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Prime Minister Scott Morrison may be forecasting ‘a new dawn in the Indo-Pacific’ with the arrival of the Quad meeting of Australian, Japanese, Indian and US leaders, but we would do well to remember the village folklore that ‘the darkest hour is just before the dawn’.

The Quad has a strategic mountain to climb to bolster faltering democracies in our region, to stop Covid-19 scything through countries that are ill-equipped to respond and, above all, to push back against the predatory wolf warriors of Beijing.

While Morrison was rightly putting a positive cast on the meeting, his Quad opening comments compared our current situation to a century ago when, after the last global pandemic, the world ‘soon found a Great Depression and another global conflict’.

The risk of a slide into conflict is clearly playing on the prime minister’s mind. Releasing a defence strategic update in July last year, Morrison said: ‘That period of the 1930s has been something I have been revisiting on a very regular basis, and when you connect both the economic challenges and the global uncertainty, it can be very haunting.’

The Quad is a grouping of countries each of which, for different reasons, is reluctantly pressed to the Indo-Pacific strategic frontline. President Joe Biden’s emphasis on working with the allies means that the US, the world’s security provider of choice, is tired of the burden and wants others to take some of the load.

Of the other Quad countries, India is only just emerging from its non-aligned mindset and beginning to craft a world view that looks beyond its immediate borders. Japan’s ‘peace constitution’, and an assumed deep public aversion to military conflict, limits Tokyo’s capacity for forthright strategic leadership.

And Australia? We have long talked a big game of ‘punching above our weight’ but baulk at the cost of real strategic leadership, even with the Pacific islands, let alone the 650 million people of Southeast Asia. Morrison promised his Quad colleagues that ‘we’ll do our share of the heavy lifting to lighten the burden for us all’. Only so much heavy lifting can be done with defence spending at 2.19% of GDP, overseas development assistance at $4 billion and falling (prior to Covid-19) and one of the smallest diplomatic corps among G20 countries.

The Quad’s arrival as a vehicle for the heads of government to meet regularly, including face to face before the end of 2021, is a substantial development, but the context is that the region has singularly failed to provide driving strategic leadership in recent years. The most important thing the new grouping can do is for the leaders to spur each other on to bigger, more imaginative policy efforts and not be slowed by bureaucratic process.

The leaders established three groups to work on urgent tasks. The Quad vaccine partnership seeks to expand vaccine manufacturing and deliver inoculations through the region, crucially to the ‘last mile’ for ‘hard-to-reach communities in need’.

Australia signed up to be a ‘last-mile’ deliverer in Southeast Asia, having already agreed to play that role in Timor-Leste and nine Pacific island states. This is vital work, but we should have no illusions about the scale of the task involved.

If Canberra is seriously going to tackle last-mile vaccine delivery through Southeast Asia, this could absorb every Australian Defence Force aircraft, ship and unit, along with much of Virgin Australia and Qantas. Recall how stretched Defence was in the early 2000s to maintain a ‘brigade-plus’ formation of several thousand personnel in Timor-Leste to stabilise a country of (then) less than a million people.

There will be many ways to deliver vaccines including using private contractors and volunteer non-government organisations, but when it comes to hard-to-reach communities—consider the Papua New Guinea Highlands and Bougainville—it’s hard to see how Defence won’t be deeply involved.

Australia limited its involvement on paper to an offer of $100 million (US$77 million) for provision of vaccines, yet another example of the low-cost leadership of which we are so nationally fond. Does this in any way meet the scale of the problem?

Even before vaccines are distributed, we may face an immediate Covid-19 crisis in PNG, where Port Moresby’s tiny hospital resources have been swamped. It might not have been possible to know when the pandemic would hit PNG, but it was surely predictable that it would arrive sometime.

The government has now announced assistance in the form of vaccine doses, medical teams and protective equipment, though more help may be needed to bring the situation in PNG under control.

Throughout the developing world during the pandemic Beijing continued to send its political leaders, diplomats, aid workers and others at a time when our travel was constrained. This was clearly a tactic to build Chinese Communist Party influence at our expense. The Quad vaccine strategy demands that we urgently get back into the region.

A Quad climate working group and a critical and emerging technology working group were also established. The former was clearly the price of America admitting the others to the call and well worth paying if it keeps Biden committed to the harder end of security engagement in the Indo-Pacific.

The critical and emerging technology group will bring the Quad most openly into competition with China because of the urgent need to develop technology options that don’t involve building dependence on Beijing or being vulnerable to yet more intellectual property cyber theft from China.

The importance of the Quad is that it holds open the possibility that Washington will include the allies as part of critical supply chains. Australia’s interest in domestic production of air- and ship-launched missiles is much more achievable if we make it part of an international effort of key democracies.

The arrival of the Quad leaders’ meeting shows not just that a consensus has emerged about our dire strategic situation but also that we desperately need to do something about it quickly, not in defence acquisition timeframes measured in decades.

Covid was the lead topic of this meeting, but the four leaders would probably not have met if the pandemic had been the only driving factor. This meeting happened for one reason only: the aggressive and destabilising behaviour of Xi Jinping. Beijing might contemplate that as it tweets out its dismissive contempt for the gathering.

Four years ago, the Quadrilateral Security Dialogue was something only officials, not ministers, could engage in and there were studious denials that the grouping had anything to do with China’s use of power and economic coercion. Official statements were bland and actions were few.

Since then, things that simply couldn’t happen according to received wisdom have kept happening. The Quad moved from a forum just for officials to a foreign ministers’ forum in late 2019. Last year, India’s Malabar naval exercise broadened to include Australia, making it a key naval exercise for the four Quad partners. And more foreign ministers’ meetings have been held since that start in 2019. This is now an agreed ‘forum architecture’, so beloved of students of international security forums and institutions.

The biggest development has happened at speed under the new US administration. President Joe Biden used his first call with Chinese Communist Party General Secretary Xi Jinping to give priority to ‘preserving a free and open Indo-Pacific’—a concise statement of what the Quad is all about. And now, just two months later, he and the prime ministers of India, Japan and Australia are getting ready for a Quad leaders’ meeting on Friday morning, Washington time.

This is happening because the Quad is a grouping that makes more and more sense as the strategic environment in the Indo-Pacific develops.

The momentum for India, Japan, the US and Australia to cooperate on security, economics, technology and public health comes partly from global interconnections, and partly from the converging assessments each nation is making about the behaviour and actions of China under Xi.

The leaders are driven by Chinese actions—that familiar list of military aggression in the South and East China Seas, around Taiwan and on the India–China border; acute human rights abuses in Xinjiang, Hong Kong and Tibet; and economic coercion, cyber hacking and political interference in other nations, combined with the expulsion or arbitrary detention of foreign nationals. Add in Beijing’s continued failure to be transparent about either the origins of the pandemic or the efficacy and safety of Chinese Covid-19 vaccines.

But Narendra Modi, Yoshihide Suga, Scott Morrison and Biden are also responding to very strong public sentiment in each of their countries.

This is a symptom of China’s soft power collapsing across much of the world.

That’s shown in a deluge of surveys, including the October Pew Research survey showing unfavourable views of China at historic highs across the developed world, Singapore’s ISEAS think tank’s February ‘State of the region 2021’ survey showing even higher concern about China ‘not doing the right thing’ after the experience of 2020, and the most recent Pew assessment of views in the US on China, released last week.

These surveys tell us that populations across the Indo-Pacific, in Europe, North America and Australia, are ahead of their governments—and certainly many in their business communities—in appreciating the implications for their security, wellbeing and prosperity of the way China is behaving and acting under Xi.

Beijing almost certainly discounts these populations’ views. As we see with the National People’s Congress, the Chinese government is advancing its strategy for growing and using power and influence through a combination of hard power, the attraction of making money from China’s large market and a plan to dominate the sources of future technological and economic power. That’s enabled by a supportive network of advocates in the political, business and academic elites of other nations, which Australian journalist Rowan Callick has described well in his recent paper for the Centre for Independent Studies, The elite embrace.

Domestically, the CCP is adept at controlling and directing public sentiment, using its own elites, security agencies and, increasingly, high-technology surveillance and social media management. So maybe it’s simply assuming that keeping foreign elites onboard will be enough to enable the continued pursuit of its ‘China dream’ of a Sino-centred world, with China under continued party-centred control.

That assumption misunderstands how much of the rest of the world works. Governments in India, the US, Japan and Australia must respond to their populations, in ways that China’s autocrats can’t get to grips with.

We are a world away from 2007, when furious diplomatic démarches from Beijing resulted in officials quickly disowning the idea that the Quad would do anything meaningful.

Quad leaders now know that actions they take that reduce the influence of aggressive Chinese power will be welcomed and rewarded domestically. And a practical agenda for the Quad that has this effect also, conveniently, can address some core policy directions of each of the leaders. It’s not often that a multilateral grouping can so effectively combine national and joint interests.

Look at the agenda for Biden, Morrison, Suga and Modi: accelerating vaccine production and rollout, finding practical approaches to increase economic cooperation in ways that reduce supply-chain vulnerabilities, and identifying common actions on climate change that have the by-product of advancing the economies and high-tech industries in each of our countries.

Each of these topics is a net good for each of our leaders, and each is given energy and urgency by China’s actions over recent years, and in the new five-year plan that’s now being signed off by the National People’s Congress.

The combined weight of the Quad partners can be a defining good, achieving multilaterally what each nation couldn’t alone—an idea at the heart of Biden’s interim national security guidance.

Vaccine production and rollout is an example. The US has developed what open scientific data tells us are some of the safest, most effective Covid-19 vaccines—the Johnson & Johnson vaccine is a single-dose shot, for example, reducing the scale and challenge of mass vaccinations. India, as a medicines-production superpower, has the horsepower to make these at speed and scale. And the combined financial and logistical capacity of the Quad partners, along with their strong relationships across South and Southeast Asia all add up to a package that will make a difference to the safety and wellbeing of a major chunk of the globe. Progress here works directly with Morrison’s South Pacific step-up, and with each of the partners’ Indo-Pacific strategies.

The Quad forum is not the sum of all things, although it is complementary to other groupings that also have a role in enhancing positive cooperation that reduces nations’ vulnerabilities, whether to pandemics or coercion. The G-7 and the Five Eyes come to mind, as do NATO, a renewed EU–US partnership and a revitalised US alliance network.

However, the Quad is developing as a working forum for leaders to generate momentum on practical actions. Having to cooperate without all the traditional sherpas, summitry and bureaucracy of other forums is one of the defining positive effects that Covid has brought us.

The Quad is now much broader than the ‘security dialogue’ that restarted in 2017, and its utility will increase given the world we are living in. This may be what Beijing is most anxious about—a multilateral grouping that is action oriented and agile enough to provide new challenges to how China wants the world to work.

For all the reasons that Beijing desperately wants the Quad to fail, it is in our interests to have it grow, prosper and demonstrate its own positive agenda.

The balance of power in the Indian Ocean is undergoing a significant change as countries from outside the region begin to establish a permanent presence there.

In the past 10 years, the biggest change has been the sharp escalation in China’s naval activities in the northern Indian Ocean, including through its hydrographic surveys in the exclusive economic zones of littoral states, growing deployment of submarines and unmanned underwater drones, and establishment of its first overseas military facility in Djibouti.

If this is the beginning of a larger Chinese naval presence throughout the Indian Ocean, a close examination of China’s intentions and behaviour is warranted.

China claims that its naval activities are normal and reasonable and assures the rest of the world that it will never seek hegemony.

When the Chinese say that they will not exercise hegemony, they presumably mean not the American kind. They are not seeking to assume the role of a paramount state that uses its power and influence to impose rules and order on an otherwise anarchic world. Pax Britannica is not for them either. They have shown no appetite to directly control large tracts outside the homeland or to carry the flag, as David Livingstone did, for ‘Christianity, commerce and civilization’.

Exercising the sort of hegemony that the Soviet Union did is entirely ruled out. The lessons of Soviet failure due to overreach in the export of communism globally are compulsory reading for all members of the Chinese Communist Party.

What China seeks is the pursuit of national self-interest through persistent and consistent actions to become the dominant state in the Indo-Pacific. The shape of possible Chinese hegemony may be uniquely Chinese in character—a kind of Chinese hegemony with socialist characteristics. Covid-19 has made this more, rather than less, likely for three reasons.

First, the fundamental shift in the world’s centre of gravity from the Atlantic–Mediterranean region to the Indo-Pacific region has occurred faster than the West had planned for. China is the central actor in this drama, but ASEAN, India and others have also hastened the process.

Second, expectations from a decade ago that the balance of power between China and the United States would likely remain decisively in America’s favour at least for the first half of this century are being proved wrong.

China has not only demonstrated the determination to challenge American power in the Indo-Pacific, but it is building the capacity to neutralise America’s naval superiority in the Western Pacific. It is unlikely that China can, any longer, be confined within the first and second island chains in the Pacific.

Third, it is building a parallel universe in trade, technology and finance that will selectively reduce its vulnerabilities to American hegemony. China’s international behaviour in the year of Covid-19 gives legitimate cause for concern to the peripheral and proximate states of the Indo-Pacific.

China speaks of the ‘community of the shared future for mankind’, and ‘win–win cooperation’; it plays balance-of-power politics and acts in ways that take advantage of others in adversity. China’s aim is to establish its supremacy in areas of productive technology, trade networks and financing options in ways that shut out competition. The Belt and Road Initiative is creating a Sino-centric system of specifications, standards, norms and regulations that will favour China’s technology and services to the exclusion of others.

Those who worry that the primary problem with the BRI is the potentially high level of indebtedness that vulnerable Indo-Pacific economies may face are missing the larger point. Beijing doesn’t aim to impoverish its potential clients, but to ensure that their national systems are fully oriented towards the consumption of Chinese technology and services and are in sync with China’s strategic interests and policies.

Digital dependencies are integral to this objective. Huawei, 5G and fibre-optic networks are some of the ways that China is rewiring the region to its long-term benefit.

In the Chinese version of hegemony, so long as its industry and services enjoy supremacy in the Indo-Pacific and thus ensure the prosperity and wellbeing of the Chinese people, China is content to provide the public goods and financing for the region’s benefit as a sugar-coated pill.

The other facet of China’s potential hegemony is the idea that it is the region’s responsibility to accept and respect what China calls its ‘core’ concerns and interests. These are flexible and change according to the situation, but are always non-negotiable. What is ‘core’ will always be defined by China. The definition has expanded beyond issues of sovereignty and territorial integrity to cover economic, social and cultural issues, and even the persona of the Chinese leader. Those who don’t fall in line are apt to be taught a ‘lesson’.

India believes that the interests of the region are better served through a balance of forces rather than the preponderance of any single force—whether it is the Americans or the Chinese. This is one of the pillars of India’s Indo-Pacific vision.

Giving any country in this region a veto in the matter will be only at the peril of the security of the whole region. It should also be a matter of concern for others when China chooses to confuse the Indo-Pacific vision with plurilateral mechanisms like the Quad. The Quad is a platform for a group of countries that share common interests in the region they are located in. The Indo-Pacific is as much home to India, Australia and Japan as it is to China.

Many in the region look upon the US as a resident power, whose benign presence has been helpful to the region’s stability and growth. China itself has benefited from the American presence, not least in securing the capital and technology that has helped in its national rejuvenation.

Hence, labelling the Quad as a security hazard and threat to peace and development seems to be contradictory and self-serving. Contradictory, because China is the initiator of similar plurilateral mechanisms, including some in India’s neighbourhood. Self-serving because China doesn’t wish to permit any other platform that offers alternatives to the region.

The claim by China that the Quad is a historical regression and a danger to peace and security rings hollow, especially when it seeks to press centuries-old territorial claims on sea and land through the use of force.

If China is committed, as it claims, to uphold the principle of peace and stability and is ready to practice its diplomatic philosophy of affinity, sincerity and inclusiveness, it should desist from tilting at windmills and demonstrate this diplomatic philosophy in deeds.

China could begin by winding down the aggression it has displayed against its neighbours by unilaterally altering the status quo, and join the open discussion on the future of the Indo-Pacific.

India is willing to discuss Asian security with all parties in accordance with the principles of democratic and transparent engagement, and on the basis of respect for globally agreed norms of behaviour.

China’s foreign minister, Wang Yi, recently declared that aggression and expansionism have never been in the Chinese nation’s ‘genes’. It is almost astonishing that he managed to say it with a straight face.

Aggression and expansionism obviously are not genetic traits, but they have defined President Xi Jinping’s tenure. Xi, who in some ways has taken up the expansionist mantle of Mao Zedong, is attempting to implement a modern version of the tributary system that Chinese emperors used to establish authority over vassal states: submit to the emperor, and reap the benefits of peace and trade with the empire.

For Xi, the Covid-19 pandemic—which has preoccupied the world’s governments for months—seemed like an ideal opportunity to make quick progress on his agenda. So, in April and May, he directed the People’s Liberation Army to launch furtive incursions into the icy borderlands of India’s Ladakh region, where it proceeded to establish heavily fortified encampments.

It wasn’t nearly as clever a plan as Xi probably thought. Far from entrenching China’s regional pre-eminence, it has intensified the pushback by Indo-Pacific powers, which have deepened their security cooperation. This includes China’s most powerful competitor, the United States, thereby escalating a bilateral strategic confrontation that has technological, economic, diplomatic and military dimensions. The spectre of international isolation and supply disruptions now looms over China, spurring Xi to announce plans to hoard mammoth quantities of mineral resources and agricultural products.

But Xi’s real miscalculation on the Himalayan border was vis-à-vis India, which has now abandoned its appeasement policy towards China. Not surprisingly, China remains committed to the PLA’s incursions, which it continues to portray as defensive: late last month, Xi told senior officials to ‘solidify border defences and ensure frontier security’ in the Himalayan region.

India, however, is ready to fight. In June, the PLA ambushed and killed Indian soldiers patrolling Ladakh’s Galwan Valley in a hand-to-hand confrontation that led to the deaths of numerous Chinese troops—the first PLA troops killed in action outside United Nations peacekeeping operations in more than four decades. Afterwards, Xi was so embarrassed by this outcome that, whereas India honoured its 20 fallen as martyrs, China refused to admit its precise death toll.

The truth is that, without the element of surprise, China is not equipped to dominate India in a military confrontation. And India is making sure that it will not be caught off guard again. It has now matched Chinese military deployments along the Himalayan frontier and activated its entire logistics network to transport the supplies needed to sustain the troops and equipment through the coming harsh winter.

In another blow to China, Indian special forces recently occupied strategic mountain positions overlooking key Chinese deployments on the southern side of Pangong Lake. Unlike the PLA, which prefers to encroach on undefended border areas, Indian forces carried out their operation right under China’s nose, in the midst of a major PLA build-up.

If that were not humiliating enough for China, India eagerly noted that the Special Frontier Force (SFF) that spearheaded the operation comprises Tibetan refugees. The Tibetan soldier who was killed by a landmine in the operation was honoured with a well-attended military funeral.

India’s message was clear: China’s claims to Tibet, which separated India and China until Mao’s regime annexed it in 1951, are not nearly as strong as it pretends they are. Tibetans view China as a brutally repressive occupying power, and those eager to fight the occupiers flocked to the SFF, established after Mao’s 1962 war with India.

Here’s the rub: China’s claims to India’s vast Himalayan borderlands are based on their alleged historical links to Tibet. If China is merely occupying Tibet, how can it claim sovereignty over those borderlands?

In any case, Xi’s latest effort to gain control of territories that aren’t China’s to take has proved far more difficult to complete than it was to launch. As China’s actions in the South China Sea demonstrate, Xi prefers asymmetrical or hybrid warfare, which combines conventional and irregular tactics with psychological and media manipulation, disinformation, lawfare and coercive diplomacy.

But while Xi managed to change the South China Sea’s geopolitical map without firing a shot, it seems clear that this will not work on China’s Himalayan border. Instead, Xi’s approach has placed the Sino-Indian relationship—crucial to regional stability—on a knife edge. Xi wants neither to back down nor to wage an open war, which is unlikely to yield the decisive victory he needs to restore his reputation after the border debacle.

China might have the world’s largest active-duty military force, but India’s is also massive. More important, India’s battle-hardened forces have experience in low-intensity conflicts at high altitudes; the PLA, by contrast, has had no combat experience since its disastrous 1979 invasion of Vietnam. Given this, a Sino-Indian war in the Himalayas would probably end in a stalemate, with both sides suffering heavy losses.

Xi seems to be hoping that he can simply wear India down. At a time when the Indian economy has registered its worst-ever contraction due to the still-escalating Covid-19 crisis, Xi has forced India to divert an increasing share of resources to national defence. Meanwhile, ceasefire violations by Pakistan, China’s close ally, have increased to a record high, raising the spectre of a two-front war for India. As some Chinese military analysts have suggested, Xi could use America’s preoccupation with its coming presidential election to carry out a quick, localised strike against India without seeking to start a war.

But it seems less likely that India will wilt under Chinese pressure than that Xi will leave behind a legacy of costly blunders. With his Himalayan misadventure, he has provoked a powerful adversary and boxed himself into a corner.

A slump in Australia’s trade with India undercuts the government’s hopes that the country might become a democratic counterweight to our economic dependence on authoritarian China.

While the headline coverage of last week’s official trade report seized on China’s share of Australia’s exports rising to an astonishing 46%, the fall in sales to India was overlooked. India’s share of Australia’s exports dropped below 2% in June, the lowest level since 2003.

It’s two years since the Department of Foreign Affairs and Trade released an impressive strategy for building Australia’s economic relationship with India. The strategy review, led by former DFAT secretary Peter Varghese, set ambitious targets, including that Australia should lift its annual merchandise exports to India from the 2017 level of $15 billion to $45 billion by 2035, arguing that India should become Australia’s third largest export market.

At the time, this seemed plausible. The Indian market had been growing rapidly and it had already overtaken the United States to become Australia’s fourth most important market behind China, Japan and South Korea.

The review spelled out the geopolitical argument for building the economic relationship. ‘If we can count India in our top three export destinations and if we can tap more two-way investment between our countries, Australia’s exposure to global risk is reduced.

‘As partners in the Indo-Pacific, we are each grappling with the implications of the fading US strategic predominance and the sharpening ambition of China to become the predominant power in the region.’

But the latest Australian Bureau of Statistics report shows that in the year to June, India’s ranking among our export markets had slipped to seventh, surpassed by the US, the UK and Taiwan while China, Japan and South Korea forged further ahead. Merchandise exports to India of $11 billion over the last year were 26% below the 2017 level when the Varghese strategy was penned.

While the pandemic has depressed many export markets, the main reason for the slump in sales to India is its government’s nationalist ‘self-reliant India’ economic strategy which includes a target of eliminating coal imports by 2023–24. Coal accounts for around 70% of Australia’s exports to India.

The trade picture is no more encouraging on the import side, where India’s share of Australia’s purchases is down to 1.6%, having peaked at just 1.8% two years ago.

As well as setting a target for exports, the Varghese review also spelled out goals for investment, urging that India should become the third largest destination for Australian investment abroad in the Asian region by 2035.

Here, too, the data has been disappointing. Australian companies invested a paltry $114 million in India last year, while it accounts for a bare 0.2% of total Australian direct investment abroad. Within Asia, India ranks behind Singapore, China, Hong Kong, Malaysia, Indonesia and Vietnam as a destination for Australian direct investment.

Portfolio investment in Indian share and bond markets is higher, but still a microscopic proportion of the total, and it is really direct investment by businesses that matters for economic relationships. The stock of Indian direct investment in Australia is no higher now than it was in 2012.

Last week’s ABS trade report didn’t cover individual country markets for services, and India has been an important market for our higher education and tourism sectors. The latest figures for the export of services, which are a year out of date, show India ranking third behind China and the United States with exports of $6.6 billion.

When the pandemic subsides sufficiently for global travel to resume, India will be important for the recovery of Australia’s university sector, particularly if China delivers on its threat to cut back enrolments.

However, the ambition of building mutual economic bonds to underpin a geopolitical realignment with India is not realistic amid rising economic nationalism.

At the joint media conference with Indian Prime Minister Narendra Modi following their video meeting in June, Prime Minister Scott Morrison commented, ‘The trade and investment flows between our countries are not where [we] would both like them to be, but they are growing and they can grow a lot faster.’

As the latest trade reports show, they are contracting, not growing as the prime minister claimed, and it’s difficult to identify what might trigger a turnaround.

India’s economy was faltering ahead of the pandemic. Estimates of purchasing power by the International Monetary Fund show the economy rose by only 2.9% last year, which was only marginally better than during the depths of the global financial crisis and well below the 6% to 8% growth rates it had been accustomed to.

Modi argues that his economic strategy of self-reliance is not about isolating India from the world but is intended to strengthen the resilience of the domestic economy. He says his economic policy is consistent with greater foreign investment and India is pitching to global businesses to relocate their supply chains from China.

However, the self-reliance strategy, developed as a response to the slowdown, will be seen by Indian businesses as a licence to seek favoured treatment and protection. In the case of coal, the ambition is to build the state-owned Coal India as the dominant supplier to the exclusion of imports.

Morrison and Modi announced that they would restart negotiations on a bilateral free trade agreement which were abandoned in 2015. But the liberalisation of agricultural markets, which is always at the top of Australian negotiators’ priorities, is unlikely to make headway in India where the farm sector is highly inefficient but a vast source of employment. Australian tariffs are already so low that it has little to offer India in return for any concessions.

India has long been the most reticent participant in world trade liberalisation, and earlier this year withdrew at the eleventh hour from the Regional Comprehensive Economic Partnership—a trade deal that would have drawn India into the Asian economic community.

The period ahead is likely to be marked across the world by poor business investment and slow growth of trade, with many countries acting in the same spirit as India: doing what they can to support domestic business and employment by adding protection against global competition. In this environment, there’s little likelihood of Australian exporters cracking any new markets of sufficient size to diversify our export profile away from China.