John Howard with Chinese president Jiang Zemin in Shanghai, October 2001. To seal the August 2002 gas deal, Howard met with Jiang repeatedly. Credit:AP Chen Yonglin, who at the time was a political officer in the Chinese consulate in Sydney and had been following events closely from the inside, later revealed that the Guangdong government was about to award the contract to Indonesia, which tendered the lowest price, until the CCP's Central Committee in Beijing ordered it be given to Australia. "They thought that Australia was really important," said Chen, "and that at the time Australia had totally turned towards America, so they thought we should use economic means to bring Australia back." Aware of how quickly Australia jumps when an economic string is pulled, from then on Beijing would "use economic measures to guide Australia". After all, prime minister Howard had refused to meet the Dalai Lama while Beijing dangled the carrot of the $25 billion deal. A month after the deal was struck, the chairman of the National People's Congress, Li Peng, made a visit to Australia to congratulate Howard on winning the contract and to "enhance mutual trust, broaden common ground and deepen cooperation" between the two countries.

Li Peng, then chairman of the Chinese parliament, visits John Howard in Canberra in September 2002. Credit:Andrew Taylor The 2002 gas deal was the starting gun for the "China is our future" craze that now dominates elite thinking in this country, exactly as Beijing planned it. Fifth column in Australia One of China's most effective instruments of economic statecraft is the making of dire but vague threats of economic harm to a country that displeases it. It works because governments believe the threats. As we will see, China is willing to make countries suffer. In Australia, China's threats are amplified by a corporate fifth column that has grown around the bilateral economic relationship, a business elite unwittingly beholden to a foreign master and undermining Australian sovereignty from within. This cohort of business leaders and their advisers shuttle between the two countries doing deals and making "friends" (with people whose backgrounds and motives they only think they know).

They present themselves as operating in the "national interest", but it is no coincidence that our "national interest" always happens to coincide with China's. Their understanding of the options available has been narrowed by their enthrallment to Beijing. June 2010: Then vice-president and now President Xi Jinping, left, shakes hands with Fortescue Metals Group CEO Andrew Forrest as prime minister Kevin Rudd looks on in Canberra. Credit:AP Apart from the sway of China's powerful friends, there is a more diffuse reason for our sensitivity to economic pressure: the enormous influence of free-market thinking whose unspoken assumption is that the economy must come before everything else, including our freedom. China apologists repeatedly downplay or evade the importance of freedom and the threats to it. Or they insist that economic growth is the best way to guarantee freedom, as if money can buy the rule of law rather than corrupt it. In their globalist commercial worldview, national sovereignty is increasingly a relic of the past. As one senior Australian official sardonically put it to me: "Who cares about the blood?"

'China is our destiny' China is vital to Australia's future because of our economic dependence on it. Or so it is said. It's truer to say that the perception of our economic dependence gives China immense influence over Australia. It's widely believed, for example, that only our close economic relationship with China saved us from the 2008 global crash. Even though China did nothing for Australia other than continue to buy from us the iron ore and other resources it needed to fuel its growth, there is a widespread view that Australia should be grateful to China for saving us, that we owe China. Many Chinese believe this too. October 2003: Jiang's successor, Chinese president Hu Jintao, is congratulated by prime minister John Howard, opposition leader Simon Crean and MPs including future PM Julia Gillard after his address to a joint sitting of Australia's parliament. Credit:Pat Scala When a difference of view emerges, over the South China Sea, for instance, it is not uncommon for China's netizens to berate Australia for our ingratitude (often coupled with comments on how uncivilised we are). Instead of pushing back and turning the argument around - you should thank us for agreeing to fuel your boom with our resources - our commentators and politicians echo the view that we are somehow indebted to China.

Perceptions of our vulnerability to China's whims weaken our resolve to resist the growing penetration of the Communist Party's influence in Australia. Sensing this, Beijing repeatedly reminds us that a continued healthy economic relationship depends on a harmonious political relationship, with harmony guaranteed when Australia conforms to Beijing's wishes. As the head of ANU's National Security College, Rory Medcalf, writes: "Essentially, Beijing wants from its commercial partners the same deal it has with its own people - economic benefits in return for acquiescence on politics and security." Malcolm Turnbull gives a speech at Australia Week 2016 in Shanghai. Credit:Andrew Meares It's worth commenting here on how the "China is our destiny" argument has played out in the public debate. Linda Jakobson of China Matters - a non-profit company founded to "stimulate a realistic and nuanced discussion of China" - bemoans the "emotional outcry" over certain Chinese investments. It's true, she admits, that "every senior business person in China is closely connected to the party", but, hey, that's how it is in China, so what are people worried about?

If we could have a "grown-up debate", Jakobson asserts, we'd realise that without Chinese investment we would spend less on hospitals and schools, so let's not have any more "public spats" and just get on with it. A more sceptical commentator, Geoff Wade, shreds this kind of apologetics, showing the contradiction between party influence in Chinese corporations and the belief that those companies are only interested in profits: "Capital ... goes where the Chinese state wants it to go." So if state-directed Chinese capital is buying up Australian energy infrastructure, telecommunications and ports, having a "public spat" over it is more grown up than burying one's head in the sand. Chinese President Xi Jinping and Madame Peng Liyuan with a Tasmanian devil during their 2014 visit to Hobart. Credit:AAP In her 2017 book with Bates Gill, Jakobson argues that China and Australia-China relations are complex and subtle, so much so that it is hard for the authors to give a clear answer to any question.

They confess that when they migrated to Australia they were surprised at the level of ignorance about China in this country. Misconceptions, missteps and blunders are frequent in Australia's dealings. The public, and even many of the so-called experts, cannot grasp the complexity and subtlety, and so commentary and advice are best left to those, like them, who know China and truly understand. The belief that "China is our destiny" is in fact an exaggeration created by business interests and people who make their living from China, amplified by the media. Like former ambassador and China buff Stephen FitzGerald, they believe "we are living in a Chinese world". Our only sensible response is to gain a deeper understanding of China and learn how to engage it with more sensitivity and skill. The latter is undoubtedly true; a greater understanding of China is the objective of this book. But it is a trap to believe that we now live in a Chinese world. We don't. We live in a complex, multipolar world. We will live in a Chinese world only if we choose to. This is an edited extract from Silent Invasion by Clive Hamilton, published by Hardie Grant Books, RRP $34.99.