Chris,
I would like to agree with your viewpoint. Unfortunately I don't see things working out in any sort of orderly manner. The US is an empire in decline. As happened to the British Empire, the Roman and all other empires that have declined in the past, once the forces of decline take over there is nothing that can be done to stop it (although a lot can be done to make it worse). I would argue that the actions taken by the US Government, Federal Reserve etc have made the United States situation much worse, through its interference in the housing market, low interest rates and quantitative easing etc. It appears that it has now resorted to debasing its currency, something that did not work for the Romans and difficult to see working for the US. These factors make the US a very dangerous beast. Those in power, who have benefited immensely from the spoils of empire, are not going to relinquish this power lightly - as has been seen by US responses to the GFC. Indeed it would not surprise me if the US resorted to military adventurism to try and prolong their hold on power.
Personally I think we are entering a very new world where many of the old rules no longer apply. How it will unfold is anyone's guess, but I doubt that it will be peaceful or orderly

leckos,

Interesting times. I hope in 20 years time we can look back and marvel at how the world made a transition without another major conflict.

I am optimistic, but we need a new wave of Western leaders prepared to make hard decisions, including a willingness to inform the public of the need for extensive reform rather than more of the madness occurring through more and more stimulus and a hope for the best.

The Chinamerica economic reliance is not going to last forever.

Chris, I pretty much concur with what you've written here.

There was a brilliant piece in the Australian by Greg Rudd recently. Despite the provocative title, there was a great deal of wisdom:

http://www.theaustralian.com.au/news/opinion/chinese-way-is-here-to-stay-so-get-used-to-it/story-e6frg6zo-1225935112902

"China is not the enemy. To some that will sound like appeasement. China is simply different. Treat them the way Chinese treat each other: with suspicion. They are the best at dealing with themselves. Learn from them. Australia needs a stable China.
How does the West deal with corrupt countries? The same way it has always done. They tick their probity boxes and hire brokers who don't have probity boxes to tick."

I am gradually coming to the conclusion that we won't be able to pressure China to change. It is more crucial that we don't allow China to change us, and we remain defiant when their demands are ridiculous.
To them, censoring the media and detaining those with divergent political views are reasonable measures.

We still need to remain vocal that these measures are not. Not because we're trying to change China, but because these measures are indeed outrageous.

Similarly, we need to remain steadfast in refusing to allow China to expand their territory purely from historical information.

China's borders have expanded and contracted, shifted and moved many times over their thousands of years. If we went by the Yuan dynasty, they'd own most of Asia. If we went by the three kingdoms period, China's borders would only encircle a chunk of China's interior, about the size of Queensland.

Unsurprisingly, you don't hear them advocating that as the template. My point is, this idea that they can annex the South China sea or the Diaoyu islands based on history will only lead to more conflict. It's a hollow argument, based on material gain, insecurity and wounded pride.

Somebody has to have the courage to say this out loud, and to say that the other smaller nations around China won't be bullied in this way.

Chris, perhaps you haven't heard of Imperial America. Perhaps you haven't noticed the number of military bases America has around the world. Perhaps you haven't noticed the invasion and occupation strategy of the U.S. especially where there are valuable and scarce resources to be had.

Perhaps you haven't noticed the use of torture by the U.S., and rendition, and cluster bombs and depleted uranium. You may have missed the situation in Guantanamo and the American threat to nuke Iran and the patrolling of drones which daily kill people in Pakistan or the U.S. military incursions into Pakistan.

Why the hell would Australia want to align itself with America with its policy of endless war, of achieving global domination, of killing uncounted numbers of innocent civilians, of supporting all manner of despots and Royal Tyrants.

Iraq and Afghanistan show clearly what the U.S. achieves. It leaves total destruction, decimated, warring people, and dangerous political instability. Israel also shows what the U.S. is capable of as it arms them with nukes and the latest military hardware and supports imperial Israel's every atrocity.

The Imperial U.S. versus the free world is the real issue that should be occupying your mind and those of the Australian people.

http://www.dangerouscreation.com

Throughout its history the US has outlasted or defeated its rivals. Now America is in the rather bizarre position of being financed by its main rival, China,I can't think of any similar situation in history. Even the Romans, in their imperial decline, didn't borrow large sums from the Persians.
Even if we accept that many Chinese admire the US as an aspirational model, China is not a democracy and the mandarins of the new Middle Kingdom might have different plans, such as restoring China to its 'natural' hegemony in the Asia-Pacific.
There's probably some unfinished business with Japan over that country's brutal invasion and occupation of China in the 1930s and 40s.

I agree that Australia is going to need to employ some very nimble diplomacy in the the coming period of transition,unfortunately, we have usually relied on our 'great and powerful friend' to set the diplomatic agenda.

Mac, with friends like America, who needs enemies?

For too long Australians have been taken in by U.S. propaganda. If anyone cares to look at what America DOES rather than what it claims to do, a very different and rather horrifying picture emerges.

By the way, what Chinese hegemony are you referring to? Unlike the Americans, the Chinese seem to have a long history of staying within their own borders (Tibet excluded).