Australia: Hedging its bets in Asia

Leaders of the Association of Southeast Asian Nations have a change in attitude toward Australia, and there has been a return to its previous middle-power role in the Asia-Pacific region. How can we work with our neighbors to wield influence in a changed regional order?

Australia: Hedging its bets in Asia AFP Photo/Torsten Blackwood

Australia’s diplomacy in recent years can at best be described as underwhelming, if not at times inimical to its national interests. In March 2018, however, the presence of Association of Southeast Asian Nations (Asean) heads of government in Australia, meeting at Prime Minister Malcolm Turnbull’s initiative, was an important event. It is to be hoped that it will mark a return by Australia to its previous middle-power role in the Asia-Pacific. 

In the past, Australia has led high-profile regional initiatives that have involved it working constructively and cooperatively with Asean states, individually and collectively. These have included the establishment of the Asia-Pacific Economic Cooperation grouping, the creation of the APEC summit, the Cambodian Peace Settlement and the Bali Process on People Smuggling. Each is a legacy of Australia’s three recent “foreign policy” prime ministers: Bob Hawke, Paul Keating and John Howard Prime Minister Scott Morrison now has the opportunity to establish his foreign policy legacy.

Ten years ago the idea of Asean leaders meeting in Australia would have been laughable. Australia has always been seen by Asean as an outsider in the Asia-Pacific, notwithstanding our massive economic integration and our valuable cooperation across defense, counterterrorism, people smuggling, organized crime and disaster relief. Asean members have always sought to protect the integrity of the group and to make it central to East Asian affairs. Australia’s liberal democracy, with a robust independent media that criticizes regional governments for abuses of human rights or for ethnic discrimination, its awkwardly with the more authoritarian political systems of our neighbors and their controlled or cowed media. Successive Australian governments have sought to navigate through this with varying degrees of success. Former senior diplomat Dick Woolcott famously described Australia as the odd man” in Asia. We were never comfortable with being an insider and neither was Asean with having us there. 

The change in Asean’s attitude toward Australia is attributable to the rise of China. Australia is now having a debate that it has needed to have for a long time regarding the rise of China. Heated and often abusive, domestic arguments over foreign interference aws are a distraction. The real issue is with China’s rise and increasing weight in the East Asian region, and Australia’s response to the changed regional order. The problem with China is that as a great power its internal. means of political and social organization stand far from the global norms. In a world where China’s influence is prevalent, we can expect much less attention to human rights, for example, or with international norms that it believes were created by developed nations without its participation. China is also adopting more assertive and at times aggressive foreign policy positions. It has taken to settling for itself disputed territorial issues in the South China Sea with unilateral action. 

Countries in East Asia need to find ways to manage the risks, militate against bad behavior by China and encourage constructive engagement with China that accommodates its rise but not at the expense of its regional neighbors. One response has been to try again to breathe life into the so-called Quadrilateral Dialogue of Democracies in the region, involving Japan, India, the United States and Australia. As its original name suggests, it is an ideologically defined grouping intended to balance China. Not surprisingly, Beijing sees it as being intended to contain China. 

Australia has become a vocal advocate for this group. The difficulty, however, is that three of its members are China’s strategic rivals, whereas Australia is not. Two – India and Japan – also have active border disputes with China. Moreover, other major democracies in the region that also are not China’s strategic rivals, such as South Korea, the Philippines and Indonesia, are not included. It is therefore disingenuous to try to pass off the so-called Quad as merely a discussion group of like-minded countries.

Rather than seeking to balance or contain China, which is only likely to be self-defeating as China will feel compelled to push back against this, a hedging strategy involving China’s maritime neighboring states that are not strategic rivals is a better option to try to prevent bad behavior by China. Australia should be clear and explicit about what it intends to do with such a strategy, which is to encourage China to adhere to rules and norms in the region that seek to minimize conflict while respecting the sovereignty of all states in East Asia. We should also explore ways to make new rules in the region and create new regional architecture that reflects contemporary realities. 

China has shown it is open to rule- making and the creation of new multilateral institutions. The Asian Infrastructure Investment Bank (AIIB) is an example of this

A major challenge for Australia, however, is that many of the governments in the Asia-Pacific have dubious democratic and human rights credentials.

and points the way to new possibilities. China could have achieved all the objectives of the AIIB by itself acting unilaterally, and it does do this as well. Instead, with the creation of the AIIB, Beijing decided to bind China to a new set of multilateral rules and disciplines. The creation of the AIIB was largely in response to the refusal of the old developed powers to reform the International Monetary Fund and World Bank to reflect the new realities of the contemporary global distribution of economic power. The confusion in the Australian government’s foreign policy in responding to China’s rise was highlighted by its fumbling of the issue of AIIB membership. While it did manage to scramble and become a founding member, Australia joined well down the list behind Luxembourg and just ahead of Norway, hardly prominent members of the Asia-Pacific. We also lost potential leverage and influence in shaping the AIIB. 

An effective hedging strategy will have a number of strands. It is messier to execute than a grand grouping like the Quad and, as such, will require skillful and energetic diplomacy. For Australia, as it already is for Singapore, close cooperation in the region on how to respond to China’s rise need not be mutually exclusive to maintaining the traditional security relationship with the United States. Indeed, that relationship is essential for any successful hedging strategy. 

Australia already has close bilateral relations with a number of countries in the region, such as Japan, South Korea, Indonesia and Singapore. These will need to be sustained and deepened, including where they do not already occur, with bilateral military-to-military exchanges and exercises. The new bilateral military arrangement with Vietnam is an excellent case in point. The Australian military is actively engaged in helping the Philippines Army deal with the insurgency threat in the south of the country. This should lead to longer and more enduring forms of bilateral military cooperation. A major challenge for Australia, however, is that many of the governments in the Asia-Pacific have dubious democratic and human rights credentials. An effective hedging strategy will require Australia to work closely with governments that we do not like. Many of these states are susceptible to China’s influence.

Collectively, Asean is the most obvious body with which Australia should engage on a China hedging strategy. Australia does not need to join Asean formally for it to add substantial geopolitical weight to Asean and Asean to Australia. Already, there is the Asean “plus” processes and the Asean Regional Forum. A hedging strategy focused on our area of immediate strategic interest, namely East Asia, should seek to strengthen and broaden each of our individual bilateral relationships across Southeast Asia, as well as work with Asean collectively.

Australia’s relations are of uneven quality. We have close and deep relations with some, but the depth of the relations tails off fairly quickly from there. We are also often inconsistent in how we manage relationships. We embraced former Philippines President Benigno Aquino III, especially after his strong stance against China in the South China Sea (encouraged by the Obama administration), but have allowed the relationship to cool in response to our concerns about President Rodrigo Duterte’s human rights abuses in his antidrug campaign, while supporting anti- insurgency efforts in Mindanao. 

Balancing these complex elements – moral convictions and security in the case of the Philippines – is an unfamiliar challenge for Australia’s diplomacy. Finding carefully nuanced trade-offs will be necessary if we are to build more robust and enduring close relationships across the region. Building trust will require deft statesmanship at the highest levels. Consistency in our policies and public statements will be a key to this. It is something we have not been particularly good at. Sensibly, we have strengthened and broadened relations with Vietnam but have neglected other parts of Southeast Asia. Incredibly, an Australian prime minister has not made a bilateral visit to Thailand, as distinct from attending a multilateral meeting such as APEC, since the late 1990s.

Other frontline states facing China’s immediate influence, such as Laos and Cambodia, have similarly been neglected. Australia was quick to support the democratic renewal in Myanmar but equally quick to cool its ardor in the face of human rights abuses against ethnic minorities.

Laos and Cambodia

Laos and Cambodia have been effectively lost to China. It has achieved its strategic aim to have these as client states. Myanmar is resisting as best it can despite a massive Chinese commercial presence. Thailand seems to be finding it difficult to position itself, as shown by the ongoing public debate and changes in policy over China’s railway construction ambitions there. Mahathir Mohamad’s return to power in Malaysia has seen him push back quickly against China with the review or cancellation of a number of major infrastructure projects. 
All countries in the region are trying to work out how to accommodate China’s rise while not undermining its sovereignty.

AFP Photo/Peter Parks

All countries in the region are trying to work out how to accommodate China’s rise while not undermining its sovereignty.

They recognize that China is now and will continue to be the dominant power in the region through its economic and increasing military weight. In an important respect, they are like Australia. They all seek China’s markets and investment, but are trying to work out how to manage its overweening influence. This convergence of interest between Asia and Australia in the face of China’s rise provides an opportunity for Australia to develop with its neighbors a hedging strategy for managing China, while providing strategic space for China’s continued rise. 

A key element of such a strategy would be realistic solidarity. This means that while allowing for the reality that each country’s interests will prevail in its dealings with China, beneath this China should know that if it pushes hard against one it would be pushing hard against all and would be resisted by all. It will take a lot of diplomatic effort to achieve this. The South China Sea is a case in point. A coordinated position from the region, including Australia, would have had much more impact in Beijing than various individual responses. While Laos and Cambodia, and perhaps Thailand, would not have engaged actively, concerted diplomacy across the region may have been able to develop a coordinated position. If Australia’s security is truly under challenge from China, which itself is not self- evident and thus needs to be argued by those who claim it to be, then Australia needs to work much harder, more creatively and more skillfully on its relations with Southeast Asia. 

Engage more directly
 A policy framework for an Asean hedging strategy would involve, among other things:

1. Continuing with Asean Plus One (Australia) engagement, including hosting more Asean meetings in Australia below the level of Head of Government to build habits of cooperation and consultation, and over time, policy coordination around challenges to regional stability, including from state and nonstate actors.

2. Engage more directly, consistently and actively with major Asean states bilaterally on strategic challenges created by China’s rise, particularly with Indonesia, the Philippines, Vietnam, Thailand and Malaysia, including more frequent prime minister and foreign minister visits to build a greater sense of strategic trust.

3. Such engagement should include annual meetings between foreign and defense officials

4. We should be clear, direct and open with China about our intensified engagement with Asean collectively, and with its individual members, and whatthe purpose of our hedging strategy isand is not. It is not about containing or balancing China, nor is it based onideological premises, but rather it is apragmatic response by China’s maritimeneighboring states to their legitimateconcerns that China, as the majorpower in the region, behaves in waysthat respect the interests of the region’ssmaller nations.

5. Initiate discussion with key Asean stateson a possible new regional securitymechanism. In 2008, former AustralianPrime Minister Kevin Rudd floated the idea of an Asia-Pacific community that would have, in effect, introduced formal discussion of security issues into APEC– or combining economic and securityissues in the same forum. Unfortunately,the execution was found wanting. Theidea was floated ahead of consultationswith regional partners and Asean wasimmediately suspicious that it would, by design or inadvertently, marginalize the grouping.

The East Asian Security CooperationConference (EASCC) might initially compriseAsean, Australia and South Korea, with theUnited States, China and Japan as observers.Once established, with a settled structure andwork streams, and demonstrating its worth,membership issues could be revisited. EASCC would preferably adopt a wide definition of “security” to include, for example, traditional areas of armament and disarmament; nonstate actors; energy; resources; transportation; food; the environment; and economic matters. It would, of course, require considerable diplomatic agility and consultation. It should be a bottom-up process, proceeding on the basis of dialogue and confidence-building. EASCC's primary objective would be to build mutual trust in East Asia and, in doing so, reduce the prospect of armed conflict.

Violent conflict not inevitable

China’s ever-growing weight in the region need not lead inevitably to violent conflict. The Thucydides Trap is not an ordained historical outcome, despite what some hawkish commentators may think. It is up to each generation of policy makers and statesmen to understand the changin geopolitical realities and the deep structural forces shaping them, and accept thei responsibility to avoid conflict.

The global order has changed but is still not settled. China is driving this. Regional states need both to play their part and find ways of cooperating to ensure that their legitimate interests are respected, especially territorial integrity, without conflict. If Australia returns to a more neutral foreign policy stance which, in the face of the vagaries of US President Donald J Trump, it will sooner or later have little choice but to do, and rebuilds its once strong relationship of trust with China andmajor regional players, it will be well placed to lead on these initiatives to promote a new regional order and stability. It is a historic opportunity for the prime minister.

Geoff Raby is chairman of Geoff Raby & Associates and was Australia’s ambassador to China from 2007 to 2011. This essay is part of the “Disruptive Asia” series produced by Asia Society Australia.

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