The strategic shocks to come in 2021
23 Dec 2020|

If the tradition still holds, arriving on Prime Minister Scott Morrison’s desk this week will be a report setting out the Australian intelligence community’s best guesses (they will call them ‘judgements’) as to big strategic developments that could go horribly wrong in 2021.

We will probably never see that report, so in its place here are my best judgements (you can call them ‘guesses’) as to the likely prospects for peace, conflict and the in-between stage now called the ‘grey zone’, where aggressors advance their interests covertly.

Here are a couple of take-to-the-bank strategic certainties for 2021. First, there will be no repair or reset to our China relationship because the Chinese Communist Party under Xi Jinping thinks it’s essential to ‘punish’ Australia so that other democracies don’t get the uppity idea that the party will treat them respectfully as equals.

Beijing is probably just beginning to work through the list of Australian exports to be banned or punished with tariffs. Don’t be surprised if the CCP starts to limit tourist and student visas ahead of any real resumption of travel.

Aggressive and insulting propaganda will ramp up, the worst of it directed to Mandarin speakers. How ugly can it get? Pre-Covid-19 there were more than 10,000 Australian citizens in mainland China and around 100,000 in Hong Kong. The number now will still be substantial. In July, the Department of Foreign Affairs and Trade’s Smartraveller website advised that Chinese ‘authorities have detained foreigners because they’re “endangering national security”. Australians may also be at risk of arbitrary detention.’

We don’t know how far Xi will take his use of the ideology of ‘struggle’ to mobilise aggressive nationalism, but this is now a central element of his rule. Australians in China need to be conscious of the personal risk this creates.

The irony is that China is helping Australia achieve the substantial delinking from the Chinese economy which our sovereign interests and self-respect needs. Thanks, wolf warriors!

Another certainty is that Australia will continue to be under full-on cyber assault, principally from China, but it’s also likely that the Russian Intelligence hack into America’s government, security and business networks via the Texas company SolarWinds will impact Australia.

The attack using a SolarWinds ‘Orion network monitoring product’ is so serious that the White House’s National Security Council met to discuss it last weekend. Notwithstanding President Donald Trump’s undisciplined tweet suggesting that China rather than Russia was the culprit, it seems most likely that Russian intelligence installed malign code into a legitimate SolarWinds update from March, which SolarWinds sent to 18,000 customers to install.

This software allowed attackers remote access to the unclassified databases of the Pentagon, the US military, intelligence agencies and the organisations managing America’s nuclear arsenal.

Should Australia be worried? A review of the government’s AusTender contract database reveals that many federal departments and agencies are recent customers of SolarWinds, including Defence’s Chief Information Officer Group, the equipment-purchasing Capability Acquisition and Sustainment Group, and the Defence Science and Technology Group.

Other recent Australian customers include the cyber intelligence agency the Australian Signals Directorate; the Department of Home Affairs; Austrade; the Department of Education, Skills and Employment; the Department of Finance; the Bureau of Meteorology; and the Australian Radiation Protection and Nuclear Safety Agency.

My understanding is that SolarWinds’ compromised Orion product accounts for about half the company’s business. Maybe there’s no problem in Australia—or we’re just yet to hear of a major security compromise. The government’s Australian Cyber Security Centre recommends ‘disabling internet access to Orion servers’.

The wider point is that Australia is under constant, sustained cyberattack from sophisticated and persistent state actors that have shown a determination to get into our networks, ranging from parliament to security and intelligence agencies, universities and businesses.

Does the Morrison government have the right level of attention on cybersecurity? We have yet to hear a minister comment on the SolarWinds attack from an Australian perspective. At the recent ministerial reshuffle, the word ‘cyber’ has disappeared from the title of any minister in Morrison’s second ministry.

It’s true that Foreign Minister Marise Payne has a strong interest in international cyber diplomacy and that Peter Dutton’s Department of Home Affairs released a cyber strategy last August, but cybersecurity is central to supply-chain security and the risk to our critical infrastructure is growing.

What is the risk of military conflict in 2021? Australia’s defence strategic update released in July says that ‘the prospect of high-intensity conflict in the Indo-Pacific, while still unlikely, is less remote than in the past’. In my view this understates the risk.

All through 2020 we have seen China’s military engaged in high-risk exercises and air- and sea-space incursions against neighbours in the South and East China seas and around Taiwan. A bloody hand-to-hand fight along the line of control in the Himalayas saw India and China engaged in direct combat.

Xi’s wolf-warrior nationalism is clearly clouding China’s normally cautious military judgement. Around China’s borders, this burst of nationalist overconfidence could give rise to a military confrontation that starts, perhaps, as the mistaken sinking of a ship or shooting down of an aircraft and then escalates until political intervention pauses military action.

Beijing clearly thinks that it has a window of opportunity to advance its military control around the so-called first island chain from Japan through to Taiwan and the Philippines. With America going through an ugly presidential transition and wracked by Covid-19, Xi may think this is the moment to apply maximum pressure on Taiwan to accept Beijing’s political control.

Would a newly sworn in US President Joe Biden intervene to defend Taiwan? If he failed to do so, that would end America’s Pacific alliances. More likely, Washington would provide military support and expect Japan and Australia to be involved.

What Australia should do in the event of a conflict or a military stand-off over Taiwan is one of these awkward discussions Canberra prefers not to have. But there is no exit strategy from our own region.

Finally, North Korea. Expect Pyongyang to test Biden’s resolve early, either by a nuclear test, possibly atmospheric, or with an intercontinental ballistic missile launch. Over three generations, the Kim regime has sought to push the US into making concessions, offering assistance or at least reducing sanctions in return for nuclear negotiations.

Biden must confront the horrible reality that North Korea now has close to a reliable capacity to hit an American city with a nuclear warhead. Trump’s failed attempt to negotiate directly with Kim Jong-un leaves Biden with deadly unfinished business.