The federal election campaign is reaching the back end, but China has finally found itself on the front page.

It took Paul Keating and his warnings of Australia's security chiefs going "berko" over Beijing. The former prime minister wanted them fired for risking relations between China and Australia.

Only days later, rival senators, the Liberal's Simon Birmingham and Labor's Penny Wong, traded barbs over Mr Keating's comments with Senator Wong finishing the debate refusing to shake Senator Birmingham's hand.

China is the sleeping giant in our election campaign: politicians may choose to keep it quiet, but as China goes, so may we.

Just weeks ago, I attended a China "masterclass" run by our premier security think-tank — the Australian Strategic Policy Institute — and came away profoundly disturbed. It was like entering a parallel universe, a world apart from the phoney Canberra consensus that we can "have it both ways" — remain bound to America and economically tied to China.

These were people who see China up-close: journalists who had experienced first-hand the repressive regime, military analysts who know how great the risk of conflict is, economists who shiver at the prospect of a China economic melt-down, political scientists who doubt Xi Jinping can fulfil his dream of being President for life.

No doubt Paul Keating would have accused them all of being "berko" China fear-mongers, but these were some of the best China brains in the business.

I was left in no doubt that the world is at a critical point: waning US power is being met with increasingly belligerent China power. Liberal democracy is facing off against authoritarian capitalism.

Xi Jinping's aim is to modernise the military to make troops more mobile and war-ready. ( Reuters )

A three-way threat: earth, sky and economy

Take this assessment: the risk of war between China and America is now "unacceptably high". That's the warning from Peter Jennings, head of ASPI, a former prime ministerial adviser and ex-deputy secretary of the Defence Department, not one given to hype.

The potential for conflict, Mr Jennings said, is at 5 per cent. Don't breathe too easily — we are a miscalculation, a misunderstanding or an accident away from that 5 per cent escalating to the point where neither side could back down.

The US-based RAND Corporation has mapped a US-China war in a report it called "Thinking through the Unthinkable". As China continues to boost its firepower, "the United States can no longer be so certain that war would lead to decisive victory", the report said.

Malcolm Davis, a senior analyst at ASPI, reminded us that Xi Jinping is on track to completely modernise the People's Liberation Army within the next 20 years, to make it a world-class force.

He also told us that the threat is not just here on earth, but in the skies. China's 2015 defence white paper said that "outer space has become a commanding height in international strategic competition ... and the first signs of weaponisation of outer space have appeared".

China wants to become a space-fighting superpower and it has carried out numerous tests of its counterspace capabilities.

Who controls space, controls earth. Malcolm Davis warned of the risks of a "space Pearl Harbor" — a surprise first-strike "designed to eliminate US and allied space-based strategic satellites, leaving their terrestrial forces deaf, dumb and blind".

China is amassing more global power as the US retreats. ( AP: Andrew Harnik )

China's debt is our concern

Conflict is only one scenario, what about the prospects for China's economy? The good news is China is still growing: compared with the rest of the world's major economies it is still remarkable. But there are doubts about how truthful the figures are — is Beijing cooking the books? — and in any case the growth is slowing, now below the 7 per cent mark that China has seen as essential.

Credit is the big risk, as Josh Rudolph, formerly of the International Monetary Fund and US Treasury, wrote last year:

"China has incurred the largest debt build-up in recorded economic history — and the prognosis is not good. The International Monetary Fund surveyed five-year credit booms near the size of China's and found that essentially all such cases ended in major growth slowdowns and half also collapsed into financial crises."

Stephen Joske, a former Australian Treasury economist who also served in the Australian embassy in Beijing, told us that China's economy is fuelled by unsustainable credit, with a "very high probability" of a financial crisis within three to five years.

That would be devastating for the country with knock-on effects globally. Within China, potentially everything would be up for grabs, there would be the risk of widespread social upheaval and the future of the Communist Party could come into play.

The Party has a compact with the Chinese people — we will make you rich but not free. When the money stops, people may demand their freedom.

China has been good for the world. Its Belt and Road project links Beijing to Central Asia and into Europe, a trillion-dollar infrastructure and investment initiative covering more than 68 countries, 65 per cent of the world's population and 40 per cent of global GDP.

China's hunger for Australia's natural resources cushioned us against the worst of the 2008 global financial crisis, and it is Australia's biggest trading partner.

It's little wonder politicians are not keen to talk about the economic downside — in a China crisis, you can forget about promised tax cuts and surpluses.

It's not 'berko' to be concerned

Foreign affairs doesn't get much of a run in domestic election campaigns: terrorism, risks of economic collapse, unstable democracies, rising authoritarianism, nuclear threats — it's a little too scary. But the rules of geopolitics are being rewritten and Australia is not immune.

Of course, there is a risk in painting China or Russia or Iran as the bogeyman of global affairs. There are concerns too about the remaining great superpower, America, and we are still paying the costs and fighting the wars because of US misadventures and over-reach.

But it is not "berko" to focus on the China challenge. There can be a tendency to overstate the risk, but smart, sober minds who know this terrain better than any of our politicians remind us there are risks we should not ignore either.

Paul Keating is right — China is a great power, it demands respect and the world needs to absorb its rise. But China is a power that does not share liberal democratic values.

As Beijing's leaders have so often told us, it is a great power with "Chinese characteristics".

Stan Grant is the ABC's global affairs analyst.