Do we agree to negotiate a new order with China that gives Beijing a bigger role and allows it to exercise more influence than it has for a long time? Or do we refuse to negotiate, and insist on preserving the old US-led order unchanged? This will be the key issue in Asia in 2011, and the implications of whichever decision is made will shape Asia for decades.

There are strong arguments for refusing to concede any space to China. The US-led order has been wonderful for Asia these past forty years, and China’s new assertiveness raises fears about how China would use any additional power, and how greedy for power it has become. Surely preserving the old order is safer than giving in to Chinese pressure to build a new one.

But the arguments in favour of accommodation are also strong.  They amount simply to this: whatever we do, China is now too strong to be contained within the old regional order.  The old order in Asia is based on uncontested American primacy, and now China’s challenge to America has become explicit, uncontested primacy and the order that has been built on it has already passed.

The choice is therefore not between preserving the safe old order or building a riskier new one: it is between allowing ourselves to slide into a new order which is certain to be intensely and dangerously contested, or trying instead to build one that has a chance of being relatively stable and peaceful.

This way of putting it makes accommodation look like the natural choice. But for many people it will still seem extremely risky. Four questions naturally come to mind.

The first question many will ask is whether China can be trusted as a negotiating partner at all. Is China a country we can ‘do business with’? Back in the mid 1940s, as FDR tried to negotiate a post-war order with Stalin, people asked the same question about the Soviet Union. George Kennan’s famous essay ‘The Sources of Soviet Conduct’ convinced them they could not. He argued that the Soviet leadership would never agree to build a stable and order with the US because a hostile and contested relationship with other centres of power was essential to the Communist regime’s claims to legitimacy with the Russian people.

Many people will be tempted to see China in the same light. But as soon as one compares China with the Soviet Union the differences become clear. The CCP’s legitimacy does not depend primarily on external enemies, but on internal success, especially economic success. It will also, increasingly, depend on China’s ability to exercise more power and influence abroad, as we can assume ordinary Chinese are proud do of their country and ambitious about its status. But that does not seem to preclude the possibility of negotiating with China about Asia’s future order in good faith.

The second question is whether we can concede anything significant to China without opening the way to eventual Chinese hegemony. It is always tempting to argue that we cannot – that if ever the US concedes its own primacy it in effect offers primacy to China.  But that need not be true. It is perfectly possible to conceive a new order in Asia in which China plays a much larger role than it would under US primacy, but still does not enjoy primacy of its own, and that is the kind of order we should be seeking to help evolve.

The third question then is how much to concede to China in the development of this kind of order. Clearly there are some things we should not be willing to give up, and some things that might be negotiable: where to draw the line? That’s a big question, but one thing is clear – under no circumstances should we concede more than is compatible with the basic norms of international conduct set out in the UN Charter. Those norms constitute the essential safeguards of national security which the survivors of the Second World War thought were worth fighting to protect, and their judgement still looks sound today.

The more difficult question is whether we would rule out compromises on anything beyond that minimum position. My hunch is that we should not – at least without very carefully considering whether anything beyond the most essential norms of international conduct are worth risking major conflict to protect.

And finally, the fourth question is whether it makes sense to start negotiating with China now about Asia’s new order, or wait a while until conditions might serve us better.  Again, the arguments for delay will always be attractive, but the arguments for moving fast are strong too. First, we cannot assume that time is on our side – as China grows and its strength approaches America more closely, it will be harder rather than easier to maximise the space we can preserve for America in Asia’s new order. Second, as time passes the US-China risks becoming more adversarial, making it harder and harder to get negotiations going.  America and its friends and allies have an interest in convincing China that it can negotiate with us to expand its role in Asia’s order, not perhaps as much as it would like, but enough to make negotiation more attractive to China than confrontation. But until that message is sent and received, it will be all too easy for China to believe that it has no option but to push for more space.

This prompts a final thought.  Many in America and among America’s friends and allies have taken some pleasure in watching China’s new assertiveness in Asia alienate its Asian neighbours, draw them closer to America’s side. But this is short-sighted. China, for whatever reason, has clearly overplayed its hand in 2010, and has suffered a reverse.  But that does not mean we have gained anything, unless we already see Asia’s future as a zero-sum game between US and Chinese blocs. If we still hope to make it a positive-sum game, as it has been for the past forty years, we should see China’s blunders this year as damaging to our interests too. No one wins if we all conclude that China’s growing power is something that we must inevitably fear.

Hugh White is professor of Strategic Studies at the Australian National University and a Visiting Fellow at the Lowy Institute.