international analysis and commentary

Australia, Asia and the West

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A couple of hundred million years ago, the supercontinent Gondwanaland split apart, sending Australia on the slow journey to its place as the world’s smallest continent, isolated by distance and sea. But with the economic and strategic rise of Asia, the land down under is quickly moving closer to the center of things, geopolitically at least. That poses some sharp tests for the conservative government of Prime Minister Tony Abbott, a foreign policy novice, elected on September 7th.

 Australia is an unusual country, little understood by much of the world. It has a small population, about 23 million people, yet huge territory, globally significant resources and a vast maritime jurisdiction. It has the world’s 13th largest economy and is a global diplomatic player including in the G20 – and currently  as a non-permanent member of the UN Security Council. The roots of its democratic political and social institutions are European yet its population is increasingly from Asia; China and India provide its largest and fastest growing migrant communities, as well as two of its most important economic relationships.

Its people are often stereotyped as relaxed and disinterested in the struggles of the world, yet a thread of anxiety has always been present in its strategic outlook. This is beginning to re-emerge as the center of gravity for both prosperity and military competition is shifting towards Australia’s region of Indo-Pacific Asia.

Some analysts, such as Australian scholar Hugh White, emphasize a major tension that has developed in the nation’s international outlook in recent years. This country has never had the military weight to be able to defend its extensive interests and territory single-handedly, so it has always relied for its defense on much larger friendly powers, initially Britain and from 1942 onwards the United States –  a relationship formalized as a treaty alliance in 1951. Traditionally, too, Australia’s number one trading partner was an ally or an ally’s ally – initially the British Empire, and in the late 20th century Japan.

That pattern changed dramatically with the ferocious growth of the Chinese economy in recent decades. China’s demand for Australian mineral resources, especially iron ore, was such that about five years ago China overtook Japan to become Australia’s top trading partner, an eclipse that has only deepened since then. In other areas too, from tourism to international student numbers to migration, China has become an indispensable partner. And while much of the developed world has endured economic stagnation or worse, Australia has enjoyed several decades of higher continuous growth than any other Western country – a boom in substantial part attributed to Chinese demand.

Yet at the same time, security worries have intensified in Canberra, as in much of the region, about the implications of China’s growing power. Nobody in Australian policy circles suggests China poses a direct military threat to Australian territory. But there are more subtle and reasoned concerns about what China’s accumulation of military strength, including its decades of double-digit growth in defense spending, will mean for Asia’s long-stable strategic order. 

That regional order, sustained by the United States’ “forward presence” and alliance system, has underwritten economic growth and suppressed regional mistrust and rivalry, including between China and Japan. And from cyber intrusions within Australia to signs of assertiveness against other countries in Asia, there are plenty of reasons for Australian strategists to recognize that China’s rise is not going to be all about harmony.

Australians are accustomed to their alliance with the United States, and most remain supportive. Indeed, opinion polling suggests that Australians have actually grown closer to the United States in recent years, even as their material wellbeing has benefited from economic links with China and Asia more generally.

An opinion poll this year by the Sydney-based Lowy Institute showed that more than 80% of Australians support the alliance, and about 66% are comfortable with the basing of US military forces in Australia. (Such basing is presently minimal, although there has been a media hullaballoo about the establishment of a small US Marines presence in the country’s sparsely-populated Northern Territory.)

Yet many Australians may not be fully aware of the expectations the alliance may place on them in a potential security crisis in Asia. Whereas for many years, Australia has paid its alliance dues by sending small contingents to join US-led operations far afield – most recently in Iraq and Afghanistan – the future scenarios that might cause the alliance to swing into action are likely to be in Pacific  Asia.

How would ordinary Australians respond to a contingency in which the United States called on its ally to support it in, for instance, a confrontation with China or with North Korea? Intriguingly, that Lowy Institute opinion poll suggests that only 38% of Australians would support US-led military action in Asia, such as might emerge from a China-Japan conflict, whereas 48% would support some future American-led operation in the Middle East.

On one reading, this kind of data might support the view that Australia faces a fundamental “China choice”, and that its support for a US-led strategy of balancing or hedging against Chinese power is thus unsustainable. But the real story is more sophisticated.

The fact is, Australian governments, with popular consent, have continuously made their strategic choice in Asia over many years. The alliance has endured for 62 years, is fundamental to Australian defense policy, and has intensified under the previous three Australian prime ministers, from the conservative John Howard (mentor to the recently-elected Abbott) to the center-left Kevin Rudd and Julia Gillard.

The challenge for Australia’s diplomacy is to find ways to actively work inside the alliance, and to shape the Obama administration’s so-called “rebalance” to Asia, rather than simply accept all elements of a strategy made in Washington. This may require Australia to increase its own strategic heft, raising defense spending from its current low of 1.6% of GDP, so as to enhance its credibility and clout as a US ally at a time when America’s own massive defense spending is understandably slipping.

But Australia is also looking to deepen ties with other key players in its region and to strengthen the fragile diplomatic architecture of a part of the world that has no equivalent of NATO, the EU or even the OSCE. Canberra has been more active than most capitals in building up the nascent security institutions centered on the Association of Southeast Asian Nations, with the East Asia Summit as a leaders-level forum bringing together all the key Indo-Pacific powers including the United States. There is no expectation, however, that such institutions can mediate differences involving powerful states, such as the persistent tensions in the East China Sea and the South China Sea.

So the Abbott government is likely to focus mostly on the big bilaterals: Japan, India, South Korea and Indonesia are all among Australia’s foreign policy priorities. The nation’s interests will be well-served by deepening security partnerships and advancing trade agreements with each of these important Asian powers. The new government recognizes this as a more fruitful path than dissipating limited resources on a myriad of small relationships or on multilateral initiatives.

One of those relationships, with Indonesia, has recently been under strain over the painful choices each country must face is deterring a surge in illegal immigration or “people smuggling” by sea – a problem they can only manage cooperatively. But more broadly Australia’s ties with its large Muslim-majority neighbor are in reasonably good shape, and much better than could have been imagined during that nation’s messy transition to democracy just 15 years ago. Australian policymakers no longer think of Indonesia as a threat. At the same time, Canberra has some unusually well-developed defense diplomacy going on with Beijing, including security dialogues and training exercises with the People’s Liberation Army (PLA). A Chinese warship is among the international flotilla joining the Royal Australian Navy’s 100th birthday fleet review this month in Sydney Harbour.

Australia’s constructive defense engagement with China makes sense, especially to ensure the region has good capacity for cooperation in future disaster relief or stabilization operations. But nobody expects the Australian military to reach a level of operational intimacy or strategic trust with the PLA on a par with the bonds it shares with the United States or fellow US allies like Japan.

To simplify Australia’s external policy opportunities and challenges to some kind of US-China dilemma is to downplay the complexity of Australia’s Indo-Pacific region, including the strong economic links the country maintains in many directions, not least Southeast Asia, Europe and America – still, by far, its largest source of foreign investment.

That is not to say that Australian policymakers do not think twice about offending China. Canberra’s rhetoric about upholding a rules-based regional order sometimes drifts into overly-diplomatic generalities. Australian officials have been conspicuously silent on whether the Philippines is doing the right thing by taking its maritime territorial differences with China to the relevant international tribunal – even while some others, such as the EU, have expressed moral support for Manila’s action.

Beyond short-term challenges with Indonesia and illegal migration, the grand foreign and security policy test for Australia’s government will be whether it can chart a secure course for the country in an era of increasingly rich and powerful Asian states. This will take strategic weight as well as smart diplomacy.