As the G20 concludes, Australia is in a Goldilocks position when it comes to the Asia Pacific. It has good relations with China, culminating in the free trade deal, and a very close relationship with the United States. Australia has successfully manoeuvred itself into an attractive position: it does not need to choose between its burgeoning trade with China and its increasingly close strategic relationship with the US or vice versa. As Tony Abbott is generally aware (when not seeking to ‘shirtfront’ Vladimir Putin) it is probably better to be prudent in terms of regional relations rather than trying to shape regional geometry or punch above your weight. Most fighters who do that get knocked out. The symbolic agreement between Xi Jinping and Obama on carbon emissions announced at APEC indicates how easily Abbott’s sceptical position on global warming may be side swiped.

However, there are areas where not only Australia but the other Pacific Asian powers will have to exercise even greater flexibility if the tension between China’s rise and the US strategic goals are not to come into conflict. In particular, they will have to negotiate with two competing regional economic visions: the ASEAN-led and China-backed Regional Comprehensive Economic Partnership and the Obama-led Trans Pacific Partnership. Former Trade Minister Craig Emerson and Foreign Minister Julie Bishop both claimed this to mean ‘two pathways to the same economic destination’. Such statements are disingenuous. China promotes the former; the US the latter. China belongs to the former and not the latter; the US vice versa. The RCEP brings under one umbrella the various bi and tri lateral preferential trade deals concluded between ASEAN and various regional states. Australia for instance signed the Australian, ASEAN, New Zealand Free Trade Agreement in 2009. However, the ‘free’ in these trade agreements is highly misleading and leaves key agricultural and manufacturing sectors protected. The TPP envisages a far more comprehensive and binding trade agreement, which a number of ASEAN states as well as China and Japan resist. Belonging to both groups looks at best like hedging; at worst schizophrenic.

This leads to the second point which regional diplomacy tends to ignore or obfuscate: that ASEAN increasingly looks much less than the sum of its parts. The ASEAN mechanisms and ‘norms’ driving regional cohesion are fragmenting rather than integrating. ASEAN cannot even agree the terms of its own economic community whose formation has been postponed beyond 2015. This is a problem for the US, Australia and Japan as they all promote the ASEAN way in the South China Sea. Yet since at least the beginning of the Obama pivot, ASEAN has very little impact on the region’s increasingly acrimonious maritime disputes.

China intends to resolve its various disputes with the Philippines, Vietnam, Thailand, Brunei, and Taiwan bilaterally. China’s more forceful promotion of its claims to the resources of the South China Sea under Xi potentially presents Australia as a South East Asian regional power with a potential dilemma.

Predictably, the Australian commentariat and political elites play the disputes down, or assert the need to do more with the ASEAN process. However, the growing escalation of maritime disputes in both the East and South China Seas demonstrate how misconceived such complacent assessments are. Given the growing incoherence of ASEAN’s response to a range of security and economic issues, it is evident that the multilateralist faith, that shared norms can transform interests, is a delusion. Instead, the region, and Australian diplomacy needs to return to the first principle of diplomacy; namely, that a great power can only be balanced by a great power. And it is here Australian diplomacy can be developed along current Abbottian prudential lines. The ASEAN states, as the disputes over the Spratly islands and the CREP demonstrated, will never be able to handle China alone. For that, they need the US.

Contrary to Beijing’s protestations, the US has, since Nixon’s opening to China in 1972, never been seriously interested in containing China’s rise. It is profoundly misguided of commentators like Hugh White to argue that Australia needs to recognize the power shift in Asia by cosying up to China. This would be highly imprudent for a variety of reasons. Firstly, the US is profoundly interested in maintaining regional stability. With regional maritime tensions making daily headlines, the US needs to be around to protect freedom of navigation, assure its allies and guarantee its trade with the most vibrant region of the world economy.

Paradoxically, the Chinese also have an interest in the US balancing their rising power; something Australia’s politicians and diplomats should be pointing out in terms of sensible realpolitik. Nationalists aside, the Chinese realize that the formula for regional stability requires a US presence. If the US disengaged, Japan would vigorously re-militarise. Chinese confrontation with Japan would intensify, especially after the election of a new and more assertively nationalist LDP government, backed since 2013 by the far right Japanese Restoration party. The South Koreans will hedge between China and Japan and the North Koreans would be emboldened. Most significantly, from the Chinese perspective, Chinese nationalism would rise and regional trade would decrease. All these developments threaten the Chinese national interest in important ways.

Regional states have prioritised economics over the dictates of regional and international politics. They have not thought seriously about the political dilemmas that could impact deleteriously upon the region’s economic health. Mao Zedong observed that the common people had to concern themselves with politics because even if they didn’t care about politics, politics cared about them. Twenty-first century China is far removed from the Cultural Revolution, but the principle nevertheless applies. A considered US engagement with the region is needed as much as ever. Power balances power. The sooner ASEAN and China’s leaders realize this and encourage fruitful and rule-binding diplomatic negotiations the better it will be for a realistically based regional peace and security. This is an area where Australian diplomacy could prove both prudent and influential.