The recent Lowy Institute survey titled Australians Speak 2005 has received a large profile and sparked intense debate.

Claiming to represent what everyday Australians think about foreign policy issues, the poll produced some incredible results. Apparently Australian's perceive Islamic fundamentalism and US foreign policy as equally concerning threats, while China's growing power isn't. Fair enough, if you think that the chance of Dubya pressing the 'N' button is as likely as Osama launching another strike. Australians also like China more than the United States and the majority of people think an FTA with China is good, while believing the US FTA is doing us no good. Ok, this can probably be explained by the fact that we're presently making a lot of money from China's hunger for our resources, and those damn crazy Yanks dragged us into Iraq. However, perhaps the piece de resistance of Chinese public relations and the result that would have the Chinese embassy "ganbeiing" copious amounts of rice wine well past midnight, is that only 21% of those surveyed would support the US if it went to war with China over Taiwan. It was results like these that spawned headlines such as "Australians view US as a threat to peace", "Australians condemn US foreign policy", and "Aussies rank US behind China". The results are certainly sensational, but to draw any implications from them would be too hasty. Apart from some flaws in the construction of the survey, the results reflect a severe lack of understanding into "The China story" and the current regional power struggles in North'East Asia.

Greg Sheridan and Gerard Henderson have already questioned the construction of some of the survey questions (Sheridan is particularly scathing) and I do not wish to dwell on these sampling flaws.

Instead, I wish to show how the Australian population is presently a little naïve and too sucked in by "The China story".

Right now, everyone is enamoured with China. Not surprising either. 9% GDP growth p.a. North'West Shelf billion dollar gas deals. The Beijing Olympics. Hell, even my stockbroker has jetted off to the Bamboo Curtain to get a feel for "The China story". But this is the problem with all the present coverage of China. It's all economics. The stuff about regional security is usually found in some piece deep in the middle of the Financial Review (and after the headlines proclaimed another big China mining deal). Let's get back to first principles. Peeling back China's prodigious growth and the huge economic impact that it will continue to have, China is still fundamentally an authoritarian state. The "Communist" label is probably a little thin these days ' check out Shanghai or any other special economic zone. Perhaps more worrisome is that nationalism has replaced communism, but more on this later. The US, Japan and Australia are all democratic countries. Is it reasonable for us to be more worried about a democratic state, the US, than it is an authoritarian one which is increasingly growing in stature?

On the back of its economic success, China is starting to assert itself. And not everything is rosy. On the military side, China has already warned Australia to review a cornerstone of Australia's security ' the ANZUS pact, if the Taiwan war scenario was ever to play out. Economically, it looks like China is our new best friend. The potential for a China FTA has featured prominently. However China is actually trying to use its diplomatic muscle to limit the amount of involvement that Australia, along with India and Japan, plays in any future dealings with ASEAN. China is worried that its influence will be severely limited were India and Japan also at the table. It is helpful to understand how China views its rivals ' The US, Japan and India.

The Chinese view of the US is paradoxical. Although it is still a developing country, China views the US as its chief rival. On the one hand, there is strong respect (and perhaps awe), for US technology, military and pop culture. Conversely, there is also a heavily ingrained sense of racial superiority. It is common to hear the Chinese line that:

"America only has two hundred years worth of history. They do not know how to rule. We Chinese however, have a six thousand year history."

While at a diplomatic and business level Chinese'US relations appear quite strong, it is quite likely that the Pentagon is very cautious about "The China story". Some hawks would purportedly even like to see Taiwan independent. Naturally a war over Taiwan is not an optimal outcome and a scenario that would result in untold costs and consequences for the region.

North'East Asia is a tense region. North Korea and Kim Jong'Il aside, Chinese'Japanese relations are terribly frosty. It is not helped by either side. Questions about the accuracy of Japanese history text books, President Koizumi's inflammatory visits to the Yakashuni shrine and an infamous orgy of Japanese businessmen and Chinese prostitutes on the anniversary of the Nanjing Massacre are but some of the grievances the Chinese have. Unsurprisingly, present Chinese attitudes towards Japan are quite negative. While in Beijing, I met quite a few six year olds who 'hated' Japan. When asked why, they would say "I don't know, I just do." And recent surveys back this up, with results showing greater than 50% of respondents feeling unfriendly to Japan. The internet has been widely used in the anti'Japanese crusade, with a present petition spamming all around mainland China asking people to oppose Japan's accession to the UN security council. A separate email has rallied large groups of protestors outside Japanese embassies in Beijing, Shanghai and Guangzhou. In internet chat rooms it is common to see very extreme (and quite disturbing) feelings. Some Chinese youth feel that

"The only way to resolve this is through blood."

On the other hand, the Chinese government has freely allowed such feelings to fester. Japan has apologised to China on no fewer than 17 occasions since the normalisation of diplomatic relations in 1972. Furthermore, China for a long time has been Japan's number one recipient of foreign aid, receiving over US$1bn annually for a number of years (which not surprising goes widely unreported in Chinese media). Japan has effectively built a large part of China's infrastructure. Indeed, the Japanese are the largest investors in Beijing. But try telling any of this to a mainland Chinese. They will not accept that any of this could at all be true. When questioned, the Chinese will claim that their negative view of the Japanese is justified, because of past Japanese atrocities. More moderate Chinese will say their gripe is with the Japanese government, not the Japanese people. Unfortunately, recent events have shown that this view is in the minority. Last year Japanese football fans were attacked when Japan defeated China in the Asia Cup Football final in Beijing, while over the weekend, projectiles were thrown at Japanese embassies, department stores and restaurants and a Japanese diplomatic car was torched. One only hopes that restraint will be exercised during the Beijing Olympics. Ominously, the relationship between these two North'East Asian giants doesn't look like cooling in the short term. With China's pursuit of a space program (when over 60% of the population is still poor), Japan is rightly questioning why they should continue to provide aid.

Taiwan is also a thorn in relations. Taiwan is a reminder of Japanese imperialism ' it was a colony of Japan's until World War II. Recently, in a provoking gesture, Japan granted a visa to Lee Teng-Hui, the pro-separatist, former President of Taiwan (and a mortal enemy of the mainland). China is also concerned that Japan, who jointly called for caution over the Taiwan question with the US, will help the US defend Taiwan.

The US and Japan are in some ways 'aspirational' rivals of China, as they are seen as the benchmark. India, a country with an equally massive population, is often viewed by more realistic Chinese as a better comparison. The similarities and differences of these neighbours are too vast for this article, but key issues will suffice ' China is communist. India is democratic. China's press is controlled and is a closed society. India is a much more open society. China has a strong IT manufacturing base. India is a world'leading software hub.

China presently has the economic advantage, pursuing liberalising economic reforms much faster than India, but India is catching up. India wants the economic and military cred that China is currently enjoying, and this may not be far off. Firstly, the world is starting to wake up to India's potential, but more importantly, India will likely play a more strategic role primarily because of its democratic tradition and to a lesser extent, its English speaking population. A classic example was the Boxing Day tsunami. Circumventing the inefficiency of the UN, the US, Japan, Australia and India (and not China), were able to quickly form a response group to coordinate planning. The tsunami tragedy illustrated two things ' India is considered part of the US "in" group, and while the outpouring from the Chinese in Beijing was heartfelt (mind you, the Chinese people had to be told by their government to feel sympathetic), China's modest aid package illustrates her limits. It is a widely held view that the US will increasingly support India, so that India and Japan are effective counterweights to China's rise. Australia has also engaged in this geo'strategic chess game ' the recent deployment of Australian troops to Iraq was to protect the Japanese. So all of this links back to why China is trying hard to prevent closer Australian, Indian and Japanese ties with ASEAN.

Perhaps the most disturbing trend is the rise of Chinese nationalism. The Chinese government is aware that while capitalism will make more people rich, dissatisfaction will rise, especially for those that miss out on the benefits. This has essentially been the history of China ' how to manage a huge country with sharp regional contrasts and keep the people from revolting. This theme of history reared its head at Tiananmen in 1989, and has been a constant even in the last few years, particularly in towns where mining disasters have occurred. Mindful of dissatisfaction, the government's strategy is to ensure that blame is not directed at them, but anything else. In doing so, the government is pursuing a policy of showing off achievements, such as the space program, on very much a nationalistic agenda. Government controlled papers run daily articles on reunifying Taiwan, with strong 'mother country' overtones. Allowing anti-Japanese sentiment to flourish (such as the 20,000 who recently protested, when protests are usually banned) is another aspect of this approach ' people are not happy with their lot, so let them blame the Japanese while showing them how great the Chinese people are. Where will this nationalism lead to? One hopes that this does not result in blinding patriotism that clouds reasoned judgement.

Finally, it should be noted that the Chinese government is still not totally in tune with international opinion. In his fictitious work The Bear and the Dragon, Tom Clancy portrays a China run by communist ideologues who think that the West only worries about money, even to the extent of ignoring a war which China starts. However, the West does react and steps in. While the real Chinese Communist Party is much more commercial and these days less ideological than in Clancy's book, there are some strikingly similar themes to recent events. The passing of the anti'secession law allowing the Chinese government to legally attack Taiwan probably was judged by the Chinese leadership to be of no concern to the West. However it has been cited as a reason for the EU's hesitation in lifting a 16 year arms embargo following Tiananmen. In a way, it has also woken up the world to the other side of "The China story". It's not just the economy, stupid.

* For more on Chinese nationalism, see Matt Plowright's article in the March 2005 issue of The Backbench.

Kevin Yeoh is back at the bank after spending every day in China bargaining for any and every commodity. Four out of five people still shun him at parties.

This article first appeared on The Backbench. All Rights Reserved The Backbench 2005