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China’s economic embargo of Australia helped to persuade several OECD members, including the United States and Canada, to back Australia’s Mathias Cormann as the organisation’s new secretary general, according to the Center for Strategic and International Studies, a Washington-based think tank.

‘Cormann’s selection sends a clear message that the OECD is not willing to cede the Asia–Pacific region to the influence of authoritarian states,’ a CSIS report says.

Although no one suggests that the former Australian finance minister will turn the 37-nation Organisation for Economic Cooperation and Development into an arm of US President Joe Biden’s crusade for global democracy, Cormann will be in a position to influence its agenda on issues highlighting China’s departure from global economic norms, such as state subsidies, intellectual property protection, labour standards, policy transparency and competition policy.

Should Cormann wish, he could raise the use of economic coercion as an issue of global concern, including by placing it on to the agenda of the G20.

Cormann is expected to encourage the expansion of the still heavily Eurocentric membership of the OECD into Asia, potentially including India, Indonesia and Malaysia.

The OECD’s origins were as an institution assisting European economic reconstruction in the wake of World War II, with its membership opened to non-European advanced nations in 1961.

It offers policy advice to its members and is also the architect of international agreements, conventions and guidelines on issues such anti-bribery, tax administration, development assistance, multinational investment and environmental policy. It also provides benchmark statistics in many areas, including pensions, health, school education standards and budget policy.

The OECD secretary-general has a seat at G20 meetings alongside the managing director of the International Monetary Fund and the body has sponsored other pivotal global agencies, including the International Energy Agency and the Financial Action Task Force.

With a staff of around 3,500, including 2,500 researchers, and an annual budget equivalent to $610 million, the Paris-based institution exercises a powerful influence on global economic policy.

Cormann was an outsider for the post. He didn’t have a history of engagement in global economic policy issues, besides occasionally representing Australia at IMF and G20 meetings, when Scott Morrison, in his former role as treasurer, was too busy to attend.

By contrast, his final rival, Sweden’s Cecilia Malstrom, had spent five years as the European Union’s commissioner for trade and had also been its minister for EU affairs and home affairs.

Australia’s reluctance to adopt ambitious targets on climate change and its continuing commitment to coal counted against Cormann’s candidacy. Malstrom supported tougher action on climate change, including Europe’s proposed carbon taxes on imports. There was also a view among some members that the job should go to a woman.

On the other hand, Cormann had much more enthusiastic support from his home government than did Malstrom, who was from a minor party in the Swedish opposition. The CSIS argues that Australia’s strong conviction that a key multilateral institution required leadership in the Asia-Pacific found favour with the Biden administration.

At the heart of Biden’s foreign policy is a belief that a revival of multilateralism, which had been shunned by his predecessor Donald Trump, is required to manage the rising power of China.

The OECD is distinct among multilateral institutions in having a membership composed of advanced and (relatively) democratic nations. It does not include either China or Russia.

Former World Bank president and US trade representative Robert B. Zoellick argued that China should be encouraged to become a ‘responsible stakeholder’ in global organisations, following its accession to the World Trade Organization in 2001.

China has, indeed, taken on leadership positions in many international agencies since then, including United Nations agencies: the International Telecommunication Union, the International Civil Aviation Organization, the UN Industrial Development Organization and the Food and Agriculture Organization. Last year, China won a seat on the UN Human Rights Council.

However, its engagement has not brought any shift in its values or led to any moderation of the state-led capitalism which the US believes brings unfair advantage to Chinese enterprise.

The CSIS argues in another report that ‘China’s growing interest and influence in multilateral organizations may preclude accountability mechanisms—specifically those associated with good development practice—from operating transparently and appropriately.’

It suggests that the OECD, as an exclusive group of the world’s most advanced free-market economies, has the opportunity to develop improved accountability standards.

The OECD’s outreach program includes China among five ‘key partners’ alongside India, Brazil, Indonesia and South Africa. They have observer status on OECD committees and agree to be bound by OECD legal instruments, such as the anti-bribery convention.

In principle, being a ‘key partner’ is a step along the pathway to membership. The OECD has expanded membership in recent years to include Latvia, Lithuania and Colombia. Brazil and Argentina are both in discussions about membership.

There has been debate within the OECD over whether membership should be extended to China, given it is by some measures the world’s largest economy and has committed to key OECD agreements.

‘Within the OECD, advocates of inviting China to full membership argue that it would result in China committing to the practices of OECD countries and working further towards an open market structure while expanding access to the OECD for policy work in the region,’ the CSIS says.

However, membership requires commitment to the OECD values of ‘democracy based on the rule of law and human rights, and adherence to open and transparent market economy principles’.

The US and, it is to be presumed, Cormann, believe China falls far short of these minimum standards.

Debates about Taiwan policy often end in a moral impasse.

Those focused on preserving peace in our time often point to the devastating human costs of defending Taiwan if that ultimately means high-intensity warfare between China and Taiwan, backed by the United States and its allies in the Western Pacific.

Meanwhile, those focused on defending liberal democracy often emphasise that it would be an abandonment of core values to not protect the rights and freedoms of 24 million Taiwanese from a clear and present danger.

Although the world may eventually face the invidious choice of large-scale war or monumental moral compromise over Taiwan, it is far too soon to resign ourselves to such a grim decision.

Instead, liberal democracies can still protect Taiwan with a policy of calibrated deterrence. And Australia has a role to play in incrementally ratcheting up deterrence measures to keep pace with China’s intensifying economic, military and political pressure on Taiwan.

Although the task of deterring Beijing is becoming harder as China’s power grows, the policy options have not been exhausted.

There’s much that even medium powers like Australia can do to expand their ties with Taiwan and thereby sow further doubt in the minds of Beijing’s policy planners about the international implications of attempting to seize Taiwan.

As others have argued, Australia and other liberal democracies should continue to make the case for Taiwan’s representation in international bodies as well as its inclusion in free trade agreements.

But beyond these diplomatic and economic policy options, there are at least three concrete steps that Australia could take to increase the deterrent effect in the defence and national security spheres.

First, Canberra could establish a de facto defence attaché office in Taipei, which as part of the Australian Office would represent Australian interests in the absence of formal diplomatic relations.

As well as deepening unofficial ties with the Taiwanese Armed Forces and government, this de facto defence attaché office could potentially also serve as a conduit for intelligence-sharing between Taiwan and Australia. As the risk of conflict in the Taiwan Strait increases, this intelligence exchange function could prove immensely useful for Australia’s situational awareness.

This de facto office would meet a Taiwanese desire for such connections, while equally reflecting the extent to which the security situation in Taiwan affects Australia’s core defence and security interests. To avoid overly antagonising Beijing, it could be staffed by non-uniformed Australian Defence Force personnel and Department of Defence civilians.

Second, Australia could explore the feasibility of incorporating Taiwanese Armed Forces personnel in multilateral non-traditional maritime security training and exercises in the Pacific islands region or Southeast Asia.

As well as providing training and representational opportunities for Taiwanese forces, such activities would provide a low-profile way of building unofficial ties between the Taiwanese Armed Forces, the ADF and other regional militaries.

Although China would view such activities with suspicion, the focus on relatively uncontentious activities and the precedent of Singapore’s low-key military relationship with Taiwan would likely moderate blowback from Beijing.

Third and finally, Australian politicians at the federal and state levels could establish a Taiwan–Australia parliamentary exchange.

Such an exchange wouldn’t need to be endorsed by the federal government and could be pursued independently by likeminded senators and members of parliament.

It could facilitate productive and candid exchanges on shared national security concerns for both Taiwan and Australia, including managing the impact of China’s politically motivated trade restrictions and responding to Beijing’s political interference.

As well as assisting Taipei and Canberra develop concrete policy responses to Beijing’s statecraft, such an exchange program would allow Australian legislators to gain an intimate understanding of the threat China poses to Taiwan’s freedoms.

Although China would disapprove, such an initiative would be consistent with the policies adopted by other liberal democracies such as France, which recently rejected Beijing’s efforts to dissuade French legislators from official contact with Taiwanese authorities.

Of course, these policy initiatives alone won’t be enough to deter China from, in extremis, invading. But they are precisely the kind of calibrated ratcheting up of international engagement with Taiwan that will challenge Beijing’s efforts to isolate Taipei.

It would be imprudent to not ask how these initiatives would impact Australia’s ties with China.

The simple answer is negatively. China would most likely cast these moves as destabilising meddling in its internal affairs and issue firm public and private diplomatic rebukes.

Yet the relatively discreet nature of these initiatives and the precedents from other countries suggest that they will probably not cause a further dramatic downturn in the already strained Australia–China relationship.

And even if these initiatives breed additional ill-will in Beijing, they are still likely the right course of action for Canberra.

For designing Taiwan policy for Australia is not just a question of strategy; it is also a question of ethics. Our decisions on Taiwan may define for this age the values that we represent and our willingness to uphold them.

Southeast Asia is a region of crucial strategic importance to China. The Strait of Malacca and the South China Sea are choke points for much of its international trade. The mainland states of Southeast Asia have been closely connected with China for centuries. And Southeast Asia is one area on its periphery where China is not encircled by another great power.

With the rise of China as an economic and political power in recent decades, Southeast Asia has become a critical economic partner for China, as well as a target for China’s political influence, as well documented by Sebastian Strangio in his recent book, In the dragon’s shadow: Southeast Asia in the Chinese century.

Strangio began his career as a reporter at the Phnom Penh Post in Cambodia, and has since traveled and reported extensively across the 10 nations of ASEAN.

With some flair, he weaves stories of the rich history of the region, with a discussion of recent trends and defining issues. Recurrent themes through his country profiles are mutually beneficial economic cooperation, Chinese attempts at regional domination, pushback by regional countries and the waning influence of the US.

Nowhere in the world is China’s rise more visible than in Southeast Asia, according to Strangio, due to the reality of proximity. For centuries, they were bound together by trade, tribute, movements of people, and cultural and technological diffusion. And with China’s economic renaissance, China and Southeast Asia are now tied ever more tightly together, thanks to a ‘collapse of the distance’ between the two. A network of highways, rail lines and special economic zones is breaking natural barriers with mainland Southeast Asia. And there’s a similar collapsing of distance at sea as China has built-up a world class navy.

Southeast Asia is also home to sea lanes which are critical for China’s booming trade, especially imports of crude oil. This is the basic strategic driver of China’s occupation of the South China Sea, writes Strangio, rather than claims of historic rights and traditional fishing grounds.

For Southeast Asia, China’s proximity has always been a mixed blessing. The lure of prosperity coexists with fear and trepidation about what a powerful China will mean for the region’s future, especially in light of the deterioration in US–China relations. In some countries, it has reawakened memories of China’s support for communist insurgencies during the Cold War and the vexed question of its relationship with the region’s ethnic Chinese communities, according to Strangio. And China has mirrored its construction of artificial islands in the South China Sea by damming the upper Mekong River, giving Chinese dam engineers the power of life and death over large swathes of the downstream Mekong nations.

China is not popular in Southeast Asia, and is its own worst enemy with its imperious attitude, writes Strangio. The general Chinese message to the region is that it can flourish within a Chinese orbit or languish outside. In short, China believes that Southeast Asian states should defer to its wishes. While all great powers tend to behave that way (‘great state autism’), in China’s case it may be worse as it also reflects the nature of its one-party, authoritarian system that leaves very little space for civil society. One disturbing trend has been Chinese outreach to the ethnic Chinese populations in Southeast Asia to enlist their support, which risks reawakening old fears about dual loyalties on the part of ethnic Chinese, notably in countries like Indonesia.

Nevertheless, a prosperous and stable China is in the best interests of Southeast Asia, which has good reason to maintain healthy relations with its big neighbour. China has become a vital economic partner to every nation in the region, and has been more helpful than the US for dealing with Covid-19. Despite the risks and challenges of China’s Belt and Road Initiative, it is very attractive to the region’s poorer countries for kickstarting their economies. The reality of geographic proximity makes China something that Southeast Asia can’t ignore or wish away.

Thus, despite their immense goodwill towards the US, Southeast Asians are reluctant to sign up to any American-led alliance or coalition of states aimed at containing China’s power. Indeed, many Southeast Asians are concerned that the US often sees its relationship with the region mainly through the prism of its great-power competition with China. The depiction of the US–China competition as an all-or-nothing struggle between democracy and dictatorship has failed to gain much traction in Southeast Asia, argues Strangio.

In this informative and readable book, Strangio concludes that the emergence of a more powerful and belligerent China poses the most serious foreign policy challenge that the Southeast Asian region has faced in a generation. One issue that could have been developed further is the future of ‘ASEAN centrality’—the notion that regional security and economic cooperation revolve around ASEAN.

In reality, ASEAN now seems less effective and cohesive than ever. It is being fractured by China’s adoption of Cambodia as a client state. Mainland ASEAN states are becoming more economically integrated with China than with other ASEAN states, and are thus drifting away. ASEAN’s perennial weak point, its inability to solve problems in its own backyard, has been highlighted once again by the political crisis in Myanmar. And ASEAN’s biggest member Indonesia is clearly more preoccupied with national interests and demonstrates very little regional leadership.

This month in Beijing, the so-called two sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference convened to formalise a range of policy goals for China’s economic development, environmental management, law, foreign affairs and more. This year, there’s been the promulgation of the 14th five-year plan (2021–2025) and the continuing dismantling of Hong Kong’s governance system.

The two sessions are a highly formalised performance that express the machinery of power in the People’s Republic of China. They are only the public moment of an extremely dense and complex policy formulation process that happens behind closed doors in the months and even years before delegates meet.

Taiwan is always mentioned in key speeches at these meetings. Premier Li Keqiang offered two paragraphs in his work report to the NPC in which he reasserted Beijing’s commitment to its ‘one China’ principle and the 1992 Consensus. He also warned against separatist activity while promoting engagement: ‘We will promote exchanges, cooperation and integrated development across the Taiwan Strait. Together, we can shape a bright future of rejuvenation for our great nation.’

Similar references to Taiwan were made in the CPPCC work report by chair Wang Yang and, with more specifics, in a section of the five-year plan devoted to Taiwan.

The references were mostly standard for PRC statements on Taiwan over recent years: the 1992 Consensus, the ‘one China’ principle, condemnation of ‘separatists’ and warnings about the use of force, as well as promotion of investments links and people-to-people exchanges.

In 2021, these statements come in the context of a significant rise in Beijing’s pressure on Taiwan since the re-election in a landslide of President Tsai Ing-wen. Most worrying has been military overflights in the Taiwan Strait that have tested Taiwanese military reactions and sought to normalise the presence of the People’s Liberation Army Air Force.

That the two sessions offered established positions on Taiwan says that Beijing hasn’t made fundamental changes to its Taiwan policy but for now is still working within the existing framework. By way of comparison, the NPC has in the past signalled sharp changes in Taiwan policy. In 1979, it issued the Message to compatriots in Taiwan formally ending the ‘liberate Taiwan’ policy set in 1954 in response to the end of the Korean War and the signing of the Sino-American Mutual Defense Treaty, and which formally drew a line under the anti-Japanese Second United Front between the Chinese Communist Party and the Kuomintang from 1936 that collapsed in the early 1940s.

That there are no comparable changes this year places the recent military activity as a tactical move within the existing framework rather than as part of a fundamental strategic shift or CCP ideological reassessment.

This doesn’t offset the likelihood of a crisis, however. Within the core positions, there were pointers on the ideological structure of PRC Taiwan policy that suggested vectors of escalation.

It was notable that Li didn’t include a reference to ‘one country, two systems’ as Beijing’s formula for Taiwan’s future, especially since the 2019 speech President Xi Jinping gave for the 40th anniversary of the Message to compatriots in Taiwan made much of ‘one country, two systems’. Clearly, events in Hong Kong and Beijing’s response to them, including at this year’s NPC, call into question the meaning and use of the term, but Li did still apply it to Hong Kong, so it might be premature to say that it has been formally abandoned.

PLA spokesman Wu Qian made a statement about Taiwan that noted the activities of a ‘tiny number of separatists’ and warned Taipei not to try to ‘borrow strength from foreign forces’. These phrases are not unprecedented, but they could be used as a pretext for military action against Taiwan if Beijing were to claim that such activities had become an existential threat to ‘reunification’ and therefore to the task of the ‘great rejuvenation of the Chinese nation’.

There were other potentially interesting comments during the two sessions. The Global Times, while not always a reliable source, reported that CPPCC members had floated the need for new legislation promoting unification. At the same time, Transport Minister Li Xiaopeng released a plan for 2035 that included an undersea rail link between Taiwan and Fujian province, an implausible proposal first suggested in the mid-1990s that highlights the challenge in separating out substantive policy changes from political theatre in the PRC system.

What the two sessions have not signalled is any tone of compromise within the existing framework. Beijing remains unwilling to reach out to Taiwan’s elected government under Tsai and has not matched claims of ‘exchanges, cooperation and integrated development’ with reduced military activity in the Taiwan Strait.

The ideological and policy framework put in place in 1979 has failed to realise Beijing’s goals for more than 40 years, and this has created structural tension in the PRC’s Taiwan policy architecture. The lack of compromise is symptomatic of a system with limited mechanisms for thoroughgoing policy reassessments and an ideological belief that policy failure is a reflection only of a lack of commitment, not of a policy being in any way wrong.

US and other naval forces have undertaken transits through the Taiwan Strait and members of US President Joe Biden’s administration have made comments in support of the status quo. In the absence of any signs of softening from Beijing or an abrupt change in PRC Taiwan policy and ideology, maintaining these calibrated international actions to ensure they figure in Beijing’s Taiwan policy calculus remain the best guarantor of regional security.