Australia's top diplomat has warned that Asia's future as the world's economic powerhouse is much less certain than it was even five years ago as the region's major economies – particularly China – struggle with vital reforms.
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Peter Varghese, the secretary of the Department of Foreign Affairs and Trade, offered a pessimistic view of Asian countries' abilities to make major structural reforms given their brittle political systems, concluding that "the Asian century is looking much more conditional".
Adding to a picture of turbulence in Australia's nearby region, Mr Varghese urged south-east Asian countries to remain united when loyalties are tested by the growing tensions fuelled by territorial disputes in the South China Sea.
On the economic challenges, Mr Varghese, who is due to finish in the job on July 1, said while much of the world faced reform difficulties Asia had more work to do, as its growth model was "running out of puff".
"There is no major Asian economy which is not facing fundamental structural economic challenges at the moment and I would argue that there are very few political systems in Asia which have the resilience and the confidence to meet those structural challenges," he said.
"The long and the short of it, in my view, is that the Asian century is looking much more conditional today than it did five years ago, and nowhere is this contrast between the need for structural reform and the diabolically complicated politics of it more evident than in China."
He said China's leadership knew what had to be done but faces "diabolically complicated" politics given that reform could spark higher unemployment and inflation, possibly threatening the monopoly power of the Chinese Communist Party.
Each of the south-east Asian economies faced similar challenges, he said.
"Unless we can find a way forward not just in the region but more broadly to address those economic issues and maintain a political stability, it's going to look like a very different decade ahead."
His comments come ahead of an imminent ruling by a court in The Hague on The Philippines' challenge to China's claim over most of the South China Sea. The court is expected to find in favour of the Philippines but Beijing has already indicated it will disregard the ruling.
Foreign Minister Julie Bishop, in a debate against Labor shadow Tanya Plibersek at the National Press Club, gave a strong signal that Australia would take a firm line if Beijing ignores The Hague ruling, saying that it would "do irreparable harm to [China's] reputation if it thumbs its nose at the findings of the arbitration court".
Mr Varghese issued a sharp plea to the Association of South East Asian Nations to remain united behind international law and the stability that the United States' presence in Asia has underwritten for decades.
He cast The Hague ruling as a vital test for ASEAN's willingness to play a central role in Asia, saying the grouping of key nations needed a unified position that was "more than an anodyne statement".
Strategic experts say that Beijing has sought to split ASEAN and has largely won over Cambodia, Laos and Brunei.
