Tag Archive for: China

ASPI suggests

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All eyes have been on Beijing this week as signs of a slowdown in the Chinese economy have been felt across the globe. With Chinese President Xi Jinping set to visit Washington DC next month, The Washington Post asks how Obama can help to get China’s economic prosperity back on track without making Xi feel vulnerable and weak. For a useful breakdown of how the 14.6% rate of decline in Chinese imports could impact on the rest of the world for another year, check out The Guardian’s interactive graphic. Experts estimate that Australia alone stands to lose $25.2 billion in export sales—the equivalent of 1.7% of our GDP.

As China’s Victory Day parade draws closer, Vice Minister Zhang Ming of the Chinese Foreign Ministry has revealed the guest list for the event. Some notable absentees from the list include US leaders and their Western allies, as well as top-level representation from Brunei, Indonesia, Malaysia, the Philippines and Singapore. Meanwhile, J. Michael Cole at The Interpreter argues that Taiwan’s KMT is making a big mistake by sending its honourary chairman, Lien Chan, to the festivities next week, a move that could potentially shake the faith that young Taiwanese have in their military establishment.

What’s the purpose of US power? As part of its 30th anniversary symposium, The National Interest asked 25 experts their thoughts. William J. Burns, president of the Carnegie Endowment, says that while US global preeminence mightn’t last forever, it’d be a bad idea to bet on its decline any time soon. Read Burns’ response, and others, here.

Refugee crises from Syria to Austria have made headlines this week. Over at Project Syndicate, Anne-Marie Slaughter has looked at the four factors that are leading to US policymakers’ change of heart about implementing a no-fly zone over Syria. While the positive strategic implications of the zone are plenty, it could also serve to alleviate some of the pressures associated with the refugee crisis, which has reached ‘almost biblical proportions’. On a side note, check out CFR’s Global Conflict Tracker for an in-depth look at US engagement in Syria—along with a detailed examination of other hotspots around the world, and they’re likelihood to impact on US interests.

The Economist has also weighed in on what could be done to deal with the enormous influx of Syrians to the EU: ‘let them work’. By keeping migrants in the workplace, both locals and newcomers learn to adjust to the change—a policy that’s been effective in London, New York and Vancouver. After the horrific discovery of the bodies of up to 70 migrants in the back of a truck parked by an Austrian highway this week, pressure will be on the EU to ‘step up and provide protection to more, share responsibility better and show solidarity to other countries and to those most in need’, stated Amnesty International’s Gauri van Gulik.

Heading north, CSIS has released a new publication on Russia’s arctic ambitions, The New Ice Curtain. Looking at the future of bilateral and multilateral relations in the region, the report focuses on Russia’s military modernisation as it aims to maintain the economic viability of its natural resources, as well as the Northern Sea Route.

And finally, North Dakota has become the first state in the US to allow its law enforcement officers to fly drones armed with weapons, ranging from tasers to tear gas. The amended bill was originally designed to prohibit law enforcement officials from weaponising drones, but after an industry lobbying firm got involved, North Dakotan police can now outfit their UAVs with anything deemed ‘non-lethal’.

Podcasts:

The ABC’s The World Today program recently hosted Peter Singer, strategist and senior fellow at the New America Foundation, who gave a brief outline of the vulnerabilities that the US defence system will likely face in the near future (9 mins).

The always-reliable CSIS CogitAsia podcast this week hosted Michael Green for a run down on Japanese Prime Minister Shinzo Abe’s statement on the 70th anniversary of the end of WWII. Take a listen here.

Videos:

The Hon Bill Shorten was the keynote speaker at ASPI’s recent 2015 National Security Dinner. For an overview of the Opposition’s take on the security issues faced by Australia in the near future, watch the video of the event here.

Events:

A big week coming up for Canberrans: next Monday 31 August, Adjunct Associate Professor James Brown of the US Studies Centre will speak at the ANU on Australia’s need to increase its efforts in space to match those of the US’s. Also be sure to mark 1 September in your diaries to catch Sheila A. Smith discuss her new book on how the Japanese government is coping with China’s growing regional influence.

Joining the long list of excellent events run by the University of Sydney’s China Studies Centre, on 10 September, Professor Christine Wong of the University of Melbourne will discuss the structure, organisation and potential reforms of China’s fiscal system.

Our warrior elite: an expanding role for Australian Special Forces

Exercise Diamond Strike 2015

The rise of ISIS allied with the seemingly inevitable mass migration caused by climate change is confronting Australia’s military and intelligence leaders with a devilish conundrum. No one yet has a plan to meet the approaching tumult but one thing is certain: in solving the dilemma the role of our Special Forces will be increasingly central to our future defence and security.

These conclusions were borne upon me during the two years of research and writing that produced my Warrior Elite, the history of our Special Forces incorporating our intelligence agencies just published by Hachette. It involved scores of interviews with the planners behind the political scenes who develop our defence policy.

In the last two decades the military and the intelligence agencies have coalesced into a Special Forces cohort unlike anything that preceded it. And it incorporates an ever increasing proportion of our defence preparedness. The planners know that the technological genie is out of the bottle. Today, an SAS squadron, for example, has at its command a firepower exceeding a WWII battalion. An extraordinary research effort in 47 military and civilian facilities in the US and others in Europe, Japan and China is producing an astonishing array of protective battle suits, advanced weaponry, communications, telemetry and real time HQ support and direction. These are either in use now or on the verge of deployment to the Special Forces of most advanced countries, Australia included. They are the instruments of a radical transformation of military strategy and tactics.

As our Commando regiment increases its battlefield capacity, the SAS in close cooperation with ASIS is expanding its capabilities in potential trouble spots in the region, the Middle East and even the African continent. But here the planners run up against a strategic quandary. Both units are closely affiliated with the US. And while this brings substantial technical advantages, in the bigger picture these are offset by strategic liabilities which defence leaders realise they must overcome.

America’s imperial superpower assertions have created serious complications in Australia’s relations with China and arguably affected the development of open-hearted, neighbourly relations with the largely Muslim nations of Indonesia and Malaysia. Both Indonesia and China are themselves deeply vulnerable to ISIS—Indonesia through its 95% Muslim population and corrupt governance; China because of its 160 million Muslims and their alienation from an unyielding single-party government. Both countries are facing much bigger problems than Australia in controlling their internal threat.

Indeed, were it not for Australia’s enthusiastic embrace of the Five-Eyes alliance which has traditionally been directed against China and Indonesia, among others, it would be perfectly possible to envisage a regional arrangement encompassing Australia and its two most populous neighbours in a cooperative Special Operations counterforce to the jihadists.

Then comes the second strand of the conundrum: climate change. Heavy Weather, an ASPI Special Report published in March 2013, warned that global warming:

 ‘has generated little interest in either the ADF or the Defence Department, [yet] climate change is transforming the conventional roles of security forces. As a threat multiplier, it has the potential to generate and exacerbate destabilising conditions that could reshape the regional security environment.’

That now seems inevitable. And the planners are aware that our response must involve international alliances with the great forces who would underwrite—with force if necessary—the right of nations like Australia to decide (in John Howard’s immortal phrase) ‘who comes to this country and the circumstances in which they come’.

When climate change produces uncontrolled mass migration—the forerunner of which we now see in the Mediterranean—the support and cooperation of regional governments, particularly Indonesia and China, will be essential to any Australian effort to retain its territorial integrity. Yet once again our ‘Five-Eyes’ alliance with the Anglosphere which targets Indonesia and China as potential threats stands as an impediment to the development of the cooperation  and support required.

While the American alliance will no doubt remain in place, it may well be that Australia needs to loosen the ties to its Anglophile past before a genuine regional integration can be secured. An innovative 2014 ASPI/ADF study might well point the way to the future. It proposes the posting of Special Forces liaison officers in Indonesia, Malaysia, Singapore and the Philippines ‘of which Indonesia is the most important’. It recommends increased Special Forces engagement with Southeast Asian nations leading to the establishment of a Special Forces Regional Training Centre in Australia. And in a ground-breaking proposal, it advocates an ‘intensification’ of cooperation with Chinese Special Forces. ‘This would be a confidence-building exercise,’ it says, and would develop through joint humanitarian and military exercises.

In this rearrangement of forces, as our Special Forces add a diplomatic cutting edge to their arsenal, we might well find that our future security—in Paul Keating’s words—is ‘in Asia’ and not ‘from Asia.’

China’s economic outlook: the end of certainty?

China’s economic outlook: the end of boom times?

As everybody now knows, the Chinese economy has a big impact on Australia. Chinese demand for Australian commodities influences our rate of economic growth, the value of our currency and—critically for the government—our tax revenues. Over the past decade, we’ve ridden the roller coaster from the good times to the bad. At the same time, cheap manufactured goods from China have benefited consumers while simultaneously putting pressure on local manufacturers.

Treasury and the Reserve Bank, not to mention the resource sector, are surely keeping a close eye on current developments. There’s a lot at stake; unemployment levels, tax revenues, corporate profits and Australia’s overall prosperity all depend upon the Chinese economy.

China’s long-term economic prospects remain favourable. The latest forecast (paywall) from the Economist Intelligence Unit is for the Chinese economy to overtake the US economy in 2026 and to be 50% larger by 2050. The strategic consequences of this long-term shift in economic weight have been explored many times; my most recent contribution is here. In comparison, far less attention has been paid to the near-turn strategic consequences of China’s economic performance. I think that’s a mistake.

As best I understand from discussions with Chinese counterparts and China experts, the Communist Party’s hold on power rests on two things; nationalism and growth. Whatever remnants of Communist ideology remain have been rendered irrelevant by China’s embrace of capitalism. Of greater contemporary relevance, though of much earlier origin, is the notion of the Mandate of Heaven, which links the historical rise and fall of Chinese dynasties with their ability to deliver competent government. Whereas democratic countries punish incompetent governments at the ballot box, more drastic measures are required in a one-party system—no different from when China was ruled by hereditary dynasties.

Although the current Chinese system seems stable, the Chinese Communist Party (CCP) doesn’t take its position for granted. A regime confident of popular support doesn’t control information and suppress dissent to the extraordinary extent the CCP does. We should have no more confidence in the stability of present arrangements in China than its architects.

What happens if the Chinese economy suffers a serious setback in the next several years and how would the Chinese people respond to a recession that saw the economy contract and unemployment rise to double digits? Perhaps the party would explain the need to tighten belts and people would do what was necessary to get things back in order—think Iceland and Ireland following the 2008 financial crisis. However, even under this favourable scenario, it could take years to put things right; economic output can decline quickly but is painfully slow to re-establish.

A less benign scenario is also possible. The Party could fall back on the remaining pillar of its domestic legitimacy—nationalism. Chinese nationalism is remarkably heartfelt, and in many ways understandable given the country’s diverse achievements. But a strong theme of historical grievance also runs through Chinese nationalism. The ‘century of humiliation’ has been kept alive in Chinese popular culture, resulting in widespread anti-Japanese sentiment and a strong resolve to never again be put upon by external powers.

It’s impossible to foresee how nationalism might manifest in an economically weakened China. But it surely wouldn’t make China easier to deal with over issues such as the South China Sea. More assertive behaviour than what we’ve already experienced is possible, and the prospects for compromise are likely to diminish. Don’t mention Taiwan. Even setting aside strategic matters, an economic downturn could see tensions rise over exchange rates and trade—especially with competing US-led and China-endorsed trade pacts under development.

So what do the economists say? Back in 2011, the IMF forecast future Chinese growth of around 9.5% a year. By April this year the medium-term forecast had been revised down to around 6.3%. That’s hardly the end of the world—most countries would be satisfied with 6% growth—but it’s still a substantial drop. More importantly, it shows that things are happening that the IMF didn’t (or couldn’t) anticipate. That’s not a swipe at the IMF; global macroeconomics in the post-financial crisis era has defied prediction and is even difficult to explain ex-post. Nonetheless, within the broader context of uncertainty, there are reasons to be concerned about what comes next for China.

There’s a risk that, like many that came before, China will fall into the middle-income-trap and see its growth stagnate. The trick will be to capture higher value-add export markets while expanding domestic demand. At the same time, China has to unwind the mountain of debt that’s accumulated in its economy over the past decade. With total debts amounting to 282% of GDP, China is a middle-income economy with an advanced economy’s level of debt. Moreover, because Chinese authorities manipulated bank interest rates to provide artificially cheap lending (at the expense of household savers), borrowers showed little discipline in their investments over the past decade. In a haunting echo of the 2008 financial crisis, almost half of China’s debt (US$9 trillion) is related to real estate.

In theory, it’s possible for China to switch from credit driven growth to more sustainable domestic demand—but it’s hardly assured. As always in economics, there’ll be winners and losers. Reforms are needed to put more money in the hands of Chinese households at the expense of those who currently benefit from cheap credit. Taking from the rich to give to the poor isn’t easy, even in a one-party state like China.

ANZUS, China and the Prisoner’s Dilemma

Prisoner's Dilemma

The recent ANU–CSIS paper The ANZUS Alliance in an Ascending Asia is a welcome addition to contemporary thinking on the Australia–US alliance and its prospects over the next couple of decades as China looms ever larger. The even more recent release of the Economist Intelligence Unit’s Long-term Macroeconomic Forecasts: Key Trends to 2050 offers a challenging counterpoint to the comfortable policy prescriptions of the ANU–CSIS study.

While it might suit some to dismiss China’s capacity to realise its leadership ambitions, as did the Secretary of PM&C at the Crawford School’s Australian Leadership Forum at the end of June, its growing economic dominance is already affecting the regional strategic balance. And when the relative economic strength of the major global economies is viewed through the lens of demographic change, workforce participation rates, greater capital use efficiency in R&D and adjustments in immigration policies, the mid years of this century look even murkier.

Then there’s the fashionably ignored problem of global warming, which may bring with it significant and adverse security effects, particularly in the riverine deltas and archipelagoes of Asia, with entire communities moving to higher and drier ground. And as the large emerging economies of China and India move away from carbon-intensive energy production, Australia’s relative economic position and associated political throw-weight will decline.

Those combined forces could well stress the alliances that the US already has in place with Japan, Taiwan, Korea, the Philippines and Thailand, and may well impact on its alliance with Australia. The ANU–CSIS paper ignores these factors.

The ANU–CSIS paper does, however, provide a useful overview of the ANZUS Treaty, identifying the key political and military developments that have served to support the continuing relevance of the alliance. Curiously, it overlooks what was probably the most profound change to the operation of the alliance— the re-engineering of the operating arrangements at Pine Gap and Nurrungar—which happened on Kim Beazley’s watch as Minister for Defence. Although that was three decades ago, it inaugurated the integrated cooperation paradigm that continues to define the alliance to this day.

The paper correctly acknowledges that the ANZUS alliance, like most defence treaties, was initially threat-based: Australia and New Zealand needed US military assurances if Japan were to rebuild an independent self-defence capability. It doesn’t, however, come to grips with the significance of how the ANZUS alliance has changed since 1951, as shared strategic aims and values have replaced threat as the driving force of the treaty. AUSMIN communiqués since the mid-90s have reflected this fact.

Sadly, what might have worked in the past is no guide to what might work in the future. The paper’s curious language of hubs, spokes, pivots and rebalances suggests a mindset that remains entrenched in the linear strategic concepts of the past. While the US, Australia and New Zealand will continue to coalesce around human, social and political values as the foundation of their long-term strategic relationship, these values are not readily transferable to strategic associations that might be established elsewhere in Asia.

This seems to have escaped the authors of the ANU–CSIS study, especially as they considered the prospective place of both Indonesia and Japan in the evolution of Australian and US strategic interests in Asia. The idea that Indonesia and/or Japan might in some way replace Australia as the US’s preferred strategic partner is ludicrous. What isn’t ludicrous is the interest that the US (and Australia if it can replace a transaction-based Indonesian relationship with an outcomes-based diplomacy) should have in engaging Indonesia and Japan more constructively in the strategic affairs of Asia.

Australia, Indonesia and Japan each bring quite different strengths and benefits to the US as it seeks to secure and manage its global strategic interests. These strengths and benefits are complementary rather than competitive.

The joint US–Australia approach to the emergence of China as a global strategic power cannot rest on some kind of latter-day containment doctrine, or even a policy of constraining China. Nor are the US and Australia in a position to ‘shape’ China’s expectations or ‘permit’ it to take a larger leadership role.

Our joint ability to condescend extends only so far!

Rather, the US and Australia are well positioned to construct a network of intersecting and differentiated relationships that capitalise on the opportunities now on offer in Asia to strengthen and extend a rules-based strategic architecture that engages China, not corrals it. Our collective aim should be to exploit and leverage complexity and ambiguity rather than engage in a form of linear reductionism that misrepresents multi-dimensional strategic opportunities as competitive binary options.

The ANU–CSIS paper questions whether US–China and Australia–China relations might be diverging, but without recognising that difference isn’t necessarily divergence. While the paper implicitly resolves this artificial dichotomy by proposing a return to first principles—what is the regional and global order we seek, and what are the ways and means we have to achieve and sustain that order—it doesn’t answer those questions.

In Australia’s case, the suggestion that some kind of ‘strategic choice’ between Washington and Beijing is inevitable is just another form of the prisoner’s dilemma. Because the nature and dynamics of Australia’s relationships with the US and China are so different, the management of those relationships is much more a question of ‘both/and’ than of ‘either/or’.

The effect of the ANZUS alliance on the strategic evolution of the Asia–Pacific region will ultimately depend on the skill shown by Washington and Canberra in fostering a rules-based regional security architecture supported by economic and trading arrangements that generate prosperity, build resilience and enhance political and social stability. The ANU–CSIS paper has made a start by identifying some of the problems that need to be addressed. But it also reminds us just how much further our joint policy development needs to go.

South China Sea: options and risks

USS Fitzgerald transits the South China SeaThe venerable Centre for Strategic and International Studies in Washington DC is hosting its fifth annual conference on the South China Sea on Wednesday, Australian time. It’s my privilege to be speaking at the conference on the theme of the international community and the strategic balances in the South China Sea.

I propose a number of steps which the US and like-minded countries might act upon to develop a more effective shared strategy towards the South China Sea. Five immediate actions stand out as offering a more promising way forward.

First, the US should seek to extract value from President Xi Jinping’s proposed visit to the United States in September 2015. As with past presidential visits, the Chinese will put an exceptionally high priority in delivering a trouble-free and successful visit which will no doubt aim to strengthen domestic perceptions of the exceptional nature of US–China relations. Washington should make it clear to Beijing that the success of this visit will require a substantive discussion on stability in the South China Sea and a willingness to agree that the interests of regional powers must be accommodated.

There’s no prospect that China will concede ground on their sovereignty claim to around 80% of the region, but there may be a possibility that China would agree to a complete halt on land reclamation and of ‘militarising’ current sites if other countries in the region do the same. Going into the Xi visit, the US should start negotiations from the position that no unilateral concessions should be made in an effort to modify Chinese behaviour.

Second, the US should open avenues for dialogue with Asia–Pacific countries and other parties with interests in the South China Sea. This should especially include countries with substantial trading interests with China, like the Europeans and oil-producing Middle East countries, whose economic life-line depends on unfettered access to the South China Sea. A Washington ‘Summit of the friends of the South China Sea’ would help to strengthen the consistency of government-to-government dialogue on the issue just as the Shangri-La Dialogue has done in Singapore. China would, of course, be a welcome participant but the effect of this will be to demonstrate that more pluralist countries are better able to negotiate and share interests.

Third, a key point of discussion in Washington and with like-minded countries should be to anticipate responses that might be necessary to handle a Chinese announcement of an Air Defense Identification Zone (ADIZ) across the South China Sea. The need is to learn from what was a poorly coordinated and unsustained reaction to the East China Sea ADIZ announcement in November 2013. There are signs that Beijing will hold back from an announcement of a new ADIZ before President Xi’s September visit, but after that time and as the US begins to focus on its presidential election campaign, it’s possible that China might seek to take this next step aimed at consolidating its control of movement through the region. Care must be taken to ensure that initial responses aren’t allowed to fade, giving way to a form of de-facto acceptance that China exercises a form of sovereign control over the region. It may be worth exploring the idea of declaring an international ADIZ, where ship and aircraft movements are pooled in a shared and openly available platform for situational awareness.

Fourth, Washington and regional countries should take time to re-think the current language which is often deployed to respond to Chinese behaviour. For example, calls for greater Chinese transparency in defence planning continue to be made, long after the strategic purpose of gaining tight control in the South China Sea is readily apparent. China has long since learned to use the artifice of policy statements as a way to describe its actions. The idea of transparency has lost practical utility as a way of trying to force a more realistic discussion with China on its intensions.

Finally, some degree of international coordination should take place to sustain a pattern of military overflights and ship passage into disputed areas in the South China Sea. One P-8 flight, no matter how welcome, doesn’t serve to ‘prove’ sustained international interest in the region. In fact the opposite is true: if there are no follow-up flights from countries that claim strategic interests in the region, this only serves to show the relative absence of deep engagement in the security of the South China Sea. It follows that Australia, Singapore, EU countries, Japan and others with a strategic interest in free access to the South China Sea need to exercise that interest in the form of actual overflights and ship transits on the principle of ‘use it or lose it.’ What may be difficult to do today will only become harder in the future if a pattern of de-facto Chinese control is established over the region.

China respects strategic realism, not flattery

Getting China right is a key challenge for Australian foreign policy. It’s not easy to do given  our tendency to scare ourselves witless with overblown assessments of Chinese power.

Foreign observers who know China well puzzle about Australian views of the country. Every foreign policy move is assessed for the apparent distress it might cause in Beijing. An Aussie military exercise with America. Won’t the Chinese see that as a provocation? Our Navy needs submarines. Surely that will enrage the People’s Liberation Army? Academics seriously warn us not to get close to Japan and to reduce US alliance ties because these might not play well in Beijing.

In The Australian on Monday Bob Carr warned that we should only ’emphasise the positive’ about China so as not to rouse the dragon.  That was certainly how Carr played his brief time as Foreign Minister.  His diary recounts how he sought to underplay growing defence cooperation with the US at the 2011 AUSMIN meeting in Perth, precisely out of concern that China might object to Marines in Darwin.

The Chinese are astute enough not to regard a few hundred visiting Marines as a dagger pointed at the heart of the Middle Kingdom. But China isn’t beyond toying with our mistaken view that the world hangs on Australian policy decisions.  So it is that every utterance by ambitious PLA senior colonels or reference in People’s Daily editorials is combed by Australian commentators looking for signs that we may have transgressed some Chinese boundary.

The concern to not poke the dragon produces a form of inverse critique of Australian policy moves. For example, at a time of significantly raised tension between China and Japan in 2014, Beijing unilaterally declared an Air Defense Identification Zone (ADIZ) over the East China Sea. Julie Bishop sensibly said this hurt Australian and regional interests in freedom of air transit. But it’s the Australian reaction rather than the Chinese action that is said by Carr and others to be the miscalculation.

Similarly Tony Abbott is chided for saying that Australia has no better friend in Asia than Japan. He talks of Japan as an ally, an often used description of close partners rather than implying a formal treaty relationship.  In both cases this is criticised by Australian rather than Chinese observers, not because Abbott’s statements are incorrect—he’s right on both counts—but because they might generate negative reaction in Beijing.

After some years of participating in and leading senior Defence talks with PLA counterparts my observation of dealing with Chinese leaders is that they understand very well Australia has a strong alliance relationship with the US and that it won’t be broken by Beijing’s preference that such ‘Cold War alliances’ wither away.

The Chinese understand that the US strategic presence in Asia has been the basis of post-war stability and therefore of Chinese economic growth.  To the extent China has any interest in defence cooperation with Australia it’s because they think our substantially US-sourced technology and intelligence engagement makes the Australian Defence Force a more valuable partner.

Beijing pragmatically acknowledges the value the US alliance delivers to Australia’s role in the  Asia–Pacific.  But as an opportunistic actor, China won’t hesitate to play up to the instincts of Australian commentators always looking for ways to make Canberra rather than Beijing the problem in regional security.

To be clear on this latter point, it’s Beijing (not Canberra) that is constructing artificial islands in the South China Sea. It’s Beijing (not Canberra) that has built a 3000 metre, military-grade runway on one of these islands, located artillery and sensors there and persists in playing risky games of chicken with the ships and aircraft of other countries transiting the region.

Australia’s foreign policy approach to China should articulate and then hold to our view of Australian strategic interests. That will be respected more by Beijing than emphasising only the positive or turning a blind eye to Chinese actions—like declaring the ADIZ or building artificial islands—which raise regional tensions.

An Australian approach based on arguing for our strategic interests has not yet, and is unlikely to damage bilateral ties with Beijing. On the contrary, it makes us look like a country which is predictable, open and knows its own mind.

Contrast this with New Zealand’s approach. Although John Key has done a lot to return New Zealand closer to the US and Australia as defence partners, Wellington’s public diplomacy studiously tries to balance between Chinese and American interests as though there is no meaningful difference between the two countries. New Zealand’s uncomfortable silence when China declared its ADIZ bought it no extra credit in Beijing, beyond a rather contemptuous view that ‘small countries’ should keep their mouths shut on big strategic matters.

It’s pointless to pretend that Chinese interests in the  Asia–Pacific align to the interests of other countries in the region or indeed globally; that’s what makes the ‘disputes’ in the South China Sea so intractable. ASEAN and other countries including Australia failed to identify that Chinese island construction was rapidly moving the problem from one of international legal positions to a far grittier fight over expanding strategic control.

To have any hope of limiting further Chinese opportunistic attempts to create reality on the ground in the South China Sea and elsewhere, we need to take a hard-eyed assessment of our strategic interests. Preemptive capitulation or false attempts to emphasise the positive won’t help in the tough minded contest for power in the region.

Cyber wrap

Hillary Clinton

Cyber security has impacted on the US Presidential race this week, with Hillary Clinton condemning Chinese hacking at a campaign event. Her commentary—that the Chinese are ‘trying to hack into anything that doesn’t move’—was part of a longer discussion on US–China competition in the Asia–Pacific, which indicates that cyber security and foreign policy will likely be linked on the campaign trail. China has dismissed Clinton’s claims and drew attention to last week’s agreement with Secretary of State John Kerry to cooperate on cybersecurity threats. The US and Brazil have also agreed to recommence cyber policy dialogues after the Snowden-induced freeze.

Meanwhile, US and British security agencies have wrapped up a three week long cyber war game in Virgina. They invited representatives from the banking and energy sectors to participate in scenarios that affected their industries. They probably should have invited Home Depot and Walmart too, as US defence contractors scored lower than financial institutions and retailers on BitSight’s ranking of US corporate cyber defence capabilities. On the west coast, the FBI are trying to solve a series of fibre optic cable cutting incidents that have blacked out internet and phone services from Sacramento to Seattle.

China has continued its legislative efforts to protect itself from cyber threats through the new National Security Law on 1 July. The law calls for secure and controllable information architecture in critical sectors and a national security review and supervision system to examine foreign investments and technology that may impact national security. This has renewed concern among tech firms that they’ll be forced to hand over intellectual property before being authorised to operate in China. Chinese officials have defended the law on the basis that internet sovereignty is an extension of national sovereignty. Similarly, the Chinese ambassador to the UN has opposed the perceived marginalization of governments in internet governance at the expense of NGOs and corporations.

Australia’s banking, insurance and superannuation regulator APRA has written to its industry charges about the risk of outsourcing shared computing services—including cloud services—as banks seek to reduce costs through complex IT outsourcing arrangements. APRA noted that weaknesses in outsourcing arrangements exposed institutions to financial risk, and has urged prudence and appropriate consideration of IT risk and assurance mechanisms when engaging these services. In the Australian mining sector, concern about cyber security threats is also growing, with some resource company executives now taking extra precautions with personal electronic devices when travelling, especially to China.

Tech firm lobby group BSA released their inaugural Asia–Pacific Cybersecurity Dashboard this week, evaluating ten regional countries’ cyber security policy frameworks and how well they enable public and private actors to cope with cyber threats. Australia compared favorably to most of the region, although the lack of a formal public-private partnership or sector specific cyber security plans was notable when compared with pack-leader Singapore.

Proving that even the best cyber security skills aren’t a sure guarantee of security, controversial Italian company Hacking Team has become the latest victim of a data spill. Listed as an enemy of the internet by Reporters Without Borders for its ‘no questions asked’ cyber surveillance and espionage exports, it appears that Hacking Team has been selling its wares around the globe including unlikely destinations such as Sudan, and US security agencies including the NSA and the DEA.

And finally, the Irish Government has released their National Cyber Security Strategy this week, which will see the Irish CERT transformed into a National Cyber Security Centre by 2017.

The enduring legitimacy of UN peace operations

Newly arrived engineers from China serving with the United Nations-African Union Mission in Darfur (UNAMID) stand to attention after arriving in Nyala, South Darfur.

A decade ago, there were some critics ready to predict a downturn in international peace operations. The start of the 21st century had seen a return of peacekeeping from East Timor to Liberia, but critics saw this as a temporary phenomenon. The first Annual Review of Global Peace Operations published in 2006 wasn’t the product of one of the skeptics. ‘There is every reason to believe that the demand for effective peacekeeping will rise, not shrink, in the years ahead,’ it predicted. It shouldn’t be a surprise, then, that the latest findings show peace operations continue to surge even as NATO and its allies—including Australia—withdraw from Afghanistan. In a world of intractable conflicts and limited good options, peacekeeping is still a valuable strategic tool.

The report of the UN Secretary-General’s High Level Panel on peace operations—Uniting Our Strengths for Peace, released on 17 June argues for the primacy of politics, more responsive operations, stronger partnerships, and missions that are field-focused and people-centered. While not as revolutionary as August 2000 Brahimi Report, this ‘insiders’ document’ does propose some new ideas for old problems as well as contain a long list of technocratic fixes.

As the Annual Review migrates online to become the Global Peace Operations Review, the latest data shows that UN deployments have grown by 8% in 2013 and 2014 to involve more than 100,000 soldiers and police. The number of personnel deployed by other regional organisations, especially in Africa, leapt by 60%.

The new website data on global peace operations isn’t just limited to uniformed personnel. In the same period, the UN and regional groupings have appointed more than 20 new envoys to head special political missions mediating crises from Burkina Faso to Ukraine.

The first edition of the Review of Political Missions in 2010 was recognition of the value of ‘blue suits’ in resolving conflicts, which are always political problems before they turn violent. Civilian crisis management operations, it said, ‘are a diverse tool, and demand for them is likely to increase’.

The reviews published over the last decade weren’t crystal-ball gazing. They gathered data from the statistics visible in the rear view mirror of history. They didn’t foresee the turmoil resulting from end of the Gaddafi regime, state fragility in West Africa, or civil wars in Syria and Yemen.

But looking backwards, the pattern of special political missions has been clear: where there’s war, there will be peacemakers—even if those are battlegrounds where armed peacekeepers fear to tread. By this metric, more peacemakers demonstrate that conflict is on the rise and are more numerous now than those of 2005. NATO’s drawdown has also restored the UN as the leader in peace operations. Compared to most regional groupings, the UN is more capable of mobilising and managing the deployment of multinational forces.

A decade on from when Australian troops packed up from the Timor–Indonesia border, peacekeeping has also evolved. In Liberia, peacekeepers were recently deployed to help combat Ebola. There are new doctrines; such as one covering the protection of civilians, and old debates; such as the limits of the use of force, especially surrounding the Force Intervention Brigade (FIB) in the DRC.

Such innovations court controversy. To many, the new tasks look like mission creep. In DRC, unarmed drones have been deployed to conduct surveillance, raising issues of invasion of privacy. In the Mali mission, Netherlands signalers have eavesdropped on the phone calls of armed groups, special forces have conducted long range patrols, and Apache attack helicopters have prowled the skies. Interventions like this come close to a red line for some member states. The last thing they want is to empower overly aggressive UN missions or ones that might spy on them.

Robust UN missions are seen as effective but are hard to sustain. Key troop contributors, especially the South Asian countries that form the backbone of UN peace operations, are reluctant to sign up for such duties.

New Asian contributors are increasingly filling the blue helmets’ ranks, but they share similar reservations. China started slowly, but has now deployed its first combat battalion in South Sudan. Indonesia has pledged to become a top-ten contributing country by more than doubling its current contribution to 4,000 personnel by 2019, but worries the FIB might be ‘seen as a party to the conflict and perceived partial’. It is a delicate line to walk and probably can only really be avoided by UN peacekeeping operations avoiding robust mandates. Panel chairman Jose Ramos Horta said that enforcement tasks, like those given to the UN in Somalia in 1993 and in DRC in 2003, must be ‘exceptional’ and ‘implemented with extreme caution’.

But despite such additions, there’s still a deployment gap. UN missions mostly struggle to reach mandated strength. Where this isn’t so much a problem, such as in UN Interim Force in Lebanon (UNIFIL), it’s because there’s a diversity of contributors, especially from Europe, but also from peacekeeping aspirants like Indonesia.

Some small European countries, such as Ireland, are proud of their tradition of UN peacekeeping. In 1997, two-thirds of Irish soldiers had served on UN peacekeeping operations—70% of these more than once. But US ambassador to the UN Samantha Power has argued that all European nations must do more. It’s a message that should be heard in Australia too.

UN deployments aren’t a distraction from NATO’s core mandate, Power says. On the contrary, they add to collective security. Perhaps, inadvertently, she also explained why they endure and the UN Security Council turns to them when ‘something must be done’.

‘Blue helmets carry the unique legitimacy of having 193 Member States behind them – from the global North and South alike,’ she said. This mattered when Australian forces went to Timor in 1999: it meant InterFET wasn’t an invasion and UNTAET not an occupation. They were missions to enforce and support peace of behalf of all nations. In some fights, it pays to have the world on your side.

Cyber wrap

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It’s ConnectSmart week across the Tasman, an event that seeks to raise awareness of cyber security in the New Zealand community. National Cyber Policy Office director Paul Ash has encouraged Kiwis to come up with unique and complex passwords for all of their online accounts and to change them regularly; and Communications Minister Amy Adams noted the need for greater awareness of cyber security threats among small-to-medium sized enterprises, asking them to improve their online security through a few simple measures like securing work tablets and smartphones with passwords. To assist in reducing cyber security incidents, and as part of their contribution to ConnectSmart week, Auckland’s Unitec Institute of Technology and Japan’s National Institute of Information and Communications Technology launched a ‘Red Alert‘ service back in March. The subscription service will help protect any network that’s connected and subscribed to the service by issuing an alert as soon as an intrusion takes place. It’s also National Cyber Week in Israel.

Across the Pacific, the fallout from the Office of Personnel Management (OPM) breach continues. While the US has been careful to not officially name China as the source of the hack, others have pointed towards a Chinese group possibly named Shell Crew, PinkPanther, KungFu Kittens, Group 72 or Deep Panda. Cyber security incidents have had dramatic effects on the US-China relationship in the past, principally the suspension of the bilateral cybersecurity working group after the US indicted five PLA officers for cyber espionage.

Cyber security was reportedly discussed in ‘direct terms’ by Deputy Secretary of State Antony Blinken and China’s Executive Vice Foreign Minister, Zhang Yesui, at Monday’s Strategic Security Dialogue in Washington DC. Treasury Secretary Jack Lew was similarly direct on US concerns about Chinese support for economic cyber espionage at the bilateral Strategic and Economic Dialogue on Tuesday. Those talks precede the visit of Chinese president Xi Jinping to Washington DC in September this year.

Also in DC, the House approved the 2016 Intelligence Authorization Bill that sets requirements for the new Cyber Threat Intelligence Centre, and would compel the administration to provide detail to Congress on the breach at OPM. Several senators have also begun to lobby for cybersecurity information sharing legislation to progress quickly.

Further afield, June marks the one year anniversary of the African Union’s (AU) Convention on Cyber security and Personal Data Convention. The convention established a standard legal framework for conducting electronic commerce, protecting personal data, promoting cybersecurity, and addressing cybercrime. While no AU members have ratified the convention, Kenya, Madagascar, Mauritania, Morocco, Tanzania, Tunisia and Uganda are in the process of adopting national cybersecurity legislation, although these laws may be more damaging to human rights than the AU convention. Overall the future for cyber security in Africa appears to remain dim.

And finally in Australia, the intergovernmental Financial Action Task Force met in Brisbane this week, where discussions on terrorist networks using the internet for fund raising took place, as well as the use of BitCoin and other online currencies to hide terrorist financing. FATF head and former Secretary of the Attorney-General’s Department Roger Wilkins noted that further research on the use of cyberspace to finance groups including Boko Haram and Jemaah Islamiyah was needed, and that exchanges that turned virtual currencies into hard cash should be required to report suspicious transactions in the same way as banks do. In Canberra last week, Defence Minister Kevin Andrews previewed  what’s in store for cyber security in the forthcoming Defence White Paper. At the same conference, other senior Defence leaders spoke about the need for innovative non-traditional recruitment techniques to attract cyber expertise to Defence—and keep it there.

What are Australia’s interests in the South China Sea?

 

USS Mustin and JS Kirisame conduct bilateral training in South China Sea

As the ‘war of words’ between China and the US in the South China Sea escalates, questions arise as to exactly what are Australia’s interests in this contested maritime zone. Bonnie Glaser has recently claimed that approximately 60 per cent of Australia’s seaborne trade passes through the South China Sea, and Peter Jennings has suggested that Australia should join the US in conducting freedom of navigation (FON) operations in the area .

These appreciations raise issues about the importance of this region to Australia, economically, politically and strategically. We need to have answers to these questions before determining our future actions.

When measured by value, the figure of 60% of our seaborne trade passing through the South China Sea is way off the mark. Based on the latest data for Australia’s overseas trade, it mightn’t even be half that—and about three-quarters of it would be trade to and from China. Thus the notion of a threat to our seaborne trade from China is rather a non-sequitur.

Our overseas trade crossing the South China Sea includes that with China (with a total of 23.9 per cent of our two-way overseas trade), Thailand (2.8%), Taiwan (1.9%), Vietnam (1.4%) and Hong Kong (1.2%). And even these figures overstate our dependence on the South China Sea, as it’s only trade with southern China that crosses the sea. These figures are based on overseas trade by value. Trade by volume could provide a different result recognising the high volume of our exports (coal, iron ore, LNG, and other minerals) carried by sea, but it would still be nothing like 60%.

Politically, we have two treaty arrangements that could involve us in the South China Sea. The first and the one receiving most attention is the US alliance, which could lead to Australia bolstering US efforts to counter China in the area. However, Canberra has denied that it agreed to US military plans to rotate B-1 strategic bombers and surveillance aircraft through Australia as part of efforts to deter Chinese regional ambitions.

The Five Power Defence Arrangement (FPDA) is the second treaty that could see us become involved in the South China Sea. Malaysia and Singapore, our regional partners in FPDA, are both littoral to the sea, but while Malaysia is a claimant to several island features, both countries have been relatively mild in their anti-China rhetoric. Also, Singapore recently concluded a four-day bilateral naval exercise with China.

Strategically, freedom of navigation is an important interest for Australia, particularly through the archipelagos to our north, but as I cautioned in an earlier post , it would be unwise of Australia to become associated with the currently unilateral, and legally questionable, assertions by the US. Such an involvement would do nothing for our image as an independent player in the region.

Australia has a clear strategic interest in the situation in the South China Sea not deteriorating further. However, the situation there is messy, and we should have our eye on our broader regional relations. As Peter Drysdale recently pointed out Asia takes Australia seriously as a ‘crucial element in Asia’s security in terms of strategic resource and energy supply’. That’s where the bigger picture and our interests in the South China Sea lie. The sea itself isn’t that important to Australia. Rather, it’s our broader regional role.

Rather than contemplating direct involvement, Australia should be using our good offices to play a role in de-escalating the situation in the South China Sea. We should be concerned about regional naval capabilities expanding in ways which, as Richard Bitzinger has suggested, will render future conflict in the region ‘faster, more intense, and more lethal, and therefore perhaps more devastating’. Like Singapore’s Naval Chief, we should also be concerned about the risks of submarine proliferation in the region.

The overall objective of all stakeholders in regional stability should be to de-militarise the South China Sea to reduce the risks of an unfortunate incident. We could help by expressing our concern to China about using its reclaimed islands for military purposes, and to the US about an overly aggressive military response to China.

We might also promote the notion of an operational and strategic level agreement to cover issues such as safety zones around disputed features, restrictions on particular types of operation in particular areas, such as submarine ‘no go’ areas (or even not to conduct FON operations in disputed waters), hot lines, operational transparency, and prior notices of operations.

All this might sound idealistic, but it’s what would best serve our national interest.