Tag Archive for: Australia-China Relations

The China challenge can make Australia more cohesive, but only if we all face it

Whatever diplomatic niceties were exchanged during Premier Li Qiang’s visit to Australia this week, China wants to undo the established liberal order and impose a different order on the region. This new order would, at best, significantly curtail Australia’s decision-making capacity on issues directly impacting our sovereignty.

It is crucial that the federal government speaks frankly and directly to the Australian people about this issue. And the message needs to be this: we are worried about China’s efforts to permanently reshape the region and have made a judgement that doing nothing in the face of that effort is worse than doing something—even if that ‘something’ is very costly. 

The costs and consequences of that judgement, it also must be said, will impact all Australians in one way or another. This unavoidable message needs to be delivered publicly, and in clear terms. 

With conflicts around the world and with the G7 and the Ukraine Peace Conference both calling out China’s support for Russia’s war machine, Li’s visit to Australia provided an opportunity to properly explain the challenge China poses, consistent with all our most trusted global partners. This didn’t happen and instead the Australian government chose to downplay the risks. 

China wanted to limit discussion to a range of topics that allowed visit outcomes to be messaged on its terms, such as the need to maintain hard won stability in the bilateral relationship and to promote cultural positives, with nothing about the real sources of tension between the two countries. 

As I’ve previously argued on this forum, leaders’ meetings—if they’re to be worthwhile—need to be about more than photo opportunities and positive gestures that signal improved ties on China’s terms.  

As uncomfortable as it may be in the moment, speaking truthfully to China and the Australian public about the biggest obstacles we face in the bilateral relationship is the only viable option. 

Li’s visit to Australia presented a particular opportunity in that it prompted a heightened level of public interest in Australia’s role in international affairs—something not typical of political discussion in this country. With foreign policy thinking and decision-making concentrated in Canberra, most Australians have been distanced from daily debate about Australia’s external security challenges and what can and should be done about them.

We know there are people thinking about such things for us and we’ve gotten used to trusting them to do the right thing. As former Office of National Assessments head Allan Gyngell wrote in 2017, foreign policy doesn’t lend itself to clear storytelling, which is why most voters have little interest in it. 

That has been okay for generations of Australian political leaders—and perhaps even desirable, if they were being honest. The absence of serious external threats to Australia’s way of life since the end of the Cold War allowed democratic political leaders, including in Australia, to focus largely inward and, for the most part, to shy away from public discussion of foreign policy issues and the patterns shaping international events.

This is changing as threat perceptions of China in Australia continue to grow, creating a need and an opportunity for the Australian public and political elites to establish a deeper dialogue about Australia’s place in the world and what we truly value.

In seeking to justify the need for an urgent rethinking on defence, for example, much more could have been, and still can be done, to explain to the Australian public what it is we are trying to defend.

To most Australians, terms such as ‘strengthening deterrence capabilities’ mean little unless it is already understood what the nature of the threat is.

The reality is that future Australian political leaders will be forced to make more trade-offs between foreign and domestic imperatives than their predecessors did. Being true to our own concerns and judgements now, will prepare the ground for that in the future.

This doesn’t just apply to the federal government. As the Li visit demonstrated, state governments, for better or worse, have an important role to play. 

While there are good reasons for any federal system of government to discourage state participation in foreign policy, the reality is they are already involved and they need to be brought along on the Australian journey. Any vacuum created by our government would likely only be filled by nations like China taking states, and therefore all of us, for a ride. If state and territory leaders are unable to engage more fully in recognising and managing risk in the bilateral relationship with China, then we will all be at a tremendous disadvantage. 

China is attuned to inconsistencies or conflicted messaging between different sectors and levels of government and will use them to its advantage.

That said, closer alignment at the state and federal level on China will take time to get right. And again, that process requires transparent leadership. With the eye-watering sums projected to meet future defence needs, combined with the security need to increasingly reject short term financial injections from countries of concern like China, the onus is on Prime Minister Anthony Albanese and his Cabinet to explain to the Australian public why money needs to be spent.

The Australian government needs to accept this public communications responsibility so as not to leave the playing field to a more assertive and authoritarian China. The public, which has historically been disinterested in foreign affairs, is now richly interested and is seeking guidance.

Let’s not leave it to other countries to give it to them.

Dialogue with China’s Premier Li was a missed opportunity

Dialogue has many meanings and purposes. But substantial dialogue in the true Socratic sense isn’t just having a conversation or swapping views. Rather, it aims to reveal the truth and to change the other person’s mind.

Prime Minister Anthony Albanese leant heavily on the value of dialogue during Chinese Premier Li Qiang’s visit this week, mentioning it seven times in his solo press conference after talks in Canberra. Sure, it’s hard to argue with dialogue—communicating is better than not communicating.

But what’s happened this week looks awfully like dialogue without depth and without real purpose. Indeed it cannot be the case, as Albanese said, that ‘dialogue is at the core of the bilateral relationship’. The core for Australia must be our security and sovereignty. And we should use mechanisms such as dialogue to resolve differences and achieve outcomes in our favour, not just for the sake of talking.

These talks can’t be treated as just a chance for both sides to air their differences. We should not simply agree to disagree; we should express, both privately and publicly, our dissatisfaction with Beijing’s positions, state our own, and explain why the gap matters.

Speaking frankly in this way should have the goal of influencing China’s behaviour. That’s a tough ask when we’re dealing with an insecurely stubborn autocracy and major power, but we can aim to show Beijing that its coercion will not pay off, that we will work with our democratic friends to achieve a strength-in-numbers, and will impose a reputational cost by calling out malign behaviour.

Otherwise, we encourage more malign activity.

The position in which Australia now finds itself is a logical outcome of the demure principle of ‘cooperating where we can and disagreeing where we must’, in that we are looking to amplify the limited areas of cooperation while downplaying the disagreements.

Whatever was said behind closed doors—and the government has said that disagreements were discussed—is not enough on its own. Australian leaders must be clear and frank in public as well, to ensure the right messages are received both by China and by the Australian people.

Publicly, Albanese and Foreign Minister Penny Wong said the barest minimum necessary on the points of difference with China—deep and structural though they are. In doing so, they missed any opportunity to state, emphatically, what our positions are, and how China stands in contradiction to them. 

For example, we know that detained Australian Yang Hengjun was discussed but were not told that such arbitrary detention is against international norms, nor that, unless he was immediately released, the bilateral relationship simply couldn’t be stable. Privately, Premier Li should have been told that if this issue was not resolved soon or if Yang were to die while detained in China, he and President Xi Jinping would be considered responsible. And the public message should have been that Magnitsky sanctions would be used against senior Chinese officials across the judiciary, law enforcement and politics.

China loves to keep talk of differences to internal discussions because, as a country with few genuine international friendships, its government bristles at the reputational cost of being called out for its bad behaviour and it knows that, as soon as a smaller country self-censors, the relationship is in Beijing’s control. 

Consequently, although the government says no compromises are being made to Australian values, we are in fact doing Beijing a favour by minimising the differences in public. This clearly meets the definition of a compromise.

Combined with the stabilisation rhetoric, crediting the meetings with giving both sides the opportunity to express their different views is actually legitimising China’s wholly unacceptable actions—after all, these issues are not mere differences of opinion but breaches of international rules and agreements that China has signed onto.

Speaking firmly and publicly also brings the country along with our leaders in understanding the differences with China and the risks that the relationship poses. As much as policymakers talk about the need for a ‘social licence’ for increased defence and security spending, we are doing little to build that licence.

In such a vacuum, panda diplomacy gains attention out of all proportion to its importance. Everyone loves pandas, but the fact that Beijing is prepared to loan or remove them as a point of leverage shows that they are another tool for China to achieve its strategic objectives.

The danger of equalising the perspectives held by Australia and China is amplified by the government implying that stabilisation was required because of Australia’s mistakes, not China’s aggression. 

Albanese referred to China’s coercive communications freeze as ‘the breakdown where you had not a single phone call from an Australian minister’—as if Beijing was waiting for a call.

Foreign Minister Penny Wong implied that ‘we are now in a state of permanent contest in the Pacific” because ‘Mr Dutton and his colleagues’ abandoned the field in the Pacific—when the primary driver is Beijing’s expansionist agenda.

And Trade Minister Don Farrell said the visit by Premier Li ‘will result in a very successful outcome for lobster producers’—giving Beijing a free pass by ignoring the injustice of the coercive trade measures, which should never have happened in the first place.

This combination of legitimising China’s views and blaming Australia risks undoing the public trust in all the security decisions made in the last decade—including banning Huawei from the 5G network, introducing foreign interference laws and taking a leading stand against China’s aggression in the South China Sea through then Prime Minister Malcolm Turnbull’s strong support for the 2016 Arbitral Tribunal ruling in favour of the Philippines.

For a while, after those decisions, Australia was left hanging like a shag on a South China Sea rock by many of its democratic partners but, since then, the world has done a collective 180 degree turn to compete with China as a systemic and pacing threat—across AUKUS, the Quad, Five Eyes, G7, the European Union, NATO and beyond. The Ukraine Peace Summit saw China called out for supporting Russia’s war effort, while last week’s G7 statement directly affirmed the Philippines and the 2016 Tribunal ruling, and opposed ‘China’s militarization, and coercive and intimidation activities’.

Right at the moment when the democratic peloton has caught up to a once breakaway Australia, our policy of quiet diplomacy can’t afford to turn into a hide-and-slide, in which we speak less, do less and return to an era of security compromise.

Australia sees the West Philippine Sea in the South China Sea

In the ‘differ where we must’ dimension of dealing with China, Australia is wielding a new nomenclature stick. (Schtick?)

Deputy Prime Minister and Defence Minister Richard Marles talks about the ‘West Philippine Sea’, not just the ‘South China Sea’.

Kicking away some of the dashes in China’s nine-dash line claiming the whole of the South China Sea certainly pokes the dragon.

The ‘West Philippine Sea’ was first used by Manila in 2011 in expressing its disagreement with Beijing’s claim. The ‘West Philippine Sea’ refers only to waters in the Philippines’ 200-nautical-mile exclusive economic zone, not the whole of the South China Sea.

Australia’s previous Liberal-National Party government stuck to using only the ‘South China Sea’ in its dealings with the Philippines. Marles shifted usage during his visits to the Philippines last year. At a press conference in Zambales in August, Marles referred to the importance of Manila’s victory over Beijing in the arbitral award under the UN Law of the Sea: ‘The 2016 arbitral award is profoundly important in terms of what it says about the West Philippine Sea and we support the 2016 arbitral award.’

In May this year in Hawaii, Marles joined defence ministers from the US, Japan and the Philippines in saying that ‘they strongly objected to the dangerous use of coast guard and maritime militia vessels in the South China Sea. They reiterated serious concern over the People’s Republic of China’s repeated obstruction of Philippine vessels’ exercise of high seas freedom of navigation and the disruption of supply lines to Second Thomas Shoal, which constitute dangerous and destabilizing conduct.’

The statement pledged maritime cooperation in the Philippines’ EEZ but did not refer to the West Philippine Sea, reflecting caution by both Japan and the US. In backing its treaty ally, the Philippines, the United States has avoided the ‘West Philippine Sea’ phrase.

Not so Marles, who told the Hawaii press conference of the ‘challenge to the global rules‑based order in the East China Sea, in the South China Sea, in the West Philippine Sea. And our four countries are utterly committed to asserting freedom of navigation, to asserting the UN Convention on the Law of the Sea, to asserting the global rules‑based order around the oceans of the world, including in the West Philippine Sea.’

At the Shangri-La dialogue in Singapore at the weekend, Marles questioned China’s strategic behaviour and the signals it sent, offering this as his first example: ‘Actions by Chinese vessels in the West Philippine Sea, such as the use of water cannons and the ramming of Philippine vessels, are a serious escalation of tensions and inconsistent with UNCLOS and the final and binding 2016 South China Sea arbitration ruling.’

Two of the strongest speeches attacking Chinese behaviour were from Marles and the keynote address from the Philippines’ President Ferdinand Marcos Junior.

Marcos said China aimed to ‘propagate excessive and baseless claims through force, intimidation, and deception. In the West Philippine Sea, we are on the frontlines of efforts to assert the integrity of the UNCLOS as a Constitution of the Oceans. We have defined our territory and maritime zones in a manner befitting a responsible and law-abiding member of the international community. We have submitted our assertions to rigorous legal scrutiny by the world’s leading jurists. So, the lines that we draw on our waters are not derived from just our imagination, but from international law.’

The response from Chinese Defence Minister Admiral Dong Jun was to claim that the Philippines, backed by the US, had ‘abandoned bilateral agreements, broken its promises, and taken premeditated action to stir up incidents’. China’s restraint, he said, ‘has its limits’.

Canberra embraces Marcos far more than it did his predecessor, Rodrigo Duterte. The warmth is encouraged by a consensus in Manila that Duterte’s attempt to cosy up to China failed. Duterte tried to play nice; Beijing kept playing nasty. Tough talk from Marcos rhymes with much coming from Canberra.

Prime Minister Albanese visited Manila in September and welcomed Marcos to Canberra in February. Albanese called the Philippines a close friend and strategic partner: ‘Australia sees the Philippines as a central player and a crucial partner for us in Southeast Asia.’

Marcos says that as a senator he was a co-sponsor of an Archipelagic Baselines Law, which defines the basis of the Philippines’ maritime jurisdiction. As president, he intends to sign ‘a Maritime Zones Law, which will clarify the geographic extent of our maritime domain’.

Australia’s call on that domain definition is in. Australia is the second country, after the US, to commit to joint patrols with the Philippines in its waters.

Adopting the notion of the West Philippine Sea, Australia embraces a geographic term that has found little favour with countries other than the Philippines in the Association of South East Asian Nations. The ASEAN language of neutrality and non-alignment trumps solidarity with the Philippines. It’s the South China Sea to ASEAN members—apart from Vietnam, which calls it the East Sea.

The Marcos administration is getting more explicit support on the West Philippine Sea from Australia than it does from ASEAN.

Sticking with the Philippines’ map, Australia is sticking it to China. That’s a pointy schtick.

China’s hackers targeted our MPs. We need to talk about this relationship

At least six Australian parliamentarians from both major parties have been targeted by Chinese state-sponsored hackers from the notorious APT31 group, the Inter-Parliamentary Alliance on China has announced.

The revelation follows announcements by the alliance—an informal, cross-party grouping of parliamentarians from dozens of countries—about a wider Chinese cyber campaign against politicians and public figures in Canada, New Zealand, France, Germany and other European nations.

The people targeted are primarily critics of Beijing’s repression and international belligerence, sending the clear signal that those who speak out against malicious Chinese activity and support policies to counter it can expect a sustained campaign to silence, intimidate and discredit them.

Yet what is our own national message? That isn’t clear. At times, Australia and other democracies call out China’s most egregious behaviour—including its conduct in cyberspace, aggression in the South China Sea, human rights abuses and unfair trade practices. But across the board, we’re hesitant, inconsistent and faltering.

These cyber attacks show that this approach is not working. Our narrative is unpersuasive and we need a new approach involving clarity and resolve, backed up by strong security capabilities.

This is necessary to deter aggression, as Europe learnt the hard way by trying to benefit from Russian energy and finance while ignoring the threat from Vladimir Putin to the extent that deterrence failed.

But it’s also necessary as an act of political leadership to prepare the nation for the most uncertain and dangerous strategic period in generations, which is already underway.

In terms of substance, successive Australian governments have rightly concluded that we need to take firm policy measures in response to China’s malign behaviour. It has led, for instance, to the understanding that economic and national security interests cannot be separated. But while Australia has done well institutionalising that basic strategic calculus across the national security establishment, it has been inconsistently spelled out to the Australian public.

We are in a digital age in which the information environment is more contested than ever. If the government isn’t providing a meaningful narrative to the public, then it will get its answers elsewhere—including from untrustworthy ‘news’ sources curated and manipulated by our strategic rivals on platforms such as China’s TikTok.

So what does effective political leadership on such a complex challenge look like?

Many countries publish a national security strategy. That’s useful provided the unclassified version is not scrubbed clean of anything that can inform the public of the real nature of the threats.

While part of the bureaucracy folds itself into a pretzel so as not to upset China, Beijing inevitably takes offence at even the mildest statement of condemnation, so the lesson is that speaking truthfully to the public is the best course.

Whether it’s through a strategy or some less formal narrative roadmap, democratic governments need to align their public messages with the realities that are in front of us all.

The problem with the persistent ‘stability’ narrative in Australia’s relationship with China is that it fails this test by encouraging us to look back to when the relationship was more stable and easier to manage.

The real cause of instability is, of course, Beijing’s destabilising behaviour, resulting in not just diverging interests but structural cleavages.

Any rhetorical framework that downplays these differences—either inadvertently or through deliberate risk-aversion—benefits Beijing’s strategic interests.

Do the terms of future stability depend on tolerating Beijing’s intimidation of its critics? If we are unclear about that because we hope to create some calmer patch of diplomatic waters in which to chart a new course towards this poorly defined stability, then Beijing will be emboldened.

More open acknowledgment of Australia’s strategic vulnerability is needed to establish a China discourse in Australia that is broadly free of partisanship and also openly accepts the long and potentially painful road ahead for Australia and the region.

Much of this is exhausting, and there is no shame in Australian political leaders admitting that. Some public expression of the depth and breadth of this workload would probably do everyone good.

Speaking frankly to the nation to bring it along on the necessary journey, and sending suitably strong signals to Beijing, are not two separate channels of communication. They’re inseparable.

Authoritarian regimes such as those in Beijing and Moscow are masters at identifying and exploiting national division. In our wonderfully messy democracies, differences are perennial, but they need to arise from robust debate over well-understood facts, not from strident ignorance supercharged by disinformation.

Beijing will be deterred and dissuaded if it sees strong signals, backed with strong capabilities, from a nation that, despite the healthy dissent that comes with democracy, shares some core resolve about what its red lines are. And having another nation intimidate our citizens, including the people we’ve elected to represent us, because they’ve spoken their minds on issues of principle such as human rights or sovereignty, should be a red line.

A national conversation on the China challenge would help ensure Australia does not miss the opportunity being presented by other democracies waking up to the threat, in particular the clear step change in parts of Europe. Few of the problems China poses can be solved by Australia alone and, while the US will remain our most vital strategic ally, this race will be won through a broader collective.

As a nation, we need to embrace the concept of strategic reliance. Investing in trusted partners such as the US and UK through AUKUS strengthens our sovereignty, whereas those advocating for an ‘independent’ foreign policy would actually increase our vulnerability.

This era of global instability means we must adapt as the world evolves and get used to feeling strategically uncomfortable more often. Stability rhetoric harking back to a less complicated strategic outlook and a more comfortable time in our China relationship must not become a psychological maginot line for political leaders discussing the future of Australia-China relations.

These principles of transparency and consistency for security in a digital era are essential.

Evolving our national conversation to respect legitimate debate while accepting we need to strengthen our story to deter those who would harm us is political leadership personified, and we need to get it right before it’s too late.

Same problems, same solutions: Australia and Vietnam react to economic coercion

The two countries are so different, but they are following remarkably similar paths. Economically advanced Australia and still-developing Vietnam have both suffered from Chinese economic coercion, and they are adopting same solution—diversification of export markets.  

That means they are also trading more with each other. 

In 2021 and again in 2023, Hanoi and Canberra moved to increase bilateral trade. Further action along the same lines will not be surprising. 

Vietnam’s most notable experience in becoming the target of Chinese trade punishment occurred in 2014, amid a stand-off over China moving an oil rig into Vietnamese waters. Beijing blocked importation of 1000 tonnes of Vietnamese lychees, which were left to rot at the border. Then in 2020 Beijing obstructed imports from Australia in response to Canberra calling for an independent investigation into the origins of Covid-19.  

Economic coercion exacerbates Vietnam’s concerns over its mounting bilateral trade deficit and economic reliance on China, with implications for sovereignty disputes in the South China Sea. Despite Vietnam’s market-oriented reforms under the Doi Moi policy initiated in 1986, its trade deficit with China reached more than US$60 billion in 2022, with Vietnam exporting US$57.7 billion and importing US$117.95 billion. The balance will worsen if Beijing blocks importation of Vietnamese products. 

So at the 13th National Congress in 2021 the Vietnamese Communist Party urged government agencies and businesses to diversify economic relations, restructure the economy and enhance economic resilience. 

In Australia, the 2016 Defence White Paper described the use of economic coercion as an emerging threat to a regional rules-based order that can ‘diminish the freedom of countries such as Australia to take independent action in our national interest.’ The 2020 Defence Strategic Update labelled economic punitive measures a ‘grey-zone’ activity used against Indo-Pacific nations including Australia. And in the 2023 Defence Strategic Review, economic coercion was described as one of the factors shaping Australia’s strategic circumstances.  

Both Australia and Vietnam have responded to China’s punishment by boosting trade with other partners. Vietnam has now signed 17 free trade agreements, including seven since 2015. Australia has signed 18, of which five were concluded after China implemented economic coercion against it in 2020. In the past five years, Australian exports to Vietnam and Indonesia have more than doubled, and the growth in sales to Japan, South Korea, Taiwan and India has been almost as impressive.  

Australia and Vietnam are both active participants in regional trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the ASEAN-Australia-New Zealand Free Trade Area and the Regional Comprehensive Economic Partnership. 

Australia and Vietnam have looked to each other in their searches for alternative markets. After the case of the rotting lychees, Vietnam increased lychee exports to Australia and Japan. Responding to China’s ban on Australian coal, Vietnam increased its imports from 15.7 million tonnes in 2019 to 20.3 million tonnes in 2020. In 2022, Vietnam became the largest buyer of Australian cotton, with imports of $1.7 billion, up from just $115 million three years before. By the same year, Australia was Vietnam’s seventh-largest trading partner, while Vietnam became the 10th largest trading partner of Australia. 

Australian and Vietnamese economies will continue to be complementary because Vietnam values Australia as a reliable supplier of raw materials and services while Australia is a market for such Vietnamese products as furniture, rare earths and seafood.  

In 2021 they signed the Australia-Vietnam Enhanced Economic Engagement Strategy, which aims to strengthen the rules-based trading system and ‘address economic challenges and coercive economic practices.’ And in 2023, they agreed on a goal to raise bilateral trade to US$20 billion and double the value of two-way investment.  

All this is sensible. The more Vietnam and Australia rely on each other and on markets other than China, the less they have to fear from Beijing’s economic coercion.

Same problems, same solutions: Australia and Vietnam react to economic coercion

The two countries are so different, but they are following remarkably similar paths. Economically advanced Australia and still-developing Vietnam have both suffered from Chinese economic coercion, and they are adopting same solution—diversification of export markets.  

That means they are also trading more with each other. 

In 2021 and again in 2023, Hanoi and Canberra moved to increase bilateral trade. Further action along the same lines will not be surprising. 

Vietnam’s most notable experience in becoming the target of Chinese trade punishment occurred in 2014, amid a stand-off over China moving an oil rig into Vietnamese waters. Beijing blocked importation of 1000 tonnes of Vietnamese lychees, which were left to rot at the border. Then in 2020 Beijing obstructed imports from Australia in response to Canberra calling for an independent investigation into the origins of Covid-19.  

Economic coercion exacerbates Vietnam’s concerns over its mounting bilateral trade deficit and economic reliance on China, with implications for sovereignty disputes in the South China Sea. Despite Vietnam’s market-oriented reforms under the Doi Moi policy initiated in 1986, its trade deficit with China reached more than US$60 billion in 2022, with Vietnam exporting US$57.7 billion and importing US$117.95 billion. The balance will worsen if Beijing blocks importation of Vietnamese products. 

So at the 13th National Congress in 2021 the Vietnamese Communist Party urged government agencies and businesses to diversify economic relations, restructure the economy and enhance economic resilience. 

In Australia, the 2016 Defence White Paper described the use of economic coercion as an emerging threat to a regional rules-based order that can ‘diminish the freedom of countries such as Australia to take independent action in our national interest.’ The 2020 Defence Strategic Update labelled economic punitive measures a ‘grey-zone’ activity used against Indo-Pacific nations including Australia. And in the 2023 Defence Strategic Review, economic coercion was described as one of the factors shaping Australia’s strategic circumstances.  

Both Australia and Vietnam have responded to China’s punishment by boosting trade with other partners. Vietnam has now signed 17 free trade agreements, including seven since 2015. Australia has signed 18, of which five were concluded after China implemented economic coercion against it in 2020. In the past five years, Australian exports to Vietnam and Indonesia have more than doubled, and the growth in sales to Japan, South Korea, Taiwan and India has been almost as impressive.  

Australia and Vietnam are both active participants in regional trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the ASEAN-Australia-New Zealand Free Trade Area and the Regional Comprehensive Economic Partnership. 

Australia and Vietnam have looked to each other in their searches for alternative markets. After the case of the rotting lychees, Vietnam increased lychee exports to Australia and Japan. Responding to China’s ban on Australian coal, Vietnam increased its imports from 15.7 million tonnes in 2019 to 20.3 million tonnes in 2020. In 2022, Vietnam became the largest buyer of Australian cotton, with imports of $1.7 billion, up from just $115 million three years before. By the same year, Australia was Vietnam’s seventh-largest trading partner, while Vietnam became the 10th largest trading partner of Australia. 

Australian and Vietnamese economies will continue to be complementary because Vietnam values Australia as a reliable supplier of raw materials and services while Australia is a market for such Vietnamese products as furniture, rare earths and seafood.  

In 2021 they signed the Australia-Vietnam Enhanced Economic Engagement Strategy, which aims to strengthen the rules-based trading system and ‘address economic challenges and coercive economic practices.’ And in 2023, they agreed on a goal to raise bilateral trade to US$20 billion and double the value of two-way investment.  

All this is sensible. The more Vietnam and Australia rely on each other and on markets other than China, the less they have to fear from Beijing’s economic coercion.

Why ASEAN-Australia summits matter

 

The ASEAN-Australia leaders’ summit in Melbourne offers the opportunity for Australia to embrace ASEAN’s ‘inclusive regionalism’ and the organisation’s centrality in mediating the Indo-Pacific struggle between the great powers.

With the Albanese government’s $2bn investment facility, Australia’s engagement with Southeast Asia is starting to look serious. The new Southeast Asia Investment Financing Facility to catalyse Australian investments in clean energy and infrastructure gave  Prime Minister Anthony Albanese a big-ticket initiative to grab the attention of fellow leaders at this week’s ASEAN-Australia Special Summit in Melbourne.

The investment facility—a recommendation from the government’s Southeast Asia economic adviser Nicholas Moore—is a welcome sign of the government’s commitment to overcoming a glaring weakness in Australia’s international economic engagement. We keenly await the government’s full response to the Moore Report.

From a longer-term perspective, however, there is much more to the Summit than commerce. An equally important issue hanging over the discussions is Australia’s positioning in the changing Indo-Pacific and whether Canberra has the imagination to adjust our strategic posture to meet those changes.

Our first special summit in 2018 received only five lines in the 698-page political memoir of then prime minister Malcolm Turnbull, and the Australian community continues to be preoccupied with China, and the US-China dynamic. This summit provides the opportunity to consider why Southeast Asia is so fundamentally important to us—and why the going might not be easy.

Geographic and economic imperatives make the Australia-ASEAN relationship vital in itself, but it is also the starting point for developing new possibilities for Australia’s strategic future.

There are no downsides to strengthening Australian interaction with Southeast Asia.  This is the region of Asia closest to Australia, where the major powers, including Washington and Beijing, assume us to be active. Engaging effectively with ASEAN can only enhance Australia’s wider influence. Also now, when the Indo-Pacific seems to be increasingly multipolar rather than American-led, it makes sense to define Australia internationally in terms of our tighter collaboration with ASEAN, as well as being a US ally. But there are challenges.

Certainly, Australia has assets with respect to ASEAN.  Apart from being ASEAN’s first dialogue partner 50 years ago, we possess strong scholarly and diplomatic expertise on Southeast Asia and our universities have been leading providers of Western education to the region.

Recently, however, the Australia-ASEAN relationship has transformed and many in the Australian community have not registered this. Our GDP was once larger than the combined total of ASEAN countries, and Australians tended to frame relations with the region as development assistance. Today the ASEAN figure is well over twice ours, larger than that of India and more than four-fifths the size of Japan. The Japanese leadership acknowledges that their old client relationship with the region is over. As for China, many ASEAN countries rank this economy as their top trade destination. Since 2020, ASEAN has achieved the status of being China’s top trading partner.

Despite such dramatic statistics, some commentators continue to refer to Southeast Asia as Australia’s ‘backyard’ and official government statements still speak of ‘development assistance to the Pacific and Southeast Asia’ as if the two regions are comparable.

Australia was more important to Southeast Asia in 1974 than it is today. Although ASEAN is our second largest trading partner, we just make it to eighth on their top ten list. China’s current dominance is well known. But South Korea, a minor player a few decades ago, today has twice our trade with Southeast Asia. With respect to investment, we are a very small player, with only 3.45% of our total investment stocks abroad going to the region. While Southeast Asia is attracting funds from many other countries, including in Europe, our outward investment tends to stay in the Anglosphere. It is good that the recent Moore Report addresses this investment gap—a gap that also damages Australia’s political influence.

That influence cannot be taken for granted. Five decades ago, we were the close ally of the region’s dominant power and viewed as a leader in economic development and democratic government. Today democracy has lost some of its shine—and the Singapore survey of Southeast Asian opinion leaders indicates China is seen as the country with most ‘political and strategic influence’. Australian contributions to the region continue to be seen as constructive, but many wealthy states are vying for the region’s attention. As a destination for tertiary education, Australia remains strong, although there are now fewer Southeast Asian leaders with Australian degrees.

While the focus on ‘climate and clean energy’ and the ‘blue economy’ at the March summit should be welcomed, deeper engagement with Southeast Asia means more investment, scholarships, and development initiatives. There are also vital differences in strategic culture that need to be taken seriously.

Malaysia’s then prime minister Mahathir Mohamad used to say Australians were ‘basically European’ and portrayed themselves as ‘deputy sheriff for America’. Despite our growing multiculturalism, these perceptions continue and are sharpened when a recent prime minister describes Australia as ‘joined at the hip’ with the United States, or when his successor calls the AUKUS arrangement a ‘forever partnership’, or when our Anglosphere investment bias is noted.

Our present government’s attempts to modify Australia’s image as a regional outlier include calling us a ‘steadfast supporter of ASEAN centrality’ and promising to be ‘guided by the principles of ASEAN’s Outlook on the Indo-Pacific’ (a major ASEAN policy statement from 2019). But can we gain advantages from those principles? The biggest challenge to a full engagement with ASEAN may be our own long-held political perspectives.

The Outlook stresses the ‘inclusivity’ of ASEAN regionalism, which means including, not rallying, against China. It insists on ‘non-intervention’ in a state’s domestic affairs, which makes it difficult to intervene in Myanmar’s domestic turmoil. The ‘non-intervention’ principle also underpins ASEAN’s non-ideological approach to international relations, running counter to promotion of the Quadrilateral Security Dialogue (Quad) as an ‘alignment of like-minded democracies’. The Outlook insists, as well, on ‘dialogue and cooperation instead of rivalry’, which is far distant from the commitment to alliance-building which led Australia to AUKUS and the Quad.

ASEAN has moved more cautiously in political than in economic development, but be in no doubt, it is ambitious. The region’s states have had centuries of experience operating in hierarchies, while asserting agency in dealing with major powers. True, there are today serious maritime disputes with China, but Southeast Asians say Western analysts overlook the many benefits they leverage from their relationships with China.

Adhering to ‘the principles of ASEAN’s Outlook’ means ignoring recent calls to turn to ‘minilateral organisations’, such as the Quad, to ‘get things done’. Groupings of ‘like-minded’ countries may move faster in achieving practical outcomes, but they also tend to be adversarial, sharpening political division in the region. Will Australians see the advantage of endorsing ASEAN’s ‘inclusive regionalism’, insisting that ASEAN leadership in the Indo-Pacific mediates the struggle between the major powers?

Such genuine commitment to ASEAN would have been unimaginable in the past, but the ending of American hegemony demands strategic imagination. Our summits with ASEAN offer the opportunity to consider a new international identity for Australia.

Why ASEAN-Australia summits matter

 

The ASEAN-Australia leaders’ summit in Melbourne offers the opportunity for Australia to embrace ASEAN’s ‘inclusive regionalism’ and the organisation’s centrality in mediating the Indo-Pacific struggle between the great powers.

With the Albanese government’s $2bn investment facility, Australia’s engagement with Southeast Asia is starting to look serious. The new Southeast Asia Investment Financing Facility to catalyse Australian investments in clean energy and infrastructure gave  Prime Minister Anthony Albanese a big-ticket initiative to grab the attention of fellow leaders at this week’s ASEAN-Australia Special Summit in Melbourne.

The investment facility—a recommendation from the government’s Southeast Asia economic adviser Nicholas Moore—is a welcome sign of the government’s commitment to overcoming a glaring weakness in Australia’s international economic engagement. We keenly await the government’s full response to the Moore Report.

From a longer-term perspective, however, there is much more to the Summit than commerce. An equally important issue hanging over the discussions is Australia’s positioning in the changing Indo-Pacific and whether Canberra has the imagination to adjust our strategic posture to meet those changes.

Our first special summit in 2018 received only five lines in the 698-page political memoir of then prime minister Malcolm Turnbull, and the Australian community continues to be preoccupied with China, and the US-China dynamic. This summit provides the opportunity to consider why Southeast Asia is so fundamentally important to us—and why the going might not be easy.

Geographic and economic imperatives make the Australia-ASEAN relationship vital in itself, but it is also the starting point for developing new possibilities for Australia’s strategic future.

There are no downsides to strengthening Australian interaction with Southeast Asia.  This is the region of Asia closest to Australia, where the major powers, including Washington and Beijing, assume us to be active. Engaging effectively with ASEAN can only enhance Australia’s wider influence. Also now, when the Indo-Pacific seems to be increasingly multipolar rather than American-led, it makes sense to define Australia internationally in terms of our tighter collaboration with ASEAN, as well as being a US ally. But there are challenges.

Certainly, Australia has assets with respect to ASEAN.  Apart from being ASEAN’s first dialogue partner 50 years ago, we possess strong scholarly and diplomatic expertise on Southeast Asia and our universities have been leading providers of Western education to the region.

Recently, however, the Australia-ASEAN relationship has transformed and many in the Australian community have not registered this. Our GDP was once larger than the combined total of ASEAN countries, and Australians tended to frame relations with the region as development assistance. Today the ASEAN figure is well over twice ours, larger than that of India and more than four-fifths the size of Japan. The Japanese leadership acknowledges that their old client relationship with the region is over. As for China, many ASEAN countries rank this economy as their top trade destination. Since 2020, ASEAN has achieved the status of being China’s top trading partner.

Despite such dramatic statistics, some commentators continue to refer to Southeast Asia as Australia’s ‘backyard’ and official government statements still speak of ‘development assistance to the Pacific and Southeast Asia’ as if the two regions are comparable.

Australia was more important to Southeast Asia in 1974 than it is today. Although ASEAN is our second largest trading partner, we just make it to eighth on their top ten list. China’s current dominance is well known. But South Korea, a minor player a few decades ago, today has twice our trade with Southeast Asia. With respect to investment, we are a very small player, with only 3.45% of our total investment stocks abroad going to the region. While Southeast Asia is attracting funds from many other countries, including in Europe, our outward investment tends to stay in the Anglosphere. It is good that the recent Moore Report addresses this investment gap—a gap that also damages Australia’s political influence.

That influence cannot be taken for granted. Five decades ago, we were the close ally of the region’s dominant power and viewed as a leader in economic development and democratic government. Today democracy has lost some of its shine—and the Singapore survey of Southeast Asian opinion leaders indicates China is seen as the country with most ‘political and strategic influence’. Australian contributions to the region continue to be seen as constructive, but many wealthy states are vying for the region’s attention. As a destination for tertiary education, Australia remains strong, although there are now fewer Southeast Asian leaders with Australian degrees.

While the focus on ‘climate and clean energy’ and the ‘blue economy’ at the March summit should be welcomed, deeper engagement with Southeast Asia means more investment, scholarships, and development initiatives. There are also vital differences in strategic culture that need to be taken seriously.

Malaysia’s then prime minister Mahathir Mohamad used to say Australians were ‘basically European’ and portrayed themselves as ‘deputy sheriff for America’. Despite our growing multiculturalism, these perceptions continue and are sharpened when a recent prime minister describes Australia as ‘joined at the hip’ with the United States, or when his successor calls the AUKUS arrangement a ‘forever partnership’, or when our Anglosphere investment bias is noted.

Our present government’s attempts to modify Australia’s image as a regional outlier include calling us a ‘steadfast supporter of ASEAN centrality’ and promising to be ‘guided by the principles of ASEAN’s Outlook on the Indo-Pacific’ (a major ASEAN policy statement from 2019). But can we gain advantages from those principles? The biggest challenge to a full engagement with ASEAN may be our own long-held political perspectives.

The Outlook stresses the ‘inclusivity’ of ASEAN regionalism, which means including, not rallying, against China. It insists on ‘non-intervention’ in a state’s domestic affairs, which makes it difficult to intervene in Myanmar’s domestic turmoil. The ‘non-intervention’ principle also underpins ASEAN’s non-ideological approach to international relations, running counter to promotion of the Quadrilateral Security Dialogue (Quad) as an ‘alignment of like-minded democracies’. The Outlook insists, as well, on ‘dialogue and cooperation instead of rivalry’, which is far distant from the commitment to alliance-building which led Australia to AUKUS and the Quad.

ASEAN has moved more cautiously in political than in economic development, but be in no doubt, it is ambitious. The region’s states have had centuries of experience operating in hierarchies, while asserting agency in dealing with major powers. True, there are today serious maritime disputes with China, but Southeast Asians say Western analysts overlook the many benefits they leverage from their relationships with China.

Adhering to ‘the principles of ASEAN’s Outlook’ means ignoring recent calls to turn to ‘minilateral organisations’, such as the Quad, to ‘get things done’. Groupings of ‘like-minded’ countries may move faster in achieving practical outcomes, but they also tend to be adversarial, sharpening political division in the region. Will Australians see the advantage of endorsing ASEAN’s ‘inclusive regionalism’, insisting that ASEAN leadership in the Indo-Pacific mediates the struggle between the major powers?

Such genuine commitment to ASEAN would have been unimaginable in the past, but the ending of American hegemony demands strategic imagination. Our summits with ASEAN offer the opportunity to consider a new international identity for Australia.

Australia must stay engaged during Pacific island countries’ political instability and change

As highlighted by Tuvalu’s recent election and recent political instability in PNG, amongst other countries in the region, Australia’s engagement with Pacific island countries can change suddenly, but our principles and support should firmly be aimed at being constant and long-lasting.

On 8 February, Papua New Guinea Prime Minister James Marape made the first ever address by a Pacific leader to a joint sitting of the Australian Parliament. Marape spoke warmly of the ‘very special and very unique relationship’ that PNG has with Australia. Indeed, many Pacific Island Countries would share a similar sentiment about Australia, New Zealand or the US. He also urged Australia not to ‘give up’ on his country. Giving up on the partnerships we have with our neighbours is not something that many Australians would be considering. Still, Marape’s comment is a strong reminder that during times of change in the Pacific, Australia’s government needs to continue to engage and convince the region that its support is available for the long haul. More broadly, his speech rhetorically signaled a desire to redefine PNG’s relations based on economic independence, however close the two countries remain intertwined.

On Marape’s return to PNG, he was met with a motion of no confidence, which ultimately required a resubmission. Former prime minister Peter O’Neill has been active in the media highlighting concerns over potential corruption in Marape’s government and threats to freedom of speech in new media legislation. Several MPs have also stood down from government following the riots that ignited in Port Moresby in mid-January, questioning the stability of Marape’s position. However, even a change in leadership is unlikely to spell doom for the Australian partnership in PNG, or significantly alter the plans outlined in Australia-PNG Bilateral Security Agreement, signed in December last year. And although Foreign Minister Justin Tkachenko had flagged China’s approach to pursue a security agreement with PNG, there is not grave concern in Canberra that an agreement would be struck that compromises Australia’s interoperability with and support to PNG’s security forces. During his visit to Australia, Marape explicitly distanced himself from the prospect of a new security deal with China.

In other parts of the region; however, Australia’s status as an ‘indispensable partner’—a term invoked by Prime Minister Anthony Albanese during Marape’s visit—may be on less firm ground.

While the newly elected members of Tuvalu’s parliament have yet to arrive in the capital, Funafuti, following last month’s general election, former prime minister Enele Sopoaga has stated that, if he succeeds Kausea Natano as prime minister, he would ‘throw away’ the Falepili Union, a security treaty signed between Australia and Tuvalu in November last year. Re-negotiation of the treaty could see a potential dilution of the current security components, including a security guarantee for the remote island nation, and veto power for Australia on Tuvalu’s other security engagements.

Natano’s failure to be re-elected should not be read as indicating a broad lack of support for the Falepili Union. Instead, it is more likely to reflect that, in Tuvalu, where only 1129 votes were cast in  Natano’s Funafuti constituency, truly every vote counts. Natano missed out on re-election by 17 votes, despite receiving a higher percentage of votes in his constituency than he did in 2019 when he scraped by to be elected by just 6 votes.

Still, Australia will need to focus on its engagement with the new Tuvalu government, and make heightened efforts to communicate what the treaty means, both to the government and to the public in Tuvalu. Australia must also be willing to compromise but should not seek to push Tuvalu to compromise on the essential components of the agreement that seek to support combatting the rapidly intensifying climate challenges. And while some MPs in Tuvalu are floating the idea of cutting diplomatic ties with Taiwan in favour of greater Chinese engagement, this should not affect Australia’s ongoing support for the Falepili Union.

The decision whether to diplomatically recognise Taiwan or China is a sovereign choice. The Australian government respects that sovereign right among its partners in the Pacific. However, it is also legitimate for Canberra to express concerns over the potential pressures and challenges that may befall a Pacific island country after switching diplomatic recognition. If we wanted to anticipate what Tuvalu, or Nauru, which recently switched recognition from Taipei to Beijing, could expect from greater CCP engagement, we need only look towards Solomon Islands.

After the Solomon Islands recognised China, in 2019, Beijing provided funding and support for the Pacific Games, which were hosted in Honiara late last year. While the Chinese-built new stadiums look impressive, it is not clear that such largesse from Beijing has brought any long-term benefit to the country. Beyond the new infrastructure in the capital, material support from China also brings political pressure on recipients and restricted freedoms in its wake. An article by local media outlet, In-depth Solomons, highlights these pressures, where emails from a Chinese Embassy official have revealed attempts to obstruct publication of certain articles because they did not align with the narrative of China’s ruling Communist Party. The editors of the newspaper were told to ‘be mindful of (their) publication since China is also a supporter’ of their organisation.

So, while a neutral stance on diplomatic recognition is essential to respecting the sovereignty of Pacific countries, Canberra cannot afford to back off from upholding liberal values such as media freedom when it engages in the region.

The Pacific will continue to be affected by political instability and political change as each country strives towards a democratic solution that best fits their cultural needs and identity. Australia must stay the course and be ready to engage with any elected leader, as well as be prepared to revisit existing agreements and support when needed without compromising on the shared values of the Pacific region. More of our analysis on these recent issues can be listened to, in the latest ASPI podcast episode.

We mustn’t be afraid to mention China in public discussions about defence 

Writing in The Australian Financial Review on 5 February, my former ASPI colleague, Jennifer Parker, put forward an excellent argument for granting more leeway to serving Defence personnel to speak out on defence affairs, raising public understanding of threats, and building the social licence for increased defence spending. However, one essential word was missing from Jen’s argument: ‘China’.

China is the state that poses the greatest danger to Australia and the stability of our region. We will not generate or sustain public consent for necessary rises in defence spending and the whole-of-nation effort required in the years ahead until our national security establishment stops treating China as a taboo subject in public.

To be fair, our women and men in uniform and our defence and national security officials do not have their heads in the sand about Xi Jinping’s China. ADF personnel literally risk their lives to confront the day-to-day reality of Chinese coercion and brinkmanship, as shown by the PLA’s dangerous use of sonar against divers from HMAS Toowoomba and its release of chaff into the path of an RAAF surveillance aircraft.

The public must tap the military’s experience to build our understanding of Chinese sharp power, especially as it seems grimly inevitable that Beijing’s recklessness will lead to a deadly incident sooner or later, plunging us into a crisis for which the nation is sorely unprepared.

That crisis will include a dramatically ramped-up, CCP-directed political warfare campaign to divide our communities by falsely claiming that criticism of Beijing is a racist slur against the Chinese people, including Chinese Australians. Indeed, I expect to be labelled a hawk, or worse, for daring to utter concerns about China in this piece. But self-censoring for fear of upsetting Beijing is not a deterrence or preparation strategy. Inoculating ourselves against such disinformation, including through the provision of information, is a whole-of-nation endeavour in which Defence must play a vital role.

While senior defence staff should become more visible and vocal in our public debate, Defence must also engage at the grass roots, with our veterans, reservists and regulars at all ranks given opportunities for community engagement. This is even more important as the Commonwealth and state governments work to backfill the military’s role in domestic disaster relief. This is necessary to preserve the ADF for its primary duties of deterrence and preparedness for war, but the trust and compact between the military and the nation must not be inadvertent casualties of these changes.

A good starting place for Defence to be candid about the threat posed by China is the forthcoming national defence strategy (NDS). The published version of the defence strategic review (DSR) that laid the groundwork for the NDS made shrewd observations about China’s growing military capabilities and coercive playbook. But it followed the tendency in our public debate to use abstractions like our deteriorating strategic circumstances. Such abstractions cloud public understanding of the fact it is Beijing’s actions that are threatening our security and destabilising our region, not amorphous concepts like great power rivalry.

Greater candour about China also needs to extend into closed-door discussions within government. For instance, the classified version of the DSR was probably restricted to senior echelons of need-to-know ministries because it was clear-eyed on China. And while it was encouraging to hear Deputy Prime Minister and Defence Minister Richard Marles tell the ASPI conference last year that the DSR includes the most comprehensive review of mobilisation since World War II, it’s telling that none of this was deemed suitable for public consumption. This is not a sound foundation for a genuinely national approach to defence.

Being candid about China is not alarmist. Government openness about the threat posed by Soviet communism underpinned public consent for substantially higher levels of defence spending as a percentage of national income during the cold war, including during Bob Hawke’s Labor government in the 1980s when Defence estimated that we would have a 10-year warning against non-nuclear attack. Our officials, ministers and allies tell us that we now face greater danger, and that attack could come without warning. Yet the government dons kid-gloves when it comes to publicly acknowledging that China is the primary threat.

Plain language on China would also help apportion the scarce resources of Defence and other parts of the national security ecosystem across a range of threats. The DSR calls for an ADF focused on ‘the nation’s most significant military risks’, but without clarity about which capabilities are required to counter China, there is a risk that the ADF will lose the scale and flexibility to fulfil other essential roles, as shown recently when ships were not available for collective maritime security operations in the Red Sea.

The main impediment to the government being more open about China is China. Labor’s stabilisation of the bilateral relationship is already being sorely tested, as Australian academic Yang Hengjun’s death sentence reminded us. Beijing would doubtless apply further pressure if the Australian government, including Defence, were honest with the Australian public about the scale and urgency of the threat China poses. But Beijing has shown that it will pressure us regardless so leaving the nation unprepared is unacceptable.

Australia does not seek an adversarial relationship with China, but Xi Jinping must learn to accept that democracies, unlike the CCP, have a duty to tell their public the truth.