The editors of The Strategist are pleased to present this extract from the first issue of a new ASPI publication series, ‘The Strategist Selections’, released today. Issue 1, ‘Kim Beazley on the US alliance and Australia’s defence and international security’, is a compilation of 24 posts written by Beazley between March 2016 and May 2018. Reproduced below is the volume’s previously unpublished afterword.

It’s now clear that the strategic context underpinning Australian defence policy as set out in the 2016 defence white paper requires reassessment. That’s a product less of a change in the behaviour of those identified as disruptors of the global system (notably, Russia and China) than of the directions of our principal ally under President Donald Trump.

DWP 2016 summed up our strategic circumstances:

[The United States] will continue to be Australia’s most important strategic partner through our long-standing alliance, and the active presence of the United States will continue to underpin the stability of our region. The global strategic and economic weight of the United States will be essential to the continued stability of the rules-based global order on which Australia relies for our security and prosperity. The world will continue to look to the United States for leadership in global security affairs and to lead military coalitions that support international security and the rules-based global order. The United States is committed to sustaining and advancing its military superiority in the 21st century, including through its Defense Innovation Initiative.

Based on these calculations about our ally, the government decided to assign military support for upholding the rules-based order and building confidence in our region equal status with the defence of our approaches as a force structure determinant for the ADF. The assessment acknowledged that two great powers (namely, China and Russia) were contesting that order globally and regionally. It also acknowledged that the burgeoning military capabilities of both powers intensified the challenge for the Americans and for us. However, it judged that the objectives we see as critical to the peace, prosperity and sovereign rights of all states in our region—and therefore the challenges—should be met, working within the structures that emerged in the aftermath of World War II.

As the second year of the Trump administration concludes, it’s clear that our assumptions about American leadership and objectives need to be revised. Liberal internationalism is subordinate to Trump’s intensely nationalist vision. He perceives allies as users and economic competitors. He admires old adversaries with authoritarian tendencies as collaborators, and as potentially more reliable than old allies. He sees the global order’s trading rules as fundamentally inimical to American interests.

July 2018 was a seminal month in the rolling out of these approaches. In Brussels for the NATO summit, Trump criticised and humiliated traditional friends and allies. He questioned their alliance commitments, alluding to NATO members’ pledge to lift defence expenditure to 2% of GDP (an old US demand), but denouncing previously agreed timelines and shifting the goalposts to 4%. Blandishments for friends. Bouquets for adversaries. In Helsinki, Vladimir Putin was feted by Trump. Little is known of their private conversation, but it was evident there was no hard talk on the many points of difference between Russia and the US.

That this would be likely was evident in Trump’s pre–Putin meeting tweet: ‘Our relationship with Russia has NEVER been worse thanks to many years of US foolishness and stupidity and now, the Rigged Witch Hunt!’ His demeanour at the press conference afterwards displayed a level of obsequiousness to the Russian leader unparalleled at such presidential encounters.

With suspicions mounting about the basis of Trump’s fears of the Mueller investigation and his past financial and personal associations with Russia, former director of national intelligence James Clapper reflected the tone of post–press conference commentary and bipartisan anxiety. He told CNN:

I think this past weekend is illustrative of what a great case officer Vladimir Putin is. He knows how to handle an asset, and that’s what he is doing with the president … [Y]ou have to remember Putin’s background. He’s a KGB officer. That’s what they do. They recruit assets. And I think some of that experience and instincts of Putin has come into play here in his managing of a pretty important account for him, if I could use that term, with our president.

Issues of Trump’s alleged venality and allegiance are matters for US domestic politics. What focuses NATO members is the president’s repeated calling into question of Washington’s support in situations involving the collective military response mandated in Article 5 of the NATO Charter. In the past two years, Japan and South Korea have had similar concerns with their agreements as the president has worked his approaches to North Korea’s nuclear disarmament. Trust has been further eroded by America’s recent trade assault on allies; their experience isn’t much different from that of an adversary and serial offender of at least the spirit of World Trade Organization rules (for example, China, on intellectual property related matters).

Trump’s approaches to trade and to recalibrating relations with Russia and North Korea have lacked coherence. The resulting confusion has allowed allies to seek friends in the administration. State Department, Defense Department and intelligence officials have produced reassurances and signed up to policy pronouncements reflective of the old order. The communiqué of the NATO meeting covered the Russian disagreements in traditional fashion with the US signed on. Defense Secretary Jim Mattis’s national defence strategy elevated Russia and China to once again being the main adversaries, displacing counterterrorism from the top spot.

The NDS was a ringing endorsement of the old alliance systems. It assigned those partnerships even greater importance in an era in which old adversaries were attributed more significance and approached parity in capability. What these contradictions mean is unclear. But what is evident is that nothing can be guaranteed in this muddle. This also raises the possibility that adversaries might probe possible gaps in the multilateral security edifice where responses from the US would be uncertain.

Returning to that quote from DWP 2016 at the beginning of this afterword, the one part that still resonates is the last sentence. The US, it says, will continue to sustain, advance and upgrade its military capabilities. While the rest of the assessment is somewhat frayed, major increases in US defence spending and vigorous technological regeneration now support that judgement.

Australia has evaded Trump’s criticism on the economic and military fronts. No threats have been issued against our guarantees and commitments. However, our careful efforts over the past three decades to engage the US in our region in a way that member states are comfortable with have been massively undermined. This is a region devoted to the rules-based order (China somewhat qualified). US participation in the Trans-Pacific Partnership symbolised our strategy’s and diplomacy’s success. Trump repudiated the work, but America still seems to be committed to the multilateral meetings that are core features of regional diplomacy. A heavy security focus supplants economics.

That’s gratifying to a degree, but given the volatility in US policy, none can be certain what might transpire in a crisis or how the US might react to provocations in the region. A quicker resort to a military response to Chinese activity in the South China Sea, for example, might challenge US allies in an environment where the Americans place a premium on burden-sharing and react harshly to a failure in support.

While the US has stepped back from some regional engagements, a number of its allies and friends, including Australia, have stepped forward to address regional diplomacy more intensively. In the absence of the US, however, China looms large. Australia’s situation is complex. Earlier in this compendium, I argued that our growing dependence on the US in the post–Cold War era has narrowed our options. In the 1980s, given the balance of advantage in the relationship with the US, Australia could push the frozen architecture of the Cold War to its limits and embark on a multiplicity of global and regional initiatives. A low-threat environment, and none that would oblige the US to contemplate its own destruction if it aided us, underpinned this flexibility. In addition, the US was relatively uninvested in the region.

That has now changed. The Indo-Pacific region has been elevated in US priorities and we have witnessed the emergence of economically powerful and increasingly militarily capable nations in our zone. Most importantly for a nation that focuses on a high-technology defence like Australia, only the US, which leads the advance to next-generation weapons, can provide us with the relevant systems in all their complexity.

For us, Trump may be inimical to the values we espouse in support of collective security, liberal internationalism and the rules-based order, even though his words of mutual regard bilaterally have been strong. However, unchallenged by him is the military component of what is fundamentally a military alliance. We are effectively invited by him to put sentiment on a back burner. The communiqués and press conferences from AUSMIN meetings, as evidenced at the most recent on 24 July 2018, still, however, reflect that sentiment. That is another manifestation of the more conventional outlook of Trump’s national security team. Given the rapidly changing character of the distribution of power in our region, it would be wise for us to plan on greater volatility in both US policy and the international politics of the region.

Our focus is now on Trump. His spectacular character overshadows dramatic change in the other major regional player, China. Its internal order has been disrupted too. Deng Xiaoping’s move to collective leadership, constitutionalism and the private sector as economic driver has been superseded. President Xi Jinping has reasserted party control, entrenched state capitalism and redefined China’s maritime borders in a quest for legitimacy. It’s possible that as time goes by and inevitable domestic difficulties arise, expectations will also rise in the Chinese polity that Xi will secure outcomes on Taiwan and military domination of China’s maritime approaches. Much more is expected of time-unlimited authoritarian leaders than of time-limited party committees.

While Xi will likely outlast Trump, it doesn’t require too much imagination to envisage confrontational events in both areas and on the Korean peninsula. He will be expected to resolve the Taiwan problem in particular. Should the US respond—and Trump has been much more supportive of Taiwan than of other friends and allies—it will look to regional friends. Both Trump and Mattis have been more hard-line on the South China Sea than Obama. They will look to us.

In this collection, I have canvassed these changes. The diplomatic and foreign policy responses are obvious and are being pursued. We are using institutions to strengthen confidence-building in the region. That is reflected in concluding the TPP on a regional basis, enhancing Singaporean and Malaysian military collaboration, working on quadrilateral consultations, and reactivating our diplomatic and aid focus on the South Pacific. The defence response is harder and massively more expensive.

The collective response clauses in our treaty arrangements with the US are not the most salient part of the arrangement. We are still realistically focused on being able to handle direct threats ourselves, albeit in the face of rapidly rising technological demands on our capacity. Chinese attitudes aside, our alliance relationship and its military aspect are welcome—or at least not unwelcome—among our regional partners. A decision to persist with the alliance carries little political cost and isn’t directly the object of Trump’s undermining. However, the contemporary era of volatile American decision-making means we will need to recognise that the cost might occasionally involve difficult choices.

The key question lies with our defence force planning. In doing what needs to be done to get the best out of the relationship, two areas stand out. The first is our level of readiness. The second is how best to use the allied relationship to advance our technological capability. Both are heavily affected by available resources. This wouldn’t be such an issue if we had kept defence spending at the level we had in the 1980s—an average of 2.3% of GDP. At that level today, we would spending about $5 billion more on defence each year. We need to get back there.

Readiness calls into question the long lead time on our plans for new equipment and the resources devoted to supplies and ammunition for existing capabilities. We need to give higher priority and more disciplined attention to a strategy of denial in our maritime approaches; upgrade collaboration in the South Pacific neighbourhood in particular; bring a sharper focus to the vulnerabilities of our critical mineral provinces; and rapidly incorporate the ‘fifth generation’ capabilities coming in with the F-35 in systems across the ADF. DWP 2016 made clear that our focus on platforms has been ‘at the expense of funding the vital enabling and integrating systems that allow the ADF to bring capability elements together to deliver more potent and lethal joint combat effects’.

It’s in this area that the technological capabilities the US brings has immediate impact. While formulating the NDS, Mattis pointed out that although adversary capabilities with particular weapons and platforms will often advance ahead of the US (as happened in the Cold War), the US was yet to be bettered in systems of systems. In the longer term, from the Australian point of view, the issue is whether the US will sustain its focus on the technological changes necessary to be competitive and whether we will interact with the US sufficiently to obtain those critical capabilities modified for our own defence purposes.

There’s a refreshing humility around American decision-makers at the moment on these matters. While Mattis’s NDS doesn’t mention the ‘third offset strategy’, it is intense on competition in next-generation capabilities. The notion of the third offset, like the first and second, was based on the assumption that the US would jump ahead. Former deputy defence secretary Bob Work said recently:

I actually regret talking about the Third Offset Strategy, in hindsight. It made it sound like we had the advantage and we had time to think about it and go through the motions … I wish I would have said, ‘we need to start about upsetting the Chinese offset, which is coming uncomfortably close to achieving technological parity with the US’ … It’s time for the US to crack the whip.

The competition, however, has been transformed, at least over the next four years, by the surge in America’s defence budget. At US$714 billion (up from US$609 billion) a year, it compares with China’s US$228.2 billion and Russia’s US$66.3 billion defence budgets. It is arguable that Russia has poked the US into an arms race on nuclear capabilities, artificial intelligence, and hypersonic and directed-energy weapons that it doesn’t have the resources to win. Journalist Paul McCleary pointed out in May that Senate Armed Services Committee members saw some mismatch between the new national strategy and the amount of funding requested by the White House. In their view, there was not enough focus on the strategic competition with China and Russia. Over the months, that has been much modified, and there’s still argument over what many regard as a misdirected focus on the additional naval platforms and army troops which Trump is keen on. What the armed services want is a focus on the new capabilities. The senate committee has finalised the budget with extra funds for hypersonics, directed-energy weapons, quantum information sciences, space constellation efforts, and rocket propulsion.

It’s clear from the close relationship forged over the years with Australian defence science, defence forces and defence intelligence that industry now has something to latch onto. At the July AUSMIN meeting, Mattis emphasised Australia’s inclusion earlier this year in the US national technology and industrial base as an enabler. This now facilitates defence integration and coordination between the US, Canada, Australia and the UK. Brendan Thomas-Noone in his seminal paper, Mapping the third offset, has pointed out how Australia might leverage this into participation in the Pentagon Defence Innovation Unit Experimental (DIUx), a mechanism for a shared meeting of these technological challenges that engages our private sector.

Australia is already involved in joint development in electronic warfare, hypersonics, directed-energy weapons and satellite constellations, among an array of technological research and development projects. Previous AUSMINs led to two new joint facilities focused on space situational awareness. The last one resulted in a memorandum of understanding on ‘critical research and development of advanced cyber capabilities’. Hand-wringing over whether we should change course in our relations with the US is overwhelmed by the intensity of the intelligence engagement and Australia’s embedding in American next-generation technologies. That intensity is matched by mutual investment in the private sector, which now stands at around A$1.5 trillion.

What this means is that Australia should be able to engage the American diplomatic posture with confidence. We can look after ourselves based on this relationship whatever way the US props, provided we move to a more direct focus on our approaches (or as we used to say, ‘our area of direct military interest’) in how we base our defence assumptions in the shifting strategic environment.

The US and the region are not as they were when core calculations were made in DWP 2016 for the strategic basis of our defence planning. The way things have changed since 2016 demands that we simplify our priorities. The emerging strategic order also requires, paradoxically, an even deeper engagement with our disruptive ally.

US President Donald Trump blew off two multilateral summits in Asia this month. Given his soggy and sulking performance that week in Paris, during the international commemoration of the centenary of the end of World War I, it was probably for the best that Vice President Mike Pence attended instead. Pence was able to spread the gospel of American unilateralism at the ASEAN meeting in Singapore, and again at the APEC summit in Papua New Guinea.

But regardless of who’s delivering the message, it’s clear that America is losing its way. The Trump administration’s ‘America First’ foreign policy has yielded little fruit and left the United States isolated and increasingly discredited on the world stage. The international initiatives of past administrations have been replaced by empty slogans, hollow gestures, and, of course, ‘alternative facts’. With Trump scheduled to meet Chinese president Xi Jinping at the G20 summit in Argentina this week, the US may have one last chance to turn things around.

When future generations of historians sift through the wreckage left behind by the Trump administration, they will probably pay special attention to the breakdown of longstanding US policy towards China. For decades, successive US presidents have understood that the careful management of the bilateral relationship with China is vital to America’s national interests.

To be sure, given the daily fare of buffoonery on display at the White House, it would be easy to place all of the blame for the downward spiral in Sino-American relations on Trump. But China, too, is responsible for the current state of affairs. For starters, while economists are correct to point out that bilateral trade deficits can’t be considered in isolation, the fact remains that China’s surplus with the US—which hit a new record in September—is politically unsustainable.

For many American workers, China has become a symbol of job loss and economic insecurity. Although automation accounts for more of the decline in US manufacturing employment than does trade, China has developed a reputation as an economic predator. And after years of forcing US companies operating in China to transfer key technologies and intellectual property to Chinese firms, that reputation will be hard to shed.

Moreover, China’s expanding military has become a source of bipartisan concern in US national security circles, even though its defence spending is still but a fraction of America’s (a point often lost amid all the hand-wringing). Since having its territorial claims in the South China Sea struck down by a Hague-based Permanent Court of Arbitration in 2016, China has continued to threaten smaller regional players’ maritime access there. As a result, the US Navy has had to launch new missions to demonstrate its right to navigate the waters demarcated by China’s ‘nine-dash line’.

China’s domestic policies also seem to be taking the country down a darker road. The treatment of Uyghur Muslims, for example, has invited international obloquy. It is up to the Chinese government to decide how to address the country’s political challenges. But if the Chinese find that their every move is being met with suspicion, they can hardly blame an international conspiracy. China’s own actions are emboldening its foes and exhausting its friends.

That said, none of China’s recent actions justify Trump’s sudden upending of Sino-American relations. The administration’s China policy is as reckless as it is feckless. China is home to over 1.3 billion people and a major contributor to the global economy. Regardless of what the US government says or does, Chinese power is not going away.

Earlier this month, Trump announced that China ‘wants to make a deal’ to bring the ongoing trade dispute to a close. No doubt it does. But Trump always trots out this line before holding talks with foreign leaders. Far from auguring a successful resolution, it signals merely that he will bring his usual impetuousness and carelessness to the negotiation with Xi.

Yes, China absolutely does need to change the path that it is on, particularly with respect to its trade and market-access policies. But as the Trump administration’s renegotiation of the North American Free Trade Agreement and the US–Korea Free Trade Agreement showed, it is likely to emphasise cosmetic issues that yield catchy sound-bites, at the expense of the substantive action that the problems in the Sino-American relationship demand.

For example, the Trump administration has not brought an effective case against China to the World Trade Organization, nor has it marshalled the support of European allies who share its concerns about China’s behaviour. More broadly, the administration has proved utterly incapable of formulating a coherent policy, let alone an effective one. Whereas good policymaking is about setting priorities, Trump’s policymaking is about wanting it all, wanting it now, and gaining very little.

If fixing the bilateral trade relationship is too hard at this juncture, perhaps Trump should pursue cooperation with China in some other area. After all, we haven’t heard much from the North Koreans in a while.

President Donald Trump’s party lost control of the US House of Representatives in midterm elections held last week. However, that probably won’t have any effect on the general trajectory of Washington’s policy on the Middle East. The US Senate—the legislative arm that’s more likely to influence foreign policy—remains firmly under Republican control. More important, Trump and his closest foreign policy advisers on the Middle East, son-in-law Jared Kushner and National Security Advisor John Bolton, will continue to determine Washington’s posture on the most important issues affecting the volatile region.

Trump has played to the Israeli gallery by shifting the US embassy to Jerusalem, thus endorsing Israel’s position that the holy city is the indivisible and inalienable capital of the Jewish state. And by withdrawing US funding for the UN’s Palestinian refugee agency, he has validated Israel’s view that the descendants of Palestinian refugees have no ‘right of return’ to homes their forefathers were expelled from in 1948. This was not merely a financial move; it was above all a political declaration that the US no longer recognises the refugee issue as integral to the resolution of the Israel–Palestine conflict.

Israeli Prime Minister Benjamin Netanyahu has returned the favour by absolving Trump of all responsibility in the horrendous shooting at a Pittsburgh synagogue that left 11 worshippers dead. He did so despite the fact that mainstream US Jewish opinion points to Trump’s anti-immigrant rhetoric and his coddling of extreme-right white supremacists as having created the atmosphere that led to the Pittsburgh massacre. Trump and Netanyahu are ideological soul mates. The administration’s approach to the Israel–Palestine problem isn’t likely to be altered by the midterm elections, especially since pro-Israel sentiments in Congress cut across party lines.

Trump’s hardline attitude towards Iran and the re-imposition of sanctions—especially the ones aimed at curtailing Iran’s capacity to export oil and engage in international financial dealings—are in part related to his desire to appease Israel. The other major reason for the US decision to withdraw from the Iran nuclear deal is related to Trump’s passion for undoing President Barack Obama’s legacy regardless of the negative consequences it generates, especially among European allies who are signatories to the deal.

In addition to demanding that Iran totally give up its desire to enrich uranium, Trump insists that the re-imposed sanctions will remain in place until Tehran renounces its missile development program and stops what he calls its ‘aggressive’ meddling in other countries of the Middle East. Both the Republicans and Democrats are largely united in their determination to punish Iran for its regional actions and to force it to give up its missile development program and its uranium enrichment capacity.

The third aspect of Trump’s antagonism towards Iran is America’s, and especially his, close relationship with Saudi Arabia, which is engaged in a Middle Eastern cold war with Iran that has the potential to turn into armed conflict in the near future. Riyadh’s importance in the Trump administration’s calculations has been most clearly on display in the administration’s refusal to impose any significant measures on the Saudi regime as punishment for the brutal murder of journalist Jamal Khashoggi in the Saudi consulate in Istanbul. That’s despite clear indications that the order to murder Khashoggi came from the highest echelons of the Saudi power structure—and despite bipartisan pressure from leading members of Congress to take punitive action.

There are several factors that explain America’s pro-Saudi posture. Washington considers Saudi Arabia its key surrogate in curbing Iranian influence in the Middle East, especially in the energy-rich Persian Gulf. Its support for Riyadh’s misadventure in Yemen that has killed, maimed and starved innumerable Yemeni civilians is an indication of this fact. The Saudi regime is engaged in fighting the Houthis in Yemen who are supported by Iran.

Moreover, Saudi Arabia is a leading purchaser of American arms and has recently offered to buy US$110 billion worth of sophisticated weaponry. It is also a major investor in the US economy. Above all, it is the world’s top oil exporter and has the largest reserves in the world. It is, therefore, the swing producer of crude and has the ability to affect oil prices in the world market both positively and negatively. Retaining influence in Riyadh is very important for Washington to protect itself from the sort of oil shock that took place in 1973.

The significance of the Democrats’ victory in the House of Representatives will, therefore, be limited primarily to the domestic arena. America’s foreign policy, especially its policy in the Middle East, will remain largely immune to the congressional power shift.

In this special podcast we look at next week’s crucial US midterms. Our guests are Stephen Loosley and Dr Gorana Grgic. Both are US specialists and both offer fascinating insights into this keenly observed election.

At the beginning of October, US Vice President Mike Pence delivered arguably the most significant policy statement produced by the Trump administration. His speech to the Hudson Institute, a Washington think tank, on ‘the administration’s policy toward China’ sets out the most dramatic shift in relations with Beijing since Nixon and Kissinger’s ‘opening’ of relations in the early 1970s. Australians should read Pence’s remarks because they will surely lead to changing American expectations of alliances in Asia. Here are six conclusions about the speech and the trajectory of US–China relations.

1. This is a genuine policy change

Pence’s speech amasses a strong case for ‘a new approach to China’ and builds on a slew of American policy documents such as the national security strategy of December 2017, the unclassified summary of the 2018 national defense strategy, and White House and Pentagon statements on Chinese theft of American intellectual property. The speech points to intelligence assessments ‘about China’s actions’ that conclude ‘Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States’. That’s a view reinforced by senior intelligence officials publicly saying in recent weeks that China rather than Russia is the biggest threat to American strategic interests.

The speech is the product of something we have recently overlooked in Washington: away from the soap opera of the Oval Office, coherent policy work still goes on. What we have here is a widely shared administration, national security and intelligence community view that China has launched on an all-out competition to supplant America as the dominant strategic and technological power in the Asia–Pacific. The White House’s National Security Council has been working on a new China policy for months, is deeply critical of the Obama administration’s drift and indecision about pushing back against Beijing’s military annexation of the South China Sea, and is determined to stop the wholesale predation of American intellectual property.

2. Pence’s moment

It’s significant that Mike Pence has emerged as the champion of this new China policy agenda. Vice presidents don’t usually get to steer such consequential issues. Why so this time? Well, unlike Trump, Pence can deliver a tightly scripted 40-minute speech that goes much deeper than Trump’s inchoate distaste for ‘unfair’ trading relationships. Pence’s speech is unfailingly polite about Trump, noting that the president has ‘forged a strong personal relationship’ with Chinese President Xi Jinping, working on ‘most importantly the denuclearization of the Korean Peninsula’. Is it too cynical to imagine that Pence well understands that Trump’s infatuation with the ‘little rocket man’ is a busted flush? Stand aside Nikki Haley, Mike Pence is interested in the presidential nomination too.

3. ‘Wholesale theft of American technology’

A substantial part of Pence’s speech details the range of methods used by China to steal American IP. In June, the White House Office of Trade and Manufacturing Policy said that ‘estimates of the cost of trade secret theft alone range between $180 billion and $540 billion annually’—that is between 1% and 3% of US gross domestic product. A week after the speech, the US Justice Department advised that an intelligence officer, Yanjun Xu of China’s Ministry of State Security, had been extradited from Belgium to face charges of ‘attempting to commit economic espionage and steal trade secrets from multiple US aviation and aerospace companies’.

The criminal complaint lodged with the US District Court in southern Ohio makes fascinating reading, showing that between ‘at least March 2017’ and Xu’s arrest on 1 May 2018, US intelligence officers had tracked Xu’s cultivation of an employee in GE Aviation using the cover of working with academics at the Nanjing University of Aeronautics and Astronautics to steal data relating to the ‘manufacture of jet engine fan blades and fan containment structures’.

The Xu case is one spectacularly public example of what FBI Director Christopher Wray told the US Senate Intelligence Committee in February was being tracked ‘in almost every field office that the FBI has around the country’—industrial-scale Chinese IP theft. Pence rather biblically claimed that ‘the Chinese Communist Party is turning plowshares into swords on a massive scale’. This, rather than the balance of trade, is what has Washington most riled.

4. Curious reference to allies

Pence quotes China scholar Michael Pillsbury, saying: ‘China has opposed the actions and goals of the US government. Indeed, China is building its own relationships with America’s allies and enemies that contradict any peaceful or productive intentions of Beijing.’ The speech points to the ‘debt diplomacy’ of the Belt and Road Initiative. The takeaway for Australia is that Washington is watching how its allies deal with Beijing. Australia is regularly cited in DC these days as being ahead of the game in pushing back against Chinese influence. The US will expect us to continue the push. This surely will be raised when Pence meets Prime Minister Scott Morrison in the margins of the East Asia Summit and APEC in November.

5. ‘Beijing’s malign influence and interference’ in the US

About half of Pence’s speech focuses on Beijing’s shaping and influencing agenda within the United States: ‘The Chinese Communist Party is rewarding or coercing American businesses, movie studios, universities, think tanks, scholars, journalists, and local, state, and federal officials.’ What is most striking about his comments is that they precisely graft onto China’s own efforts in Australia. From encouraging American business leaders to ‘condemn our trade actions, leveraging their desire to maintain their operations in China’, through to media supplements, radio and TV broadcasts, and the role of the Chinese Students and Scholars Association, Pence makes clear that there is an established CCP playbook —called a ‘propaganda and censorship notice’—guiding their activities. It’s in play in Australia too.

6. ‘China wants a different American president’

In a speech with many surprises, perhaps the most startling claim is that ‘China has initiated an unprecedented effort to influence American public opinion, the 2018 elections, and the environment leading into the 2020 presidential elections’. Pence claims ‘what the Russians are doing pales in comparison to what China is doing across this country’ with the aim of removing Trump as president. It would be a great pity if a widely shared American concern about the PRC’s behaviour were to be turned into a highly partisan American political stoush.

Pence ends with the rather forlorn hope that ‘China’s rulers can still change course and return to the spirit of reform and opening that characterize the beginning of this relationship decades ago’. Nothing in his speech suggests that that hope is realistic.

What happens next? Trump remains mercurial and wildly unfocused, but Pence shows that there is a strategic plan behind the broader administration’s China policy. This has Beijing worried. China’s ambassador to the US, Cui Tiankai, told Fox News Sunday: ‘Honestly, I’ve been talking to ambassadors of other countries in Washington DC and this is also part of their problem … They don’t know who is the final decision-maker. Of course, presumably the president will take the final decision. But who is playing what role?’

Now here’s a curious thing: On 4 October—the same day Pence made his speech—Scott Morrison made an address to what was described as a Chinese–Australian community event. The speech appears on the website of the Australian embassy in Beijing, but not the prime minister’s official website.* Morrison says of China: ‘We welcome its remarkable success and we are committed—absolutely committed—to a long-term constructive partnership with China based on shared values, especially mutual respect.’

Shared values, indeed. Australia’s wiggle room to ‘balance’ American and Chinese interests is narrowing. The key message for Australia is that we need to get our own China thinking in order, reduce our dependence on Beijing’s money and set some realistic strategic policy goals for our national security. These are challenging times.

 

* As of the afternoon of Friday 19 October, we note that Scott Morrison’s speech to the Hurstville Community Lunch has been posted on the PM’s website.