There is opportunity for Australia in a more contested and competitive Indo-Pacific.

A moment of bright opportunity for Australia in Asia has emerged amid the uncertainty roiling the region — the twin realities of a more powerful and assertive China and a more sharply competitive U.S.-China relationship are pushing Australia and many of our most important regional partners closer together.

This is a period of convergence. It is marked by a sense of shared challenges and shared aspirations for the future of the Indo-Pacific. 

These convergences are not uniformly spread across the region – some countries are bound more tightly to China than others. They do not erase the political and cultural differences between Australia and Asia that periodically trouble our ties.

But where they exist they are an opportunity to seize – a chance to build ever stronger direct and independent connections to Asia and to support the resilience and sovereignty of close partners feeling the pressures of a contested world.

Maximising the possibilities of this moment requires a whole-of-nation effort. A rebooted aid strategy for Asia, better-resourced diplomacy and a stronger on-the-ground commercial presence in the region would help take us further, faster.

Converging interests

Asia and Australia prospered in the post-Cold war era, a period marked by undisputed U.S. global leadership, the absence of major power competition and an increasingly open and integrated global economy.  

It seems now a distant memory.

China has become not just more powerful but also more nationalist, authoritarian and assertive. President Xi Jinping strives for a great “national rejuvenation”.

On the other side of the Pacific, our close ally, the United States, is more unilateral and unpredictable as it pursues an “America First” foreign policy.

Economic, technological and security competition between China and the United States has an increasingly sharp edge but is only a modest check on Beijing’s growing power and influence.

The world’s multilateral institutions struggle to find answers to our most complex and urgent global challenges, such as climate change.

Economic nationalism and protectionism, disenchantment with globalisation, political alienation, rapid technological advances and profound demographic shifts are all powerful vectors of change.

Like Australia, most of our Asian partners feel strongly the growth of China’s power and influence and pressure to conform to Beijing’s wishes. 

While they pragmatically accept the inevitability of a more China-centred region, they worry privately about an erosion of their sovereignty.

They fear a “might is right” strategic culture prevailing over norms such as the peaceful resolution of disputes, just as Australia does.

They want the United States engaged in the region economically and strategically to balance China’s power, but also fret about U.S. distraction and the narrow nationalism of “America First”. 

They recognise the inevitability of a more competitive U.S.-China relationship but do not want that competition to become destabilising. 

They seek partners who share their interest in strengthening the region’s architecture, especially the East Asia Summit, to better manage a new era.

Like Australia, they want the region to remain open economically and integrated through free trade agreements that reflect World Trade Organization rules and disciplines.

None of this means our Asian partners will always think about the Indo-Pacific in the same way that Australia does or that they will act exactly as we do to protect our interests domestically and regionally where we have concerns about China’s — or America’s — behaviour.

Asia won’t suddenly become a champion for human rights in Xinjiang, for example. 

Even on contentious issues closer to home, such as the South China Sea, many Asian countries will calibrate their policies carefully to avoid antagonising China.     

And most will continue to juggle their relationships with Washington and Beijing, doing their best to avoid making difficult choices.

China is too big, too close and far too important to the rest of Asia — and to Australia, for that matter — for other partners to simply substitute for it.  That won’t happen.

But a more contested and competitive Indo-Pacific does mean many Asian nations are interested in doing what they can to diversify and balance their bilateral relationships.

They want options – more than one partner they can turn to – whether for foreign investment or trade or security cooperation or development assistance.

And they want partners who will support their sovereignty and help boost regional resilience. 

There is rational self-interest at work here. Implicitly or explicitly, most Asian nations recognise they will be better off in a multi-polar Indo-Pacific, rather than a region dominated absolutely by one country.

This dynamic is helping drive the remarkable recent trajectory of Australia’s relationship with Vietnam.

It is evident in the way Australia now features in Indonesia’s strategic outlook and in Jakarta’s push for the Association of Southeast Asian Nations (ASEAN) to develop its own set of principles and norms to guide conduct between nations in the Indo-Pacific.

It helps explain India’s growing comfort with the Quadrilateral Security Dialogue, which brings Australia, Japan, India, and the United States together, despite its previous ambivalence, and maturing India-Australia defence ties.

Our already deep relationship with Japan has been given renewed impetus.

There is opportunity elsewhere. Even tiny Laos, with the weight of China on its geographically narrow shoulders, would like more attention from Australia.  

This positive momentum does not absolve Australia from the necessity of plugging away patiently but hard-headedly at finding a modus vivendi with China, one that makes space for cooperation that benefits both countries while protecting Australia’s sovereignty and our regional interests.   

But it does give Australia a clear foreign policy imperative for the period ahead — to maximise convergences, reinforce direct ties to Asia and help build the resilience of regional partners. 

Working with others, such an approach gives us the best chance of supporting a region in which there is a diversity of influences and voices.

How are we doing?

Seizing the moment

Building on the 2017 Foreign Policy White Paper, with its strong focus on the Indo-Pacific, the Morrison government is investing in our major bilateral relationships, especially India, Indonesia, Japan, Vietnam, Singapore and the Republic of Korea. Political-level relationships are in good shape.

Australia also works to encourage a multipolar Indo-Pacific: in the Prime Minister’s words, “a region of sovereign interdependent states, resistant to coercion but open to engagement on the basis of shared interests.”

Witness the Prime Minister’s visit to Vietnam last year, with its long list of initiatives aimed at taking bilateral ties to a new level, talk of “converging interests” and Morrison’s instinctive support for Hanoi in the face of Chinese interference in longstanding Vietnamese offshore oil and gas activities.

Expect a similar level of ambition when the Prime Minister reschedules his visit to India.

Investing in our political, economic and defence and other security connections to our top Asian partners is being complemented by regional programs to help build resilience in areas such as infrastructure and cyber and maritime security.

The government’s call for open markets and “trade relationships based on rules, not coercion” is backed by its successful pursuit of regional and bilateral free trade agreements, most recently with Indonesia.    

And Australia continues to take seriously, and invest heavily in, the region’s architecture for cooperation and dialogue, particularly the East Asia Summit.

There is energy and commitment here but also some gaps worthy of attention.

Australia has realised it is in a tough competition with China in the South Pacific to retain its standing as the partner of choice of Pacific island nations. 

Increasing our diplomatic, aid and defence effort in the Pacific is necessary – the stakes are very high for us in our near neighbourhood.

But it remains true that the future shape and character of the Indo-Pacific will be decided in Asia, not the South Pacific.

If we are to maximise the possibilities of the current period of convergence we must compete on a whole-of-nation basis, using all arms of statecraft. 

We will be less able to respond to the needs and interests of partner countries if we short-change ourselves on the expert capabilities and resources necessary for this new era.

Particularly in Southeast Asia, it will be easier for Australia to be crowded out by others and for us to lose relevance and influence.

More ministers from more portfolios need to visit Asian capitals – there is simply no substitute for turning up. Foreign Minister Marise Payne works tirelessly but has global responsibilities and can’t be everywhere at once.

The recently announced review of the development assistance program is an opportunity to stabilise and recommit to Australia’s aid to Southeast Asia, which has suffered repeated cuts and changes in programming in recent years.

Giving aid to the economically-growing region attracts the ire of some voters, especially at times of stress, such as the drought and bushfires. 

But other countries use aid to Southeast Asia to build influence and encourage political and business elites to lean towards them. In short, aid is a tool of statecraft.  This is the hard reality of the current contest for power, influence and economic advantage in the region.   

Australia, too, must compete with all the policy tools at its disposal.  In much of the Mekong region, for example, our bilateral and regional aid looks significantly underdone for the current era of geo-political contestation. Supporting regional resilience does not come cost free.

And despite its growth record, millions of people in Southeast Asia still live in extreme poverty.

Their best hope lies in the durable economic growth that will only come from reform, smart policy choices and good governance. 

Australian aid can’t “fix” Southeast Asia’s many challenges, but has shown in countries like Indonesia and Vietnam that it can support good policy choices.

Governments reasonably cast a jaundiced eye over bureaucrats asking for more resources. Yet the Department of Foreign Affairs and Trade’s budget is on a unsustainable downwards trajectory as it grapples with the complexity and volatility of the current international environment.

Making the case in Canberra for diplomacy has proved hard work in recent years, even in such a period of challenge.   

Australian governments are generous in praising the work that goes into a successful high-level visit, a complex trade negotiation concluded or a difficult consular case handled well. 

Somehow this gets separated from the patient, expert diplomacy necessary to help build a multipolar region in which our economic and security interests are advanced and our political sovereignty is protected.

Yet diplomacy will always be the first and principal Australian response to a rapidly changing region. 

Diplomacy coordinates across government. It is the tool by which we maximise our interests in this period of opportunity, translating the needs of regional partners into practical collaboration that binds us closer.

Equally, diplomacy is the first option for a hard-nosed defence of our interests when this is necessary.

Investing in diplomacy is not just about the right level of base funding. It also means getting serious about prioritisation. 

The time has come to halt any further expansion of our global diplomatic network without a major new injection of funding. 

New overseas missions in recent years have plugged some big gaps in Asia and the South Pacific. This was important to do, but further expansion without new funding risks coming at the cost of “thinning out” existing posts in Asia at a time when we need them to be as match fit as possible. 

Finally, a stronger on-the-ground commercial presence would help build Australia’s “weight” in Asia.   

Australian direct investment into most of Asia remains relatively low.

Trade is healthy. But exports of minerals and energy, agriculture products and Australia-based services such as tourism and education don’t normally require big offices and staff in Asian capitals.  

Economic nationalism and sovereign risk in parts of Asia are understandable constraints and very difficult for any Australian government to resolve.

Free trade agreements will only ever be a partial remedy. But deeper liberalisation of the services sectors in Asia – in finance, health and education, for example – and further work to tackle non-tariff barriers will over time provide more opportunities for Australia to build its commercial presence. The newly completed Indonesia-Australia free trade agreement, for example, has opened new space for majority Australian-owned businesses in sectors such as education and aged care.

Getting Australian company boards to visit the region more regularly, as some of Australia’s senior diplomats in Asia have been doing, and cultivating more business leaders with deep Asia experience could also help our companies feel more confident about navigating the risks of doing business with Asia while taking advantage of the growing opportunities in our neighbourhood.

Not everything is converging

Growing illiberalism in parts of Asia is a potential constraint on this unique period of convergence. 

Few Asian nations live up to the liberal values set out in the 2017 Foreign Policy White Paper.

Illiberalism and intolerance have increased in many countries. Serious human rights abuses are common. The space for civil society and the media is often very narrow. 

At the same time, Asia is more important than ever to our future security and prosperity.

We have to work harder at a time of rising strategic contestation to maintain Australia’s influence and ability to advance our interests.

This is the contemporary sharp edge of an old dilemma —how best to juggle our values with our political, economic and security interests in Asia.

This is a difficult challenge to manage. Australia cannot afford to make values the primary driver of our engagement with Asia. Such an approach would quickly kill efforts to take advantage of the current period of convergence in outlooks between Australia and many of its regional partners,

But nor do we need to ignore human rights abuses and illiberalism — effective diplomacy can find space for Australia to reflect its own values in the region without shutting the door on closer cooperation.

Each challenge requires a tailor-made response. We support the democratically elected government of Myanmar, for example, even as we sanction its military leaders and call for justice for the Rohingya, as Foreign Minister Payne has done.  

There are two fundamentally important reasons to persevere. 

First, we will naturally hew closest to societies that are free and observe universal human rights. To the extent we and others can encourage it, a freer region amplifies the current period of convergence and stands in contrast to China’s authoritarian model.  

Secondly, and most importantly, a foreign policy in Asia that does not encompass a continuing commitment to freedom and human rights is one that forgets who we are as a nation and what we believe in. It is not, ultimately, sustainable.

---

Richard Maude is a Senior Fellow at the Asia Society Policy Institute and Executive Director, Policy at Asia Society Australia.

An edited version of this article titled 'Whole-of-Nation effort needed to chart a course in changing Asia' appeared in the Australian Financial Review on 13 February 2020.