Loading Have we fallen prey to some sort of local Sinophobic hysteria? Is the Australian media to blame, or political scaremongering, as Beijing and its Australian apologists like to claim? It's hard to sustain that argument. Australians still view China more kindly than do the citizens of many other democracies. A comparative poll of 41 coun­tries by Pew Research in September found the people of South Korea, Japan, the US, Canada, Sweden, France and the Netherlands have darker views of China than Australians do. Australian opinion towards China turns out to be precisely the median among the countries of the Asia-Pacific and among the countries of Western Europe. Australia’s people, on this evidence, are neither rabid nor romantic about China. Just realistic.

And then the fear. I've learned a lot in the past few weeks. In the process of launching and then talking about the Quarterly Essay I've written about China and Australia, Red Flag: Waking up to China's challenge, I've seen and heard many dimensions of fear of Beijing. It extends from the top to the bottom. One of our elite universities was interested in hosting me for a discussion of the essay until it emerged that it involved China. Suddenly, higher authorities needed to be consulted. Similarly, a senior parliamentary figure was keen to help with arrangements for a launch in Parliament House until the word "China" was mentioned. At that, he explained that it was just too sensitive. Our universities and our national Parliament are supposedly the very cradles of free inquiry and free debate in our society. Yet at least some officials have been conditioned to think that the People's Republic of China is an exception to Australia's normal processes. An event was held at a university this week, and another is scheduled for next. A launch in Parliament House did happen. I'm not arguing that our institutions are paralysed. But the timorousness is real.

I also found it in discussions with a business analyst, who is happy to issue commentary on any economic subject, but has a self-imposed rule against making any comment on the biggest economic subject for Australia, China. Loading Even a bloke cutting my hair told me that he'd learned to be careful about discussing the news with his Chinese Australian customers after being upbraided by one young man for expressing his view on the Hong Kong protests. After all, said the hairdresser, one day the Chinese government will be monitoring everyone in Australia. Some tens of readers emailed with their own stories of being silenced, intimidated, monitored or otherwise discouraged from speaking frankly about this apparently radioactive subject. These included encounters in universities, workplaces, even retail establishments. Others expressed relief that I was broaching a topic they felt too nervous to canvass in their own lives. Talkback radio shows and sessions with live audiences brought me in touch with fear and anger in roughly equal measure. Fear and anger at the extent of Chinese investment, at Beijing's efforts to buy and bully its way into Australian politics, at China's crushing of its Uighur minority. And frustration at the perceived lack of Australian government action to restrain Chinese government activities, overt and covert, in Australia.

These themes recurred in the hundreds and hundreds of readers' comments posted to columns I've written in the past week or two. Loading But perhaps the most troubling were the people who seemed resigned to an unstoppable Chinese takeover of Australian sovereignty. One man stood up to ask a question during a discussion. He cited statistics of university reliance on Chinese student revenue, overall economic reliance on China, and concluded by saying he thought it was too late for Australia to extricate itself from China's grasp. One reader posted this comment: "I don't think we'll put up the resistance of Hong Kongers. One-percenters and collateral beneficiaries will take the buy-off, move to Europe and let us wallow in the New China of authoritarian serfdom ... Consider yourself effectively psychologically and economically annexed now. This is how Australia dies." One important note is that, as far I was able to detect, there was little or no raw racism in any of this. The concern was overwhelmingly about the actions of China's government, its big businesses and the Australian politicians seen to be tolerating its intrusions.

For instance, no one seemed bothered that a Japanese firm owns Lion Dairy & Drinks. Many were indignant that it may sell the business to a Chinese firm if Josh Frydenberg approves the deal. In other words, it's not about race but about the sense of a loss of sovereignty to an authoritarian political entity. Scott Morrison this week said the report that Chinese spies had tried to infiltrate an agent of Chinese Communist Party influence into the Federal Parliament was "deeply disturbing and troubling". Australia was "not naive" to the threats it faced, he said, and the national security agencies had never been so well funded. The authorities would investigate. Loading This reassurance isn't adequate to the level of concern building in the community. Australia seems to be poised somewhere between awareness and action. Awareness of the Chinese Communist Party's ambitions to do what former ASIO chief Duncan Lewis described as its intention to "take over" control of Australia's political system. And action to adequately meet the challenge. Worry, fear, anger and despair. Skilfully tapped, this is a potential vein of hot political magma, building pressure for populist exploitation. If such public concern isn't addressed rationally, it may well be deployed irrationally for political gain.

Lowy's Sam Roggeveen recently published an essay titled Our Very Own Brexit. He ruminates on the possibility of one of the main political parties breaking the consensus on immigration and fomenting a xenophobic backlash. It can happen here. Loading Xenophobia is one possible response. Trade protectionism is another. We've tried both in the past century and a half. Both failed. Either, or both, would be deeply harmful to Australia's interests as a multicultural trading nation. Yet look around the world. The planet increasingly is in the grip of populist leaders inciting their peoples to angry attacks on imagined repressors and conjured enemies. The Morrison government, and the Albanese opposition, are right to keep their cool. But they need to show intelligent and effective responses to the reality of an authoritarian regime's intrusions into Australian democratic, economic, educational and social institutions.

What to do, exactly? Three former political leaders – Kevin Rudd, Julie Bishop and Tony Abbott – all made various suggestions this week, and so does my essay, and I'll canvass them. But one column at a time.