Scott Morrison’s recent speech to the Lowy Institute was the most important prime ministerial foreign policy announcement in some years. This is because it acknowledged – for the first time – that we are now living in an era of strategic competition between the United States and China. Indeed, the PM was quite open about living in a new world of great power rivalry. It was a long-overdue recognition of a basic reality that virtually the whole Australian establishment has hitherto chosen to ignore.

Like people, countries have a tendency to gloss over uncomfortable and inconvenient facts. At least since Deng Xiaopeng began market-oriented reforms, and certainly since China became a major trading partner in 1990s, it has suited Australia to forget that China remains a communist dictatorship. We wanted to believe that more economic freedom would inevitably lead to a measure of political freedom too. For a while that seemed to be happening; and it may yet be that economic innovation ultimately becomes impossible in a climate of stifling political conformity. Yet there’s no doubt that under president-for-life Xi Jinping, the communist state has clamped down hard domestically and become much more assertive around the globe.

There’s the repression of religion, the imprisonment of dissidents, the internment of almost a million Uighur Muslims, the militarisation of the South China Sea, and initiatives designed to increase vulnerable countries’ political and economic indebtedness to Beijing. Then there’s the jailing of Western business people and academics on the thinnest of pretexts. Hence it was way past time for an Australian prime minister to cease the pretence that we live in a relatively benign part of the world where everyone shares common values and common interests. Plainly we don’t.

As Morrison made clear, the US alliance is the bedrock of Australian security ‘past, present, and future’. As he also made clear, China is a ‘newly-developed’ economy that can’t escape the responsibilities of a great power. In other words, stop claiming a poor country’s dispensation from the world trade rules, stop taking advantage of free trade without actually practising it, and stop stealing Western technology in order to get an economic and strategic leg-up on your rivals.

The PM didn’t explicitly take America’s side in the burgeoning trade war, didn’t explicitly criticise China’s cavalier indifference to the global rules and didn’t openly denounce growing militarism. But he did make it clear that if Australia were ever forced to choose between our greatest ally and our biggest trading partner, we would be on America’s side. This is the unmistakable import of his ringing declaration that the close engagement of America with our part of the world is ‘indispensable’.

It was also implicit in his barracking for the so-called Quadrilateral Security Dialogue between the Indo-Pacific’s key democracies – the United States, Japan, India and Australia – and in his pointed declaration that democratic India (rather than authoritarian China) was a ‘natural partner’ soon to be elevated into the ‘top tier’ of our relationships.

It’s worth reflecting why Australia has been so enamoured of China for so long – despite the gulf between our values and interests – and how resistant officialdom has been to facing up to the obvious. It can’t just be China’s economic value to us, as Japan for a time was almost equally important as a trading partner without generating a similar cringe. It can’t just be courtesy to the million-plus Australians of Chinese decent, as a number came here to escape Chinese communism. Mostly, it seems to be the current tendency of English-speaking countries, including Australia, to be comparatively forgiving of other countries’ and cultures’ faults while hyper-conscious of our own.

Take, for instance, Australian universities’ different approaches to the establishment on their campuses of Chinese government-funded and staffed Confucius Institutes and the bid by the Ramsay Centre for Western Civilisation to fund courses on the Western canon. Along with 12 other Australian campuses, Sydney University is happy to host a Confucius Institute – even though its curriculum is controlled and its staff are selected by China. Discussion of the occupation of Tibet, the autonomy of Hong Kong and the massacre at Tiananmen Square is forbidden or heavily slanted, and China’s hegemony over adjacent seas and its right to rule Taiwan is taken for granted.

By contrast, Sydney University is too ‘academically pure’ to accept Ramsay’s $10 million a year endowment if there were to be a minority of Ramsay representatives on the staff-selection and course-management committees; and because Ramsay is broadly ‘for’ rather than merely ‘about’ Western Civilisation.

The same noisy activists deeply opposed to Ramsay were blasé about the Confucius Institute, even though, under the contract our oldest university accepted, teaching material explicitly had to be approved by Beijing.

Just as many Australian businesses have become dependent on sales to China, Chinese students – whose presence can be turned on and off by the regime – have become a central part of our universities’ business model. The real apologists for the communist government, it seems, are not Chinese Australians with an understandable sympathy for their homeland, but native-born Australians who are putting their own commercial interests first, second and third.

It’s one thing for the PM to accept that it’s a dangerous world. It’s another for him to take serious action to deal with it. Our naval build-up might be the biggest in our peacetime history, but it’s also the slowest. There’s still no restraint on universities’ over-dependence on foreign (mostly Chinese) full fee-paying students. Importantly, China continues to be among our biggest sources of immigrants, while Australian businesses are continuing to integrate Chinese ones into our supply chains.

There are still no special rules governing Chinese investment. That’s primarily because there must be a substantial cost to any change.

But carrying on as we are means having to bear the burden of a growing dependence on China. This surely is utterly unbecoming of a proud, sovereign and successful country like Australia.