On page 132 of Clive Hamilton’s highly charged attack on China and Australian leaders’ encouragement of closer ties, he reports that our former ambassador to China, Geoff Raby, “lamented the influence of the defence/security establishment which … was placing too much emphasis on ‘values’ rather than economics”.

This idea of a conflict between a defence view that emphasises democratic values and human rights, and an economic view that does not, lies at the heart of the book. But is it right?

Influenced, it seems, by some in the defence establishment, Hamilton believes the Cold War never ended in Asia. Rather, China’s ideological war “fiercely” intensified after the collapse of communism in Eastern Europe, with its Leninist party consolidating its position, particularly under President Xi Jinping.

Hamilton paints a picture of unrelenting determination not only to control those within China but also to dominate the world using whatever means at its disposal. To Hamilton, China is “Australia’s enemy”.

Chapters in the book describe in detail the means Hamilton believes China is using. These include the international diaspora of Chinese people, “dark money” to buy influence, so-called China institutes, leveraging trade and investment, exploiting university linkages, controlling overseas Chinese students and, not least, old and new spying. He names names, listing the many Australian individuals and institutions he believes have been complicit, whether as “innocents” or “appeasers” (among other epithets).

He claims the Australian establishment has set the economy above everything, and we need to take a very different stand, accepting some cost from protecting our freedom from China’s incursions.

But Hamilton misrepresents the alternative approach he so denigrates. That approach looks to encourage China to build on its market-based reforms and the “opening up” agenda since 1978. This would continue China’s economic growth and alleviation of poverty, enhance Australia’s economic fortunes and build more shared interests, including in global stability and security. It would also promote increased freedoms within China.

Read more: Asia is set for a difficult year in 2018 – much of it centred around China

The truth is that China’s opening-up has led not only to extraordinary reductions in poverty, but also to a dramatic shift in its own self-interests. From Chairman Mao’s support of revolutionaries around the globe, we now have a China supporting international governance frameworks from the World Trade Organisation to the United Nations. China’s self-interest is now in a stable international order that protects its trade and international investments.

This shift has led to more shared interests with Australia and the West generally. That’s a “win-win” worth recognising (“win-win” is a term Hamilton dismisses as “a favourite party slogan”).

In 2016, former World Bank president and US trade negotiator Robert Zoelleck presented a far more balanced view than Hamilton’s. He recognised that Xi’s number one priority is the preservation of the Chinese Communist Party’s monopoly of power. But Zoelleck was also persuaded that China’s skilled leaders recognised the need to change the country’s growth model and continue its economic reforms to address the “middle income trap”.

The US strategic defence/security policy, he said, was not to slow growth of China’s power, but to shape Chinese calculations of its interests as it expands its influence.

Zoelleck then made a comment that is apposite given Hamilton’s book:

It is increasingly difficult for those (in the US and China) who are knowledgeable about each other to clearly explain to their domestic audiences that the other side does not necessarily harbour ‘evil’ strategic intentions.

He went on to say we need to “suggest positive agendas with China, even while remaining clear and firm about Chinese actions that threaten security stability”.

This approach does not dispute many of the points Hamilton makes. Aspects of China’s view of the world are not benign and, under Xi, do risk conflict with our interests and our values. It is not China’s socialism that has succeeded in raising hundreds of millions above the poverty line, but its opening up to a market economy.

As Hamilton argues, Xi is rewriting history about such matters as Mao’s contribution in the second world war and omitting from history such events as the Great Leap Forward, which caused dreadful famine, and the 1989 Tiananmen Square tragedy.

Hamilton is also right to say Australia does need to tighten its political donations laws.

One area of concern to me, not included in Hamilton’s book, is the possible impact of Xi’s strengthening of Communist Party control of academic freedom in China.

One of the most positive aspects of the opening-up reforms over recent decades has been the opportunities provided to Chinese scholars and students to travel outside China for further education, and for Western scholars to visit Chinese universities to teach and participate in academic forums.

In my own experience, such engagement has generally been open and unconstrained. Chinese schools of public administration have existed only since the late 1990s, but most of the professors I engage with gained their PhDs from US universities. In turn, a large proportion of their PhD students have been able to visit overseas universities as part of their studies.

Chinese academics are keen to pursue public sector reform. While not emulating the sort of democracy we favour, this does involve more effective service delivery, greater accountability and transparency, and more citizen participation.

Xi’s recent actions may present a risk to continued open discussions. His speech on May 17, 2016, called for the development of a system of philosophy and social sciences with Chinese characteristics that incorporates the country’s socialist practices. Xi’s “Chinese characteristics” conflate the Communist Party leadership’s current thoughts and Chinese traditions and Marxist philosophy.

The speech was followed the next day by directions to the Chinese Academy of Social Sciences to strengthen supervision of university courses, seminars, journals and publishing generally. How far this might push back the openness of previous years is not yet clear.

Read more: Stephen FitzGerald: Managing Australian foreign policy in a Chinese world

But Hamilton is wrong to suggest that those promoting continued engagement and strengthening of economic ties are undermining Australia’s security and abandoning our democratic and human rights values.

Indeed, those arguing from an economic perspective are trying to encourage Xi to extend the economic reforms of past decades, as he claims is his intention (including in last year’s 19th Party Congress). This should include, for example, greater transparency and firmer accountability of state-owned enterprises, and the One Belt One Road initiative being based upon proper and transparent cost-benefit analysis.

Xi, in fact, faces quite a dilemma. China’s economic growth has been achieved through market-based reforms and decentralisation. Strengthening Communist Party control risks reversing these developments. In time, it may also curb economic growth and upset community expectations.

So far, China’s leadership has managed an extraordinary transformation that has increased not only the real incomes of its people but their overall wellbeing, including freedoms to travel and communicate unheard of in the Mao era. For the most part, it has done so peacefully.

The next stage will require even greater dexterity, and the risks of an emphasis exclusively on Communist Party central control are considerable.

It may not be inevitable that further economic success will lead to democratic government along Western lines. But it will require both political and economic reforms consistent with greater political transparency and individual freedoms, if not in the short term then over the longer term.

Perhaps Hamilton’s book is a useful reminder that we must not be naïve about our relationship with China. But his prescription, premised on China being our enemy and determined to achieve world domination, is precisely the wrong direction for addressing the genuine issues he raises.

We should engage more, not less. And it does not help informed dialogue in Australia to trash the many people with whom Hamilton disagrees.