THE once pervasive optimism among Western liberals that China's rise will be strategically benign and a boon to an ailing global economy is giving way to a gnawing anxiety that a strong China may not be so good for the world after all.
In a few short months, China's image has been tarnished by perceptions of a new and ugly assertiveness in Beijing on issues ranging from climate change and human rights to Tibet, Google's resistance to censorship, US arms sales to Taiwan and Australian businessman Stern Hu.
This perception is especially acute in Australia as concerns grow that China's treatment of Hu may presage a far more difficult bilateral relationship.
For the first time in our modern history Australia confronts a powerful, confident China that in the blink of a historical eye has morphed from a threat into a partner and our most important export market and source of international students. There are more Chinese undergraduate students in Australia than in the US, and trade is growing so rapidly that China will soon eclipse our third, fourth and fifth next largest markets combined.
Yet the full impact of this historic transformation is only vaguely grasped in Australia, even by business and political elites. There is a broad recognition that China is the key driver of the booming mining sector but there is little understanding of the wider challenge China poses.
While it is unlikely that China will be able to successfully export its development model or impose its values on a very different Australia, a subtle process of conditioning is already taking place in which business and political leaders are becoming more receptive and sensitive to Beijing's concerns. But where does sensitivity end and compliance begin?
Clearly, it would be unwise in the extreme to offer the proverbial finger to Beijing if we don't like China's politics or policies, because the risk of a damaging reciprocal response is far greater now that China is a major power and trading partner.
It is difficult to quarantine the political from the economic or strategic, so a trade or human rights dispute that gets out of hand can quickly infect the whole relationship. This fear largely explains Canberra's cautious response to the sentencing of Hu.
Less understandable, however, is the government's unwillingness to initiate a robust public debate about the full implications of our relationship with China, and its puzzling reluctance to invest resources in our diplomatic and trade representation in China, which lags where once we led.
Among the questions such a debate should canvass is how can we accommodate China's interests without sacrificing our independence of action. Whereas we were once criticised by China for being a lackey of American imperialism, is it conceivable that the US will come to see us as being too much within the embrace of the Chinese dragon?
Is Australia destined to move from the comfort of the Anglosphere to a new, 21st-century Confucian sphere in which China becomes our third special relationship after Britain and the US? If so, what would be the consequences? And what economic damage would we incur if, for whatever reason, Beijing decided to turn off the student tap that provides cash-strapped Australian universities and colleges with billions of dollars in fees?
Although such propositions may seem far-fetched, our foreign policy, defence and business communities need to start asking such questions.
We also need to think strategically about the country that is more likely to determine our prosperity and national security than any other in this century.
One of the outcomes of a national China debate should be a China strategy that clearly articulates what we want out of the relationship, as well as understanding what China seeks.
This strategy should aim to maximise the benefits to both countries while ensuring that each understands the limits to a partnership that is founded on many shared interests but few shared values.
Finally, we need to ramp up the critical mass of Australians who are China literate and do something about the appalling state of Chinese and Asian studies in this country. Unless we do so, our relations with China risk being seriously undermined by misperceptions and neglect.