 So Jane, Belt and Road has been described by many China watchers as very much linked to the sort of China dream. Do you think China's dream can become Australia's dream? Look, China's dream is fundamentally about the rejuvenation of the nation, and I guess ultimately returning China to what its leaders see as its rightful place at the centre of the world. I see that primarily in economic terms, not necessarily about it wanting to rule the world, but either way the idea that Australia and China can share exactly the same dream seems pretty unlikely to me. Because I mean, it raises the question of whether any country really has a sort of rightful place in the world. It tends to, these things tend to wax and wane. I would have thought that, you know, Belt and Road, although it's been described as a great big sort of geopolitical experiment, or a sort of transnational, even a transnational coalition, Belt and Road does look in many respects like a bit of a hodgepodge of different projects for sort of different purposes. And a lot of China watchers, I think, find it rather difficult to untangle precisely what Belt and Road is and what it's for. What do you think it's for? So let's think about the most important thing of the China dream. As I said, it's not about China ruling the world. It is about the Chinese government providing economic growth opportunities primarily for its own people. And what they see is the best way to do that is a grand or transnational development strategy that brings its own developmental experience to countries in neighbouring regions, offering them prospects for economic growth that then also trickle down back at home. So in the first instance, I've always thought of it as an economic strategy and it's one that makes really good sense again from China's perspective. Their whole of the last 40 years since the reform and opening up commenced under Deng Xiaoping has been about economic development and they've always used regional development strategies to promote development within China's own borders. They've also integrated very successfully into the global economy and the Belt and Road initiative has the potential to combine both of those two things, bringing what they call win-win economic development both for China's 1.4 billion people and essentially for the rest of the world as well. But of course other people see it in a different light. The most the starkest contrast of it being an economic development strategy is that it's purely geopolitical. That is that China is using this to gain power and influence in neighbouring regions and if you take that to extreme to possibly take over and control the world and all of the people in it. I think that's going way too far but there are elements of control and influence that come out of being the largest economy in the most influential economic actor in the region and particularly when you're laying down infrastructure and telecommunications networks that are linked to large Chinese enterprises, state owned or otherwise that are in turn linked in ways that we don't fully understand to the Communist Party of China. I mean I think it's really interesting you describe it as primarily an economic venture and I can see from the perspective of an economist that would be the case. Unfortunately I'm one of these nasty people as you know who's trained as a sort of geopolitician and one thing that strikes me is that there's never really been the expansion of economic influence by any type of major power whether it's the United States, whether it's Great Britain whether it's other European nations or whether it's China at the moment that doesn't come with it a hell of a lot of political influence. So I think from my perspective at least Belton Road is creating the building blocks for a sort of not domination of the world but certainly significant leverage that China has over a sphere of influence that's really quite large. One that spreads from basically Europe through to Central Asia through to the Middle East. The big question I guess is how much and to what extent China is able to project that within the sort of area that Australia occupies which traditionally has been a bit of a geostrategic backwater but suddenly becomes newly important because you have so much hydrocarbons flowing through from the Middle East the straits of Malacca and the sort of energy transit states around there. So the area towards Australia's north is becoming very interesting and that's potentially a site for Chinese leverage too. One of the things we've witnessed of course with the Belton Road loans is very much the approach of countries who are keen to sign up to it initially and then worry what happens afterwards. Will it create narrow development corridors or the types of benefits that Belton Road is supposed to generate flow on through to the rest of those societies? I think the answer on this is quite mixed. I think sometimes it has. I think many times particularly in Africa it has not done so but that doesn't really dampen the enthusiasm for many elites within just the general Eurasian region to get on board Belton Road mainly because it looks like investment that might be simply bilateral not really multilateral but investment that allows them to create jobs allows them to build infrastructure and allows them to solve many of the problems that they face. What comes next though is the big issue. I guess my question here would be to try and link this together what should Australia do? Should Australia sign up to the Belton Road? We've seen the Victorian government say that it was going to and sign an MOU should we be doing the same? Look what we need to do is understand much better than we do right now exactly what the Belton Road is about. So just to be clear even though I describe it as an economic strategy to a certain extent I see it absolutely as a geoeconomic strategy that is the use of economic tools to achieve geopolitical outcomes. It is still really unclear whether those geopolitical outcomes will be entirely benevolent as the Chinese government would like us to believe or whether it will have some malevolent attributes. Now a really good example of this is the discussion around the debt trap diplomacy it's had a lot of press. Our own former Foreign Minister Julie Bishop picked up on it and basically started talking about how Australia should compete with China in our sphere of influence already talking in very geoeconomic terms in the Pacific in order to provide infrastructure and she used the specific words roads that don't lead to nowhere. So the implication there or the insinuation is that the Belton Road is deliberately trying to trap countries into unsustainable debt and that Australia should come to the rescue. Do I think that's the right thing to do? Not in that particular instance. If you look at the research including research that's come out of the ANU of Donald Dornan and Rohan Fox they looked at all of the countries in the Pacific region to consider where their debt was coming from and how much China was to blame and they answered emphatically that debt trap diplomacy was an inaccurate assessment of China's engagement in the region. If that's the case then competing with China on infrastructure is the completely wrong policy response and that's why we really need to get the facts straight. If you know that money flowing in whether it's from China or anywhere else in the world as these two found is problematic because of how the host government responds and utilizes the funds not because of the fact that China is pouring it in then pouring more money in from another country is going to result in the same problems and there's an example of where you'd be much better off to cooperate with the host country and even to cooperate with China to make sure that any investment that went into the region found its way into positive efficient investments that could deliver positive economic growth to the region in the future. But in many respects it's not leading to positive long-term benefits in the Pacific isn't it? A lot of the times it's offered to regional elites to help them politically whether it's by building a new parliament building or building a new stadium or providing fast 5G Wi-Fi. Those are semi-infrastructure but they also come with it the expectation that those countries will tie themselves very closely to China. There's no suggestion for instance that as any part of Belt and Road that Chinese aid, Chinese loans don't have the expectations of warmer relations between those countries in China. So the Australian government by trying to pump equal amounts of money or large amounts of money back into the Pacific is in my view at least fighting with one hand tied behind its back because of course as a democracy we stress things like good governance outcomes in places in the Pacific where good governance outcomes are often not desired by the political leadership. So in many respects I think China has both the economic advantage in that it has more to spend but it also has the political advantage in that a lot of the nations in the Pacific region don't necessarily want the many strings attached development assistance that comes from Australia. And that's what puts China in such a powerful position and that's why we need to think very carefully about how best to use very limited funds our aid budget, declining over the last decade or so and use them in the way that's most effective for aiding development in the Pacific region. And so again if governance is the problem we channel our efforts into improving governance trying to stop China when they're the wealthier country far more powerful offering lots of money to people who really need it, we're just not going to succeed there I don't think. Oh no I completely agree with you mainly because regional trade architecture has kind of declined with the United States effectively abrogating its leadership of the trading space not just within our region but frankly globally. The interesting thing being of course like you know people say oh it's Trump's fault, it's Trump's fault, it's Trump's fault but let's face it had Hillary won had Bernie Sanders won they would have all pulled out of the Trans-Pacific partnership so effectively the type of open trade governance that we've been promoting for years and years and years since APEC and before is something that we have to spearhead ourselves with the assistance of perhaps Japan in many respects there therefore you know any deals we come up with a kind of TPP minus one with the minus one being the United States. Still better than no TPP at all. Still better than none at all, yeah. There are many who would say that support for the American alliance is hardwired into our DNA. Now that's a phrase I hate because it suggests that there is absolutely no time you ever swap best friends and it suggests that Australia will be wedded to the United States forever and a day no matter what the United States might do. Do you think Australia faces as Hugh White suggests a sort of China choice? Is it the fact that we are sometimes at some stage going to have to choose between our major strategic partner and our major trade partner? I mean I get the sense that the government or successive governments for a long time have tried not to have a choice. They've tried to make a series of little choices. But if it really push comes to shove do you think that necessarily Australia will be able should it even want to, to sign on as a complete enthusiastic supporter of Belt and Road without a hell of a lot of pushback from the United States? And on the other side of the equation do you think perhaps Australia can necessarily chart a path as a firm democratic ally of the Americans and not suffer some kind of punishment from the Chinese? How do we get that balance right? Well that's exactly the question that the foreign policy makers here in Canberra will be thinking about very deeply immediately after the election and I hope already now. I don't think Hugh White points to or forces Australia into making such a stark choice. He's really about how we steer that line to mitigate the line between our number one security ally and our number one economic trading partner as the relationship between those two superpowers becomes increasingly tense. It requires flexibility, it requires nuance, it requires sophistication and it requires a deeper knowledge of the complexities of both of those two countries. So as we move ahead that's the question that they're grappling with and I don't think they can make a black or white will do this all the time. We need to figure out where we need to compete with China, where we need to cooperate with them, where we should stand up and challenge them, figure out where that puts us vis-a-vis the United States and I would argue through that process carve out at least a slightly more independent foreign policy that enables us for example to stand up and defend free trade when our number one ally is crushing it to pieces. I look to be honest I couldn't agree with you more. Australian foreign security policy hasn't been particularly independent in my view whatsoever. What we have done however is we have in many respects locked ourselves into a series of preferences for the future. If you look at things like defence procurement for instance we're effectively locked in for the next 20 to 25 years. It's not an awful lot we can do. Where we can change the equation I think is where we make political choices. There was a famous story from about 2004 when Alexander Downer was foreign minister. You probably know this story when he was asked by the Chinese press what would Australia do in the event of a shooting war over Taiwan between the United States and China. Downer said basically the thing the newly minted foreign minister probably should say which was we would do nothing. We will be absolutely neutral. It was pointed out to him within 24 hours by the United States that Australians would be expected to fight and die under those circumstances. Now interestingly enough that has been very much the default setting of Australian foreign security policy community for a very long time. The fact that we're even having this discussion now and that we're raising the question well could Australia in fact be more of a sort of swing player? Because let's face it under the type of scenarios that are shaping out within our region as a middle power Australia should be able to make out like an absolute bandit. Middle powers tend to do that when you have a sort of bipolar configuration within your region you can play one major power off against one another and therefore avoid those hard choices. Whether we have the flexibility and whether we have the capacity really to think outside the square in the way that you're suggesting to be really independent in the types of choices we make I'm not quite sure. I tend to think that the alliance will be something that will be expected to uphold and possibly expected to do so at the detriment, financial detriment and trade detriment of Australians for a while yet. What I think we need to see and we're seeing it already here in Canberra is the people across the university I mean with China's rise just in the last few years there's been so many more conversations between security and foreign policy people like yourself and economists like me coming together and trying to understand and navigate and provide policy advice to government about how to operate foreign economic and security policy in this new era that we find ourselves in. What I'm talking about here is geo-economics and we both are. We're understanding the economics and security overlap in complex ways that none of us fully understand but we're sitting in exactly the right place to get that right in the years ahead.