Australia’s international clout set to grow in 2009: Gottliebsen

Canberra is buzzing with the rising number of world Prime Ministers, Presidents and other leaders who want to visit Australia in 2009.

Never before in Australia’s peace time history has the island continent at the bottom of south east Asia been the centre of so much global attention.

The reason is not hard to find. Prime Minister Kevin Rudd is beginning to develop a strong relationship with US President elect Barack Obama.

On the face of it, Australia should not be high on the global priority list of the new US President. But Obama recognises that the Australian Prime Minister Kevin Rudd has an ability unique amongst western leaders – he can talk with the Chinese President Hu Jintao and other Chinese leaders in mandarin.

And the Chinese leaders also understand the potentially pivotal role Kevin Rudd could play in what are turning out to be a very difficult set of circumstances.

In economic terms, the relationship between China and the US has been a simple one over the last decade. America transferred vast chunks of its manufacturing capacity to China and the Chinese (plus the Japanese, Koreans and others) lent America the money to buy their imports. But the collapse of the American banking system changed the rules. China must now stimulate its own economy.

It will face enormous pressure from the US and Europe to increase its clamps on carbon. China, Japan and Korea want to spend more money on stimulating their own economy yet if they don’t also fund the American stimulus package and the US is forced to simply print money instead the American dollar will fall dramatically which will substantially reduce the value of the money they have already ploughed into the US.

During December the leaders of China, Japan and Korea met and this conundrum was amongst the issues they discussed. After centuries of rivalry, a loose alliance between these three nations could produce a new global power base.

Maybe that bond will not develop to its full potential but whatever happens relations between the US and China are going to be pivotal and the international community believes that there is no better person to keep them in the loop than Kevin Rudd.

This is an opportunity for Australia to obtain global influence far beyond its economic clout.

This article first appeared on Business Spectator.