AUSTRALIA’SSOUTHCHINASEADILEMMA:MULTIFACEDINTERESTS,SHIFTINGPOLICIES,AND‘ATALEOFTWOCITIES’(BEIJING&WASHINGTON)DrChristopherRobertsDirector,NationalAsianStudiesCenter(NASC),AdjunctAssociateProfessor,InstituteforGovernanceandPolicyAnalysis(IGPA),UniversityofCanberra.TaiwanFellow(MOFA),InstituteforInternationalRelations,NCCU.

AUSTRALIA’S‘INTERESTS’INTHESOUTHCHINASEA

• FreedomofNavigation• Commercialgoods?• Military

• Political-Legal• Apoliticalinterestinthesalienceofa‘rules-basedorder’

underpinnedbyadherencetotreatybasedinternationallaw• The2016AustralianDefenceWhitePaper& the2017ForeignPolicy

WhitePaperhighlightthe‘SouthChinaSea’asakeyconcern.• Military:

• FivePowerDefenceArrangements(1971)andOperationGatewaySurveillanceFlights(1980,ButterworthAirbase,Malaysia)

• TheAustralia-USalliance

BEIJING:ACTIVEMILITARYINVOLVEMENT/INTERESTS(RED)ANDINFLUENCE(YELLOW)

AustralianAntarcticTerritory

3(4?)Chinesebasesand2FieldCamps

IndiaandBhutan’sTerritorialDisputeswithChina

Beijing’semergingstrategicencirclementofIndia

TheEastChinaSeadisputes

TheSouthChinaSeaDisputes

MountingInfluencebyChinaacrossSoutheastAsia

TheKoreanPeninsula

ENTIREIndo-PacificTrumpadministrationgeneratinguncertainty

MountingInfluenceacrossthePacificIslands

MountingInfluencebyChinawithinAustralia

BEIJING’SGRANDSTRATEGY:SECURINGITSMARITIMEPERIPHERY

3.NeutralisetheKoreanPeninsula

1.ControltheSouthChinaSea

2.ControltheEastChinaSea

4.ReunifyTaiwan(byanymeans)

2017:STRATEGICALARMANDACALLFORCOLLECTIVEACTION

• StrategicAlarm:Legality, Proportionality,andCoercion• TheJuly2016ArbitralAwardlargelyignoredbyBeijing• Dangerousprecedent:theEastChinaSea,SouthAsiaandAntarctica?

• July2017PMTurnbull’sShangri-LaDialogueKeynoteaddress:• ReferredtoChinathirteentimesandstated‘wemustpreservethe

rules-basedstructure…Thismeanscooperation,notunilateralactionstoseizeorcreateterritoryormilitarizedisputedareas.Thismeans…notwinningthroughcorruption,interferenceorcoercion’.

• JulieBishop’s2nd NewDelhiOration• SupporttorestarttheQuadrilateralSecurityDialogue2.0

• 6VesselNavalTaskGroupthroughtheSouthChinaSeaandbeyond• GlobalTimes:Australiawas‘encirclingChina’

2017-2018:CONTINUED(LIMITED)MILITARYBALANCING/CONTINGENCIES

• AU$195billiondefence procurementprogram(5th largestarmsimporter)• Recentcontractsinclude:

• 9BAEanti-submarinefrigates(Britain,AU$35billion)• 12offshorepatrolsvesselsand211BoxerCRVarmoredcombat

vehicles(Germany,AU$9.2billion)• 6AdvancedTritonDrones(US,AU$6billion)

• Earliersignificantcontracts/acquisitionsinclude:• 2LandingHelicopterDockShips(AU$3billion)• 72F-35B(AU$17billion).• 12FrenchShortfinBarracudaBlock1Asubmarines(AU$50billion)

• Overallassessment:LimitedDeterrenceandForceProjectionCapabilities• Professionalandrelativelypotentforcegovernedbypopulationlimits

2016-2018:BEIJING’SRELATIVELYMEASUREDRESPONSESANDPRESSURE

• EscalatingrhetoricagainstAustralia(CCP&state-controlledmedia):• GlobalTimes:‘Economic&militaryconsequenceslieinstorefora“papercat”suchas

AustraliathatdarestochallengeChina’ssovereigntyclaims’• GlobalTimes:Beijingwill“adoptstrongcountermeasureswhichwillseriouslyimpact

Australianeconomicdevelopment”unlesswestop“kissinguptotheUnitedStates.”• Tangible(adverse)DevelopmentsintheChina-AustraliaRelationship

• From2017:ChinadeferredaSeniorAustralianOfficialsmeeting• Stalledministerialvisitsandlowerlevelexchanges• ChinablockedprogressontheMarch2017pledgetocreatean

Australia-Chinaministerialenergydialogue• WineindustryreportsofChinesecustomsdelayingAustralianexports• Nonetheless,clearsignal:BeijingwillnottolerateAustralian

interference

BROADERISSUESINTHEAUSTRALIA-CHINARELATIONSHIP

• MilitaryConcernsreChina’sGrandStrategy• ThePacificIslandsregion– e.g.mountingCCPinfluence• ‘Debate’abouttheCCP+UnitedFront’sinfluenceinAustralia

• DifferenceswithinandbetweenpoliticalpartiesoveraChinaPolicy• ASIODirector:nowmoreforeignintelligenceofficersthantheColdWar• AnnualReportbytheAustralianSecurityintelligenceOrganization

(ASIO):‘scaleofthreattoAustralia...isunprecedented’• TheSamDastyari Affair(LaborPolitician)

• Australia-ChinaEconomicinterdependence• Chinaabsorbed30%ofAustralianexportsin2017(up21.2%)• Cf:Chineseinvestmentsdeclinedby22.8%(2016-17)• 2017:166,000Chinesestudents(43.3%ofinternationalstudents)

Alan Boyd, ‘China dangles trade threat over Australia’, Asia Times, 3 Jan 2018: http://www.atimes.com/article/china-dangles-trade-threat-australia/

2018:CANBERRADISENGAGINGFROMTHESOUTHCHINASEA?

• SouthChinaSeaFatigue?• LossofconfidenceintheQuadrilateralSecurityDialogue• Early2018:PolicymakersconfidentASEANcannegotiateaCodeof

ConductalbeitonChina’sterms(‘sweepingitunderthecarpet’?)• Distancingfrom2018USNationalDefenceStrategy

• FMBishop:wedon’tsee‘ChinaaposingamilitarythreattoAustralia,…WecontinuetoworkcloselywithChina

• Militaryexercises:incontrasttotheUS,AustraliadidnotdisinvitethePLAfrom‘ExerciseKakadu’orExercisePandaroo (BothSep2018)

• July2018:FMJulieBishopcategoricallyruledouttargetedFONOPs(firsttime)addingAustraliahadnevertargetedaspecificcountryanditwouldbean‘extra-ordinarysteptodoso’

AUSTRALIA,JAPAN&INDIAUNDERTHETRUMPADMINISTRATION’SSHADOW

• June2017:Turnbull’sSLDMessagetotheUS:• ‘Inthisbravenewworldwecannotrelyongreatpowerstosafeguard

ourinterests’• July2018,strongestcriticismbyCanberrayet:

• ‘Ourclosestallyandtheworld'smostpowerfulnationisbeingseenaslesspredictableandlesscommittedtotheinternationalorderthatitpioneered…TheUnitedStatesisnowfavouring amoredisruptive,oftenunilateral,foreignandtradepolicythathasheightenedanxietiesaboutitscommitmenttotherules-basedorderthatitestablished,protectedandguaranteed.’

• JapanandIndia:Similarconcerns,plusUStariffs,mayalsoinformasimultaneoussofteningoftheirapproaches.

THEASEANCODEOFCONDUCTAMIDSTDISUNITY&FRUSTRATION

IMPLICATIONSOFTHEANALYSISFORTHEAUSTRALIANFOREIGNPOLICYTRAJECTORY• Australiawilllikelycontinuewithamore

cautiousapproachtotheSouthChinaSea• Fracturedpoliticalenvironment• 2019:changeofgovernmentcouldresultin

anewapproach• Nonetheless:anynewpoliciesunlikelyto

positivelyaffecttheSouthChinaSeasituationabsentamorecollectiveapproach

• Prospectsforaneffectivecollectiveapproachverylow(beyondtheASEANCodeofConduct)• Cf.SignificantconcernsretheCoC (e.g.Prof

Thayer’sanalysis)

NEWALLIANCESAND/ORCOALITIONBENEFITSPROPORTIONATEMILITARYEXPENDITUREBYCOUNTRY(IISS,2018)

AnnualMilitaryExpenditure(2017,US$)China: $150billionOtherKeyMajorandMiddlePowersIndia: $52billionJapan: $46billionSouthKorea: $36billionAustralia: $25billionSingapore: $10billionTotal: $169billion

Source:2018MilitaryBalance,IISS

CAVEATSTOTHEANALYSIS(PLUSTHEPOSSIBILITYOFABLACKSWANEVENT)

• Analysiscouldrapidlychangeshouldacombinationofthebelowoccur:a) TheTrumpAdministrationisreplacedbyanew

government(unlikelybeforenextPresidentialelection)

b) AmilitaryskirmishbetweenBeijingandanotherclaimantorstakeholderstate

c) Asignificantandadversedevelopmentinanotherarena

d) China’sdebtbubblecrashesorotherdevelopmentscombinetounderminetheCCPregime’ssecurity– i.e.leadingto(b)and/or(c).

POSTSCRIPT:WHAT’SNECESSARYINTHEEVENTOFSTRONGCOLLECTIVERESOLVETORESTOREORDER1) AstrategicdialoguethroughanexpandedQuadorthelinkingofkey

regionalminilaterals2) Subsequentarticulationbythesestatesof‘redlines’reBeijing’sbehavior

(+demonstratedwillingnesstoapplyhardpowerwherenecessary)3) Establishmultinationalcoastguardpatrols,subjecttopermission,to

policeresourceswithinlegallyunambiguousEEZsofclaimantstates;4) AbroadermaritimeCodeofConductinvolvingstakeholdersbeyond

ChinaandASEAN5) Collectiveapproachtostrategiccommunicationstocounterpropaganda

andpsychologicalwarfareactivities6) Anincrementalapproachtowardstheestablishmentofamutualdefence

pactcoveringanymilitarythreattothestatusquoacrosstheIndo-Pacific

ANNEXESFORLATERUSE

2017-2018:MAINTAININGAUSTRALIA’SINFLUENCEINTHEPACIFICISLANDS

• Power/InfluenceBalancing– theCaseofthePacificIslands• AnavalbaseinVanuatu?(US$87millionfromChina’sEximBank)• PMTurnbullexpressed‘alarm’andsoonhostedVanuatu’sPMfor

thepurposeofanewsecuritytreaty.• RapidPacificDiplomacy:PMhostedleadersofPNGandSolomon

Islands;FMundertookvisitstoMarshallIslands,Micronesia,andPalau.

• CanberraunderminedHuawei’stelecommunicationstenderbyproviding2/3fundingforunderseainternetcable(PacifictoAustralia)

• Possible

AUSTRALIA’SDEPENDENCEANDBEIJINGINFLUENCE:DEVELOPMENTSANDREGIONALPERCEPTIONS

• Investments from China rose by 60% in 2015• Mining: 80-83% foreign ownership

• BHP Billiton 60%; Rio Tinto 82% (contrast Norway)• Cf: Norway’s US$873 billion future fund

• Agriculture: >12%• 2015-2016: Chinese ownership increased from 1.5 million hectares to 14.5 million

hectares• Residential Property

• 2015: 45% of total Chinese investment ($6.85 billion)• 95% directed towards NSW: Affordability?• Restraint through two way dependence?

• Mixed Signals with and perceptions by Major Powers: Japan, India and the United States

AUSTRALIA’SUS-CHINADILEMMA:MIXEDSIGNALSAMIDSTAWEAKENINGDOMESTICENVIRONMENT?

• Australia’s history of staunch support for U.S. • FM Alexander’s Downers Statement on Taiwan (2004)• Port of Darwin sale, Freedom of Navigation exercises, and

joint exercise with China• Former FM (Gareth Evans): Australia should demonstrate a

foreign policy more independent of the alliance• A strengthening of Australia’s position?

• PM Turnbull at the 2017 Shangri-La Dialogue• FM Bishop at the 2017 2nd India-Australia Oration

• A long-term strategic, political and economic strategy?

ALANDDIVIDED:DEBATESINCANBERRA’SSOUTHCHINASEAAPPROACH

• DivideswithinPolicyandAcademicCircles• Accommodation/morepassiveapproach• Challengingexcessive/illegalclaimsandactions• WhethertoundertaketargetedFONOPs• Otheractionsincludingcollectiveapproaches(e.g.theQuad)

• EvolvingPartyApproaches• Labor