Tag Archive for: Foreign Policy

Economic coercion in Indo-Pacific island states: Building resilience

Indo-Pacific island states face diverse challenges as they grapple with their own unique vulnerabilities to the geopolitical consequences of growing strategic competition in the region. This report explores the vulnerability of island states to economic coercion and the risks they face in navigating the growing economic power of the People’s Republic of China (PRC).

In this report, the authors examine four perceived examples of economic coercion within the region that challenge the Quad’s vision of a free and open Indo-Pacific. China’s increasing interest in the island states of the Indo-Pacific has led to concern that the imbalance in those relationships is so large that both domestic and broader regional stability are at risk.

This report offers a number of policy recommendations to protect Indo-Pacific island states from economic coercion, including:

  • Island states must be better invested in the rules-based international economic order;
  • Establishing codes of conduct to limit economic duress, limit undue economic influence and strengthen the rules-based international system;
  • Strengthening government institutions so they can resist economic coercion;
  • International partners should work with Indo-Pacific island states to help strengthen the ability of local businesses to take collective action against economic coercion.

Iron ore futures: possible paths for Australia’s biggest trade with China

The iron ore market is wrong-footing forecasters again, as it has throughout the last 20 years. Nobody expected the iron ore price to surpass US$200 a tonne as it did in May and no one predicted it would then plunge to less than US$100 as it has this week.

This report argues that Australia’s troubled relationship with China will be influenced by which path the iron ore market takes over the medium term.

China’s authorities are determined to reduce their dependence on Australian iron ore, both by seeking alternative supplies and by capping their steel production.

However, China has been trying and failing to curb its steel production for the past five years, with many local governments ignoring central orders. In just the first six months of this year, 18 new blast furnaces capable of producing as much steel as Germany’s entire output were approved.

Although China will never be able to rid itself entirely of the need for Australian supplies, this report warns that if an iron ore glut emerges, whether by Chinese government design or because of an economic downturn, the commodity may join the list of other Australian exports subject to Chinese coercion.

The report also highlights that the effort to reduce its dependence on Australia will come at considerable cost to China. Australia is by far the cheapest and closest source of high-quality iron ore for China’s mills.

The Pacific Fusion Centre: the challenge of sharing information and intelligence in the Pacific

The Pacific Fusion Centre: the challenge of sharing information and intelligence in the Pacific examines the Australian-sponsored Pacific Fusion Centre (PFC) which is due to open permanent offices in Vanuatu later this year.

The PFC was set up in 2019 as an outcome of the 2018 Boe Declaration with the mandate of providing strategic intelligence to Pacific Island states to assist in high-level policy formulation on human security, environmental security, transnational crime and cybersecurity. The report argues that the impact of these assessments may be limited, including due to the open-source nature of the information.

There are also widespread misperceptions about the PFC’s role. Unlike regional information fusion centres elsewhere in the region, the PFC will not produce actionable intelligence on specific security threats. For example, identifying vessels that are engaged in illegal fishing or smuggling people, arms or drugs.

The Pacific still sorely needs a regional centre to fuse and share actionable intelligence in the maritime domain. Australia needs to consider how it can best move to fill this important intelligence gap.

The Report concludes that the PFC may be a useful soft-power initiative, but the Pacific still sorely needs a regional information fusion centre to produce and share actionable intelligence in the maritime domain.

ANZUS at 70: The past, present and future of the alliance

The ANZUS Treaty was signed on 1 September 1951 in San Francisco. It was the product of energetic Australian lobbying to secure a formal US commitment to Australian and New Zealand security. At the time, the shape of Asian security after World War II was still developing. Canberra worried that a ‘soft’ peace treaty with Japan might one day allow a return of a militarised regime to threaten the region.

ANZUS at 70 explores the past, present and future of the alliance relationship, drawing on a wide range of authors with deep professional interest in the alliance. Our aim is to provide lively and comprehensible analysis of key historical points in the life of the treaty and indeed of the broader Australia–US bilateral relationship, which traces its defence origins back to before World War I.

ANZUS today encompasses much more than defence and intelligence cooperation. Newer areas of collaboration include work on cybersecurity, space, supply chains, industrial production, rare earths, emerging science and technology areas such as quantum computing, climate change and wider engagement with countries and institutions beyond ANZUS’s initial scope or intention.

The treaty remains a core component of wider and deeper relations between Australia and the US. This study aims to show the range of those ties, to understand the many and varied challenges we face today and to understand how ANZUS might be shaped to meet future events.

Watch the launch webinar here.

Losing our agnosticism. How to make Australia’s foreign influence laws work

Country agnosticism, under which Australia’s laws treat all foreign influence efforts in the same way, regardless of their source country, is the key failing of Australia’s statutory response to foreign governments’ influence activities.

It has imposed sweeping, unnecessary regulatory costs. It has caused waste of taxpayer-funded enforcement resources. It has diverted those resources from the issues that really matter. And it has brought unnecessary legal complexity. Yet for all that, nobody believes that the laws are truly country agnostic. Not the Australian media, which routinely describe them as ‘aimed at’ China. Nor, presumably, the media’s audience. Nor, certainly, the Chinese Communist Party (CCP), which regards itself as the target, explicitly citing the laws as a key grievance.

Perhaps the greatest cost of country agnosticism is that the current statutory framework isn’t as effective as it needs to be. Why? In adopting a country-agnostic stance, we blinded ourselves to the very factor that matters most in evaluating and responding to foreign influence—its source country.

It’s time to remove the blindfold. We should recognise this basic truth: foreign influence transparency requirements must be more stringent in relation to some source countries than others.

Mitigating the risk of a China–India conflict

More than a year has passed since Chinese troops began to occupy previously Indian-controlled territory on their disputed border in Ladakh. The crisis has cooled and settled into a stalemate. This report warns that it could escalate again, and flare into a conflict with region-wide implications.

The report assesses the risk of conflict by analysing its likelihood and consequences. A possible war would be costly for both India and China. But a possible war could also risk stirring Indian distrust of its new partners, especially in the Quad – Australia, Japan, and the United States. The report outlines some conditions under which a war would disrupt or dampen those developing partnerships.

The report concludes by offering a framework for policymakers to shape India’s expectations and the strategic environment before and during a possible war.

France’s Indo-Pacific Strategy and its overseas territories in the Indian and Pacific oceans: Characteristics, capabilities, constraints and avenues for deepening the Franco-Australian strategic partnership

The report analyses France’s military capabilities and cooperation activities in the Indian and Pacific Oceans, underlining its strengths and limitations. In terms of its economic presence and official development assistance commitments, it is clear that the French strategy suffers significant limitations. However, these may be offset by a growing commitment from the EU and through strategic partnerships allowing France to pool efforts at all levels to meet regional and global challenges.

What if …? Economic consequences for Australia of a US-China conflict over Taiwan

What if China were to attempt to seize Taiwan by force and the US and allies responded militarily? One consequence would be the disruption of China’s trade with many countries, including Australia. While strategic analysts have been working over such scenarios for years, there’s been little study of the likely economic consequences.
 
This study is focused on the short-term shock to Australia’s economy. The objective is to contribute to an understanding of the nature of Australia’s economic relationship with China and the likely paths of adjustment should that trade be severed. It also explores the options available to the Australian Government to ameliorate the worst of the effects of what would be a severe economic shock.
 
The conclusion of this report is that the disruption to the Australian economy would be significant. There would be widespread loss of employment, along with consumer and business goods shortages that would be likely to necessitate rationing.

What If, data files

Gamechanger: Australian leadership for all-season air access to Antarctica

Next year, the Australian Government will decide on whether to commit funding for a proposed year-round, paved aerodrome near the Australian Davis research station in East Antarctica. An all-weather, year-round, paved runway near Davis would have huge positive impacts on Antarctic science and logistics in East Antarctica, where there are no equivalent facilities. It would be the only paved runway in Antarctica.

As with any major piece of infrastructure development, there’ll be inevitable environmental impacts from the construction and operation of the Davis aerodrome. However, we believe that with care, it should be possible to design, construct and operate a facility that satisfies both operational requirements and environmental obligations under the Madrid Protocol and relevant Australian legislation.

If Australia doesn’t proceed with the aerodrome, another country may step into our shoes and take a similar proposal forward. It might be a country with lower standards of environmental assessment and a lesser track record of environmental protection in Antarctica. The Davis aerodrome project requires long-term funding and political commitment.

Failing to proceed with the proposal would weaken our influence in Antarctica: it would allow other states to take advantage of the opportunity for logistical and scientific leadership in East Antarctica. The proposed Davis aerodrome will increase Australia’s strategic weight in Antarctica, where we claim 42% of the continent.

Island voices and Covid-19: Vulnerability and resilience Views from The Strategist

This Strategic Insights report is being published as part of an ASPI project that focuses on the vulnerabilities of Indo-Pacific island states in the Covid-19 era. It presents a series of views on ways that insiders and external observers have viewed the vulnerabilities and resilience of island countries in the Pacific and Indian Oceans in dealing with the Covid-19 pandemic.

All of these contributions have appeared as posts on The Strategist. They don’t try to offer a sequential account of events or perceptions but represent a collection of responses to the crisis. The authors were not asked to address a single issue but, rather, were encouraged to focus on issues of relevance to them. The result is a mosaic rather than a portrait of nearly a year of living with the tensions posed by the pandemic. Two key themes do tend to dominate this mosaic. One concerns the way vulnerabilities are expressed as challenges. The second identifies the opportunities that resilience can create.

Tag Archive for: Foreign Policy

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