Nice piece Peter. Having spent some time in China myself, I couldn't agree more with this assessment.

It's important to note though, that most of those internal demonstrations are about specific matters - either forced eviction or unemployment. Not many are direct challenges to Beijing.

I find myself wondering what economic calamity will precipitate the next crisis. A burst housing bubble could be a distinct possibility, however I wonder what measures the government can take in terms of reforming their hukou registration policies, they may have more latitude than we think.

Certainly, I think there is destined to be a rise in anti-China sentiment overseas as Beijing becomes more aggressive. Tact isn't one of their strong points, in fact a cursory glance of the China Daily can see their surprising lack of finesse when it comes to presenting a convincing narrative. One-sided propaganda is rarely convincing to any bar the already converted.

Peter,

Most of all Australia requires some mature leadership.

Something we have been lacking for quite some time.

Shaggy Dog.

Yes,sound advice from Peter McMahon.The problem for Australians is that we've always relied on a 'Great and Powerful Friend',self reliance doesn't seem to be one of our virtues. A world divided between a declining militaristic superpower and a rising one is not a pleasant prospect.

The Rudd government's foreign policy should be based on a rapidly changing world situation. History records that all empires will decline. In the past the decline was gradual, like climate changes. This is no longer the case.

Peter McMahon provides an objective assessment of the features that are causing this change. His article provides an objective assessment for an updated foreign policy, one that recognises that the centre of the universe is no longer in Washington.

Not based on what somebody once described "a toothless tiger". It was premature, we all rode the tiger. We all suscribed to the American dream. The dream that Obama is trying to restore. We wish him luck but we should not tie our future in keeping America afloat.

Gun Boat

It is very hard for me to imagine that China will take the place of the United States as a world leading power, let alone a world power to provide the world with a trading and security system.

I doubt that "China is most definitely back." Its fragility is enormous. Though China had sometimes trade in its history with distant places like India, Arabia and the East Coast of Africa, it remained a virtually self-subsistent country until its modern contact with the West. Today its position is vastly different in that it is heavily dependent on the external world for its own subsistence and prosperity; it could not do without the outside world. This is a situation that the Chinese have never experienced in their history.

I do not think that China will ever have military parity with the U.S. The Soviet Union had the second largest economy and was almost equal to the U.S. in militay might but could not hope to win in the Cold War; the U.S. had such formidable allies as Australia, Great Britain, West Germany, Japan, and Canada. China does not have such a single trustworthy partner, as it is not trustworthy.

We must have "a clear understanding of how the world lookes through China's eyes and how strongly held is China's position," as Prof. Jeffery Garten says in On Line Opinion "The world needs rebalancing, not China alone." Unnan City, Japan

Peter McMahon has drawn a picture of the world that has a couple of
misconceptions.
First, it is Mercator influenced. If Australia is in China's sphere
then so is Nth America and Europe. After all they are closer to China
than we are. Most people are used to looking on their school room wall
at maps of the world drawn to Mercator's projection.
Try a great circle chart instead.

The second misconception is surprising as he seems to be aware of peak
oil implications. The era of Globalisation is coming to an end and
China will not be exporting anything like the amount of product that
has been normal up to now.

Already some industries are returning to the US. Steel production
and furniture manufacture have already started the change.
Why ? Simple, the cost of bunker fuel is upping the cost of container
transport across the Pacific and as it rises more compact product
will be forced back to local manufacture.

World trade is about to undergo a traumatic transition that will mean
a total transfer of manufacturing to local industry.
In future if you want a new table, you will not buy it from the big
retailers, but go to the local shopping area and see the furniture
maker there. This reconstruction has started and will take place
gradually as fuel prices rise. probably over ten years or more, but it
will happen.