As Deputy Prime Minister and Defence Minister Richard Marles noted in his statement introducing the 2023 defence strategic review, a stable relationship between Australia and China is in the interests of both countries and the broader region. ‘Australia will,’ he stressed, ‘continue to cooperate with China where we can, disagree where we must, manage our differences wisely, and, above all else, engage in and vigorously pursue our own national interest.’

The review thoughtfully reflects Canberra’s determination to never give up trying to engage China while at the same time squarely facing up to the risks inherent in a region defined by strategic competition.

China’s military build-up is a big part of the problem, and it has long been large enough to, in and of itself, increase the potential for military conflict in the region, if only because it encourages other countries to modernise their military forces.

But it has taken several years of naked aggression and overt bullying from Beijing alongside that military build-up to show clearly how Australia’s interests and the global rules-based order could in the future be permanently undermined.

So, what is driving China’s increasingly aggressive stance?

Despite its many positive chapters and subplots, China’s rise is at its core a tale of discontentment and revenge—and it is a story playing out on a large scale.

To most observers of international politics in Asia, it’s now clear that China’s leaders won’t be satisfied until the United States is kicked out of the region, preferably unceremoniously, and Beijing has secured the unquestioning respect of all those left behind.

From this analytical starting point, it is hard to view China as anything other than an enduring national security threat to Australia.

While it is always difficult to divine the real strategic intentions of China’s leaders, Xi Jinping’s China clearly covets deference as a precondition for engagement and, it seems, genuinely believes that getting other countries to defer to China’s interests is necessary for it to achieve full national rejuvenation.

To Xi, all serious questions of power and cooperation should be—and for domestic political reasons increasingly need to be—framed in terms of external struggle.

In contemplating the potentially negative consequences of all this, in terms of China either getting or being denied what it wants, it’s important to understand the centrality of the notion of deference to Beijing’s view of itself and its external security environment.

But how much does it really want it?

For strategic thinkers in Canberra and across the region, there’s a world of difference between dealing with a China that seeks to control most of the things that others say and do but is quietly satisfied with being able to do so only some of the time, and a China that believes it is entitled to do so routinely and justified in acting out when it cannot.

Both are unpleasant, to be sure, but while the former is seriously annoying, the latter is unacceptable because it so clearly undermines the ability of sovereign states to make their own decisions and therefore threatens to make life permanently challenging for all of us.

Avoiding this potentially negative outcome would be one of the lines of reasoning underlying Canberra’s recent decision to expand Australia’s contributions to regional security through the AUKUS arrangement.

There were certainly clear risks associated with that decision. For one thing, it risked shifting China’s perception of Australia as a benign middle power with no real means to shape the regional security environment to something distinctly darker and more impactful. But it was a decision that reflected the reality of the enormous national challenge we face.

The cost of inaction, should China succeed in getting what it wants, simply became too serious to ignore. And we tried to do just that for quite a while, perhaps longer than we should have.

China’s efforts over the past several years to permanently reshape the region have caused even those observers who pride themselves on their capacity not to overreact to worry about the prospect of the global power balance shifting decisively in China’s favour.

China’s campaign of economic coercion against Australia gave us a taste of what a region deterred by Chinese coercion would look and feel like. And it tasted bad.

Under Xi’s leadership, China has undoubtedly become more aggressive and more accepting of risk. More worrying than its growing military power is the fact that Beijing’s desire to dominate the region is still deeply rooted in historical memory and intersecting domestic-political and geopolitical issues and interests that make it hard for China’s leaders to step back from external challenges—even if they wanted to.

The legacy of hatred and bitterness from Japan’s military invasion of China some eight decades ago hasn’t faded with the passing of time.

Simply put, China’s leaders have less room for manoeuvre and more power to exert.

Against the backdrop of all these considerations, it is no longer possible to credibly argue that China will eventually become a benign hegemon, one that will in time happily use at least some of its national power to pursue things other than self-interest.

With all indictors pointing in the opposite direction, it is a very worrying and, for want of a better word, threatening time for the region and the world.

And there’s no shame in admitting that.

Home to almost two billion people, some of the world’s most dynamic economies, and important shipping routes, South Asia is a crucial geopolitical arena and the site of increasing rivalry between two of Asia’s biggest powers—China and India.

This growing competition manifests in many areas. Despite having much in common—as rising powers with nuclear weapons and large populations alongside a shared ambition of multipolarity—India and China regard each other with suspicion.

This has led the two countries to try and contain the influence of the other, and to compete to expand into new areas of regional strategic interest in South Asia and the Indian Ocean region.

For China, greater influence in South Asia supports domestic and foreign policy goals, specifically protecting access to world markets via the Indian Ocean region’s important global maritime routes.

Aiming to challenge India’s position as the regional naval hegemon, China’s People’s Liberation Army (PLA) Navy has also built up presence in the Indian Ocean.

Furthermore, using the ambitious Belt and Road Initiative (BRI), Beijing has strengthened relations in South Asia through infrastructure investments and greater connectivity via sea, road, and rail. This also supports China’s ambition of building a ‘community of common security’ in the neighbourhood.

Most of India’s South Asian neighbours—aside from Bhutan—have joined the BRI, under which Chinese investment has grown considerably through soft power and hard power. Since 2018, China has committed or invested over US$150 billion in the economies of Bangladesh, Maldives, Myanmar, Pakistan, Nepal, Sri Lanka and Afghanistan. China is now the largest overseas investor in Maldives, Pakistan, and Sri Lanka.

This has worried India, which fears that China may significantly impact its own sphere of influence and even encircle India with a ‘String of Pearls’, similar to Beijing’s fears of a ‘Malacca Dilemma’.

China’s establishment of a military base in Djibouti and the Sri Lankan authorities allowing a Chinese military surveillance ship to dock at Hambantota port have exacerbated these concerns. From India’s perspective, China’s growing influence in the region has placed them in competition, pushing it to reconsider its foreign policy and engagement in the region.

It has done this by implementing a ‘Neighbourhood First’ Policy in South Asia. This policy is further supported by an ‘Act East’ Policy, under which India seeks to improve relations with Southeast Asian countries and the rest of the Asia-Pacific region.

Additionally, New Delhi has extended lines of credit to five countries in the region—Bangladesh, Maldives, Myanmar, Nepal, and Sri Lanka—and also invested in infrastructure, especially in energy and connectivity. To support these efforts, Indian conglomerates like the Adani Group have greatly increased their presence in Asia aided by concessional loans for ‘strategically important infrastructure projects abroad’.

Neither China nor India’s efforts to increase their spheres of influence are without challenges. For China, the BRI has faced significant criticism for its ‘predatory’ loans and for trying to legitimise China’s authoritarian model of government and economic development.

Some note that expanding trade deficits in China’s favour, alongside the absence of strong institutional mechanisms to protect borrowers and the scale of China’s lending, pose risks for countries accepting BRI investments.

Still others argue that fears of ‘debt trap diplomacy’ are exaggerated, noting that Chinese investment nearly always faces backlash, regardless of its terms.

India’s foreign policies have also come under scrutiny. Along with territorial disputes and New Delhi’s inconsistent regional engagement, there are concerns that India may co-opt regional cooperation mechanisms to try achieve regional hegemony in South Asia.

These fears are made worse by anti-India sentiment in parts of South Asia, including in Bangladesh and Nepal, where India has been credibly accused of meddling in domestic politics. For other countries like Bhutan, close relations with New Delhi have hampered attempts to strengthen bilateral ties with other countries.

This Sino-Indian competition in South Asia stands against a backdrop of systemic China-US competition. This unstable environment offers smaller South Asian countries—who might be concerned about an asymmetry of power in India’s favour in their bilateral relationships—opportunities to use offers from China to get a better deal with India, and vice versa.

However, this risks them being drawn into regional and global geopolitical rivalries, and could lead to pressure from all sides. After all, as the example of Nepal shows, achieving a balancing act is difficult. As it stands, the geopolitical landscape of South Asia is being decided by this increasing rivalry, and how these smaller powers navigate it deserves closer attention.

In 2022, US Speaker of the House Nancy Pelosi visited Taiwan, despite threats of retaliation from Beijing. ASPI’s Samantha Hoffman speaks to Nadège Rolland, a distinguished fellow at the National Bureau of Asian Research, about Pelosi’s visit and the effectiveness of Beijing’s propaganda campaign.

While climate change is viewed primarily as an environmental challenge, Australia, like many other countries, is increasingly focused on its implications for national security. ASPI’s Robert Glasser speaks to Tobias Ide, a senior lecturer in politics and policy at Murdoch University, about climate change and Australia’s national security and how climate hazards can lead to conflict.

Last week was budget week in Canberra, and to break down the defence budget, ASPI director Bec Shrimpton speaks to ASPI senior fellow David Uren. They discuss defence projects and the usefulness, or otherwise, of measuring defence spending by GDP.

In opting to acquire nuclear-powered submarines as a part of the AUKUS deal with the United States and the United Kingdom, Prime Minister Anthony Albanese has committed Australia to a price tag of about $368 billion dollars. That’s a lot of money, even spread over several decades. It will result in the acquisition of an as yet uncertain number of submarines—possibly upwards of eight—as well as improvements to port and maintenance facilities, training and education of crews and the creation of a nuclear capable workforce and research capacity. As these boats retire—and since the first ones Australia is getting are second hand—that time is not as far off as one might think. Defence will need money to manage the nuclear waste with unknown technologies at a yet-to-be-decided location. Additionally, some money will go to American submarine builders to improve assembly lines.

The goal is to make Australia more secure. What needs to be examined is what security opportunities will be foregone because of the submarine project’s absorption of much taxpayer largesse and  government political capital. Might not such expenditure on other things result in an equally, or even more, secure Australia? And would such expenditure not generate greater second-order effects, such as more quality jobs or a better way of life for all Australians?

In the enthusiasm for AUKUS, for example, the implementation of serious climate change policies has again been overlooked. This is telling because the threat to Australia’s security from climate change is only growing more severe. At a 20 March press conference, United Nations Secretary General Antόnio Guterres released the Intergovernmental Panel on Climate Change’s 6^th synthesis report and  again called on major greenhouse gas producing nations to make a serious effort to halt emissions to save humanity. He peppered his talk with expressions of frustration, such as ‘the climate time-bomb is ticking’, and we are ‘on thin ice’ and the ‘ice is melting fast’.

I suspect that the $368 billion earmarked for submarines would go a long way towards meaningfully reducing Australia’s emissions. This would smooth Australia’s transition to a future in which electricity, produced by renewable technologies, is the dominant energy source for all homes and industries nation-wide. Professor Saul Griffith, author of The Big Switch, argues that it’s now possible to electrify virtually all of the nation’s economy with existing technologies, largely eliminating Australia’s greenhouse gas emissions.

The move towards an electrified future would necessitate a government-led whole-of-nation investment program. It would be a nation building effort, much as the Snowy Mountains Scheme was, and as the nuclear-powered submarines would be. Of course, some workers will need to adjust. Those employed in the fossil fuel economy would find ready employment, with government provided retraining, in the installation of solar and wind farms or in the mining and processing of the new economy’s essential minerals such as lithium and rare earths.

Because of its vast space and plentiful sunlight and wind, Australia could also become a global energy powerhouse. Electricity that Australians do not need could power Indonesia, Papua New Guinea, Singapore and elsewhere, exported via undersea cables.

There’s no doubt that China is challenging the established US order. However, the reality is that because of a misunderstanding of risk, the enhanced security created by eliminating the burning of fossil fuels would be far greater for Australia than that gained from a militarised response to China’s challenge. China’s assertiveness, even under worse case scenarios, does not pose an existential risk to Australia. If the emission of greenhouse gases continues, on the other hand, Australia will experience worse and more frequent natural disasters, become increasingly arid and see major reductions in food production.

More worrying is the damage climate change will do to the stability of the broader region. Changes in rainfall patterns and rising seas will reduce food production in Asia and Oceania which will lead to rising social tensions, state disintegration, intra- and inter-state conflict, mass migration and the proliferation of ungoverned spaces. Under the rampant climate upheaval that will result if greenhouse gas emissions are not stopped, Australia will need to contend with a much more destabilised region posing a multitude of threats to its territory and interests—much in the manner of a more assertive China, just more chaotic, widespread, and closer.

A nation building program focused on electrification from renewable sources would also solve another major security risk Australia faces—the fragility of its liquid fuel supply. Australia is wholly dependent on the importation of crude and refined petroleum products. Much of Australia’s refined fuel comes from Asia: China met 13.5% of Australia’s needs in 2020. As a precaution against disruption of supply, Australia established a petroleum strategic reserve, but the product is sub-optimally located in the salt caverns of Texas and Louisiana and is not readily accessible.

A failure of liquid fuel supply would cascade rapidly through the economy. Trucks would come to a halt, mines would shut and industries cease to operate. Within weeks supermarkets would start to run out of food. The liquid fuel threat over Australia can be solved with leadership, resolve and money—perhaps part of the $368 billion. Relieved of its dependence on imported liquid fuels through electrification, Australia would be more secure.

Australia could further enhance its national security by increasing its investment in soft power. According to Andrew Bacevich, the US has a tendency to see international disputes as military problems and does not see benefit in seeking solutions through non-military means. For the US, the first tool with which to manage a dispute is war or its threat. This need not be the case for Australia. If Australia opens additional consulates across the region, significantly enlarges international engagement by all government departments, and establishes cultural, language and education programs, for example, an outcome is likely to be a better understanding of our neighbours, including China, which would create opportunities to deescalate conflict rather than the reverse.

National security cannot be achieved by the acquisition of any one weapon system, no matter how expensive, state-of-the-art or impressive. In committing to these submarines, Australia has shut out other options with no national debate. Their cost, barring a significant increase in the overall defence budget, will create an unbalanced defence force capable of operations in only narrowly prescribed scenarios. Other options would result in much better outcomes for the Australian people. The building of a nuclear-powered fleet carries risks of its own. Australia is an inexperienced operator and requires investment in technologies which this country has no track record in building or using. In contrast, our scientists, engineers and grid operators have been at the forefront of advances in solar and wind generation technology.

Australia needs a national discussion on what security means and how it can best be achieved. It needs the leadership to envisage alternate futures and the policies to see through a nation-building program that will result in a more self-reliant and regionally engaged nation. Then Australia will truly be secure.

The stern warnings issued by China ahead of Taiwanese President Tsai Ing-wen’s tour of the United States and Central America have highlighted the threat that intensifying Chinese pressure poses to the island’s security and stability. But the warnings also underscored the degree to which the ongoing US efforts to ‘onshore’ semiconductor manufacturing could cripple Taiwan’s economy at a critical time.

Taiwan’s security rests on two main pillars: self-governance and economic prosperity. Maintaining de facto sovereignty is non-negotiable, which rules out an accommodation that would placate China, at least under the current Chinese leadership. Even in the face of economic and diplomatic coercion, Taiwan is unlikely to relinquish its democratic system.

Taiwan’s dominance in semiconductor manufacturing is critical to its economic security. Taiwan currently produces more than 60% of the world’s semiconductors and 90% of all high-end chips. But the efforts of US President Joe Biden’s administration to promote domestic semiconductor manufacturing—reflected in the US$280 billion CHIPS and Science Act—threaten to undermine the long-term competitiveness of the Taiwan Semiconductor Manufacturing Company, severely threatening the island’s so-called silicon shield.

The US semiconductor manufacturing push has inspired nervousness in Taiwan. TSMC founder Morris Chang recently backed the Biden administration’s imposition of sweeping export controls to curb Chinese advanced-chip production. But Chang says that he doesn’t understand why the administration wants to move manufacturing from efficient Asian sites to the US.

Nevertheless, in an effort to escape a geopolitical quagmire, TSMC announced plans last year to invest US$40 billion in a new fabricating plant in Arizona, which will drive up costs and could limit the company’s ability to make the massive investments in research and development needed to retain industry leadership. It is already clear that production costs are significantly higher in Arizona than in Taiwan, forcing TSMC to pass its additional costs on to customers or accept lower profit margins, implying higher prices, reduced innovation or both.

Moreover, the administration’s onshoring and ‘friend-shoring’ drive implies that the US does not view Taiwan as a reliable partner. As US Secretary of Commerce Gina Raimondo put it last year, ‘America buys 70% of its most sophisticated chips from Taiwan … [That is] downright scary and untenable.’

Drumming up fears that Taiwan is in danger undercuts business confidence and could undermine Taiwan’s economic prosperity and hurt global chip production. The global semiconductor supply chain would be more resilient with a prosperous, innovative TSMC. But that requires the US to stop eroding Taiwan’s strategic position as a tech powerhouse.

To be sure, US politicians have been increasingly vocal in their support for Taiwan in recent years. But this newfound enthusiasm is largely symbolic and intended for domestic consumption by voters who favour a more aggressive US stance towards China. Such political posturing doesn’t help Taiwan. Provocative acts, like former House Speaker Nancy Pelosi’s visit to Taiwan last year and the 5 April meeting between Tsai and current House Speaker Kevin McCarthy, threaten the delicate status quo that has enabled Taiwan to maintain its de facto sovereignty and protect its way of life.

Chinese leaders have long asserted the mainland’s sovereignty over Taiwan and insisted that reunification is inevitable. Paradoxically, it is the US government’s endorsement of and adherence to this official ‘one China’ narrative that has kept Taiwan safe. Dropping the facade, ostensibly in support of Taiwan, would make the island’s geopolitical position even more tenuous.

Instead of grandstanding, what Taiwan needs from the US is a bilateral free-trade agreement and support for Taiwan’s membership in regional trade agreements such as the Indo-Pacific Economic Framework for Prosperity and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

There are also steps that Taiwan could take on its own, like continuing to invest in asymmetrical defence capabilities, cyber and critical infrastructure, and military training. Economically, the island could benefit from the ongoing decoupling between China and Western countries by positioning itself as one of the world’s largest manufacturing powerhouses.

But first, Taiwan needs to buy itself some time. The tug-of-war between the US and China leaves Taiwanese policymakers with little room for manoeuvre. At present, there’s no scenario in which the ‘Taiwan question’ is resolved in a way that satisfies the needs of all parties. While it’s vitally important that Taiwan remains a prosperous tech hub and a democratic society, this outcome is far from guaranteed.

The US intelligence community believes that China will invade Taiwan by 2027. With the right policy response, however, the US can prevent this catastrophe and push the resolution of the ‘Taiwan question’ far into the future. But a shift in US policy towards ‘containing’ China would invite rather than postpone the island’s day of reckoning, and could lead Taiwan—and the world—down a perilous path.