Beijing will be keeping a close watch on the G7’s efforts to cap the price of Russian oil because China is trying to do the same to Australian iron ore.

As the world’s biggest exporter of resources and energy, Australia has a vital interest in transparent and freely negotiated commodity markets. Its economy would be seriously jeopardised if consumers were successful in using their combined power to supress prices for specific commodities.

China accounts for 70% of global imports of iron ore and has long believed that its dominance of the market should give it greater influence over prices. The China Iron and Steel Association plans to have a central iron ore buying agency in place by the end of the year to stop individual steel mills from bidding up prices against each other.

The G7 plan would exploit the US’s and UK’s control of financial services to the shipping industry, particularly insurance, to prevent Russian oil from being loaded on tankers if its price exceeded a G7-imposed limit. Although the G7 accounts for only 30% of global oil imports, virtually all shipping insurance goes through the London markets.

Insurers would be forbidden from providing coverage for ships taking on Russian oil at higher prices. Two-thirds of Russian oil is shipped in tankers owned by companies based in the European Union, the UK or Norway, which increases the G7’s leverage.

The idea is that the price cap on Russian oil would apply not only to the oil purchases of G7 nations but to all Russian oil exports.

The G7 ambition is to stop Russia from profiteering from the energy crisis that has been partly precipitated by its war on Ukraine. ‘We are working to make sure Russia does not exploit its position as an energy producer to profit from its aggression at the expense of vulnerable countries,’ the G7 communiqué said.

The volume of Russia’s oil, gas and coal exports in the first three months of the war was down 15% from the same time last year, reflecting the impact of sanctions, but the average revenue is up by 60%, even after taking into account the discounts that Russian oil is suffering in world markets, according to analysis from a Finnish think tank.

Russian oil has been selling at about a 30% discount to the Brent benchmark (based on the price for North Sea oils) to compensate for the difficulty in obtaining trade finance for dealing with Russia.

Japanese Prime Minister Fumio Kishida indicated that a much steeper discount was envisaged in the G7 plan, commenting that the price cap would be ‘about half’ the current market price of around US$100 a barrel.

The big risk in the G7 plan is that rather than accept the imposition of a 50% price cut by Russia’s adversaries, Russian President Vladimir Putin would order a halt to the country’s oil exports to anyone demanding sub-market prices.

Russia accounts for around 8% of oil supplies to the global market. Its former president Dmitry Medvedev recently warned that the G7 plan could take global prices well above US$300 to US$400 a barrel.

That is hyperbole, but former International Monetary Fund chief economist Olivier Blanchard has estimated that the removal of just 3% of world oil supplies could result in a 30% price increase.

There would also be a risk that other big consumers of Russian oil like China and India would arrange their own insurance and shipping to keep their Russian oil flowing. The more oil Russia could sell outside the G7 blockade, the easier it would be for it to cut sales to the West.

The defining feature of commodities is their fungibility—they are the same wherever they are produced and, as a result, they fetch the same price, barring market interference.

Oil is the world’s biggest commodity market, with annual international trade of about US$1 trillion, or about four times the size of next-ranked iron ore. With vast numbers of sellers and buyers, it would be difficult to hermetically seal Russia’s 8% market share.

Even against the relatively small producers Iran and Venezuela, former US president Donald Trump’s ‘maximum pressure’ campaign of sanctions had only partial success. Oil sales were reduced but not eliminated because work-arounds were developed.

The idea of a G7 price cap was first mooted by US Treasury Secretary Janet Yellen in February. Last month’s G7 summit agreed to ‘explore’ the concept; however, German Chancellor Olaf Scholz commented afterwards that the concept was ‘very ambitious’ and would ‘need a lot of work’ to become a reality.

The danger is that a buyers’ cartel would prove no more effective than the OPEC producers’ cartel was in the 1970s. While OPEC engineered a short-lived price spike, within a decade its share of the world oil market had dropped from 51% to 30%.

One might imagine that fixing the price of iron ore would be a lot simpler in China’s centrally planned and authoritarian economy. Yet, a concerted effort to impose a buyers’ cartel failed in 2009. When price negotiations became deadlocked, the China Iron and Steel Association ordered a complete boycott of Australian iron ore. However, smaller mills—fearful for the security of their supply—ignored the order, which ultimately led to the collapse of negotiated iron ore prices.

A recent Australian Financial Review report, which appeared to reflect the thinking of the iron ore majors, commented that rumours of a central buying group had been around for a decade without coming to anything. One of the problems is that China has hundreds of steel mills. Small mills would be concerned that a central buying group would favour the large state-owned steel mills.

China’s demand for steel is volatile, depending on political decisions on infrastructure and other stimulus programs, as well as on the vagaries of the property sector. Central planners frequently get their forecasts of demand wrong, so both large and small mills would be left sweating on the accuracy of the central buying group’s orders.

All consumers want lower prices, but it’s ultimately the genius of transparent markets that they deliver a price that matches both supply and demand. The suppression of a price through consumer power (known as ‘monopsony’) ultimately leads to lower investment, lower production and higher prices. In the same way, the artificial boosting of a price through a producer monopoly would lead to a search for substitutes and a long-lasting destruction of demand.

The chances of either the G7 engineering a special discounted price for Russian oil or China manipulating the price of Australian iron ore are not high. However, with resources and energy accounting for almost two-thirds of Australia’s exports, the new resources minister, Madeleine King, should be paying close attention to their efforts.

The recent virtual BRICS summit, which brought together the heads of state and government of Brazil, Russia, India, China and South Africa, was interesting as much for what didn’t happen as for what did. The two-day gathering was marked by some constructive discussion but also platitudes and pablum, and concluded with a grandly titled but thoroughly anodyne ‘Beijing declaration’.

Few doubt the huge potential of the BRICS, which comprises the world’s two most populous countries (China and India), a former superpower (Russia) and two of the biggest economies in South America and Africa. But the grouping’s record since the first annual BRIC meeting in 2009 (South Africa joined the bloc the following year) has mostly been a story of lofty rhetoric and chronic underachievement.

The Beijing declaration states that the BRICS high-level dialogue is an opportunity to deepen cooperation in the fight against Covid-19, digital transformation, supply-chain resilience and stability, and low-carbon development. All these goals are being pursued in a variety of multilateral forums.

More hypocritically, the declaration condemned terrorism and called for the finalisation and adoption of the Comprehensive Convention on International Terrorism within the United Nations framework. This rang rather hollow, since the summit took place just days after China blocked a joint proposal by India and the United States to designate the Pakistan-based Abdul Rehman Makki as an international terrorist under the provisions of the UN Sanctions Committee.

This wasn’t the first time that China stymied a proposal for the sanctions committee to list known Pakistan-based terrorists. It has repeatedly blocked efforts to designate as international terrorists Masood Azhar, chief of the UN-proscribed terrorist entity Jaish-e-Mohammed, and others associated with the equally murderous Lashkar-e-Taiba. Indian Prime Minister Narendra Modi pointedly stated at the BRICS summit that the group’s members should understand each other’s security concerns and provide mutual support in the designation of terrorists, adding that this sensitive issue should not be ‘politicised’.

It was against this background that China, the summit chair, floated a proposal to enlarge the group by accepting new members, and subsequent reports claimed that Argentina and Iran had applied to join. But the matter was not officially discussed at the meeting and featured only tentatively in the closing declaration.

Underlying the enlargement issue are two questions that go to the heart of the BRICS grouping. First, is it primarily an economic organisation or a geopolitical one? Second, if the BRICS is largely a geopolitical bloc, will it become the principal vehicle for the emergence of a global axis led by China and Russia—a goal that China appears to support and that the proposed enlargement, and the putative candidates, seems intended to serve? In that case, what is India doing in it?

As to the first question, the BRIC acronym—created by Goldman Sachs economist Jim O’Neill in 2001—was initially impelled by a vision of economic cooperation. The four (later five) emerging markets’ shared and compatible perspectives on issues of global governance reform certainly provided a raison d’être.

But their common concerns about the direction of global development and the power of the Western-dominated Bretton Woods institutions meant that the group’s agenda was political as well. The BRICS seemed to be emerging as the premier platform of the ‘global south’, articulating developing countries’ dissent from the so-called Washington consensus—a tendency underscored by the addition of South Africa, the only African economy in the G20.

In recent years, however, the global environment has changed dramatically. A backlash against globalisation and a US–China trade war, as well as heightened suspicions among US policymakers of China’s geopolitical intentions, have been compounded by military hostilities between China and India, including the killing of 20 Indian soldiers along the countries’ disputed Himalayan border in 2020.

As a result, the BRICS appears to be undergoing an identity crisis. Indian foreign policy mandarins initially saw the group as a useful platform to increase India’s international influence, in keeping with its traditional role as a leader of the developing world. But India is plainly uneasy about efforts to turn the bloc into a geopolitical forum supporting Chinese and Russian interests—and to enlarge it to include other ‘like-minded’ states such as Iran. (Brazil has also maintained a studied silence on Argentina’s reported membership application.)

India is said to have had a crucial hand in the drafting of the Beijing declaration’s single reference to the bloc’s enlargement, buried deep within the 75-paragraph document. Paragraph 73 states: ‘We support promoting discussions among BRICS members on [the] BRICS expansion process. We stress the need to clarify the guiding principles, standards, criteria and procedures for this expansion process through [the] Sherpas’ channel on the basis of full consultation and consensus.’

Humphrey Appleby, the famously circumlocutory British bureaucrat in the Yes, Minister television series, couldn’t have put it better, except perhaps for adding ‘in the fullness of time’. The meaning is clear: ‘full consultation’ is a recipe for indefinite delay, and the insistence on ‘consensus’ means that at least one state will ensure that enlargement never happens.

It appears that China hasn’t taken India fully into its confidence regarding BRICS expansion plans and the pending applications. India can scarcely be expected to welcome an enlargement of the BRICS that’s intended to make the bloc more China-centric. There are also the inevitable concerns about whether, given China’s patronage, Pakistan would be next in line to join.

India has always been the indispensable swing vowel in the BRICS acronym. If the bloc’s current strategic direction and possible enlargement push the country towards the exit, the grouping will become not just unpronounceable, but also unviable.

Last weekend’s Shangri-La Dialogue in Singapore was the first since 2019 because of the Covid-19 pandemic, which seemed to make the event cathartic for pent-up tensions in the international system. Taiwan was a major topic of discussion, even if the Taiwanese government wasn’t formally represented.

US Secretary of Defense Lloyd Austin, China’s Minister for Defence Wei Fenghe and Australia’s new Defence Minister Richard Marles all made references to Taiwan in their speeches and fielded a number of questions about the prospects for conflict.

None of their comments conveyed changed policies on Taiwan, but they were notably categorical in tone. They therefore represented an intervention in Taiwan policy that’s difficult to capture with the norms of foreign policy analysis.

Taiwan’s position as simultaneously excluded from the international system and situated at the centre of US–China relations and global technology supply chains means that layers of international Taiwan policy operate at the level of the tacit, ambiguous and unsaid. In this way, Taiwan destabilises what is ideally a stable relationship between foreign policy language and state power in the international system.

For national leaders to be unequivocal about Taiwan, therefore, is discomfiting because it creates a fixedness to the language with which the international system addresses Taiwan. It demarcates the complex and unstable realities of Taiwan’s status from the stable norms of the international system and ultimately constrains policy choices and Taiwan’s own future within those norms.

From the US side, the defence secretary affirmed the US position on Taiwan through the key statements: the Taiwan Relations Act, the Six Assurances and the three joint communiqués. He also restated the US commitment to its ‘one China’ policy, which deploys a deliberate ambiguity on the US position on Beijing’s territorial claim over Taiwan.

Austin went on to convey the developing belief in Washington that Beijing is reneging on its commitments to the US over Taiwan made since the 1970s by changing the material conditions in the Taiwan Strait through the use of state power. He was referring to the pattern of People’s Liberation Army Air Force flights across the median line in Taiwan’s air defence identification zone that threatens Taiwan and normalises a territorial claim over the strait. This was also the substance of US President Joe Biden’s comments in Tokyo about the potential for US involvement in the defence of Taiwan. He suggested that Beijing wasn’t holding up its side of the bargain made with Washington in the 1970s and 1980s, and so the US could respond accordingly.

But although Austin stated Washington’s position concomitant with its developing view, he also stated with unusual force: ‘The US does not support Taiwan independence.’

That statement would have come as a disappointment to Taipei, not because it is about to ‘declare independence’ but because President Tsai Ing-wen has worked hard to reframe Taiwan’s status beyond this rigid phraseology that constrains how it’s possible to talk about Taiwan’s past and future. As Tsai has stated, Taiwan has no need to ‘declare independence’ because it is already an independent sovereign state, the Republic of China. But the bald statement by Austin unequivocally places Taiwan outside the international system and that leads to the assumption that Taiwan’s only pathway into it is through ‘reunification’ with the People’s Republic of China. This suits Beijing but not the democratic aspirations of the Taiwanese people.

From the PRC side, Wei gave a speech that was notably belligerent and uncompromising in tone but did not indicate any fundamental change in Beijing’s position.

He declared that China would ‘fight to the very end’ to prevent Taiwan splitting from the mainland. He also said, using the scientistic Marxist teleology of the Chinese Communist Party, that ‘reunification’ was inevitable, in accordance with history’s laws, and that Beijing was ‘making every effort with the greatest sincerities to deliver peaceful reunification’. Beijing’s efforts are limited to offering the people of Taiwan a non-negotiable outcome—one country, two systems—with no roadmap to achieve it. In responding to questions, Wei did affirm a no-first-strike defensive doctrine for China’s nuclear arsenal, which matters for those commentators who use the risk of nuclear war to make an argument about Taiwan’s future that denies the Taiwanese the right of self-determination.

Wei did, however, lambast the Tsai’s government for refusing to accept the 1992 Consensus. This is a policy formulation coined in the early 2000s, referencing non-official negotiations between Taipei and Beijing in 1992, that agreed to set aside the question of Taiwan’s sovereignty in order to facilitate trade and governmental links. However, in a style that is typical of Beijing in many areas of policy beyond Taiwan, what was initially a pragmatically vague formulation has been concretised by the party-state system into an obdurate demand to accede to an immutable principle.

His comments, which have been repeated by PRC officials in Australia, highlights the way Beijing’s specific internal ideological fixations and its policy system can intrude counterproductively into its international relations.

For Australia’s part, the new defense minister responded to a media question about a Taiwan Strait crisis by declining to follow his predecessor’s line about preparing for war. Marles said, ‘Australia supports a one-China policy’, distinguishing Australia’s position from Beijing’s ‘one-China principle’. But he also followed Austin’s statement by saying unequivocally that Australia did not support ‘Taiwanese independence’. He went further, however, and said that Australia had ‘good relations with the people of Taiwan’ (that is, not the government of Taiwan) and stated that ‘what we do want to see is that the situation for the people of Taiwan is resolved through peaceful negotiation’. This diverged from the established formulation ‘the peaceful resolution of cross-strait issues’, in which the use of the plural captures the many aspects of the cross-strait relationship, rather than the single situation of the future of Taiwan itself. Beijing has no negotiable position on the future of Taiwan.

Amid these declarative statements, it was perhaps not surprising that that it was Ukraine’s President Volodymyr Zelensky who, in an address via video to the Shangri-La Dialogue, responded to a question about Taiwan without naming Taiwan. Instead, he spoke of ‘certain political leaders who are not content with the present level of their ambitions’ and, on smaller countries, urged the international community to ‘not leave them behind at the mercy of another country’. Zelensky returned the question of Taiwan’s sovereignty to the tacit and unsaid and brought forward the liberal principles of the modern international system of shared peace and progress and the dignity of sovereignty, tacitly giving Taiwan a place in such a system.

Echoing Russian President Vladimir Putin’s description of his war in Ukraine, China’s Xi Jinping has released a directive that licenses his armed forces to conduct ‘special military operations’.

This involves the People’s Liberation Army using force outside circumstances that other nations would consider as war. The guidance is consistent with Beijing’s recent coastguard law, which allows that well-armed organisation to use lethal force wherever China claims jurisdiction (as it does in the South China Sea despite its claims being comprehensively rejected under international law). It seems likely to apply to the Taiwan Strait if Xi persists in attempting to assert that the strait is Chinese waters, not a key international waterway.

Xi’s new directive has clear implications for the people of Solomon Islands, as it tells the PLA to use force where required to protect Chinese nationals and Chinese projects and investments. Prime Minister Manasseh Sogavare’s deal with Beijing talks about this too, so what Xi is now doing with his military will be applied in the ‘security assistance’ that China’s authoritarian forces provide in and around the Solomons. Like with the Sogavare–Beijing pact, Xi has not released the text of his directive, just had it reported in state media.

Chinese Defence Minister Wei Fenghe, who said at last weekend’s Shangri La Dialogue that he wanted a new positive relationship with his Australian counterpart, Richard Marles, will implement Xi’s direction. The result will be in an even more aggressive PLA in the South China Sea, around Taiwan and Japan, and on the India–China border.

What does all this mean for the prospects of a sustained positive ‘reset’ in the bilateral relationship between Australia and China? All bad things.

It looks very likely that the reset has been gazumped by a more outwardly focused, increasingly aggressive PLA that seeks to define its use of force as ‘not war’.

Definitions that deny reality may work in the land of the Chinese Communist Party. But as Putin is experiencing with the international reaction to his ‘special military operation’ in Ukraine, just calling something what it is not doesn’t prove convincing anywhere in which there’s freedom of expression and media that’s not closely supervised and censored.

The Marles–Wei meeting was a positive development because it’s the only ministerial-level contact between the two countries since China began its diplomatic freeze and then its continuing campaign of economic coercion against Australia in 2020.

It’s also a positive that the meeting happened without Australia needing to show major policy change beforehand. China had demanded that Australia change its policy decisions and directions to resume dialogue—notably in Beijing’s list of ‘14 grievances’.

So, what does Beijing want as the price for resuming dialogue?

Beijing may want the warmer tone and senior meetings to make it harder for Australia to oppose China’s growing military presence in the South Pacific, and harder for Marles to end the Chinese port operator’s lease over the strategic Port of Darwin. There’s leverage there because that would give Beijing a pretext to claim Australia had ended the ‘thaw’.

Wei’s continued line in speeches and dialogues is to assert that China’s approach is one of peaceful cooperation and win–win outcomes, and that anyone noticing anything aggressive or negative in Chinese military or broader government behaviour is smearing China, hurting the feelings of the Chinese people, and adopting a destructive Cold War mindset—usually by being a slave to the US.

Wei’s Shangri-La speech takes this position. That creates a credibility gap for him in dialogue with counterparts like Marles because the PLA he directs is not behaving in any way that could be characterised as peaceful cooperation in pursuit of win–win outcomes.

Instead, the PLA’s aggression in international airspace and waterways is growing, to the extent that mid-air collisions and crashes and on-water incidents are becoming likely as China tries to enforce rights it just doesn’t have.

A broad warming of the Australia–China relationship cannot occur while Beijing persists with unilateral economic coercion across several sectors of our economy; while the PLA behaves increasingly dangerously and aggressively in the South China Sea, around Taiwan and near Japan (all places where the Australian military operates along with partners); or while Beijing accelerates its direct military presence in Solomon Islands and potentially in other parts of the South Pacific.

Marles clearly understands this, using his speech at Shangri La to say: ‘What is important is that the exercise of Chinese power exhibits the characteristics necessary for our shared prosperity and security. Respect for agreed rules and norms. Where trade and investment flow based on agreed rules and binding treaty commitments. And where disputes among states are resolved via dialogue, and in accordance with international law.’

So, the new Australian government’s tone may not be the same as its predecessor’s, but the structural policy directions—on security risks in foreign investment (notably from Chinese entities) and the priority on countering foreign interference in Australian politics, countering traditional and cyber espionage, and working with allies and partners to confront the now overt strategic partnership between Russia and China—all mean that the foundations and differences between Australia and China persist. In fact, the differences are growing as Xi leads China down the path he has chosen.

Given Xi’s latest policy directions to the PLA and the growing gap between General Wei’s words and the PLA’s actions even before this, we should expect resumed government-to-government dialogue to be broadly disappointing to Australia.

That’s because Beijing wants us to compromise but intends to make no significant compromises itself. (This is not unusual or particular to the China–Australia relationship. Wei made it clear that for US–China relations to improve, for example, the US had to make positive moves to reset the relationship. That’s a line many of us hear in our dealings with Beijing, and one Beijing’s foreign ministry has already returned to since the Marles–Wei meeting.)

We should expect Beijing to accelerate its plan to have a direct military presence in the South Pacific and to conduct the newly minted ‘special military operations’ Xi envisions there. This will be a sufficiently grave and adverse development for Australia that the already strong public opinion that assesses China under Xi to be a threat to Australia’s security will harden. And in a democracy, that drives policy.

A collision in the South China Sea, on the water or in the air, would have a similar effect—and it would reverberate well beyond the Australia–China bilateral relationship.

With all this, the Albanese government is likely to continue a more positive, more engaged approach to other key partners in our region. That’s good news for bilateral relationships like the growing ones with Japan, South Korea, India and Indonesia, as well as for minilaterals like the Quad and the Australia–US–Japan trilateral, all underpinned by the military advantages Australia, the US and the UK will bring to the region through AUKUS.

These partnerships and the military power and advantages that come from them seem even more needed considering Xi’s latest move with the PLA.

In the recent statement from the Quad leaders’ meeting in Tokyo, the Pacific islands feature prominently. Each of the Quad members of Australia, India, Japan and the US have their own unique track records and capabilities to contribute in the region.

From June through to October Japanese naval ships will make port calls to seven Pacific island countries. But perhaps Japan can be persuaded to become even more engaged, especially in the Micronesian zone, where three of the five countries (Marshall Islands, Federated States of Micronesia and Palau) have free association agreements with the US, and three (Marshall Islands, Nauru and Palau) recognise Taiwan. It’s no accident that of the five Micronesian countries, Chinese Foreign Minister Wang Yi only landed in one, Kiribati, on his tour of the region.

Japan should cooperate more in surveillance of various island exclusive economic zones. The Palau marine surveillance co-ordination centre that Japan supports could, for example, become one of the fusion centres for the flagship Quad partnership for maritime domain awareness through which risks to undersea cables as well as other maritime crimes could be evaluated.

Similarly, Australia should work more with the US in Micronesia. If the US is able to capitalise on Palau’s offer to Washington to establish a base there, then we should offer some military assets there. Australia is now building 12 offshore patrol vessels. There could be a rotational access of, say, four OPVs through the area. Being in-country, buying provisions from local shops and building people-to-people ties goes a long way. We should also be working more with the US on Guam, the centrepiece of US-led north Pacific security.

More broadly, there’s a wide range of possibilities to work with the US. Australian and US forces could deliver health assistance to the islands with regular rotation of teams of military clinicians through host-nation hospitals for around four weeks at a time, incorporating local training along the way. If requested to assist, we should encourage our engineering firms to work with the islands in land reclamation. Given the importance of maritime transport and safety in the Pacific, we should team with the US and possibly South Korea to design and construct safe ferries to be operated under the islands’ ownership. Taiwan can help with information technology and perhaps EEZ surveillance.

France is a key Pacific player with nearly 3,000 defence personnel in the region. We need to get our relationship back on track for that reason alone. These forces protect French territories and offshore zones, as well as assist in disaster response. France plays an important role in the South Pacific defence ministers’ meeting. We should enhance cooperation with France in fisheries surveillance and patrolling the high seas.

India is well placed to play a bigger role in creating options for the island states. China’s expansion is largely achieved through political warfare. That’s a battlefield on which India has proven skills: India has helped its neighbours weaken China’s grasp on their economies and elites, including in Maldives and Nepal.

In a wide range of key sectors such as education, healthcare, telecommunications, transport, renewable energy, information technology and agriculture India can provide affordable, climate- and culture-appropriate solutions. Maritime security training could be facilitated with India’s new theatre command, and through that with the Quad. Exchanges with Indian MPs and island parliaments would build understanding and contribute to pushing back on China’s attempts to shape and control international rules and norms.

Daniel Suidani, the premier of Malaita, the most populous province in Solomon Islands, recently pointed out that China wants to work with Solomon Islands on policing and ‘centralisation of control’, but that ‘policing won’t bring us development’. Rather, he argued that ‘we have a lot to gain from working more closely with India. It innovates and leads in so many sectors, including affordable healthcare, education, pharmaceuticals, IT, communications satellites and so much more, all the while being vibrant, open and diverse. We feel a natural warmth towards India.’

Australia should be willing to work with a wide range of partners in the region, depending on the needs of the island country involved, without feeling threatened. While there are many partners to work with, in many ways, Australia doesn’t have to lead, do it alone, or even be there if someone else can do it better.

The people of the Pacific want democracy, transparency, accountability and rule of law. From there, they can build their economies and become islands of stability in a free and open Indo-Pacific, benefiting all. We should be working flexibly, with like-minded countries, to use our strengths in an appropriate and co-ordinated manner to reduce each other’s weaknesses. It’s that sort of burden sharing that truly scares Beijing and gives hope to the people of the Pacific and far beyond.