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Like his strategic partner Vladimir Putin in his horrific war in Ukraine, Xi Jinping’s violently aggressive actions in the past few days against Taiwan—and Japan—have revealed how he wants to act in the world.
These acts are what diplomats and governments have called ‘disproportionate and destabilising’.
Despite the strident efforts of China’s wolf-warrior diplomats, it’s plain hard for Beijing to portray itself as the victim here. Victims are usually not the ones launching ballistic missiles when others aren’t.
The military violence is far from a reasonable response to the visit to Taiwan of an 82-year-old American politician called Nancy Pelosi.
China’s ambassador to Canberra, Xiao Qian, did his best to follow the instructions from Xi, repeating foreign ministry lines. ‘The actions taken by Chinese government to safeguard state sovereignty and territorial integrity and curb the separatist activities are legitimate and justified. Instead of expressing sympathy and support to the victim, the Australian side has condemned the victim along with the perpetrators.’
But in the real world, Chinese military aggression shows us that Beijing is intent on changing the peaceful status quo across the Taiwan Strait—something that is a flat contradiction to China’s stated policy of wanting peace.
Chinese military planes and ships closing large areas of the air and maritime space around Taiwan and the People’s Liberation Army firing ballistic missiles over the heads of 23 million Taiwanese people and into Japan’s exclusive economic zone are a physical demonstration of China’s intent. These actions make its words about peace and stability empty.
It’s surprising that no one in Beijing or in the PLA higher command seemed to consider the effect on Japanese policy and public opinion that’s flowing from the disastrous decision to launch ballistic missiles into Japan’s EEZ. If China had wanted to really energise Tokyo’s efforts to strengthen Japan’s military power and to think through the close connection between Taiwan’s security and its own, these missile launches would have been the best way of achieving that.
Xi went beyond even the military violence, adding other overreactions like ending climate talks and military contact with the US, cancelling a meeting between the Chinese and Japanese foreign ministers and threatening the EU if members of the European parliament visit Taiwan.
This lack of control from the Chinese also shows us something important about what happens next in nations’ relationships with Taiwan.
Xi’s violent overreaction to a political visit demonstrates how determined Beijing is to isolate Taiwan from the rest of the world. That is probably the biggest implication to draw from the past few weeks.
Beijing’s primary goal with all the heat, light and aggression is to raise the costs of future engagement with Taiwan by all politicians from every democratic country and every government other than its own.
Beijing wants us all to self-censor our engagement with Taiwan to avoid more of these disproportionate reactions. That’s so important because Xi and his military want to have a free hand to act against Taiwan and its people at a time of his choosing.
So, if the US, the EU and its members, Japan, the UK, Australia and even ASEAN members want actual peace and stability across the Taiwan Strait, one of the primary ways of getting that is continued—and increased—political and economic engagement with the Taiwanese government, people and economy. That raises the costs to Xi of ordering an attack on Taiwan and it also provides political support for the Taiwanese government and people.
This engagement will show Xi something he already fears is true: using force against Taiwan is against the interests of many governments and peoples. It is not what he would like it to be—an internal matter for the Chinese Communist Party to determine.
Xi’s direction of violence against Taiwan and Japan in the past few days has driven some interesting responses from different parts of the world. The G7 grouping—made up of Germany, France, Italy, Japan, Canada, the US, the EU and the UK—clearly identified Beijing as the source of destabilising aggression around Taiwan and called on China to de-escalate its military actions.
The US, Japan and Australia all issued measured, calm statements separately and as a group that also plainly identified China’s aggression as destabilising and disproportionate.
Even a reluctant ASEAN put out a quietly worded statement that disagreed with Beijing’s core propaganda around its one-China principle, stating, ‘We reiterate ASEAN Members States’ support for their respective One-China Policy.’ Decoding this diplomatic note, the reference to ‘their respective One-China policy’ was ASEAN quietly but firmly dissenting from Beijing’s line that everyone has accepted its particular definition of ‘one China’—which is that Taiwan is an inalienable part of the territory governed by Beijing.
Like Australia, and many other nations, ASEAN states simply do not and have not signed up to China’s view of the world on this critical issue.
Australia, like many, maintains the same policy that Prime Minister Gough Whitlam put in place back in 1972 when China and Australia established diplomatic relations: ‘The Australian Government recognises the Government of the People’s Republic of China as the sole legal government of China, [and] acknowledges the position of the Chinese Government that Taiwan is a province of the People’s Republic of China.’
Critically, Australia acknowledged it is the PRC government’s view that it has jurisdiction over Taiwan—but, beyond acknowledging it, we have never agreed with that view. We do, however, support peace and stability across the Taiwan Strait and reject anyone acting unilaterally to change the status of Taiwan by force.
And, stripping back all the words and focusing on who has done what to whom around Taiwan, it’s the Chinese military that is acting unilaterally in an attempt to change the status quo. This is longstanding policy that predates all the drama about Pelosi and will continue long after this event, because it’s about Chinese strategic ambition, not a reaction to a US politician.
Interestingly, having stoked nationalist fervour and outrage in the lead-up to the visit, China’s propagandists have had a hard time convincing these strident, angry nationalists that their government’s actions were at all meaningful. It’s a demonstration that even a deeply controlling, technologically enabled autocracy like China’s can have trouble responding to its own citizens and may even be forced to act internationally simply because of the domestic energies it has channelled and cultivated. While this often violently expressed nationalism is a direct result of successful propaganda in China’s education system and state media, it is adding to the multiplying domestic pressures and challenges Xi is facing.
Where to from here for Australian policy on Taiwan and for bilateral relations with China? The path seems clearer now than it was when Prime Minister Anthony Albanese’s government came to power in May.
On Taiwan and regional security, Australian efforts with allies and partners to raise the costs to Beijing of conflict must intensify.
The defence strategic review ordered by Defence Minister Richard Marles has an obvious and key contribution to make as it finds ways to urgently increase Australia’s military power—a direct contribution to deterrence of conflict in our region.
But this is as much a political and diplomatic issue as a military one, which the government seems to know well. Understanding Beijing’s goal of isolating Taiwan as a precondition for it to then use force to ‘unify’ Taiwan and its people with the mainland makes Australian political and economic engagement with Taiwan more important.
By deepening political and economic engagement with Taiwan, Australia will be working in concert with partners and allies across the Indo-Pacific and in Europe. One example is Japan, with the week’s events only accelerating an already deepening strategic partnership with Australia.
Australia and other partners can also work to have Taiwan included in more international organisations and forums, engage in security discussions with Taiwanese officials, and work with Taiwan on strengthening cybersecurity and countering coercion and disinformation activities.
All this is entirely possible within the one-China policy Australia adopted in 1972. It’s entirely impossible within the one-China policy Beijing is working so hard to tell us we have.
A key part of engagement with Taiwan that Beijing will pretend not to understand is for it to happen just like democracies work internally—in a messy and organic way that allows diverse people and views to express their opinions and act without government direction. So, political visits to Taiwan must not just increase, but be communicated to be what they are: the choices of individuals living in freedom in democracies—and not subject to veto by presidents or prime ministers.
This contrasts with what Xi and Putin told us they wanted in their joint statement back in February: a world where these two leaders dictate the choices of other nations by force if necessary and where other governments self-censor themselves and their populations for fear of the consequences from Beijing and Moscow. This goes to the heart of the real competition with Xi and Putin, which is about how our societies and the world work.
Beijing’s anxiety about this kind of policy direction from governments with connections to Taiwan is already obvious. The future will be a tense one because Chinese strategists and military planners have an object lesson in what this kind of unity can do when they look at the political and military support Ukraine is receiving to fight the war Putin’s miscalculation has inflicted on Europe.
For those who see tension as inherently bad, the alternative to managed tension with Beijing over Taiwan is a future in which we all watch the type of horrific killing and destruction we are seeing in Ukraine occurring in Taiwan as China’s military attempts to conquer 23 million people living in freedom in the vibrant democracy that is Taiwan.
As for Australia’s relations with Beijing, the false dawn that the Chinese ambassador dangled before the new Australian government has already ended. That’s because China is now far less a bilateral relationship for Australia than an increasingly obvious common strategic challenge for every nation affected by Beijing’s use of power. And the strategic partnership between Putin and Xi joins Europe’s security with the security of our own region in new and direct ways.
Our policy must be informed by the knowledge of this common challenge and the unity and power that it brings to common efforts between Europe and the Indo-Pacific. That’s just as important to communicate to the Australian public as it is as a foundation for policy and action.
As Australia’s space sector grows and continues to build significant sovereign capabilities, optimising the links between the commercial and national security space sectors is critical. ASPI’s Bec Shrimpton speaks to Adam Gilmour, CEO and founder of Gilmour Space Technologies, about the need for greater collaboration between the private sector and government to support Australia’s space industry.
It’s been more than two years since the deadly clashes on the India–China border in 2020, and despite many rounds of consultations between the two countries, the situation shows no signs of improving. ASPI’s Baani Grewal speaks to Tanvi Madan, senior fellow in the Project on International Order and Strategy in the foreign policy program and director of the India Project at the Brookings Institution, about the trajectory of the India–China relationship in light of the border issues, as well as the differences between India’s participation in the Quad, BRICS and the Shanghai Cooperation Organisation.
Southeast Asia continues to see a rapid digital transformation, fuelling the region’s economic growth. ASPI’s Gatra Priyandita talks to Elina Noor, director of political-security affairs and deputy director of the Washington DC office at the Asia Society Policy Institute, about how governments in Southeast Asia are responding to the region’s digital transformation.
US Vice President Kamala Harris appeared virtually at the Pacific Islands Forum leaders’ summit in July to announce a new wave of US assistance to ‘significantly deepen’ US re-engagement in the region. But if Harris made waves in Suva, there was barely a ripple by the time the news spread across the vast ocean to the outer islands of Pacific countries.
If the US and the other members of its Partners in the Blue Pacific initiative—Australia, Japan, New Zealand and the UK—are to have an impact, they need to better understand online and social media information flows so they can speak to, understand and demonstrate that they’re meeting the priorities of the region.
Partners in the Blue Pacific is supposed to be an inclusive, informal mechanism to enhance cooperation in support of Pacific island priorities. But the partners also need to invest time and energy in communicating what assistance is actually being delivered, and they need to do it in a way that reaches and makes sense to Pacific people.
The recent Pacific Islands Forum summit was an example of a prime messaging opportunity that didn’t reach its full potential.
Initially, the chair of the forum, Fijian Prime Minister Frank Bainimarama, uninvited all 21 of its dialogue partners—including China, Japan, the UK and the US—in an attempt to stop geostrategic competition from distracting Pacific leaders from their core agenda.
But on the third day of the event, Harris announced her administrations new plans, which include tripling funding for economic development and ocean resilience in the Pacific to US$60 million a year for 10 years, establishing new embassies in Tonga and Kiribati, and re-establish a USAID regional mission in Suva.
The US announcement didn’t get the traction it deserved with the broader population through online media. It’s not the first time that has happened. Unfortunately, it also won’t be the last.
That’s because the countries that make up the Partners in the Blue Pacific don’t always tell the story right.
Storytelling is an essential part of Pacific island cultural knowledge and information sharing. More needs to be done to engage local media and to help tell the story of how aid, assistance and improving people-to-people links affects each country, island or group.
In an ASPI study of news and social media in the Pacific over the two weeks when the meetings in Suva were taking place, our analysis showed obvious differences between locally written and US-origin articles. The study used a simple categorical sentiment analysis of relevant social media comments that are targeted at foreign countries or local governments. Each comment was categorised as either positive or negative.
Articles written in the US resulted in a positive-to-negative comment ratio of 0.25. That means that for every positive comment there was about the US announcements, there were four negative ones.
For articles written locally, the ratio was 1.27. So, for the same four negative comments, there were just over five positive ones.
This comes from a relatively small sample size, however. There were only 459 Facebook comments in total across 171 articles reporting on the forum. Around 10% of comments were focused on the US, aligning with the 12% of articles that focused on the US announcements.
Regardless, the benefits of engaging local media are obvious. Only half of the articles on the US assistance announcements were produced by local journalists. The US announcements and geostrategic competition in the region were the topics with the lowest percentages of locally written articles emerging from the forum.
Finally, if the US and its partners needed one more reason to engage local media, they could look towards the Chinese Communist Party’s failed attempts to push narratives of American militarism and Australian paternalism in the region.
During the two-week collection period for this study, we identified 20 editorials in CCP state media relating to the Pacific Islands Forum, pushing a combination of pro-CCP propaganda and anti-Western narratives.
Highlighting how these narratives—written and published in China—lack relevance to the region, only one article attracted more than a handful of comments in Pacific island public Facebook groups. In this small sample, Pacific islanders consistently expressed scepticism and resentment of foreign interference in their affairs.
The population’s visible frustration with Chinese messaging online, as determined by our sentiment analysis, is echoed by Pacific leaders offline. The forum’s secretary-general, former Cook Islands prime minister Henry Puna, outlined the importance of listening to Pacific voices when he said, ‘If anybody knows what we want, what we need, and what our priorities are, it’s not other people, it’s us.’
The next test for Pacific partners will come this weekend when the new US ambassador to Australia, Caroline Kennedy, visits Solomon Islands.
In May, Chinese Foreign Minister Wang Yi failed his test when a press conference he held in Honiara was boycotted by Solomon Islands journalists who claimed that the CCP was ‘impeding on democratic principles’ when it sought to limit access and questions.
The US wouldn’t ever make that mistake, but it can still do more to engage local media—for example, by giving exclusive interviews to members of the Solomons’ media association. Following the recent tightening of government control over the Solomon Islands Broadcasting Corporation, giving power to the local voice has never been so important. And it is the local voice that will be integral to how the US is perceived and understood in Solomon Islands.
The Labor Party’s pre-election promise of a defence force posture review has now taken shape as a much more expansive strategic review encompassing the Australian Defence Force’s structure, posture and investment requirements over the next 10 years and beyond. Listen carefully and you’ll hear the gentle noise of a white paper being prepared.
The review will be headed by two independent leads, former Labor defence minister Stephen Smith and former ADF chief Angus Houston, and will report to the National Security Committee of Cabinet by March next year, alongside the release of the findings of the investigation of alternatives for acquisition of an Australian nuclear submarine capability announced under the 2021 AUKUS agreement.
The terms of reference make it clear that this review will consider not only the posture of ADF units, but also ‘force disposition, preparedness, strategy and associated investments’ required to achieve a force that is fit for purpose in a more adverse strategic environment. It will build on the analysis of trends set out in the 2020 defence strategic update and force structure plan, which in turn were hinted at in the 2016 defence white paper.
The review will first need to ‘outline future strategic challenges facing Australia’. That will demand a robust treatment of the challenge posed by a rising and assertive China. The threats from China are taking the form of not only a much more capable and modernised People’s Liberation Army, but also a more assertive use of grey-zone tactics by Beijing, the application of direct political warfare against Australia, and a creeping expansion of Chinese influence and presence into Australia’s area of direct military interest, including the South Pacific.
Past defence white papers have invariably seen their analysis rapidly overtaken by events. This is certainly what happened with much of the strategic assessment from the 2016 white paper. The accelerating deterioration in our strategic environment, which has been underway since 2015, prompted the 2020 update to go further to address the challenge from China. But that challenge has grown markedly even in the two years since the update’s release.
The evidence is clear, with aggressive PLA actions against Australian ships and aircraft in international waters, and the prospect of a Chinese military presence in the Solomon Islands—not to mention the rising danger of a Chinese invasion of Taiwan, perhaps as early as the second half of this decade. The PLA’s ability to project power at long range has also grown. China now has more advanced missile systems, strategic air power and counterspace and cyberwarfare capabilities. It has a bigger and more capable navy, and a large-scale nuclear build-up is underway.
To meet this challenge, the ADF needs to embrace a more forward-orientated posture that emphasises and hardens its capability in northern Australia. The notional sea–air gap in the north, which first appeared as early as the 1986 Dibb report, will have to be seen as a main rear area from which the ADF projects its operational focus—rather than from the south of the continent. That would be a significant shift in force posture, which I first suggested in 2018.
A ‘forward defence in depth’ strategy would involve expanding the ADF’s northern posture as well as building closer defence relations with key Indo-Pacific partners such as Japan, South Korea, India and some of the ASEAN states. It also entails strengthening Australia’s burden-sharing with the United States, including by allowing enhanced access for US forces to defence facilities in northern Australia—a step already suggested in last year’s AUSMIN communiqué.
In terms of force structure, priority needs to be given to expanding, enhancing and accelerating the acquisition of an ADF strike and deterrence capability. The review should not simply reiterate the 2020 force structure plan, and nor should it simply rely on the very long-term acquisition of nuclear-powered submarines to provide enhanced military capability. It needs to recognise the importance of acquiring truly long-range power projection for the ADF. It also needs to contend with that fact that air and naval platforms such as the F-35A Lightning II, F/A-18F Super Hornet and Hobart-class air warfare destroyer are likely to face increasingly greater risks in penetrating deeply inside China’s growing anti-access/area-denial envelope to deliver standoff weapons. Longer range platforms to deliver longer range missiles with precision and speed will be essential.
Ideally, Australia would have forward host-nation support in any crisis, but we can’t assume that’s always going to be available. Projecting strike capabilities directly from northern Australia to hold at risk any maritime threat generated by a major-power adversary like China, well beyond the notional sea–air gap, would dramatically boost the ADF’s ability to deter and respond, as well as to burden-share with key allies. There needs to be a discussion about acquiring in-development B-21 bombers and long-range conventional ballistic missiles that can strike at both land and maritime targets.
Related to this challenge are maximising the weight of fire to generate useful effects and sustaining combat in a possible conflict with China, which could easily become a protracted war. Part of the solution could be a far more ambitious and fast-moving autonomous systems strategy. But combat sustainment is a key weakness for the ADF, with its brittle and boutique platforms and munitions. A force structure that has both mass and endurance will be what’s required in a future war.
Earlier this year, the former government sought to accelerate the guided weapons and explosive ordnance enterprise as part of AUKUS, but so far little has happened beyond the choosing of two large aerospace prime contractors to lead the project. There’s been scant information on what weapons are to be built, how many and how fast, and when those weapons will start flowing. Building small numbers of weapons will be insufficient to meet the demands of high-intensity warfare, a fact so clearly demonstrated in the ongoing war in Ukraine. Nor does Australia have the luxury of time to build small stockpiles slowly.
The review is also tasked with considering funding and investment both for force structure and for preparedness and mobilisation. It’s vital that this is a strategy-led—not fiscally-led—exercise. The review must decide what the threat is and how to meet it in a manner that best protects Australia from emerging long-range capabilities and, in particular, neutralises the risk posed by Chinese military bases in our near region.
Deterring Chinese adventurism—be it against Taiwan, in the South China Sea or across the South Pacific—and responding to the threats posed by Chinese military capabilities must drive the review. This goal must also shape the review’s assessment of force structure requirements and its promotion of the case for a stronger and more robust ADF presence in northern Australia. Then it can work out how much extra spending will be needed to meet these goals. National security and defence will need to come first and the money will need to be found. The alternative is to accept a more insecure future.
A review that advocates a steady-as-she-goes, more-of-the-same approach in the face of a much more adverse security outlook will be a failure. Now is the time for the government to grasp the extent of the challenge posed by a rising China to our nation and our region and respond with responsible and decisive changes to Australian defence policy.
On 14 July, after months of controversy, Solomon Islands Prime Minister Manasseh Sogavare publicly ruled out the possibility that his security pact with Beijing would result in a Chinese military base in his country. Many Indo-Pacific nations no doubt welcomed his assurance that ‘there is no military base, nor any other military facility or institutions, in the agreement’.
In Canberra, many will have welcomed Sogavare’s declaration that Australia remains the ‘security partner of choice’ for Solomon Islands. However, his comments that his government would only call upon China if there were a gap Australia couldn’t meet is telling. His warm greeting of Australian Prime Minister Anthony Albanese was equally telling.
Like most politicians, Sogavare aspires to prevail over his opponents and stay in power. However, he faces mounting domestic challenges, including declining public trust in his government.
Domestic law-and-order problems present a genuine risk to Sogavare’s leadership. In November, he refused to meet with protesters from the province of Malaita, which led to serious riots that caused widespread damage in Honiara. A month later, he faced a vote of no confidence, which he easily defeated. Sogavare quickly linked the riots with Taiwanese influence (in 2019, he decided to switch recognition from Taiwan to China, which Malaita has opposed ever since).
But Sogavare, unlike leaders of the ilk of Cambodian Prime Minister Hun Sen, doesn’t harbour aspirations to leave a leadership legacy or dynasty. Instead, his motivations are far more modest. He wants to maintain his power and control over the island nation. His strategy to achieve that has both external and internal dimensions.
Externally, he seems set to ensure that money and aid from the East and West continue to flow to Solomon Islands. In doing so, he will continue to exploit opportunities as they arise. For now, Chinese money is flowing. And he has Canberra worried that if it doesn’t provide the security he needs, China will be waiting in the wings.
Internally, Sogavare is moving to cement his control over his opposition. Like with Cambodia’s Hun Sen, these manoeuvres include controlling the domestic media. Last month, Sogavare transferred control of the state-owned broadcaster SIBC’s budget directly to the government. SIBC has now been ordered to only publish favourable news about the Solomons government.
On Monday the ABC reported that Sogavare, like Hun Sen, has been able to access Chinese funding to support his grip on power. The ABC obtained access to documents that indicate a ‘Chinese slush fund was activated twice last year and dispersed nearly $3 million directly to members of parliament loyal to the Prime Minister’.
Sogavare has shown consistent disdain for international media, including the ABC, refusing to engage with them.
Experience in Bougainville and Solomon Islands has shown that in the absence of independent media, local communities will be informed by rumours.
It’s no accident that Sogavare has accepted the offer of police training from China. He also made a statement regarding a more permanent Chinese police training presence. In contrast with Australia’s approach to policing, the priority for China’s police is protecting the Chinese Communist Party. A loyal praetorian guard is a necessary tool for a leader facing increasing opposition while focused on prevailing.
Sogavare would do well to remember that Solomon Islanders have a deep cultural memory of colonial-era policing. Recent history has also shown that aggressive policing fails to quell riots. In some cases, aggressive policing in Solomon Islands has promoted further civil unrest. While this doesn’t bode well, Sogavare isn’t keen for Solomon Islands to become a vassal state of China. That would prevent him from playing every side to get the best deal.
While money does talk in the Pacific, strong relationships are built over time. Australia is fortunate that its police have worked closely with their Solomon Islands counterparts for decades. From commissioner to recruit, Solomon Islands police know that Australian police are their partners. Of course, China’s policing aid, including the gifting of equipment and training, will continue. China will also, in time, likely provide Solomon Islands with a police academy.
Australia’s long-term law enforcement cooperation with Solomon Islands, including its 14-year-long regional assistance mission from 2003 to 2017, has profoundly impacted the nation’s police. The police force has moved from being concerned with policing the people and protecting the state to serving the community, but this positive shift could be easily undone through Sogavare’s pact with China.
Neither Australia nor any other country should try to outspend China in Solomon Islands. But we should be looking for opportunities to deepen our relationships. Solomon Islanders, and their police, want community policing, not security policing. Australia should seek opportunities to increase cooperation and capacity-development activities through the Australian Federal Police and the Australian Border Force. Both agencies should look for opportunities for Solomon Islands police to attend specialist and leadership courses with their Australian counterparts. Australia should look for opportunities to continue assisting with the development of Solomon Islands police training programs. Where appropriate, Australia should provide the kinds of capabilities that help with community policing.
Regardless, China, like Australia, must deal with Sogavare’s opportunistic nature. China has a security pact with Solomon Islands, but the conditions on the ground can and will change regularly. Australia, with its long-term relationships and principles-based approach, is in a far better position to navigate the ebb and flow of this challenge than China.
Australia’s recent change of government provides a useful opportunity to reflect on the problems of the South China Sea and the way ahead for our national policies. In a sense, the clear continuity between the approach of the last government and, so far, that of Labor confirms the need to consider matters both in their wider strategic context and for the long term. As a strategic problem, the South China Sea isn’t going to go away.
Why does the South China Sea matter for Australia? Because to accept China’s claims to it not only undermines fundamental elements of the 1982 UN Convention on the Law of the Sea but acquiesces to Chinese coercion through the use of armed force. Russia’s invasion of Crimea in 2014 and its more recent attack on Ukraine are compelling examples of what uncontested ‘learned bad behaviour’ can go on to become.
Australia must be there for the long haul. It needs to assert its independent national interests and its national presence in the region. On the other hand, Australia must work not only with the United States but, and this will be increasingly important, its regional (and extra-regional) partners to minimise its and their vulnerabilities and maximise the pressure on China.
The South China Sea is as much a contest of information and ideas as a cockpit of at-sea and in-the-air encounters. For Australia, that contest has both domestic and international aspects. Continuing education of a shore-bound and ground-based—and sometimes less than expert—media and commentariat will be required to inform the Australian public. Australia’s strategic narrative must highlight its commitment to a stable region, why that commitment matters and its record in building and supporting it.
Making an effective case for the South China Sea not to become a ‘closed sea’ is fundamental. So are clarity and consistency. Most notably, distinctions between ‘shadowing’ and ‘harassment’ must be made clear. The People’s Liberation Army Navy and China’s maritime air arms have just as much a right to range freely as our own forces. Australian and allied units can expect to be monitored by Chinese ships anywhere within the ‘first island chain’ and possibly elsewhere, but if the Chinese presence doesn’t interfere with our operations, it must be not only regarded but openly acknowledged as legitimate. As should be any professionally conducted shadowing of Chinese units by Australian forces in our own areas of interest.
Only when PLA units operate in an unsafe way or prevent our forces from carrying out their intended operations should loaded terms such as ‘harassment’ and ‘aggression’ be employed. To be fair, since 2018 it appears the PLA Navy has generally conducted itself responsibly on and below the surface. It’s no coincidence that the 2014 Code for Unplanned Encounters at Sea, a document accepted by China, speaks of ‘Actions the prudent commander might generally avoid’, something that has not been agreed for China’s maritime militia units or, potentially most critically, units of the PLA’s air arms. Recent events have highlighted the special potential for encounters in the air to go badly wrong, with serious, immediate and potentially fatal consequences. An aircraft falling out of the sky is a more serious matter than ships riding each other off.
Australia’s operational and tactical concepts must thus encompass worst-case scenarios. The need for cover—that is, to have forces of sufficient capability and/or in reasonable proximity to deter aggressive actions—is a key consideration. There have been calls for different approaches to asserting Australia’s presence. Such ideas have merit, although implementation would be very complex, particularly those involving closer cooperation with some of the littoral states.
Contingency plans must be ready for when things do go wrong. In particular, the information components of such plans must come into play straight away. Getting the message out to the world about Chinese aggression cannot wait. China was clearly blindsided by the speed with which the Americans uploaded critical video footage to the internet after the USNS Impeccable incident in 2009, footage which made clear that the Chinese fishing boats involved were provocateurs and not victims of the American surveillance ship. Commanders need to have the authority to publish such video evidence without delay. Arguably, airborne units should be transmitting audio and video at all times.
China itself must be a target of our educational effort. Its attempts to paint Australia’s presence in the South China Sea as alien and aggressive must be constantly refuted. A regime which has made so much of the centenary of the establishment of the Chinese Communist Party cannot lightly dismiss Australia’s record over much the same period, however ancient China’s civilisation. Also, considering that Darwin is closer to Singapore than is Shanghai, our arguments need not only to emphasise the realities of geography but the interaction between those realities and our security and economic interests as a regional power.
At a time when Chinese scholars are beginning to recognise and lament the atrophy of the time-honoured Chinese virtue of prudence in China’s approach to international affairs, its notable absence in the PLA’s air arms in particular needs to be pointed out. Dangerous behaviour in the air should be described with the scorn it deserves.
The Australian narrative needs to be promulgated in Mandarin and Cantonese as well as in Southeast Asian languages and made as accessible as possible. Australia’s position must be explained and the inconsistences and outright mendacity of much of the Chinese ‘case’ made clear. This information campaign must not only be focused on the strategic level but extend to the operational and tactical.
Finally, Australia cannot sustain a case for the legitimacy of its operations in the South China Sea and other regions if it is as careless with commentary over China’s sallies into Australia’s maritime zones as the then defence minister was during the federal election campaign. Perhaps our requirement can best be described by paraphrasing Theodore Roosevelt. In South China Sea matters, Australia needs to speak carefully and carry a big enough stick.
US House of Representatives Speaker Nancy Pelosi’s arrival in Taiwan has incited a predictably strong response from China. Chinese warplanes have brushed up against the median line dividing the Taiwan Strait. The Chinese foreign ministry has warned of ‘serious consequences’ as a result of Pelosi’s visit to the island. Chinese President Xi Jinping has told US President Joe Biden that ‘those who play with fire will perish by it’. And now, China has announced a major military exercise with live-fire drills starting tomorrow (just after Pelosi leaves Taiwan). The spectre of military confrontation looms large.
But Pelosi is hardly responsible for today’s heightened tensions over the island. Even if she had decided to skip Taipei on her tour of Asia, China’s bellicosity toward Taiwan would have continued to intensify, possibly triggering another Taiwan Strait crisis in the near future.
Contrary to the prevailing narrative, this is not primarily because Xi is committed to reunifying Taiwan during his rule. Although reunification is indeed one of his long-term objectives (it would be a crowning achievement for both him and the Chinese Communist Party more broadly), any attempt to achieve it by force would be extremely costly. It might even carry existential risks for the CCP regime, the survival of which would be jeopardised by a failed military campaign.
For a Chinese invasion of Taiwan to have a good chance of succeeding, China would need first to insulate its economy from Western sanctions and acquire military capabilities that can credibly deter an American intervention. Each of these processes would take at least a decade.
The main reasons for China’s current sabre-rattling over Taiwan are more immediate. Chinese authorities are signalling to Taiwanese leaders and their supporters in the West that their relations with one another and with China are on an unacceptable trajectory. The implication is that if they do not change course, China will have no choice but to escalate.
Until relatively recently, China’s leaders viewed the situation in the Taiwan Strait as unsatisfactory but tolerable. When Taiwan was ruled by the traditionally China-friendly Kuomintang (KMT) party, China was able to pursue a gradual strategy of economic integration, diplomatic isolation and military pressure—one that it believed would eventually make peaceful reunification Taiwan’s only option.
But in January 2016, the pro-independence Democratic Progressive Party returned to power in Taiwan, upending China’s plans. While the KMT claims that Taiwan and China have different interpretations of the 1992 Consensus—the agreement the party reached with mainland Chinese authorities 30 years ago asserting the existence of ‘one China’—the DPP rejects it altogether.
Though it is difficult to pinpoint precisely when the new status quo became intolerable to China, a key turning point probably came in January 2020, when Taiwanese President Tsai Ing-wen of the DPP easily won a second term, and when her party trounced the KMT in legislative elections. As the DPP solidified its political dominance, China’s dream of achieving peaceful reunification moved further out of reach.
It also did not help that the United States had been gradually shifting its Taiwan policy. Under Donald Trump’s administration, the US lifted restrictions on contacts between US officials and their Taiwanese counterparts, subtly changed the formulation of its ‘one-China’ policy by placing more emphasis on American commitments to Taiwan, and transferred advanced weapons systems to the island. Such challenges to China have continued under Biden. Last year, US marines openly trained with Taiwan’s military. And in May, Biden signalled that the US would intervene militarily if China attacked Taiwan (although the White House quickly walked back his statement).
The Ukraine war also seems to have heightened the sense among Western leaders that Taiwan is in grave and immediate danger. They appear to believe that only robust and vocal support, including high-level visits and military assistance, can avert a Chinese attack. What they fail to recognise is that, viewed from Beijing, their support for Taiwan looks more like an attempt to humiliate China than anything else. It is thus more provocation than deterrent.
China now fears that if DPP leaders and their Western supporters do not pay a price for their affronts, it will lose its grip on the situation. This would not only undermine Xi’s chance of achieving his long-term goal of reunification, it also could invite accusations of weakness that would undermine his standing both within and outside China.
China is probably not planning to launch an immediate and deliberate attack on Taiwan. But it may decide to engage the US in a game of chicken in the Taiwan Strait. It is impossible to predict such a confrontation’s exact form or timing. But it is safe to assume that it would be extremely dangerous, because China believes that only brinkmanship can concentrate all the players’ minds.
Like the 1962 Cuban missile crisis, a new Taiwan Strait crisis might end up stabilising the status quo—albeit after a few hair-raising days. And that may well be China’s plan. But such a gambit could also go horribly wrong. We mustn’t forget that the fact nuclear war did not break out in 1962 was largely a matter of luck.
Beijing’s creation of a new state-owned company to centralise China’s purchases of iron ore and other metal resources is unlikely to have much impact while markets are tight and prices are high, but it could become a weapon against Australia in the event of an iron ore glut.
The China Iron and Steel Association (CISA), which is the government-sanctioned body representing China’s major steel companies, has long railed against what it sees as an iron ore producers’ cartel and pushed for a central buying agency to counter it.
The four biggest suppliers of seaborne iron ore—Rio Tinto, BHP, Fortescue Metals and Brazil’s Vale—account for about 70% of world trade and about 80% of China’s imports.
China’s nationalist English-language daily, the Global Times, said the goal was ‘to create a centrally administered state giant to have a bigger say in ore pricing by leveraging China’s strength as the world’s largest consumer of iron ore’.
The new China Mineral Resources Group, launched last month, has been granted significant start-up capital of ¥20 billion ($4.2 billion) and has a high-powered leadership team. Its chair is Yao Lin, outgoing chair of Aluminum Corporation of China, or Chinalco, and its operations are headed by Guo Bin, former vice president of the world’s biggest steelmaker, China Baowu Steel.
BHP has responded sceptically to the new venture. Chief Financial Officer David Lamont noted that China’s previous efforts to negotiate iron ore prices with a single voice hadn’t been successful.
‘Let me say up front, at the end of the day we believe that markets will sort out where the price needs to be based on supply and demand,’ he told a business forum in Melbourne.
‘So we’re not worried about that. It’s something that’s been talked about for a period of time.’
Asked directly whether he thought the new venture would succeed, he responded, ‘History would say no.’
That’s a reference to the efforts of CISA in 2009 to mount a boycott of the biggest three miners—BHP, Rio Tinto and Vale—as it sought to impose an 82% cut to the iron ore price. The boycott was ultimately broken, first by small mills seeking to secure their supplies, and then by the majors.
The head of CISA was forced out and BHP succeeded in persuading the Chinese steel industry to accept long-term contracts based on the spot price index, rather than hammered out in annual bilateral negotiations.
China has a vast steel industry with about 250 large steel mills and thousands of small ones. Both CISA and successive governments have sought to consolidate the industry but with limited success. Some large mergers have raised the output share of the top 10 steel mills from 36% to 43% over the past two years, but that still leaves a highly fragmented industry.
While China has been attempting to shut down its smallest and least efficient mills, the country continues to build new ones. Tracking by a think tank based in Finland established that 18 new blast furnaces with a capacity of 35 million tonnes (about seven times Australia’s output) were approved in just the first half of 2021.
Blast furnaces are critically dependent on a constant supply of iron ore and coal and face massive restart costs if they’re forced to suspend operations. The problem with central buying is that smaller mills will fear that the interests of the largest mills will receive preference, and that their survival will be jeopardised if supplies are interrupted.
The push for centralised buying has been a response to high prices. The iron ore price reached a record US$240 a tonne in May 2021, delivering spectacular profits to the biggest miners, whose production costs at the time were less than US$15 a tonne. Although the price has come down a long way, it’s still at an enormously profitable level of around US$100 a tonne.
Central buying is likely to be most effective when prices are depressed. If a glut of iron ore emerged, smaller Chinese mills would have less concern about supply security and would have an incentive to join the central agency if they believed it could deliver lower prices.
China’s vast steel industry will always need Australian iron ore, but a central agency could decide to favour non-Australian supplies.
The Japanese steel cartel that operated from the 1960s through to the 1990s was seen to have engineered surplus supplies and was able to keep the iron ore price at levels delivering bare profitability to the miners. The iron ore price hovered between US$11 a tonne and US$14 a tonne throughout the 1990s.
Although China’s steel industry doesn’t resemble the Japanese steel cartel, the history of bulk commodities is that they deliver flat returns, like utilities. The only reason they’ve been so profitable for the past 20 years is the explosion in China’s demand, which has no parallel in history.
China’s new resource company has also been given responsibility for increasing its supply, including the development of the large Simandou iron ore project in Guinea. The new Guinean government, which took power in a coup last year, has given the project operators until 2025 to start production. Formidable technical and political challenges remain, but the probability of the project’s being realised has increased.
However, the greater risk for Australia is not increased supply but a fall in Chinese demand. That may be happening now. China’s steel production was down 6.5% in the first half of the year, and stocks are growing.
The conventional wisdom is that a softening in the Chinese economy is bullish for iron ore because the government responds with steel-intensive infrastructure construction. Infrastructure spending is indeed rising, but its share of steel demand at around 20% to 25% is below that of the property sector at 35% to 40% and real-estate investment is in a slump.
It is beyond the scope of this article to consider the broad forces at work in the Chinese economy, but a serious recession is possible, given the challenges of high debts, falling property prices, weak income growth and rising world interest rates, which are also threatening a global downturn.
The China boom has been spectacular for Australia. A key economic measure is the terms of trade, which is the ratio of export prices to import prices and is measured as an index.
For 50 years from the mid-1950s, that was fairly constant at around 60, but in 2005, it started rising as China’s demand for resources accelerated and the cost of Australia’s manufactured imports fell. By September 2011, it reached an unprecedented 120, meaning that every tonne of Australian exports was buying twice as many imports as was the case six years earlier or throughout most of Australia’s history.
While that sounds abstract, a return to the long-run average for the terms of trade could wipe out $250 billion of national annual income, with big implications for both government finances and Australian living standards. The China Mineral Resources Group could help make that happen.
When Indonesian President Joko Widodo visits his country’s three major North Asian economic partners this week, bilateral trade and investment, along with the upcoming G20 leaders’ summit in Bali, are set to head his list of priorities. But whether he likes it or not, they are unlikely to be the only topics on the minds of his principal interlocutors, especially China’s President Xi Jinping.
Widodo’s first stop (26 July) is Beijing, where he will meet both Xi and Premier Li Keqiang. Generally, the leaders will have a good story to highlight during what will be Widodo’s fifth visit to China. Despite an array of international and domestic complications, the value of bilateral trade totalled US$110 billion last year, confirming China’s status as Indonesia’s largest trading partner. Imports from China amounted to five times the value of US exports to Indonesia. During the January–April period this year, Indonesia enjoyed a trade surplus of just over US$1 billion arising from the more than US$44 billion in trade.
China has also consolidated its position in the top three foreign investors in Indonesia (after Singapore and Hong Kong), contributing to a 39.7% year-on-year jump in foreign direct investment in Indonesia’s economy during the second quarter—the biggest rise in a decade. In the first six months of 2022, China accounted for US$1.7 billion of the total of US$15.65 billion in foreign direct investment into Indonesia.
Most of that investment flowed into key sectors in the Indonesian economy, including mining and the metals industry, transportation, telecommunications and utilities. China has been especially active in many of these, notably the expanding smelting industry, in which Chinese companies are becoming dominant actors.
A key deliverable (as foreshadowed by Indonesia’s all-powerful coordinating minister for maritime affairs and investment, Luhut Pandjaitan) is likely to be the renewal of a 2017 memorandum of understanding underpinning Indonesia’s participation in China’s Belt and Road Initiative, which is scheduled to end this month.
But not everything in the economic relationship is rosy. The troubled Jakarta–Bandung high-speed rail project is bound to be a key part of the conversation. A totem of Indonesia’s development cooperation with China (if not an officially acknowledged BRI project), it is being undertaken by a consortium of Indonesian state-owned enterprises and Chinese companies. Under the original arrangement, the China Development Bank was to finance 75% of the project.
But it has been bedevilled by construction problems that have resulted in lengthy delays and a multibillion-dollar cost blowout necessitating an unanticipated, controversial injection of government funding from a reluctant administration. This reportedly prompted Indonesia last year to press China to help defray the rising costs.
Indonesian authorities continue to insist that the project will be completed in time for a trial run to coincide with the November G20 meeting. That would serve the interests of both leaders, showcasing Indonesia’s development achievements and China’s claims as a beneficent and technologically impressive partner. But experience to date and the Indonesian consortium members’ financial problems offer ample grounds for doubt that the trial train will run on time. To help ensure it does, therefore, Widodo’s cap may again be in his hand as it reaches out to shake Xi’s.
Widodo will also doubtless be expecting Beijing’s unbridled support for Indonesia’s G20 presidency and its agenda of post-Covid-19 global economic recovery and resilience. A specific initiative for which Widodo may be seeking Xi’s formal backing is the establishment of a financial intermediary fund to aid in ‘health management under the management of the World Bank’, as Indonesia’s finance minister, Sri Mulyani Indrawati, has outlined. He’s likely to get it, as well as a ringing endorsement for his goal of keeping the G20 as focused on Indonesia’s economic cooperation agenda as the war in Ukraine and the reaction of G7 countries to it will allow.
It’s just as certain that Xi will want a few things in return. One may well be some kind of endorsement of China’s condemnation of AUKUS, specifically in terms of Australia’s planned acquisition of nuclear-powered submarines. Jakarta’s concerns about this issue haven’t been so forcefully expressed as Beijing’s strident remarks, and Widodo is likely to be careful not to align Indonesia too overtly with whatever actions China might be planning to take against Australia in the context of the Nuclear Non-Proliferation Treaty, including at next month’s 10th NPT Review Conference. But Beijing would know that Jakarta’s scepticism towards the submarine program almost certainly persists regardless of the Albanese government’s efforts to reassure its Indonesian counterpart and will likely be aiming to stoke it.
From an Australian perspective, then, the visit underscores the importance of Canberra’s cooperation with its AUKUS partners and the International Atomic Energy Agency towards an answer to the NPT questions posed by AUKUS that will prove acceptable to Indonesia and other sceptics in the region. Hopefully, as he departs from Beijing, Widodo might also reflect on the fact that the same person urging him to condemn Australia’s ambitions for nuclear-propelled—not nuclear-armed—boats is concurrently overseeing the growth of China’s nuclear arsenal contrary to its obligations under the NPT to disarm—an obligation that Indonesia has consistently demanded that nuclear-weapon states meet.
The Tokyo (27 July) and Seoul (28 July) legs of Widodo’s trip are set to be no less heavily centred on economic matters, and especially on spruiking for more foreign direct investment. Widodo is scheduled to hold meetings with business communities in both capitals as well as with his counterparts, Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk-yeol. Both countries sit among the top six investors in Indonesia, though it won’t have escaped Widodo’s attention that Japan, hitherto among the top two or three providers of foreign direct investment to Indonesia, has fallen to sixth spot in 2022, below the Netherlands and South Korea.
Defence cooperation, however, may well also be an item on the leaders’ meetings in both capitals. Seoul in particular will be interested in where Indonesia is heading on its defence procurement plans in light of the two countries’ cooperation on the KFX fighter program and Jakarta’s apparent deal to procure 42 Rafale fighters from France. It will be especially interested to glean whether Indonesia remains committed to the program and, post-Covid, is ready and able to meet its financial commitments under it.
Both Japan and Korea have also figured in Indonesia’s ambitions to enhance its naval and maritime domain awareness capabilities. Seoul has already provided three new submarines (one of which was assembled in Surabaya) and, earlier this year, the first of several second-hand corvettes that Jakarta hopes to secure.
Indonesia, however, has in the past given both nations reason to question its reliability as a defence partner. Widodo may well have his work cut out when it comes to shifting any such perception.
Beijing is moving at high speed to co-opt South Pacific states economically and then use that leverage to achieve broader goals, including the ability to project military power across the Indo-Pacific. China is also working to undercut Pacific regionalism and obtain advantage from its bilateral engagement with individual Pacific states, with obvious successes in Solomon Islands, while Manasseh Sogavare remains prime minister, and now with Kiribati.
The swiftness of Beijing’s actions is obscured by both the pandemic and the focus of policymakers and analysts on the global implications of Russian President Vladimir Putin’s war in Ukraine. It would be nice to be able to take comfort in the obvious personal priority that Australia’s new government, notably Prime Minister Anthony Albanese and Foreign Minister Penny Wong, is putting on engagement with the South Pacific, but developments in the region and between China and individual Pacific states create doubt about what can be achieved from the face-to-face diplomacy and the policy approaches outlined so far.
Australia and like-minded partners are moving to enhance their cooperation with Pacific states. However, it seems likely that China’s economic and cash-based engagement will continue exploiting a large seam that our engagement is leaving largely unaddressed.
That’s because we continue to prioritise decades-long approaches focused on aid, capacity-building and defence cooperation, now with the additional, welcome, priority of cooperation on climate change action. These priorities respond to stated needs of Pacific states, but they will probably do little to change the region’s status as the most aid-dependent area on the planet.
And aid-dependent small states are inherently vulnerable to the economic largesse of the Chinese state and its closely aligned corporate actors—banks and companies. We’re seeing this pattern in Kiribati’s engagement with China and, even more obviously with Sogavare’s embrace of Beijing and simultaneous distancing from Australia.
Australia, the US, New Zealand, Japan and Pacific Islands Forum (PIF) members and dialogue partners seek to support the forum’s vision of regionalism because of the values inherent in ‘a common sense of identity and purpose, leading progressively to the sharing of institutions, resources, and markets’.
But there’s an important other aspect to effective regional cooperation, which is for the PIF to act as a shield for the region to resist Chinese co-option that will undercut the security of Pacific states—and of Australia and New Zealand.
Effective regionalism benefits each Pacific state and the whole region. Splintering of regionalism benefits China and allows it to use the same methods of interaction that are damaging in other regions. Europe is the most obvious example.
Beijing has a track record of forming its own Sino-centred forums for engagement and avoiding working closely with multilateral and regional groupings. This allows it to use its weight and scale with individual nations in direct interaction and to avoid confronting the combined weight that regional bodies like the EU or the PIF can bring to bear.
The underlying behaviour of Chinese Communist Party officials and leaders is captured by the infamously frank statement of China’s then foreign minister Yang Jiechi in 2010 when, faced with differences between Southeast Asian states and China, he told ASEAN representatives: ‘China is a big country and other countries are small countries, and that’s just a fact.’ February’s joint statement by Xi Jinping and Putin just weeks before Putin began his war in Europe is a reminder that this way of thinking and operating—where scale and raw power are used to determine outcomes, not respect for sovereignty of nations large and small—is how Xi is pushing his party and individuals like China’s current foreign minister Wang Yi to operate.
In 2012, European states welcomed China’s 16+1 forum, officially called the Cooperation between China and Central and Eastern European Countries, as a way of collaborating economically, seeing it as complementary to EU activities and simply about obtaining direct benefits without the interface of the EU. When Greece joined in 2019, after pushing its role in Xi’s signature Belt and Road Initiative, the grouping expanded to 17 European states engaging with Beijing (the 17+1 forum).
Since then, things have changed. Most obviously, Lithuania withdrew in 2021, calling on others to do the same. Lithuania’s foreign minister, Gabrielius Landsbergis, said: ‘From our perspective, it is high time for the EU to move from a dividing 16+1 format to a more uniting and therefore much more efficient 27+1. The EU is strongest when all 27 member states act together along with EU institutions.’ There’s a direct lesson in this for Pacific states, which smaller European states with histories of dealing with the two big autocratic powers in Moscow and Beijing can help Pacific states to learn without the painful, belated discoveries happening in Europe.
The idea that the EU is strongest when all EU states act together through EU institutions is obviously true—perhaps even more true—for the Pacific. The PIF magnifies the weight and influence of each member state and gives the region more agency and authority when dealing with even the largest powers. This sense of common purpose has been obvious in how PIF members have worked to change international policies on climate change, for example. They have achieved much more together than each could have done alone. Arguably, the strong Pacific voices on this issue helped enable the Australian policy change we are now witnessing.
The PIF leaders and their democratically aligned dialogue partners must bring this same cohesion and sense of common purpose to bear in dealing with the uncomfortable truth that, right now, the South Pacific is a key place on the map that Beijing has identified as providing real, rapid opportunities to achieve long-desired strategic gains.
So far, though, on China the Pacific is moving in the opposite direction to Central Europe. Just this week, Kiribati’s government announced that it’s leaving the PIF while signalling a growing appetite to engage directly with Beijing. For all the denials of anything other than benign and normal international relations, this centres on expanding China’s ability to project military power unconstrained by US and allied power.
The Pacific is again a central place for active and direct strategic competition, and denying that or pretending otherwise will only advantage Beijing and leave Pacific states—and their people—victims of insecurity and tension.
Dealing with this must be the role and responsibility of the Pacific states themselves, but Australia and its partners must acknowledge that our current policies will continue to fail to reverse the momentum of Beijing’s moves in the region.
For Australia, this starts with not rewarding China’s government for simply meeting with Australian counterparts by agreeing to ‘shelve differences’ as Beijing acts against our strategic and national security interests in the South China Sea, in its partnership with Moscow and now in direct security moves in our near region.
Our differences with Beijing are stark and growing—as other governments and organisations are also now finding—and focusing only on the positives is a path to disarray and disadvantage.
China is not making the gains it is with Sogavare, and now with Kiribati’s president Taneti Maamau, because of its positive work with the Pacific on climate change. It’s making its strategic gains from economic engagement—and cash splashes for elites who help achieve Beijing’s goals. Beijing is also rewarding those who act against regional interests and pursue short-term transactional and political benefit.
Without a much larger, more ambitious strategy for the South Pacific that has an economic and workforce focus and marks a radical shift from our decades of failed capacity-building and aid, we will be bystanders as Beijing’s direct reach and presence grow. Cutting aid is obviously a bad idea, but that doesn’t mean that simply expanding aid is the path to success.
The good news is that the real advantage Australia and New Zealand have is economic. The working model for what a prosperous and stable region looks like can be found in the wildly successful Australia – New Zealand Closer Economic Relations framework and visa-free travel for work. This opens economies and employment markets between Australia and New Zealand and, if extended to small Pacific states, would turn aid-dependent places into joint contributors to successful economic regionalism, addressing the needs of South Pacific workers for meaningful employment while simultaneously filling growing workforce gaps in Australia’s economy.
Another advantage Australia and its partners have in the South Pacific is the fact that we’re democracies and so can engage not just with counterpart governments, but with democratic opposition figures and voices and non-government institutions, and at people-to-people levels. This will also require a shift in government thinking in Canberra to make meetings with opposition figures—like Matthew Wale in Solomon Islands and Tessie Lambourne in Kiribati—a normal part of relations. Engaging beyond the government of the day is routine in other relationships, like the Australia–UK partnership and the Australia–US alliance, for example.
As the realisation dawns on the new Australian government, and on the governments and institutions in Tokyo, Washington, Paris and Brussels, that opening embassies, expanding aid programs, having greater ambition on climate change and doing small-scale but valuable work on ocean management and illegal fishing isn’t reversing China’s strategic momentum, things will have to change.
Australia and New Zealand, working closely with partners, must move towards a bigger way of thinking and acting centred on economics and democracy. And, as we see with the splintering of the PIF and bilateral moves from Beijing with small-state leaders, time is not our friend.