian defense strategists is a Sino-American conflict over the island democracy. “Australia would be under excruciating pressure.”

This is not to say that Australians always kowtow to Beijing. Despite Chinese warnings, both Howard and Labor Party leader Kevin Rudd (who speaks fluent Mandarin) recently met with the Dalai Lama. Howard signed a landmark defense pact with Japan in March, and has also boosted Australian security ties with the U.S. and India. (Japanese Prime Minister Shinzo Abe hopes that greater quadrilateral cooperation among the four countries will help check the rise of China.) After inking the Japan deal, Howard explained to a reporter: “There are a lot of things we have in common with China, but China is not a democracy. Japan is.”

Howard is above all a realist. He takes pride in forging closer relations with both the U.S. and China, an achievement symbolized by the back-to-back visits of George Bush and Chinese President Hu Jintao to Canberra in October 2003. “We’re trusted by both sides,” says Arthur Sinodinos, Howard’s former chief of staff. “We have strong interests in developing our relationships with both the Chinese and the Americans. We want the Americans to remain engaged in the region.” In addition, “We want to enmesh China … in the global system, both on security grounds and on economic grounds,” so that “they are a fully participating and cooperative partner in the world economy. That’s vital.”

What about pressing China on human rights and democracy? “It’s very hard for outsiders to dictate what should happen to the Chinese political system,” he says. “At the end of the day, that is an issue which will have to be resolved internally.” In the meantime, Australia will continue to serve as a “trusted interlocutor” between Washington and Beijing.

Duncan Currie is a reporter at The Weekly Standard.

Image credit: photo by flickr user Mr Imperial.