Belt and Road, International relations, National security, South China Sea | Southeast Asia, The Pacific, The World, Australia, Asia, East Asia, South Asia

5 June 2018

This speech was delivered by Professor Rory Medcalf, Head of the ANU National Security College, Canberra on 21 May 2018.

I am privileged to see so many with expertise, experience and policy wisdom in the room today, and look forward to learning from you in the question and answer session.

We are also honoured to see such a distinguished corps of diplomats here, from so many places in the Indo-Pacific and beyond.

I want to begin at the end, with some key conclusions.

First, the Indo-Pacific is Australia’s region.

It is literally where we are – between the Indian and Pacific Oceans – and where we see ourselves to be.

Maps matter, mental maps matter.

They inform priorities and influence decisions.

For this country, therefore, an Indo-Pacific policy is an authentically and bipartisan Australian policy.

Far from an abstraction or an ally’s imposition, it is an independent foreign policy defined by our geography.

Second, an Indo-Pacific policy is not, by definition, inherently anti-China.

This is a region in which China is rising.

It is a region in which the rest of us want to see Chinese interests incorporated in ways that do not fundamentally harm the interests of other sovereign states.

Third, nor is the Indo-Pacific idea fundamentally pro-America come what may.

Of course it is important, in my view, that, whatever the vicissitudes of Trump, Australia’s ally the United States is developing its own comprehensive policy for renewed engagement in this region.

The US National Security Strategy is avowedly Indo-Pacific in the way it defines priorities.

Pacific Command in Honolulu is being formally renamed Indo-Pacific Command to reflect enduring defence engagement in the Indian Ocean. Good.

America’s Indo-Pacific priorities need to be much more than military, and need to outlast Donald Trump.

I think they will.

But, without question, uncertainty about US behaviour is one of the drivers of Australia’s new policy of diversifying partnerships.

The key question in this town is about Australia’s own interests in a connected region, and the inextricable relationship between those interests and our national values.

And as we build policies of mutual respect with others in the region, we need to begin with national self-respect, with an emphasis on the sovereignty of our decision-making.

Mutual respect, by definition, is impossible without self-respect.

Four, the dynamic of power and rules in our region is a long game, and we should beware setting long-term strategic precedents based on the panic or the parochialism of the present.

If some other countries are having better dialogue with China right now, good for them. The wheel will turn.

We need to play a long game, avoiding false binary choices and instead making the many-sided nature of the region – multipolarity – work for us.

My fifth takeaway – it is not good enough for Australia or anyone else to have merely a declared Indo-Pacific policy.

We need to translate policy into strategy, connecting ends, means – that is, building up national capabilities, and not only in defence – and a willingness to face obstacles.

More on this: Policy file: What should we make of the Indo-Pacific?

So, let’s unpack the ambitious title of this presentation: towards an Indo-Pacific strategy.

Let’s assume for a moment that the Indo-Pacific is more than an abstraction, or as one Beijing-based business consultant most piquantly called it last week, an Orwellian concept.

The Indo-Pacific is the expansive two-ocean region around us, with the busy sea-lanes of Asia at its core. I will properly explore its definition shortly, but the main point for now is that it’s a big place.

What is strategy?

Strategy is about connecting ends, ways and means; what you want to do with what you have with which to do it.

Ends can be infinite; means, never.

But strategy is more than a plan.

As Lawrence Freedman reminds us in his magisterial history of the subject, strategy is required when others might frustrate one’s plans because they have different and possibly opposing interests and concerns.

So here is our starting problem.

It will be difficult for a power like Australia to protect and advance its interests in a region as vast as the Indo-Pacific.

And it will be impossible to do so alone.

The region is an arena of increased competition among powers great and growing.

The only country with anything resembling a comprehensive Indo-Pacific strategy is China, even though the official line in China is to call it something else, the Maritime Silk Road.

And as its power grows, China has sometimes-different interests, concerns and, indeed, values from our own.

So why not just step back?

All we need to do then, some might say, is to reduce our ambitions.

By this logic let’s rein in our exaggerated sense of what actually matters, shrink the mental map of the region in which we operate, so that ends and means align and that we don’t get in anyone’s way.

Thus a smaller Australia – diminishing in relative economic and military and diplomatic heft – would only try to make a difference in, say, Southeast Asia or the South Pacific.

More on this: Missing the mark on the Indo-Pacific

The trouble is this. In a connected region and a connected world, no nation is an island. Indeed, no island is an island.

This applies to defence and security, trade and investment, aid and development, and the interplay of power and wealth in so-called geo-economics.

It also applies to the system of rules, power and diplomacy that connects all these elements.

We cannot hide. Australia’s interests are intimately linked with the wider Indo-Pacific.

For instance, the question about how to engage with China’s growing power and influence now matters in Australia’s immediate South Pacific neighbourhood – as President Xi Jinping’s forthcoming visit to Papua New Guinea for APEC will show.

And our external policies can no longer be divorced from the integrity of domestic institutions and sovereign decision-making, where foreign powers seek to exert influence.

That’s where the wider Indo-Pacific theatre works to our advantage.

Many countries in the region face similar challenges.
Good policy needs patience, so please now give me a little time to get back to the point, the ‘what to do?’

There are some necessary ports of call on this evening’s Indo-Pacific voyage.

What is the Indo-Pacific?

It is a region defined by multipolarity and connectivity, the centre of strategic and economic gravity in a globalised world.

The Indo-Pacific treats as a single strategic system what were hitherto seen as two very separate Asian regions – East Asia, centred on China and lapped by the Pacific Ocean, and South Asia centred on India and abutting the Indian Ocean.

A strategic system can be understood as a set of geopolitical power relationships among nations where major changes in one part of the system affects what happens in the others.

The Indo-Pacific concept underscores the fact that the Indian Ocean has replaced the Atlantic as the globe’s busiest and most strategically significant trade corridor, carrying two-thirds of global oil shipments and a third of the world’s bulk cargo.

The powerhouse economies of East Asia depend acutely on oil imports across the Indian Ocean from the Middle East and Africa, and this dependence is set to deepen further.

Around 80 per cent of China’s oil imports, perhaps 90 per cent of South Korea’s, and up to 90 per cent of Japan’s are shipped from the Middle East and/or Africa through the Indian Ocean.

And even with all its ambitious overland pipeline projects, China could only offset a small proportion of this seaborne dependency – and at great expense.

The reality of an Indo-Pacific region has been brought about by a confluence of economic and strategic factors.

There’s a long history involving plenty of maps, which I have bored my students with many times before – if you want to join them, please enrol in our Master’s degree here at the ANU National Security College!

Suffice to say that a good case can be made that there is a submerged Indo-Pacific historical dynamic to our region, going back to colonial and pre-colonial times, of economic, security and political linkages between seemingly disparate subregions of South and East Asia, of the Pacific and Indian Oceans.

In that picture, the Asia-Pacific was a useful but ephemeral moment – which I am always happy to debate.

But the key point is that many countries have come to recognise some profound change afoot from the 1990s onwards, connecting the different parts of the maritime region, regardless of what they label it.

And principal driver has been the rise of China and India back to their precolonial status as great trading economies and powers that have become increasingly outward-looking in their economic and military affairs, and reliant on the sea lanes for their energy and security.

But this is a region too large for one, or perhaps even two, powers to dominate.

It has some very distinct characteristics which influence the strategy we need.

As well as a strategic system, the Indo-Pacific is a geo-economic system: the changing economic interests and links among countries have helped give rise to their power relationships.

As in the previous colonial era, the flag follows trade.

Indeed, the origins of the modern Indo-Pacific were economic, especially the sudden dependence, since the mid-1990s, of a burgeoning China on imported oil from Africa and the Middle East, crossing the maritime highway of the Indian Ocean.

It is primarily a maritime system, where the interests of and interactions of countries at sea tend to overshadow the continental, land-based elements of their relations with each other.

It is a multipolar system, in which the fate of regional order, or disorder, will not be determined by one or even two powers – the United States and China – but also by the interests and choices of others.

Beyond those two obvious features, it is characterised by duality.

Indeed, it encompasses a range of dualities – in other words, the reconciliation of contrasting aspects within one idea. That is part of the strength of this idea.

The Indo-Pacific idea is both an objective description of geopolitical circumstances and the basis for a strategy.

It is both inclusive and exclusive: It is about incorporating Chinese interests into a regional order where the rights of others are respected; but it is also about balancing against Chinese power when those rights are not.

It is both economic and strategic: it has economic origins but profoundly strategic consequences.

As a maritime region its boundaries are fluid, in every sense of the word, and this helps explain why some different countries define it differently. Is Africa in or not?

It depends on the extent to which the interests of the key Indo-Pacific powers – China, the US, India, Japan – are engaged.

Still on the exposition of dualities, the Indo-Pacific matters as a maritime region, but give the emphasis on competing port access and infrastructure in the unfolding great game, perhaps it is the connection of the sea to the land that defines what is strategically important.

The Indo-Pacific is thus a complement to continental conceptions of connectivity in Eurasia.

Or more accurately, Eurasia is the complement to the Indo-Pacific, given that the sea outweighs the land for ease of power projection and cheapness of commercial transport.

More on this: Anthony Bergin takes a look at how Australia and India could deepen their relationship in the Indo-Pacific

The Indo-Pacific is about Asia but also more than Asia.

It is regional and global: the Indo-Pacific is the main highway for commerce and energy between Asia, Africa, Europe, Oceania and the Americas.

So it is the most globally-connected of regions. You could call it the global region, a duality not a contradiction.

Thus, not all the Indo-Pacific’s stakeholders are resident powers.

For instance, consider all the countries with interests and capabilities deployed in the Indian Ocean.

Fairly much all the world’s ocean-going navies converged there against Somali piracy about ten years ago.

Indeed, that moment marked China’s return to the Indian Ocean as a naval power after a 600-year break. And this time it has not left.

Which brings us back to China.

An Indo-Pacific strategy must be grounded in reflections on China.

Those are part about China’s external policies.

The extension of China’s own interests, capabilities, presence and influence in the Indian Ocean has, more than any other factor, has driven this redefinition of the region. Consider:

  • China’s dependence on the sea-lanes of the Indian Ocean for its oil security;
  • The permanent presence of its Navy in the Indian Ocean. With bombers landing on artificial islands in the South China Sea, it is increasingly clear that the aircraft carriers are for the Indian Ocean, and I anticipate we will see a Chinese carrier battle group fairly much permanently in the Indian Ocean within a decade;
  • The recent establishment of its major military base at Djibouti;
  • Its growing presence in Pakistan, which is taking on some semi-colonial characteristics;
  • Its leverage over strategic waypoints like Sri Lanka and Maldives;
  • The rapid growth of its fishing fleet presence and seabed exploration, as resources closer to China are depleted;
  • Its massive bid to export surplus capacity by building infrastructure and influence southwards and westwards;
  • Public expectations, fanned by movies and propaganda, that it will protect the interests and dignity of its people wherever they may be;
  • And an active reimagining of history, under the mantle of tian xia, everything under the heavens, to legitimise all this.

China’s own geoeconomic regional influence-through-infrastructure enterprise, the Belt and Road Initiative, includes the so-called Maritime Silk Road.

This is essentially the Indo-Pacific with Chinese characteristics; indeed, for now, China may be the only nation with a truly Indo-Pacific strategy.

And yet there is quite another side to understanding China in the Indo-Pacific.

That is its internal challenges, and the central question of whether time is really on China’s side.

This is illuminated by some of the latest scholarship and reportage on the uncertainties and insecurities around China’s future – the work of Carl Minzner, David Shambaugh, Minxin Pei and Howard French.

Their work points to the risks of Chinese overstretch.

Such analysis suggests that China’s haste and confidence may in fact mask an insecurity, a desperation to lock in relative advantages in the current high point of opportunity.

This version of the future warns of rapidly ageing demographics, debt bubbles, the limits of an unreformed economy, worsening authoritarianism and autocracy, the Party’s cannibalisation of legal institutions and civil society, and the potential coalitions of strategic pushback.

No sensible strategist, no sane person, wants the Chinese nation and people to fail.

But the one thing we know about the future is that it is not written.

So whether Chinese power grows or founders, there are good arguments for the region’s many middle powers and stakeholders to coordinate their policies to moderate China’s influence and discourage its risk-taking.

And that is where the nature of the Indo-Pacific comes in.

It is a region too large and diverse for hegemony.

Of course, prediction is foolish. Much will depend now on the strategic choices and political will of many governments, of democracies struggling with the global challenge to the rules-based order, and of the many middle players, those seeing in their ties with one another new avenues for independent agency in between the United States and China.

Without question, the rude arrival of the Trump Administration has come at precisely the time when Asia needed confidence in America’s commitment to leadership, liberal values and the support of its allies.

Many people are starting to pay attention to the terminology of the Indo-Pacific now, only because late last year the Trump Administration began formally using it.

But the Indo-Pacific idea is not solely American and I suspect it will be around a lot longer than a Trump Presidency.

The Indo-Pacific idea feeds into the recent revival of a quadrilateral security dialogue or ‘quad’ among the United States, Japan, India and Australia. But it is much larger and more inclusive than the quad, and that is one of many emerging small groups of security cooperation across the region.

To reiterate: much is at stake in names of regions and mental maps. They help define what matters. They influence real-world decisions.

That’s why, for example, China wants others to sign up to its invented label ‘Belt and Road’.

This describes China-centric economic and strategic connections across Eurasia – the Silk Road Economic Belt – and the sea-lanes through Southeast Asia – the Maritime Silk Road – towards the resources of Africa and the Middle East.

For what it’s worth, I should emphasise that Australia has never and should never reject specific opportunities for economic partnership with China just because they come under the Belt and Road mantle.

There has been a lot of myth-making out there that the Government has somehow entirely rejected the Belt and Road.

In fact, there is a quiet bipartisan consensus in this country that Australia should engage pragmatically, on a project-by-project basis. The press report this to be Labor’s policy; I believe it to be Government policy too.

Australia should cooperate on individual infrastructure projects with China where they make commercial sense, match our governance standards, and are consistent with our security interests, without having to endorse an entire Beijing-made worldview.

The Indo-Pacific is a place of many belts and many roads. Its massive infrastructure needs are best met by cooperation that is inclusive, not exclusive.

Such cooperation should reconcile international standards, transparent governance, commercial imperatives, and the needs and limitations of local economies and their capacity to take on debt.

Whatever lexicon it deploys, and whatever its ambitions on land in Eurasia, China has also categorically turned to the sea – both for commerce and military power – and so is facing up to the realities of being an Indo-Pacific power.

The complex geostrategic beauty of this region, which no Orwellian terminological distortion or ‘doublethink’ can deny, is that it too big for one power to dominate.

It is made for multipolarity and a diversity of partnerships.

That suits Australia.

There are many nations with stakes and capabilities in the emerging competition, and sea powers will retain advantages, especially when they cooperate in coalitions.

I have said the Indo-Pacific idea is not inherently anti-China.
Why, then, has China been uncomfortable with the Indo-Pacific idea even though its very interests and actions are quintessentially Indo-Pacific?

My sense is that, unfortunately and unnecessarily, China has sought to downplay perceptions that it must come to terms with the interests and equal sovereignty of those many others powers in the region.

Thus it chooses to see the Indo-Pacific as code for that uncomfortable reality of multipolarity.

But the term need not be politically loaded. It is an objective description of the maritime region in which China is rising.

In 2013, Australia, under the Labor government of Julia Gillard, became the first country formally to call the region the Indo-Pacific.

Since then, leaders in Japan, India, the United States, Indonesia and most recently France have explicitly advocated their own version of an Indo-Pacific view.

It’s a trend, which disproves suggestions that this is some kind of useless abstraction or American plot, and it’s quite striking.

For instance, two weeks ago Indonesian Foreign Minister Retno Marsudi released that country’s new ‘Indo-Pacific cooperation concept’, based on principles of being open, transparent and inclusive, promoting dialogue and upholding international law.

This will, commendably, reinforce ASEAN centrality and be a key agenda item at the next East Asia Summit in November.

The sea-lanes of Southeast Asia, including the South China Sea, are absolutely at the core of the Indo-Pacific and will remain everybody’s business.

Rather than disempower the Association of Southeast Asian Nations, the Indo-Pacific offers it a new vehicle, a new purpose.

In fact, ASEAN nations have far more scope to shape the emerging, inclusive, multipolar and maritime Indo-Pacific framework than they do the China-centric Belt and Road.

Three weeks ago, French President Macron called for nothing less than an Indo-Pacific Axis, of France, India and Australia, as maritime powers able to share data and build capacity of smaller states in the Indian and Pacific Oceans.

This is just another in the new web of security arrangements designed to hedge and warn against what President Macron rather deliciously called ‘hegemonic temptations’.

Indian Prime Minister Modi has put a clearly Indo-Pacific stamp on his country’s Act East policy. India’s growing engagement with such powers as Japan, the United States, Vietnam, Indonesia, Singapore and Australia is in this context.

And the India-China relationship, set to be one of the two big stories of strategic competition, or cooperation, or at least coexistence, is playing out over an Indo-Pacific canvas.

Japan’s active strategic diplomacy in recent years, including an enhanced security and economic partnership with India and the establishment of a small military base in Djibouti, is explicitly Indo-Pacific in character.

Indeed, in 2016 Prime Minister Abe declared that Japan would pursue a so-called ‘Free and Open Indo-Pacific strategy’, encompassing development, connectivity, investment and security issues stretching all the way to Africa.

This built on his earlier championing of a precursor to the Indo-Pacific, the so-called confluence of the two seas.

Other players, such as Singapore, Vietnam and Britain, are considering their options for more creative strategic diplomacy in a many-player region, whatever they choose to call it.

Even Taiwan has established a new Indo-Pacific policy unit to invigorate its so-called new southbound policy of diversified engagement with others.

The most active player in advocating the Indo-Pacific idea has been Australia.

Canberra has a unique role here: it is a middle power in the gathering Indo-Pacific strategic game, in multiple ways.

These include its relative diplomatic influence, its unusual two-ocean geography, its proximity to and advanced surveillance of the crucial sea lanes connecting the Indian Ocean and the Pacific, and its status as a state that—despite being a close US ally—is diversifying and deepening economic, societal, and security relations with multiple Asian powers.

Which brings me to the ‘so what’ for our policymakers?

Australia’s policymakers need steadiness and perspective.

We need a policy that anticipates, recognise and responds to the great construction and disruption that accompany Chinese power.

Like others, Australia is seeking a narrative for engagement with China that transcends both fear and greed.

That calls for confidence and patience, not panic whenever another country adjusts its diplomacy.

In the larger Indo-Pacific canvas, it is a wilful misreading of events to claim that key powers are fundamentally realigning towards China.

Recently the leaders of India and Japan have had useful dialogues with their Chinese counterparts, as they should.

These reset moments have been desired equally by each side.

They moderated long phases of intense bilateral tensions that ran the risk of war. And America’s vicissitudes under Donald Trump and the great unknowns of nuclear North Korea give everyone reason to talk.

But as last year’s Pew research data reminds us, China’s relations with its neighbours are mired in profound mistrust.

Not so long ago, China would sometimes recklessly alienate many of its neighbours at once: in 2013 and 2014, its relations with India, Japan, Vietnam and the Philippines were all bad at the same time.

Right now, it is playing a smarter game. It is trying to generate the impression of Australia as isolated, as a stubborn swimmer against the tide, with diplomatic discomfort and hints of economic pressure to follow.

But the fact is that our economy is more capable of withstanding that pressure than some in our public debate seem to imagine, but that is another conversation.

The fact is, this is not a full-blown crisis nor need it be. Over recent years from Vietnam to Singapore, South Korea to Japan to India, much of the region has endured much worse from China, with patience not panic, with realism, resilience and solidarity.

And so to the elements of a sustainable Indo-Pacific strategy for Australia.

The 2017 Foreign Policy White Paper was a solid start at sketching this out, building on and largely consistent with the 2016 Defence White Paper.

The evolving debate in this country about China is another important element.

I think what’s striking about the Foreign Policy White Paper is that in part it reads like a comprehensive national security strategy. It placed a great emphasis on building resilience and capacity at home.

An Australian Indo-Pacific strategy will involve foreign policy, development assistance and soft power; it will involve defence and national security; it will be comprehensive and many-layered.

We need to coordinate our so-called defence engagement – really, defence diplomacy – with our larger diplomatic strategy, with both more vision and more flexibility than we have exhibited in the past.

The so-called Indo-Pacific Endeavour activity of naval training exercises is a good start, and needs to extend more seriously into the Indian Ocean.

We also need to link defence with security at home. Thus as we modernise our navy and build a regionally-superior submarine fleet, we will need world-class cyber security to protect that technology.

Our defence modernisation will also need to become more creative in ways that challenge the cultures of our three services. We need to take a look at greater investment in autonomous and unmanned systems to monitor and protect our extensive Indian Ocean geography. Australia has an extraordinary mismatch in the scale of the area we must watch and protect and the number of people we have with which to do so; so we must make disruptive technologies work for us.

Australia needs real debate about energy security as an element on our Indo-Pacific strategy. There’s an extraordinary lack of awareness among the public and an extraordinary complacency in our political class about the paucity of Australia’s own transport fuel stocks and the vulnerability of our maritime supply lines to crisis and disruption, whether or not it is deliberately engineered in a conflict between states.

Diversifying sources of supply of refined fuels to the Indian Ocean, such as the west coast of India, thus bypassing the contested waters of Southeast Asia, would be one step to consider.

There is a new need for a focus on development assistance and capacity-building as instruments, not only for humanitarian good, but for strategic purposes, not only in the South Pacific but elsewhere.

If there is one silver lining to the emerging concerns and debate about the contest for influence in the South Pacific, with China’s growing presence there, it is that this could renew and improve our investment in aid and development as, among other things, a national security issue.

There is a need to bring together our policies for engaging with different parts of the region, with Southeast Asia, the Indian Ocean and the South Pacific – now a theatre of strategic competition, whether we like it or not, for the first time since the 1940s.

These may have been differentiated sub-regions in the past, but the challenges we face now, whether to do with state power and influence or environmental resource constraints, such as the strain on fisheries, are becoming strikingly and disturbingly similar across these zones. The experience in Sri Lanka, for example, may have lessons for the South Pacific.

And of course there is a need to deepen a wider range of strategic partnerships, not only with the United States.
We must now place a premium on partnerships: creative new coalitions, not just the quadrilateral dialogue, but with in various combinations with India, Japan, Indonesia, Singapore, Vietnam, France and more.

There will be flux and we need to make the most of that. With its extraordinary recent electoral upset, for instance, Malaysia is back in play, just as Sri Lanka was a few years ago. China’s advances in influence over democracies are provisional only.

When it comes to the new geoeconomics – the strategic consideration of investment and infrastructure in the region – Australia should not compete with China in terms of scale.

Instead we should focus on standards, on best practice, on education, not so much offering alternatives to Chinese investment and money but rather building the institutions in smaller countries that will make those states more attuned to distinguish risk and opportunity, more resilient and more informed about the ways they may choose to question or utilise others’ apparent largesse.

Australia should focus on its strengths of capacity building in the maritime domain, and consider for instance the lessons from our patrol boat program in the South Pacific to supporting the development of maritime monitoring for partners in Southeast Asia and in the eastern Indian Ocean. And working where we can with other quality maritime security providers like Japan.

And finally, a truly national Indo-Pacific strategy requires some serious work on the narrative. Actually, much of the story is already there – the Foreign Policy White Paper is a compelling account, as far as these documents go. But we, the policy community, need to bring the nation with us.

One of the striking challenges in this country is the gulf between the policy debate in Canberra and the wider public debate, in the general community in the business community and in multicultural Australia.

That is not good enough if we are going to have an effective strategy as a middle power in a contested region, where other countries, notably China are trying to influence our own public’s perceptions.

There is a need for an authentically Australian public narrative about our future in the Indo-Pacific, and a need for our political class to get serious about that narrative.

All this will require sustaining and accentuating what we as a nation already possess and cherish – an independent foreign policy.

This speech was given at an event hosted by the National Security College and

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