Middle Powers Hedge against China

What does China want? And when does it want it? No two questions have been posed more frequently in the contemporary literature on international relations. And yet we are no closer to achieving consensus among specialists in the field than we were a decade ago.

whether it is the objective of the US and the global community to see China succeed economically as a support for global prosperity and a driver of positive social and political change, or whether it is to contain and weaken the country economically, so it has less capacity to mount global threats.

Stripped to the bare essentials, there are two alternative scenarios for how China's rise will impact on Asian security. The first is that China will be a defensive great power concerned with safeguarding its core national interests and not interested in seeking domination of other countries. In this world, China will establish a modus vivendi with the US, become more engaged in multilateral forums in Asia, and possibly broaden its willingness to underwrite public goods for other states in the region, as it has done with the Asian Infrastructure and Investment Bank (AIIB).

In recent times, Beijing has been emulating both defensive and dominating behaviour in its dealings with regional states, which in turn has reinforced the logic of hedging among Asia's middle powers in particular. The preference for hedging is further reinforced by a popular view among most regional states that China provides the economic goodies in the form of trade and investment, while the US furnishes security protection that provides the insurance should things turn bad with Beijing. In a forthcoming article in Political Science Quarterly, John Ikenberry argues convincingly that Asia is experiencing the emergence of a 'dual hierarchy': a security hierarchy, with the US at the apex, and an economic hierarchy dominated by China.

Australians reading this will be very familiar with the dual hierarchy characterisation. Australia has continued to strengthen the fundamentals of its alliance with Washington in the form of deeper intelligence and military cooperation, as well as increasingly intimate expressions of ideological solidarity. Indeed, across the spectrum of material and non-material indicators, the alliance between Australia and the US is closer than ever. Significantly, the alliance has deepened as Australia's exports to China since 2010 have increased by 50%, and as Chinese inward investment across a range of sectors of the Australian economy continues to climb rapidly.

In November 2014, the same month as President Xi Jinping's landmark speech to the Australian Parliament, the Abbott Government agreed to upgrade the existing Australia-China 'Strategic Partnership' to a 'Comprehensive Strategic Partnership' (CSP) to coincide with the signing of the bilateral FTA. While referenced on the Chinese Foreign Ministry's web site, any reference to the 2014 CSP is difficult to track down on DFAT's web site. It seems the 2014 'upgrade' builds on the 2013 agreement, which includes annual strategic dialogue between senior officials, direct annual meetings between the two countries' heads of government, and enhanced defence cooperation between the PLA and ADF. In June 2015, the then Treasurer, Joe Hockey, confirmed Australia would join the China-led AIIB in spite of very strong concerns expressed in Washington and Tokyo that the AIIB will promote Beijing's strategic influence in the region.

Despite all of this, however, Australia has continued to issue fairly tough public statements about China's strategic behaviour in the region, most notably in respect to freedom of navigation. Following on from the Abbott Government's spirited public condemnation in 2013 of Beijing's declaration of an Air Defence Identification Zone in the East China Sea, Australia was the only regional country, besides Japan and the Philippines, to issue a public statement of support in October this year for the US Navy's patrol inside the 12 nautical mile limit declared by China around Subi Reef in the South China Sea.

Reports that the Turnbull Government was actively considering the option of an Australian 'sail through' in the wake of the USS Larsen reinforced the point that, while Australia has no direct territorial stake in the South China Sea, the fact that over half its trade traverses this maritime area means it has strong national interest motives — irrespective of the US alliance — to uphold freedom of navigation.

Australia's hedging in relation to China is analogous to that being practised by many other countries in its region, including most of ASEAN, New Zealand and South Korea. This undermines claims that Australia and other middle powers in particular confront a Manichean 'choice' between China and the US — claims made, incidentally, not just by Hugh White but also by some of his pro-American alliance critics as well.

Of course, it stretches credibility to argue that US alliance partners could say no to Washington, and subsequently retain the alliance intact, if a major crisis erupted between the US and China involving the use of military force. However, uncertainty over China's future strategic behaviour, and the increasing economic dependence many states have on Chinese trade and investment, mean that even US allies and 'security partners' will probably resist for as long as they can a more muscular stance against Beijing over its assertive maritime territorial claims.

This article originally appeared at the Lowy Institute Interpreter.