Australia achieving both security and prosperity in an era of an assertive China and an ambivalent United States requires a more transparent public debate and new forms of cooperation between government and business, a Nous Group panel discussion has found.

At the first event in Beyond 2020: Shaping Australia’s Future, a series to mark Nous’ 20^th anniversary, a panel of experts in Canberra engaged with the topic “Prosperity and security: Australia’s foreign policy balancing act”.

On the panel at the National Gallery was Dr Don Russell, a former Australian ambassador to the United States, Nous Chief Economist Dr Jenny Gordon and Nous Principal Anthony Bubalo. The event, held on March 27, was chaired by Nous founder and managing director Tim Orton.

The audience of 50 Commonwealth public sector leaders heard that the certainties that have defined the global order for most of the post-War period were breaking down.

“The world is moving from an era of globalisation into an era of polarisation: populism, protectionism, increased nationalism, terrorism and extremism,” Mr Bubalo said.

He said the tensions between China and the United States had become more overt, including in the recent US national security strategy. “The thing that’s changed in the past few years is that the US and China have defined each other as adversaries,” he said.

Dr Russell cited IMF data showing that China’s GDP had zoomed from 1.75 times that of Australia in 1980 to 3 times Australia’s in 2000 and an expected 10 times next year. He said that in PPP terms the size of the Chinese economy has eclipsed that of the United States since 2014.

“Is this the dynamic of a conflict between the US and China that we will not be able to stop? The US alliance is an important asset for Australia as are our relationships within our region. The question is, to what extent can we as a member of the alliance influence the outcome of what is in store?” Dr Russell asked.

He warned that history demonstrated that the great conflicts of the past have come from the divergent growth of nations and that rising powers can be impatient and great powers do not cede power willingly. However he noted that the exceptionalism that defined America’s post-War rise could continue and allow the US and China to operate successfully in a multipolar world.

Mr Bubalo explained that conflict was being waged within borders, not just across them. He noted that Australia had introduced measures such as foreign interference laws, export controls, restrictions on who can supply critical infrastructure and limits on university cooperation, mainly in response to fears about China.

But these efforts to counter Chinese government influence in Australia also risked damaging economic prosperity and hurting social cohesion if not implemented carefully and communicated clearly.

“We are implementing regulations to prevent the Chinese Communist Party from interfering in our domestic politics, but what are we doing to limit any risks these policies might create in terms of our social cohesion and how Australians of Chinese descent feel about their inclusion in our society?” he said.

For Dr Gordon, increasing inequality within countries and between countries was feeding increasing populism and thereby the risk of global conflict.

“When people do well and they feel the tide is lifting all boats they are pretty happy with their lot and they are less likely to succumb to the temptations of nationalism, which is what builds into this mercantilist approach to trade and protection,” she said.

She argued Australia needed to engage like-minded countries, such as the Asian nations in the Regional Comprehensive Economic Partnership, including India and Indonesia.

“We really ought to cooperate with countries like us – countries that have a lot to lose from losing the rules-based order,” she said. “If we think about what really threatens our lifestyle, it’s disruption in the Pacific region.”

The panellists agreed that a more diverse pool of players had a role to play in shaping foreign policy.

Dr Russell cited his experience as a leading public servant in South Australia, which has a formal sister state agreement with the Chinese province of Shandong dating back 30 odd years.

“The states can play a useful role in this. It is easier for the states to manage the economic relationship with China because they are not responsible for the security relationships,” he said.

Dr Gordon noted that communications technology had given greater power to ordinary citizens.

“We need to make the economy work for people so they have a stake in a world order that will work for them,” she said.

She added that the division between economic concerns and security concerns was a false one.

“You can’t just give security experts carte blanche to do what they want, particularly if whatever they’re doing is ineffective and expensive. If you don’t have prosperity your security is going to be at risk,” she said.

Concluding the event, Mr Orton said the security establishment on one hand and universities and businesses on the other often failed to communicate openly.

“We need to connect people in this room interested from a security and economic perspective with people in other cities who are not having this conversation,” he said.

This event was the first in a 10-part series to celebrate Nous’ 20^th anniversary. The next event, taking place in Melbourne in May, will consider how leaders can create more diverse and inclusive workplaces.