Ex-diplomat and China scholar, Kevin Rudd, set to take over as Australian PM

Sydney: Australian prime minister John Howard has suffered a humiliating defeat in national elections Saturday, according to preliminary results. The defeat ends the twelve and a half year reign of a key ally of US president, George W Bush, in the region. It also marks the advent into power of the opposition Labour party, headed by former diplomat Kevin Rudd, who amongst other things has promised to prioritise relations with China.

Rudd has also promised to pull some troops from Iraq, and re-align Australia''s stance in the debate with regard to global warming.

With 70 per cent of the votes counted, Labour was on track to win at least 80 of the 150 seats in Parliament''s House of Representatives, responsible for forming governments. This compares to just 60 seats in the last election in 2004. Full results, however, will only be known in a couple of days.

Meanwhile, the rout faced by John Howard, Australia''s second-longest-serving prime minister, is so complete that he appeared likely to lose his own parliamentary seat, held by him for 33 years.

As for Kevin Rudd, he has now vowed to be a prime minister for "all Australians" and has also begun to underline some of his policy priorities, including a promise to move with "great urgency on the challenge of climate change."

In the course of the campaign, Rudd promised to ratify the Kyoto Protocol, the 1997 international accord aimed at reducing greenhouse gas emissions. His victory will now deprive the US of one of its key supporters on climate change issues. The Bush administration has so far refused to ratify the Kyoto plan.

World leaders are due to meet next month (Dec 3-14) in Bali, Indonesia, where they will discuss what to do when the Kyoto Protocol expires in 2012.

Rudd has also said that he will withdraw about 550 troops from Iraq.

Looking ahead, Rudd faces a unique challenge. According to analysts, he is now faced with the task of ''managing prosperity.'' Unemployment is already at a three-decade low, and the country''s ports, rail lines and other infrastructure are straining to keep up with orders for iron ore, coal and other Australian resources - primarily for consumption by the emerging economic giant, China.

China

Kevin Rudd grew up in a farming family in Australia''s Queensland state and has been a scholar of Chinese history at the university. He served in the country''s diplomatic corps, rising through the ranks, and eventually serving in the Australian embassy in Beijing in the 1980s. He is a fluent Mandarin speaker, who has said he hopes to boost relations with China in the coming years.

Despite the country''s historically strong relationship with the US, Rudd will now seek to re-balance this with a deepening economic partnership with China. As analysts point out, despite a free trade agreement with the US, the percentage of Australian exports to the US has declined since the 1990s, and it is China that is now becoming Australia''s most important trade partner.

A recent $125 billion bid by Australian mining giant BHP Billiton to take over Rio Tinto Plc could become Rudd''s first litmus test in his relationship with China. The merger would give Billiton enormous control over the world''s supply of exported iron ore, one of the most critical raw materials for China''s industrialization. Chinese steel makers have already expressed concern over the deal, and could likely put pressure on Rudd to change the terms, or even block the purchase outright.

India

Relations with India were headed for a sticky patch, over the issue of the Indo-US nuclear deal and the export of uranium to India by Australia. Prime minister John Howard announced in August this year that his government would provide uranium to India, subject to certain pre-conditions.

The decision, which reversed Australia''s long-held policy of supplying uranium only to countries that have signed up to the Nuclear Non-Proliferation Treaty (NPT), was immediately opposed by the ALP, with Kevin Rudd, pledging to scrap the agreement if he was elected.

However, with the deal running into problems at home, the agreement with Australia has also stalled. A potentially damaging issue between two of Asia''s leading democracies may have been averted for the time being, but may well come back to haunt it, as India has enormous energy needs and sees uranium as part of the mix of solutions. It could well approach Australia for supplies forcing it to take a stand on the issue once again.