General

China’s choices in a more contested Asia

A more contested Asia: many pieces to the puzzle

Hugh White and others are right to worry about a drift toward antagonism among Asia’s great powers. China’s recent assertiveness in local maritime disputes should moreover disabuse anyone of the comforting conceit that China will forever meekly accept the meagre consolation of being an also-ran great power.

But China’s options for challenging the East Asian regional order are in fact profoundly constrained. In debating Canberra’s ‘China choice’, we must keep in mind the reality of China’s own limited room for meaningful choice in a more contested Asia.

China cannot and will not directly challenge America for regional hegemony in the foreseeable future. That’s partly because of the great economic gains China continues to derive from American incumbency. But it’s also because today’s East Asian order is underpinned by a broad-based constituency for American engagement, among American treaty allies, but also increasingly among potent non-traditional security partners, such as Vietnam.

More fundamentally, as Evelyn Goh has masterfully demonstrated, today’s order isn’t merely ‘made in America’, but bears the imprint of multiple authors, including smaller and middle powers anxious to enmesh both the United States and China in a region-wide multilateral security architecture. Talk-shops like the ASEAN Regional Forum (ARF) are of course limited in their capacity to socialise and pacify great powers. But the proliferation of those architectures nevertheless reflects the real depth of regional resolve to uphold the status quo.

Even though China may chafe at American primacy, then, it cannot directly challenge that primacy without also challenging the densely institutionalised and increasingly poly-centric regional order American primacy supports. For that reason, a direct full-spectrum Chinese challenge to the existing order is likely to remain a non-starter.

If China can’t directly overthrow the existing order, an alternative might be to hollow it out and eventually revise it from within, precisely by embracing Rod Lyon’s call for a ‘responsible’ Beijing, more willing to shoulder its share of great-power obligations. In the security realm, a greater Chinese commitment to Humanitarian and Disaster Relief (HADR) operations could potentially prove a plausible mechanism of regional reassurance. Economically, meanwhile, the BRICS’ establishment last week of a New Development Bank (to be headquartered in Shanghai) may be read as a leading-edge indicator of China’s new willingness to outbid the United States in the provision of collective goods, at a global as well as a regional level.

Hypothetically, that ‘responsible’ path to revisionism could challenge the existing order incrementally, by providing an alternative source of collective international goods not tied to American hegemony. For the moment, though, this strategy also remains practically beyond China’s reach. Beijing’s late and lacklustre response to Typhoon Haiyan in November 2013 dramatised a deficit of political will and logistical capabilities which together constrain a more systematic Chinese embrace of HADR as a lever of regional ‘soft power.’ Similarly, China’s own internal development needs limit its capacity to displace the United States and its OECD allies as a development financier and source of foreign direct investment, much less as a provider of an alternative global reserve currency.

A more ‘responsible’ China—more willing to shoulder the burdens of managing Asia’s and the world’s increasingly complex governance challenges—would be welcome. But shouldering such responsibilities will not thereby equip China with a Trojan Horse capable of effectively undermining either American hegemony or the East Asian regional order from within.

Bill Tow’s intervention reminds us that China—traditionally a continental power—is now eagerly embracing a ‘go-west’ strategy of integrating Eurasian ‘spokes’ into a China-centred ‘hub’ via growing investments in pipelines and transportation infrastructure. In contrast to the Cold War, China neighbours a now-diminished but still vehemently anti-Western Russia, which is increasingly dependent on China as a market for its energy exports. Similarly, China counts as its Shanghai Cooperation Organization (SCO) partners a penumbra of energy-rich rentier-state autocracies, which are far less likely to resist Chinese leadership aspirations than China’s feisty East and Southeast Asian neighbours. That raises a third possibility: if China can neither smash the existing order in East Asia nor subvert it from within, might it eventually be able to secede from it?

The idea of an autocratic China—engorged with Central Asian resources and paramount over continental eastern Eurasia—revives a Mackinderian spectre that has haunted Western strategists for over a century. Fortunately, this option of a Chinese ‘re-balance’ to Eurasia and away from littoral East Asia also lacks credibility. Inevitably, as China continues to grow, it’ll assert more influence over its resource-rich Eurasian hinterland. But even as China’s ‘go-west’ strategy matures, its manufacturing sector—the key to China’s continuing rise—will remain hard-wired into regional production networks centred on littoral East Asia. Likewise, the countries to China’s West are unable to provide ready substitutes for either the Japanese capital goods, or the massive American consumer market, on which China’s manufacturing success still depends.

We are undoubtedly entering a more contested era in Asia, and must accordingly be wary of blithe assurances that we can effortlessly extrapolate from Asia’s peaceful recent past to anticipate its future. And a more multipolar Asia will undoubtedly pose real challenges for Australia, which since European settlement has almost only ever known an international order sponsored by its Anglo-American kin. But acknowledging those challenges should not blind us to the reality of China’s limited bandwidth of choice in the current regional order, which remains easy to join, but infinitely harder to smash, subvert or secede from.

Andrew Phillips is an Australian Research Council Discovery Early Career Research Award Fellow and senior lecturer in International Relations and Strategy in the School of Political Science and International Studies at the University of Queensland. Image courtesy of Flickr user Cindee Snider.

International relations as art, not science

Art, not science

The good news is that Australia is doing just fine in shaping its relations with both China and the United States. The bad news is that things could still go wrong for Australia at any time, notwithstanding how skilled it might be in orchestrating its ties between Beijing and Washington.

There’s never any guarantee that the ‘right road’ to regional stability or economic growth will be free of unexpected traps and complications. As Hedley Bull once observed, conducting international relations remains an art, not a science. The best Australia can do is to apply the most reasonable policy assessments it can. Those involve assessing what we have learned from history and then applying diplomacy as judiciously as possible without excessive fear of risk.

In that context, fundamental aspects of Australia’s relations with China, the United States and other regional security actors can be assessed without excessive drama.

First, while China is no fan of the US bilateral alliance system, there’s currently little prospect that it’ll attempt to coerce Australia into relinquishing its alliance ties with the US. Past Chinese efforts to soften ANZUS have backfired and China also learns from history. China’s preoccupation with strengthening its economy and maintaining domestic stability remains paramount and that trumps ongoing rhetoric by China’s leaders and its media about US regional alliances.

Second, a country like Australia has limited influence relative to Asia’s great powers and therefore generates little strategic concern among China’s policymakers. It remains a valued supplier of commodities that underpin China’s industrial output and economic growth. Rather than forcing Canberra into an unpalatable policy choice, it’s better—from China’s vantage point—to engage symbolically with the US and Australia in joint military exercises and to acknowledge with gratitude Australia’s good international citizenship in taking the lead on the search for a missing Malaysian Airlines aircraft with many Chinese passengers.

Third, however, for historical and geopolitical reasons, China is genuinely alarmed about Japanese Prime Minister Shinzo Abe’s ongoing quest to transform his country into a ‘more normal power’ and to amend Japan’s peace constitution. As this process unfolds, China will watch closely how other regional actors such as Australia directly or indirectly collaborate with Japanese security objectives.

Fourth, structural changes are occurring that require China, along with its regional neighbours, Australia and the US to work collectively to modify regional security dilemmas and to forge a regional order that will guarantee stability to the greatest extent possible. Australia and Japan are both maritime trading states keen to ensure that tranquillity and trade are preserved in Southeast Asia. They, along with most member-states of the Association of Southeast Asian Nations (ASEAN), have a common interest in arresting or neutralising what they view as Chinese ‘salami-slicing’ tactics in seizing gradual control of the East and South China Seas by asserting extensive territorial and maritime claims in those waters and building up its naval power to enforce them. China must find better ways than it has to date for reconciling what it views as rectifying legitimate historical grievances and securing its territorial rights in those waters with the need to avoid intensifying regional security dilemmas through a series of uncompromising nationalistic postures.

Another emerging dimension of geopolitics is complicating regional order-building. Washington, Tokyo and Canberra are only now becoming more aware of what some analysts have characterised as China’s ‘go-west’ policy. Beijing is endeavouring to transform inland Eurasia into the new economic hub of Asian development and geopolitics. It is investing heavily in pipelines and transport infrastructures that connect Central, Southwest and Southeast Asia to form a new Eurasian network in which a Chinese ‘hub’ draws in raw materials and energy resources and exports manufactured goods to sub-regional ‘spokes’. Given Japan is marginal and Australia largely inconsequential in China’s Eurasia strategy, it seems unlikely that the Chinese will waste the energy and resources needed to separate Australia from its American benefactor.

A fundamental challenge confronting Australian policymakers, therefore, is to identify and implement policies that may enable the traditional American hub-and-spokes network to co-exist alongside—and even complement—China’s Eurasian strategy. Moreover, the US must assign increased emphasis to the diplomatic aspects of its Asian pivot strategy relative to its military dimensions. And it must convince Japan that a moderate and incremental path to normalisation is essential—not least to reassure China that the US still has the will and the capacity to influence Japanese governments to embrace policy moderation.

As a respected middle power in the region interested in avoiding having to make choices between China’s version of regional geopolitics and that projected by the US alliance system, Australia’s best policy course is to support those initiatives emanating from both sides that promote regional compromise, reasonable conciliation and long-term confidence-building.

William Tow is a professor in the Department of International Relations at the Australian National University. Image courtesy of Flickr user epsos.

Engaging North Korea, on both high road and low road

A new dawn for North Korea?

Australia has a simple policy on North Korea: say ‘tsk-tsk’ to its ongoing nuclear and missile programs and lightly criticise Kim Jong-un’s leadership. Our Foreign Minister, Julie Bishop, said as much last month. For a country whose stability directly impacts South Korea, China, Japan and the US—which represent our top four trading partners and include our biggest strategic ally and two closest partners in Asia—Australia’s ‘tick a box and move on’ approach to North Korea misses a major opportunity to influence change in one of the world’s most threatening and oppressive regimes.

Sure, Australia has other pressing concerns. Minister Bishop is busy responding to the MH17 tragedy in Ukraine, including coordinating the AFP force necessary to assist in the important duty of recovering the bodies. Prior to the MH17 disaster, on 30 June Minister Bishop highlighted two other main concerns: territorial disputes in the East and South China Seas; and social unrest resulting from wealth inequality in new middle-income countries. She’s also been busy establishing new relationships with countries in Southeast Asia. So, Australia’s got a lot on its plate. Moreover, Australia may be less interested in revising its policy on North Korea because Pyongyang doesn’t look poised to revise its policy on the world: its belligerence—and nuclear and missile development—continues. Perhaps Australia has become resigned to the position that there’s nothing it can do dramatically to alter the trajectory of the North’s WMD programs or its human-rights abuses, so why waste our diplomatic capital and energy?

While it’s true Australia holds weaker cards than the key players, Canberra shouldn’t have an all-or-nothing approach. It could take advantage of important social trends underway in North Korea and simultaneously seize the opportunity to influence the next generation of North Koreans. Let me tell you what I mean.

Technological advances are allowing greater amounts of information to seep into North Korea. DVDs and USBs carrying Western programs and information are being traded along the China–North Korea border as well as smuggled into the North by NGOs. We know from the accounts of North Korean defectors that Western programs are undermining the regime’s propaganda and opening the eyes of the public to their wealth inequalities. One defector said that South Korean DVDs were very effective at changing North Koreans’ minds. He said: ‘They portray a South Korean middle-class existence so luxurious compared to their own, and a society so much wealthier and more advanced. North Koreans see the lives of their South Korean and Chinese neighbours and they compare it to their own existence’. North Koreans are also learning about their wealth inequalities through trade networks that connect them with some of the 20,000-odd North Koreans who have resettled in the South.

Although the North has attempted to crack down on the trade, the trickle of information is impossible to stop as military elites provide part of the market. With foreign influences and information flowing into the country, the prospects for popular discontent and dwindling support for the regime increase. That’s a view held by a number of North Korean experts, including Andrei Lankov of Kookmin University. In 2009, Professor Lankov argued (paywalled) that ‘an information campaign would beat the regime’. Given international sanctions have been ineffective to date and the fact that the third Kim looks unlikely to implement domestic reforms, Professor Lankov’s assessment may provide a path forward—albeit not a rapid one.

Up until the beginning of this year, the US supported the NGOs that send information into North Korea through the National Endowment for Democracy. The US State Department’s Bureau of Democracy has since offered grants to groups to promote ‘access to information into, out of, and within North Korea’. To bolster those efforts, Australia should consider funding similar grants to support the civil-society groups that send DVDs, USBs, transistor radios, and leaflets with information into the North. Of course, prior to making its decision Australia should consult with the South Korean government and with NGOs based in the South. It’s important to consider how supporting NGOs engaged in those activities will impact our relations with Seoul as well as the accuracy of the information the groups intend to smuggle into the North.

Australia should also forego its non-engagement policy and engage the North. Engagement isn’t intended to reward North Korea’s bad behaviour but rather to expose North Koreans to the outside world. Australia could start by accepting Pyongyang’s request to reopen a North Korean Embassy in Canberra. Although it is likely only elites will staff the embassy, it will allow them to experience life in a democratic, free-market society and they will return to the North and share their experiences with friends and family.

Further, Australia should ease visa restrictions and again support student exchanges. Up until 2006, ANU hosted North Korean economics students. But since 2006, sanctions preventing North Koreans from obtaining visas have made similar programs impossible. Educational exchange can allow Australia to influence a new generation of North Koreans and expose them at a young age to an open, liberal society.

The argument for Australia to engage North Korea was made here and here in 2011, here in 2013, and most recently here in February 2014. In addition, the growing body of evidence, including defector testimony, that information from the outside world is undermining the regime’s grip on power gives Australia the option to increase the flow and speed up the process or stand by idly and draw it out. Our Department of Foreign Affairs and Trade should decide if it wants to continue its current position on the North or expedite the flow of information into the country and shorten the lifespan of a regime determined to develop nuclear weapons and oppress its people.

Hayley Channer is an analyst at ASPI. She presented these views at a recent Kokoda Foundation event, Kokoda NextImage courtesy of Flickr user (stephan).

On the merits of avoiding stark choices

On the merits of avoiding stark choices

Strategic analysts have a poor record of anticipating the future shape of international relations. Most famously, apart from a few obscure French historians, no-one seriously foreshadowed the demise of the Soviet Union and subsequent end of the Cold War. Distressingly for those of us who get paid to explain what’s likely to happen in international relations in the future, there’s no shortage of other examples.

At the outset of the 1990s, the overwhelming consensus was that North Korea would collapse by the end of that decade. In the year 2014, the DPRK is nuclear-armed, there are glimmers that its ramshackle economy may be turning around, and the authority of the regime under a thirty-something four-star general appears stronger than ever.

Few envisaged the most significant geopolitical shift of the past three decades: the rise of China to great power status. Indeed, when the small but committed staff at Australia’s freshly-minted Beijing embassy in the 1970s sent cables to Canberra predicting that China would rival Japan as the region’s major power by 2000, they were laughed out of town by senior policymakers. Read more

Why should we be any more confident that our capacity for prediction today is better than it was in years gone by? That’s no mere academic question. It has major implications for how we allocate the shrinking defence dollar and how we deploy our small but effective diplomatic presence globally. The counter-claim from some that ‘we don’t have a crystal ball so we can’t predict anything’ is disingenuous. Ultimately, strategic analysts purport to predict future trends and shifts on the basis of key global drivers, with a few intervening variables thrown in for good measure. It’s how the credibility of our craft is judged.

The subject of prediction has direct relevance to the lively discussion between Hugh White and Peter Jennings over whether Australia has to make a choice between China and the US. Both perspectives are, in essence, based on pretty confident predictions about the future trajectory of Sino-American relations and how our region will evolve in the next 20–30 years. Rod Lyon has captured nicely the key assumptions underlying each view, and while I’m probably slightly more sympathetic to Peter’s angle, I have some concerns about the deeper foundations on which both arguments are based.

First, both assume that current trends will continue; in Hugh’s case that US–China rivalry will sharpen over time, and in Peter’s case that economic interdependence and middle power autonomy will remain as independent variables that drive strategic choices in Asia. But there’s no guarantee that either trend will persist. To be sure, China–Japan economic relations are important, but there are palpable signs Beijing and Tokyo are pulling policy levers to dilute mutual interdependence, particularly in the area of foreign direct investment. Rivalry between Washington and Beijing may well become more acute going forward, but then again, it might not. Structural realists predict that war is inevitable between rising and declining great powers because the latter will seek to hold on to accumulated power through whatever means, including armed force. But as we have witnessed throughout even recent history, nothing is preordained in international relations and, given the paucity of accurate forecasting, we should be inherently sceptical about claims to the contrary.

Second, Peter and Hugh make distinctively different assumptions about the degree of agency Australia enjoys in international relations. Hugh is a thoughtful realist—as distinct from the uber-realist types often found in government—but he’s still a realist and therefore inclined to see non-great powers as secondary actors with little real autonomy. Peter’s view echoes liberal optimism about the power of interdependence, but also acknowledges that small and middle powers have agency that can overcome structural constraints in the international system. That perspective rejects the standard realist view that small and middle powers don’t matter.

Yet there’s a pretty good chance both perspectives will be borne out as we move forward in the 21st century. One of the really striking macro-trends in international relations since 1945 is that realist and liberal theories have both been validated at different times in different circumstances. It’s not as if we should be making a stark choice between them as a guide to the future. Put simply, in relation to the US–China relationship, Australia will feel more constrained in some cases and more autonomous in others. That will depend on a range of contingent factors, including the views of elites at any given time, the precise issue(s) at stake, and whether Australia is able to act in concert with other middle powers as a diplomatic force-multiplier. The one theme uniting those contingent factors is that, by definition, they will be hard to predict.

Andrew O’Neil is professor and head of the School of Government and International Relations at Griffith University. With Bruce Gilley, he is the editor of Middle Powers and the Rise of China to be published by Georgetown University Press in September. Image courtesy of Flickr user nahemoth.

The Great Asia Bargain fades and falls away

Richard Nixon meets with Mao Zedong in Beijing, February 21, 1972.

In 1972, Nixon and Mao met in Beijing to begin the Great Asia Bargain. Nixon called it the week that changed the world. The Republican and the Revolutionary ushered in a glorious period.

Almost as an aside—a prelude to the geopolitical plotting—they launched an economic engagement that turned China into the phenomenon of the modern age. As the man who took the US dollar off the gold standard, Nixon started a process that will see the yuan become a global currency to equal the greenback. Talk about unintended consequences. And that was just an aside.

Look back at what Mao and Nixon wrought because of what Shinzo Abe’s is now doing. Making Japan a security power—even claiming Japan’s right to be a ‘super power’—marks the demise of an important residual element of the Bargain. Read more

Of course, much else disappeared long ago. The central driver of the Bargain was the primary threat from the Soviet Union. For both leaders, Russia was the number one danger. Kissinger judged that following military clashes along the Soviet–China border, Beijing moved beyond ideology to deal with the US: ‘Their peril had established the absolute primacy of geopolitics. They were in effect freeing one front by a tacit nonaggression treaty with us.’ With that tacit treaty, China was aiming to use ‘one set of barbarians to balance another.’

Today China and the US see each other as their greatest threat, the binary reality rendering the Bargain an artifact of history. Even so, as with the economic deal, security elements of the Bargain have continuing effects, often of major importance. Losing those lingering security deals after four decades tells us how much uncertainty now envelops Asia.

Beyond China–US national self-interest, the Bargain rested on understandings about US interests in Taiwan and Japan and South Korea. The explicit understanding on South Korea also carried implications for what China would do to restrain North Korea—another area where the Bargain failed long ago.

Mao assured Nixon that Taiwan was not an important issue and China could show patience about its return to the motherland. Kissinger quoted Mao: ‘We can do without them [Taiwan] for the time being, and let it come after 100 years.’ For all the push and shove since, that promise holds.

That long view on Taiwan was linked to acceptance of the US alliance with Japan and a particular understanding of how the alliance should work. Kissinger quoted this from Mao: ‘Japan must not feel neglected by the US; Japan was inherently insecure and sensitive. He would see to it that China did not force Tokyo to choose between the US and China. That might polarize; it would surely enhance Japanese insecurity and might give rise to traditional nationalism.’

Kissinger wrote that China came to accept America’s argument that the US alliance with Japan should be viewed ‘as a guarantee of America’s continued interest in the Western Pacific and a rein on Japanese unilateralism.’

The military balance in the Bargain was elegant. The US would keep its troops in Japan to maintain a firm foot on Japan’s neck. China’s former occupier was not to return to any form of assertive nationalism, much less military power.

If Washington was to maintain boundaries on Japan, then Beijing should do the same to North Korea. Allowing North Korea to go nuclear rates as a major breach of Mao’s undertaking not to disturb Japan or South Korea.

All this is context for Japan’s Defence Minister, Itsunori Onodera, arguing Japan is more than just back. Japan, he says, is ‘drastically moving its security policy forward’ because of ‘severe challenges’ to Asia’s security order. Expanding defence cooperation with the US, Australia and Southeast Asia is normal: ‘It is natural for a great power like Japan to play a responsible role for the region based on the significance of the area and the increasingly acute regional security environment.’

That ‘great power’ line led the Wall Street Journal to ponder Japan’s identity confusion and whether it is, indeed, a great power. The fascination in the piece was the link to Amy King’s analysis of Chinese writings, showing that Beijing certainly does not view Japan as a great power; that Great Bargain effect persists in Beijing, even if the US and Japan have ditched it.

Asia has long outgrown the Bargain bequeathed by Mao and Nixon; I was going to say blessed rather than bequeathed, but that confers too much grace on a hard-eyed geopolitical compact. If the Republican and the Revolutionary—a pro and a tyrant—could do the deal, their successors should be as competent and as ambitious in seeking a new power-sharing order in Asia or a new responsibility-sharing order.​

Graeme Dobell is the ASPI journalist fellow. Image courtesy of Wikipedia.

ANZAC divergence—where to from here?

Secretary and Chief Executive of the Ministry of Defence of New Zealand, Helene Quilter, and Lieutenant General Tim Keating Chief of Defence Force New Zealand Visit to ADF Headquarters Canberra 23 July 2014.

Although it’s peculiar that we find strategic differences between Canberra and Wellington peculiar, disagreements may become starker and more costly as hard power reemerges as a driving force in international affairs. What more, then, might Australia and New Zealand do to promote strategic convergence where we can and to avoid harming each other’s interests when we can’t?

It shouldn’t surprise when two countries draw dissimilar policy conclusions from an essentially shared reading of global trends. Nations quite reasonably adopt divergent solutions to problems they’ve broadly convergent views about. Our circumstances provide different options and constraints to a ‘near neighbor’ 2,000 km away with a population five times smaller, an economy 10 times smaller, and a strategic culture that sometimes seems more Nordic than part of the Anglosphere. The way Washington has, ‘in pivot mode’, welcomed Wellington partly back into the military fold without requiring it to ‘repent’ its nuclear-free policy blinds us to the Cold War-era ANZUS row. References to ‘family’ and ‘the spirit of Gallipoli’ reflect genuine closeness but can let relationship managers ‘wallow in their comfort zones’ rather than innovate. Read more

Andrew Davies and Robert Ayson detect divergence on the capability and political fronts. As Australia lifts its defence spending and invests in stealth fighters, large submarines and systems able to operate towards the top end of modern combat, interoperability may become more challenging even in regional stabilisation operations and other lower-end missions where we’ll need to work together. And differing policy approaches to handling China’s rise were highlighted by Prime Minister Abe’s recent visits to Australia and NZ, with their emphasis on security matters in one country and trade and totemic issues (such as whaling) in the other.

Such divergence seems set to grow. That’s partly due to the apparent retirement of Deng Xiaoping’s ‘hide your strength, bide your time’ axiom. Beijing is ‘nibbling’ to exercise control over islands and seas to which it claims historic title—using various forms of pressure below the threshold of applying direct military force to accumulate gains and undermine US assurance. But NZ doesn’t want to publicly rebuke such calibrated coercion. Of course, China’s fuelling NZ’s dairy and forestry boom. Still, our exports are more concentrated there than NZ’s (and while soft commodities are more exposed to a swift Chinese-burn than steel or coal, demand should remain robust as consumer bases in emerging economies grow).

An exchange of posts on what each partner wants from the relationship updates the old ‘Aussies are from Mars, Kiwis are from Venus’ trope: Rob Ayson hopes for someone who ‘won’t get too carried away’ in the Indo-Pacific while Peter Jennings imagines racier trilateral cooperation as alliance partners rather than ‘close friends’. Peter warns the ANZAC alliance will continue to shrink if we don’t each get more out of it—including in our neighbourhood. But even there, the regional stabilisation missions fostering habits of operational cooperation have ended.

Both governments should use some of the resources freed by the end of such operations to broaden and better coordinate our efforts to promote stability and growth in nearby countries. That would include aligning and, where possible integrating, our Defence Cooperation Program (DCP) with NZ’s tiny Military Assistance Program (MAP). But it should extend well beyond that. NZ led us in reintegrating its development specialists and diplomats in pursuit of its national interest. It also has an interest in conflict prevention (and achieved the peacemaking breakthrough we couldn’t in Bougainville 17 years ago). Although helping to shape a peaceful and prosperous immediate strategic environment isn’t acting as anyone’s ‘deputy-sheriff’—we do so for our own reasons—our roles as regional security managers appear increasingly important to Washington.

Australia’s commitment last month to renew and modernise the Pacific Patrol Boat (PPB) Program provides a specific area for greater cooperation. NZ already supports one of the 22 PPBs, due to its defence responsibilities for the Cook Islands, but might also assist the other three Polynesian PPB users it has close ties with. An evolved maritime security program also requires more aerial surveillance. Although humanitarian in scope, the program provides a low-key enduring strategic presence across our shared maritime approaches and eases the patrol burden on our navies.

Other opportunities include aligning our exercise programs even more closely; making scarce capabilities available to each other (Wellington’s already generous with its sealift ship, HMNZS Canterbury, and B757 long-range VIP/transport aircraft); cooperating on capability sustainment and upgrades where possible; sharing the burden of Antarctic logistics; and nurturing closer intelligence exchange. The ADF and NZDF must remain interoperable for credible regional operations as our LHDs near service. And after a decade of reform in both countries, we probably have lessons to share.

None of those ventures would ensure strategic convergence. But we could do more to manage differences and avoid the sort of mutual damage we inflicted on each other in the mid 80s. We must resist undercutting each other when we hold strong contrary views (say if Wellington was determined to impose sanctions on a state we felt should be inside the tent). And we must provide space for dialogue to narrow such gaps. A framework for our militaries to consult more closely has worked since 2011. But since key issues of strategic divergence sit above even senior officers’ and officials’ pay-grade, clever ‘summitry’ remains crucial. (One idea at the recent 1.5 track dialogue in Wellington was for Canberra to periodically invite NZ leaders to attend joint NSC sittings.)

White Paper preparations in each country will provide the means, motive, and opportunity to sharpen the focus of future ANZAC cooperation. We can’t afford to waste them.

Karl Claxton is an analyst at ASPI. Image courtesy of Department of Defence.

Analysing the China choice

Choices ...

The recent posts by Peter Jennings and Hugh White outline an interesting set of thoughts about Australia’s strategic policy options in a transformational Asia.

If I can summarise the argument bluntly, Peter says we don’t need to choose between the US and China, nor even between Japan and China—explicitly making the case that ‘countries in the Asia Pacific stickily persist in cooperating with each other’, and implicitly making the argument that zero-sum strategic competitions come along a lot less frequently than many people suppose. Just as well too, says Peter, since the choice Hugh outlines is one between ‘subordination or incineration’. Read more

Hugh agrees that the objective of Australian policy should be to avoid having to choose between the US and China. But being able to do that, he says, turns critically upon how well the US and China get on with each other: ‘the worse they get on, the starker the choice we’ll face between them’. Since Hugh is a self-confessed pessimist, he doesn’t expect the two great powers to get along well. So he does think we face a looming—stark—choice between great powers. Hugh’s answer is greater accommodation of China: ‘the more firmly we resist any accommodation of China’s ambitions, the faster strategic rivalry will escalate’.

The argument between Peter and Hugh is rather more subtle than it appears at first glance, but I think it turns upon one important difference: Hugh wants Australia ‘to promote a new power-sharing order in Asia’, where I get the sense that Peter would like Australia to promote a new responsibility-sharing order in Asia. Between the two competing principles, I’m attracted to the notion of responsibility-sharing. If China’s ambitions don’t include a role as something like a ‘responsible stakeholder’ in the regional order (yes, I know Robert Zoellick’s term is unfashionable these days, but it captures the right metric), why should we accommodate it?

Power is neither a good thing nor a bad thing in international relations—it’s what it’s used for that matters. In that sense, power’s like war and intelligence operations—you judge it by its political objectives rather than standing in slack-jawed admiration of power in its own right. That’s the way we’ve always judged other powers: it explains why we think now that concluding ‘peace in our time’ with Hitler was wrong, and also why we thought the Soviet Union had to be contained, even if it couldn’t easily be fought in a nuclear age.

So, the real determinant of whether we have to make a choice between the US and China isn’t how well they get on with each other. It’s ‘what does China see as its role in the world?’ The problem is that question doesn’t get a single answer, even in Beijing. Chinese grand strategy is a mish-mash of: its earlier expectations of what it meant to be a great power; a sense of entitlement now China has escaped the century of humiliations; a great sense of economic interconnectedness to the outside world; and a history of fractious relations with its neighbours.

That means Beijing likes some parts of the current regional order but dislikes others. It likes maritime security and safe sealanes so it can trade. It likes regional stability so it can concentrate on development. It accepts that US alliances help ‘tether’ Washington’s regional allies, though it’s becoming a bit more hesitant about that one. It dislikes foreign barbarians encroaching on Chinese civilisation. It resents that it’s a great power with unsettled territorial claims. It dislikes an Asian security order organised in Washington.

Hugh says that accommodation doesn’t mean giving Beijing everything it wants. That’s true. But what do we do when push comes to shove on something it wants but we don’t want? At some point, even in Hugh’s universe, the rubric of ‘choice’ cuts both ways. And choosing to resist China in a regional order we’ve designed to accommodate it might involve a set of strategic risks that we’d be unwilling to run on the day: by necessity, there’d be a set of salami-slice calculations in which the running of great risks for small gains could always be reasoned away.

Let’s go back to the nub of the problem: what does Australia want in Asia? I think the answer is relatively simple: it wants a stable, liberal, prosperous regional order. We can accommodate a China that wants that too. But power-sharing for its own sake doesn’t strike me as a recipe for strategic happiness. And arguing in Washington for a course that dilutes US influence in order to fashion a workable G2 with China means arguing for a smaller role for the one great power that’s actually built a stable, liberal, prosperous order in Asia. I’m not in favour of our doing that.

Rod Lyon is a fellow at ASPI and executive editor of The Strategist. Image courtesy of Flickr user Daniel Lee.

Wanted: a defence/industry decision framework

Recent decisions by the Department of Defence have highlighted weaknesses and inconsistencies in the decision-making associated with defence procurements. The decision to go to restricted tender for the RAN’s two auxiliary ships to replace Success and Sirius is the subject of a Senate Inquiry, and the Rossi Boots decision has attracted considerable criticism in both parliament and the media.

Defence industry has, quite rightly, been a major consideration on this site in the recent past. John Harvey has postulated on ‘A simple Defence Acquisition/Industry Policy framework’, Mark Thomson has discussed ‘Defence projects, jobs and economic growth’ and I have advanced a conceptual framework for a sensible defence industry policy.

Those posts, and others, have one overriding thing in common: they all want to see the best national outcome for the money that the Government devotes to defence. Read more

The difficulty lies in the discrepancy between what’s commonly promoted by those outside Defence, and what’s decided by those inside Defence. That discrepancy represents a failure of government (indeed, governments of all persuasions—not just the current one) to articulate an overarching decision framework to guide procurement. Projects decisions are made solely on a case-by-case basis, seemingly with no consideration of the impact on industry, and reflect what Chris Jenkins at Thales has described as a ‘series of random outcomes’.

The development and implementation of a transparent framework within which procurement decisions are made would seem to be warranted; and would provide logic and robustness for the application of tailored programs aimed at defence industry. Treating Industry as a capability as I have previously advanced seems to be (at least part of) the solution.

Defence acquisition decisions typically promote the outcomes as representing best value for money, and in accordance with the Commonwealth Procurement Rules (CPRs). That’s all well and good, but the CPRs are not restrictive, and do allow for factors other than the cheapest price to be considered. Those factors should include (1) the mitigation of strategic risk through the development of an industrial base that we need to have, (2) the associated development of skills and expertise for the sustainment of that industrial base, and (3) the economic benefits of doing the work in-country through increased employment, return to the Government through taxation, increased innovation and generation of intellectual property, and potential export.

It would appear that those making the decisions are not inclined, or not able, to consider the wider implications of their decisions. Treating industry as a fundamental input to capability would force those broader considerations.

Analysis of DMO contracts (from Austender) placed between July 2007 and June 2014 shows that since the placement of the Air Warfare Destroyer contracts in 2007/08 the value of acquisition contracts awarded locally has plummeted, and now more acquisition is contracted from outside Australia than within it. The graph below (click to enlarge) depicts only acquisition contracts (and not sustainment or other contracts). It shows that in the four financial years from 2009/10 to 2012/13 only 10% of DMO contracts were placed with companies operating within Australia for the acquisition of capability. The figure for Australian-owned companies is significantly (woefully) lower—and remember you can’t have cash flow if you don’t have a contract.

graph dunk

The development of the 2015 Defence White Paper and the Defence Industry Policy Statement represent an opportunity to start to get the industry bit of defence in order. A similar opportunity will not come again for a few years. It’s imperative that those documents describe a framework that will guide the development of the industrial base that we need to have—to minimise strategic risk, to maintain and develop critical skills, and to provide national economic benefits—and not merely continue the current approach of ‘any road is good enough’.

Graeme Dunk is manager of Australian Business Defence Industry, a national defence industry association.

China and Japan: strengthening peace in the Pacific

Japanese version of the Treaty of Shimonoseki, 17 April 1895.

The recent dialogue between Hugh White and Peter Jennings on The Strategist makes us all ask where we stand on the Sino-Japanese relationship. Statements by President Obama emphasise that the United States takes its security partnership with Japan seriously, while Prime Minister Abbott was reassuring towards Prime Minister Abe during the latter’s recent visit to Australia. In many ways, those statements are wise and reflect the gravity with which both the United States and Australia view their treaty obligations.

There is, however, another side to this question—what do the Chinese think about the issue and are we handling them in the best possible way? Before we make up our minds simply to defend the status quo in the western Pacific right down to the last detail, it might be prudent to examine the diplomatic basis on which security rests. We know about the US–Japan Treaty of Mutual Co-operation and Security concluded in 1960, and we certainly know about ANZUS, concluded in 1951. But we may be less familiar with the principal agreement between Japan and China in the western Pacific: the Treaty of Shimonoseki (Japanese version pictured), concluded in 1895 and still partly in effect. 1895 was a good time for Japan to insist on a treaty that expanded the area under its control, and a poor time for the Chinese to negotiate on behalf their interests. Read more

The principal European imperial powers had been giving China a hard time through the 19th century. The British Opium War against China looks absurd today, with the British sending in the Royal Navy to blast the Chinese defences because the Qing Emperor refused to allow the commercial entry of opium from the East India Company in the 1840s. There were several other conflicts in which a weak China gave way to the formidable military power of foreign states, resulting in a series of agreements (at least 22 of them) termed by the Chinese the ‘Unequal Treaties’. The most consequential of those conflicts was the First Sino-Japanese War of 1894–95, which, after a Japanese victory, was concluded by the Treaty of Shimonoseki.

That treaty gave Japan Taiwan, the Ryukyu Islands and possibly the Senkaku/Diaoyu Islands, although the treaty isnt explicit on this point. The Japanese believe the islands are included while the Chinese do not. The Japanese lost Taiwan to China after World War II, and the United States administered the Ryukyus and the Senkaku/Diaoyu group from 1945 until 1972, when Japanese sovereignty was restored. Since then the Chinese have pressed their claim, based on their view of history, to have the Senkaku/Diaoyu group returned to them.

The Japanese response has been to stand firm, and to strengthen the national claim by buying three of the five major islands of the group from a private Japanese owner. There has been no indication of Japanese readiness to step back on this issue and discuss the return of those islands to the Chinese. Indeed, all the indications have been in favour of a willingness to go to war to defend the Japanese claim. That response flies in the face of growing Chinese military strength, and Chinese public opinion which, in the 21th century, remains highly critical of Japan.

The issue of the balance of military strength is particularly disturbing, partly because of the increase in the range, sophistication and destructiveness of Chinese weaponry, and partly because of the proximity of the islands to the Chinese mainland. At 330 km from the Chinese coast, and 170 km from Taiwan, they, and the seas around them, can easily be subjected to intense attack by Chinese forces based on the mainland.

That in itself isn’t a reason for giving them to China, but when set into the wider contexts of economic relations, strategic geography and historical experience, one has to wonder whether the islands are worth running the risk of a war over, to Japan, the United States and possibly other allies of the US such as Australia. The question is all the more salient when one considers the fact that the islands are uninhabited. The seas around them may, or may not, be covering hydrocarbon deposits, but at present they are of economic significance only for fishing.

Before both sides in the dispute get into such a level of confrontation that a war seems thinkable, would it not be better for them to step back, relax a little, and think more positively about how they might resolve this dispute peacefully? Given China’s memory of the ‘Unequal Treaties’ of the 19th and 20th centuries, might it not be time to revise what was done in a markedly different context in 1895? And might it not be better for Japan’s allies to have a little less to say about willingness to support it without their having a decisive voice in heading off a possible crisis?

Robert O’Neill was the head of the Strategic and Defence Studies Centre from (1971–82), director of the International Institute for Strategic Studies (1982–87), and Chairman of the IISS (1996–2001). Image courtesy of Wikipedia.

A ‘Jokowin’ is a win for Australia

Jokowi!

It’s official, Joko Widodo has been elected Indonesia’s new president. Last night, hours after Prabowo’s dramatic announcement that he was quitting the election, Indonesia’s General Election Commission (KPU) declared Jokowi and his running mate Jusuf Kalla (together known as Jokowi-JK) the winners with 53.15% of the votes. And that’s a good thing for Australia.

For one, Jokowi’s looking to strengthen Indonesia’s state capacities as well as its economy. If you look at the ‘Vision Mission’ statement (PDF) of Jokowi-JK (summary in English here), many of its policies relate to improving governance and law enforcement, reducing inequality, boosting the economy via productivity and competitiveness, and raising the quality of life. It’s early days and Jokowi remains inexperienced at the national level, yet the combination of his positive track record coupled with his commitment to transparency and efficiency give cause for modest optimism. And here’s why: a strong and stable Indonesia is an Indonesia that can do more in international affairs.

Team Jokowi has already indicated that it intends to pursue greater middle-power diplomacy as well as expand engagement among Indo-Pacific partners, especially ASEAN. A strong and confident Indonesia can continue to act both as the de facto head of the Southeast Asian grouping as well as a mediator role amongst the region’s more powerful actors. If you take, for instance, Jokowi’s commitment to protecting Indonesian migrant workers abroad, he’ll need good working relations with Malaysia, a country with which Indonesia also has its diplomatic ups and downs yet hosts a significant number of Indonesian maids. Read more

Jokowi intends to boost Indonesia’s maritime interests as well and says he will increase the military budget to 1.5% of GDP within five years. Given the volume of trade passing through archipelagic waters, Australia’s economic interests are also served by a stronger Indonesian naval presence. I would note, as my colleague Ben Schreer argues, Indonesia’s military modernisation is by no means going to be easy to achieve.

Jokowi also has a pragmatic and level-headed approach in negotiating which will be desirable during diplomatic shocks such as Snowden revelations. He sees a lack of trust in bilateral relations, but he’s keen to build better government, business and community ties with Australia. A more capricious figure, egged on by domestic outrage and nationalistic fervour, may have compounded the challenges in a diplomatic relationship already marked by highs and lows.

All of that bodes well for Australia’s relations with Indonesia and its interests in the region. In particular, we would do well to see Jokowi as a problem-solving president. That means there’s an opportunity to think about what we want to do together in the medium to longer-term, given Jokowi’s five-year (possibly, decade-long) tenure. For one, that would add more ballast to our relationship, insulating it somewhat from diplomatic shocks. Also, Australia-Indonesia cooperation could form the axis around which more regional involvement on key defence and security issues could rotate.

These are only preliminary thoughts for now as there are a number of ‘unknown unknowns’ along the way. Of course, Australia can help this process along by showing a willingness to be transparent and communicative on some of the pricklier issues. It’s a long road ahead that starts with Jokowi’s inauguration in October, but for now, Australia, along with Indonesia, can celebrate.

Natalie Sambhi is an analyst at ASPI and editor of The Strategist. Image courtesy of Flickr user Jazzuality.

MH17 and the limits of Russian power

Private Meeting with Vladimir Putin

Following Russia’s annexation of the Crimea in March this year, there was plenty of talk about ‘the Bear’s return’ to great power status. Triumphant Russian politicians and media commentators crowed about their country’s return to glory. Internationally, the theme of Russia’s resurgence at the expense of the rules-based, Western order was also common, fuelled by what many regarded as a weak Western response.

But the tragic fate of flight MH17 is only the latest indication of the severe limitations on Russia’s power. In reality, Russia’s return to Cold War-era politics reflects the behaviour of a declining power. Indeed, it’s increasingly obvious that Russia’s short-term gains through its bellicose action in the Ukraine are negated by both immediate and long-term costs.

Domestically, Russia is beset by enormous demographic and economic problems. High-levels of corruption, lack of reform and an overreliance on gas and oil exports have stymied economic growth. In fact, despite having been denounced as too soft, the US’ and Europe’s limited sanctions already have had a serious negative impact on the Russian economy. In the wake of the MH17 disaster, major European powers, including Germany and France, are likely to consider even stronger sanctions. Consequently, as Lawrence Freedman has concluded, ‘Russia’s claims to be a great power are increasingly geo-political rather than geo-economic’. Read more

But Russia’s geopolitical project doesn’t look especially promising either. While nice to have, nuclear weapons and a permanent seat at the UN Security Council aren’t sufficient to circumvent Moscow’s growing international isolation. Moreover, Putin’s dream of restoring the Russian empire, including through an expansionist foreign policy doctrine, is likely to go nowhere.

Consider this: to the west, Russia faces a NATO of now 28 members, including many former Warsaw Pact countries. If anything, the annexation of the Crimea has provided new impetus for the alliance to update its force structure, mobilisation scheme and doctrine for operations on its eastern flank. Watch NATO’s upcoming Wales Summit for more to come. The EU also signed an association agreement with the Ukraine (as well as Georgia and Moldova), something it had been reluctant to do so prior to the crisis.

To the east, Russia faces a rising China. Contrary to conventional wisdom, Moscow is well aware about the limitations of its ‘strategic partnership’ with Beijing, a partnership increasingly plagued by power disparities in China’s favour. For example, the inability to secure its long land border with China is a serious headache for Russia’s defence planners. Finally, Russia’s southern flank is highly volatile and there’s still uncertainty about the future cohesion of the Russian Federation.

That’s hardly a winning geopolitical design. And, as the shooting-down of MH17 shows, Putin’s proxy war in the Ukraine is becoming more and more a strategic liability. Pressure is growing on him to cooperate in the investigation and to end Russia’s destabilising behaviour in Ukraine.

From an Australian perspective, it’s thus important to recognise that Russia is dealing from a position of relative weakness, not strength. That provides diplomatic opportunities. Russia has already supported this week’s UN Security Council Resolution calling for a ‘full, thorough and independent international investigation’ and bringing those responsible to justice. Behind closed doors, Australia and the international community should also use the momentum to pressure Putin to do his share to bring about a lasting cease-fire in Ukraine as a basis for political negotiations.

But it’s equally important to remember key principles of crisis management: keep communication channels open and refrain from making unacceptable demands. In this context, banning Putin from attending the G20 Summit in Brisbane wouldn’t send the right signal after Moscow’s supporting the UN Security Council Resolution. Further, demands of a return of the Crimea to the Ukraine are unrealistic—no Russian president would survive such a move domestically. Instead, a key objective should be about negotiating special status for those provinces currently under control by the separatists whilst ending Russia’s objections to Ukraine moving closer to the West. It’s unclear whether Russia is prepared to go down that road but such an outcome could mean real progress for the geopolitical mess that is Ukraine today.

Moreover, as the dynamics in the Ukraine crisis could increase the leverage of the West, calls for immediate, even more serious sanctions should be resisted unless the Russian government fails to follow through on its pledge to punish those accountable or if Moscow continues to destabilise Ukraine. While some defence-industrial steps make sense (for example, France would be well-advised to cancel the sale of two Mistral-class amphibious assault ships), further economic sanctions could lead only to a weaker Russia acting even more erratically. The isolation and humiliation of wounded powers has never been a good strategy in international relations. And whether we like it or not, we still have to find ways to work productively with Russia. It may not soon be the great power it was in the Cold War, but it will still be able to cause serious problems in its near abroad and elsewhere.

Benjamin Schreer is a senior analyst at ASPI. Image courtesy of Flickr user World Economic Forum.

Australia’s term on the UN Security Council: an intensive final quarter

United Nations Security Council

Less than a week ago, Australia spearheaded efforts for the adoption of a UN Security Council resolution on the Syrian humanitarian crisis. This week Australian diplomats in New York, boosted by the high-profile engagement of Foreign Minister Julie Bishop, have worked deftly to navigate their way around Russian opposition to reach agreement on resolution 2166 which calls for an independent and impartial investigation into the ‘downing‘ of flight MH17.

As a non-permanent Council member with a genuine strategic interest in the events unfolding in the Ukraine over the last few months, but little leverage to shape outcomes there, Australia’s engagement on the situation during 19 Council meetings since February had effectively been limited to that of a diligent and constructive board member.

But that changed when 37 Australian citizens and residents—the most of any Council member—lost their lives on MH17. Citizens from several countries, including the Netherlands, Malaysia and the UK, were among the 298 passengers and crew killed last week. Given the impact of the events on Australia’s interests, it was natural for Australia to take a leadership role in pursuing a resolution for an independent and impartial investigation. But, without the support of other Council members, we would have had more difficulty doing so in such a short period of time—something which reflects the level of respect that Australia has garnered during its current term on the Council. Read more

The Council agreed unanimously last week to resolution 2165 (PDF) on humanitarian access in Syria. This came after months of behind-the-scenes work by Australia, along with Luxembourg and Jordan, to finalise a text that would be acceptable to all Council members (including Russia and China, which have vetoed four previous resolutions on Syria). The resolution authorises the delivery of humanitarian aid by the UN system to the civilian population, without the requirement of consent from the Syrian government. After more than three years of civil war, it’s a small but significant step forward, which is expected to enable assistance to as many as 2 million civilians on the ground.

Australia will rotate off the Council in less than six months. Recent events suggest the final quarter will be intense. Nonetheless, the last few months also present an opportunity to be the most effective: we’ve now mastered the complex intricacies of Council procedures, established working relationships in New York, and built a stock of political capital with other members.

In the remaining months, it’ll be important that Australia continues its substantive engagement in areas where it has built a reputation as an effective Council player. Most immediately, this will involve holding the Council’s attention on the investigation into the events surrounding MH17 and ensuring that those responsible are held to account. Ongoing engagement with the UN will also be required on humanitarian access in Syria to ensure resolution 2165 is being implemented effectively. Supporting timely public briefings to the Council will maintain pressure on Russia in both those contexts.

We’ll need similar efforts in areas where Australia holds clear Council responsibilities. As the ‘pen-holder’ (coordinator in the Council) on Afghanistan, it’s expected that will include a Council product prior to the end of 2014 on the post-ISAF presence in Afghanistan. As chair of three UN sanctions committees, Australia has also invested time in shaping UN efforts on a more comprehensive approach to sanctions. While that work could continue once Australia leaves the Council, there’s more political capital available to influence those efforts in the next few months.

Australia’s also in the unique and enviable position of holding a second Presidency of the Council in November, presenting another opportunity to pursue an outcome on a thematic issue. It’s expected that Australia will seek to focus on the role of policing in peacekeeping. Given the growing need for qualified and skilled police peacekeepers, it’s an issue that would benefit from further international engagement.

In addition to high profile activities, one of the most durable legacies that Australia can leave in the remaining few months will be incrementally shaping Council mandates, particularly on peacekeeping missions. While mandates are reviewed regularly, they essentially build on the language already agreed. Ensuring resolutions include language on Australian priorities—such as protection of civilians and preventing the illicit flow of small arms and light weapons—will help sustain our influence beyond our Council term.

While the Council’s agenda might not always directly affect Australia, it does affect our interests—and those of our partners and allies. As the government starts to contemplate the priorities and legacy from our current term on the Council, it should also be thinking about the lessons we’ve learned—and when Australia might step up to serve again.

 Lisa Sharland is an analyst at ASPI. Image courtesy of Flickr user Arthur Lee.