Asia Pacific Geopolitics in Transition

Presentation to Gilbert & Tobin Asia Regional Meeting, Sydney, 16 November 2018

The global and regional geopolitical environment is changing rapidly and dramatically and, on the face of it, not for the better. In this post-truth, post-rationality, post-decency, Trumpian world we now seem to inhabit, it is difficult to be optimistic about anything. But I’m not sure that we need to be quite as apocalyptically pessimistic as some policymakers, analysts and commentators, particularly in the Western defence community, have tended to be about developments in our own Asia-Pacific (or if you prefer ‘Indo-Pacific’) region.

Let me test that by exploring with you the five big geopolitical shifts in this region that I think most compel our attention, all of them occurring in the context of a very well documented shift in the global centre of economic gravity from the Euro-Atlantic to here. Those shifts are China’s rapid rise, America’s rapid comparative decline, North Korea’s rapid acquisition of nuclear weapons capability, India’s long awaited emergence as a major player, and ASEAN’s loss of a significant amount of its coherence and credibility at a time when both have never been more needed.

China. First, and most obviously, there has been the rise of China. Economically, that rise has been breathtaking in its speed and magnitude. In purchasing power parity (PPP) terms China is already the world’s largest economy, and destined to become much bigger still. And now the geopolitics is following the economics.

Under Xi Jinping’s leadership, the longstanding injunction of Deng Xiao Ping for China to ‘hide its strength, bide its time and never take the lead’ internationally has now been completely abandoned. China wants to be a global rule-maker, not just a rule taker. It is no longer prepared to accept second-rank status in international financial institutions: exhibit one being the creation, against intense US opposition, of the Asian Infrastructure Investment Bank (AIIB). And economic strength is now being parlayed into geopolitical influence on a massive scale across the Asian continent and its maritime surrounds through the Belt and Road Initiative.

China wants strategic space in East Asia, and is no longer prepared to play second fiddle to the United States. Militarily, while its expenditure and overall firepower does not match America’s, and catch-up globally will be a long time coming, there has been a very significant modernization and expansion of its capability, certainly along the East Asian littoral, and into the Indian Ocean. Most disconcertingly, some expansionist territorial claims have been pursued, most notably in the South China Sea, with the continuing creeping militarisation of the reef installations in the Spratlys.

China’s emergence as a global power began in fact 40 years ago. But as the former Australian Prime Minister, and recognised China scholar, Kevin Rudd has put it: ‘what has changed under Xi Jinping has been the clarity of articulation of China’s strategic intentions…If the three pillars of strategic analysis are capabilities, intentions and actions, it is clear from all three that China is no longer a status-quo power.’

United States. As China’s authority has been rising, that of the United States has been manifestly waning, notwithstanding the enormous economic and military power the US continues to have, the alliances and partnerships it continues to maintain, and the enormous weight of the soft power – the capacity to influence through attraction – that it has accumulated over so many decades. The Trump administration has squandered US credibility, not just in Asia but worldwide, at multiple levels:

• By tearing up the painstakingly negotiated, and so far totally successful, nuclear deal with an Iran that remains nuclear weapon-less and demanding that the world punish its leadership, while at the same time declaring his ‘love’ for the murderous and still very nuclear-armed Kim Jong-un on the basis of, so far, no substantive agreement at all with North Korea.
• By insulting and alienating his NATO partners, and making clear in multiple ways that he regards allies as expensive encumbrances rather than assets.
• By walking away from the Trans Pacific Partnership, trying to destroy the WTO, and showing less understanding than a junior high-school student of the economic benefits of international trade.
• And by walking away from the Paris Climate Accords and all the other assaults on multilateral institutions in which the US has engaged.

As to the Trump administration’s response to China’s rise, the most charitable analysis until very recently has been that it has no real idea what it is doing here, any more than anywhere else, with the President himself making very clear that he was about postures not policies – impulse and instinct unhampered by anything resembling knowledge, mature judgment or intelligent strategic calculation.

But we now seem to have a US strategy that may be even worse than incoherence and indiscipline. When you link together a series of developments over the last twelve months – the National Security and Defense Strategy documents published last December and January, with their declaration that ‘strategic competition’, not terrorism, was the primary US national security concern; the initiation of a trade war with China from which it will be very hard now for each side to back down; and now Vice-President Pence’s very toxic anti-China speech to the Hudson Institute last month – we do seem to be looking at the birth, if not as some commentators have described it ‘a new Cold War’, at least a much Hotter Peace.

While all this is very troubling I don’t believe the situation is irretrievable. Much of China’s behaviour is no more than can and should be expected of a rapidly economically rising, hugely trade-dependent regional superpower wanting to flap its wings and reassert some of its historical greatness after two centuries or more of wounded pride – certainly wanting to buy some strategic space for itself, certainly wanting the military capacity to protect its economic lifelines, and wanting an influence in global policy-making consonant with its strength. The ‘Thucydides Trap’ storyline is overdrawn. Thucydides did not say that war was inevitable between the rising Athens and established Sparta; it was a risk, not an inexorable trap.

What is absolutely crucial, if things are not to end in tears, is that there be a return to the mindset on both sides of the Pacific – and particularly right now on the US side – that there is infinitely more to be achieved through cooperative power-sharing, within the framework of a rules based international order, than through confrontation. Just about the wisest words I have ever heard on this subject came from Bill Clinton at a private gathering at which I was present in 2002 (in Hollywood, but that’s another story…) shortly after he had left the presidency, remarks that unfortunately seem never to have been repeated by him publicly with anything like this clarity:

America has two choices about how to use the unrivalled economic and military power we now have. One is to use it to try to stay top dog on the global block in perpetuity. But the other is to use that power to create a world in which we are comfortable living when we are no longer top dog on the global block.

It is not only Trumpian ‘America Firsters’ who have been slow to appreciate the attractions of Clinton’s second choice. Even President Obama, admirable as he was in so many ways, was completely cloth-eared in saying in the context of the Trans-Pacific Partnership ‘we make the rules’: not China, us. But cooler heads in Washington, and there are still some on both sides, are now recognizing that talk of preserving US dominance, predominance or primacy in the world is counterproductive, and the storyline has to return to one of cooperative engagement.

North Korea. The rise of China and relative decline of America are not, of course, the only big power shifts which have been generating alarm. The most dramatic single geopolitical development in our region, and maybe anywhere in the world, in recent times has been the emergence of North Korea, resisting all non-proliferation efforts, as a more or less fully capable nuclear armed state.

The crucial issues we all have to wrestle with are just how serious and urgent a threat this poses to South Korea, Japan, the United States itself and perhaps other US allies and partners in the wider region; whether any negotiated solution of the kind now being pursued can achieve anything more than a freeze on further capability; whether if the present process breaks down the situation can best be addressed by a strategy of containment, deterrence and keeping the door open for further negotiation; or whether the risk of DPRK aggression is so great that a pre-emptive military strike, with all its potentially horrendous escalation consequences, would be justified. There is no consensus in the region as to how any of these questions should be answered.

As a close observer of previous nuclear negotiations – as Australia’s foreign minister and in other roles – I do not believe that all the blame for their breakdown belongs with Pyongyang. And I have long believed that seriously committed, step-by-step trust-building negotiations, giving the DPRK real confidence that its national security and regime survival will be protected – negotiations of the kind now so effectively being advocated by South Korean President Moon Jae-in – will bear real fruit.

But how the US plays its role in all of this will obviously be crucial. President Trump, whatever his motivation, did the right thing with his circuit-breaking Singapore summit with Kim Jong-un. But the trouble is that with his manifestly superficial understanding of the issues, indifference to process, fragility of temperament, track record of total inconsistency, and being surrounded with advisers like John Bolton, it is hard for anyone to be confident that the ultimate outcome will be one of triumph or disaster.

India. If the US is a declining presence, India is a growing one. In the last twenty years there has been a dramatic surge in its economic development, to the point where it is now has the potential – provided a sustained program of structural reform continues – to surpass the US economy for size, by mid-century if not 2030, in purchasing power terms, and to become, after China, the world’s second largest economy. With India now making its own major contribution to the shift of global wealth – and eventually power – eastward from the Euro-Atlantic, and with trade volumes between East Asia and South and West Asia growing much faster than, and now far outweighing, those across the Pacific, the concept of the ‘Asia Pacific’ as the new centre of world gravity, which has been central to most of our thinking in recent years, is losing its resonance in favour of ‘Indo-Pacific’.

Diplomatically, India has long been under-resourced and has punched at less than its weight, and has often been seen as more obstructive than constructive in its contribution to multilateral negotiations. On economic and trade issues the jury is still out on whether India really is prepared to become a seriously committed partner in trade and investment liberalization. But geopolitically it has been in recent times more effective, including in defusing the potentially very combustible territorial dispute with China in the Bhutan border area.

Militarily it has always had plenty of capability, with the potential to develop an immense amount more, and has shown a growing interest in maritime security cooperation in the context of the long-dormant Indian Ocean Rim Association, and sub-groups like the trilateral dialogue with Australia and Indonesia. It is likely to continue to be more cautious about giving any new content to the idea of a quadrilateral grouping with the US, Japan and Australia in a way that could be seen too overtly as a China-containment enterprise. And it may well be more interested in developing a separate sphere of influence of its own in South Asia and the Indian Ocean than intruding on Chinese dominance of East Asia and the Western Pacific. But there are clearly a number of ways in which a growing India will have the power to impose some limits on Beijing’s expanding influence in the broader region.

ASEAN. A less dramatic regional geopolitical development than the others I have mentioned, but which is still quite troubling (and certainly will be for many of you here) is the deteriorating coherence and credibility of ASEAN. Celebrating its 50th anniversary last year, ASEAN has been one of the world’s great conflict prevention success stories, transforming a region of extraordinary cultural, linguistic and religious diversity, with a very long history of discord and deadly conflict, into a genuine economic and political community where, as has been the case with the European Union, not only is war between any of its member states effectively unthinkable, but what might once have been very drawn out and acrimonious non-lethal disputes are now for the most part resolved without tears. But in sustaining these achievements and building further upon them, ASEAN faces at least three big challenges.

The first of on which I want to focus, which I hope will resonate with all of you as lawyers, is ASEAN living up to the standards of democratic and human rights governance to which it is formally committed. It has always been something of a tightrope act balancing ASEAN’s traditional, and understandable, desire to continue to give primacy to state sovereignty and non-interference against the need to address unacceptable violations of universally recognised civil and political rights, and a number of its member states have always had authoritarian governing structures. But ASEAN cannot be blind to the extent to which in recent times internal developments in so many states have really been putting at risk the ASEAN brand.

There really has been an evident deterioration in the quality of member state commitment to democracy, human rights and the rule of law in the Philippines, Thailand, Cambodia and elsewhere, and above all in the shocking treatment by Myanmar of its Muslim Rohingya people, where ASEAN’s impotence has been most apparent. All these violations seriously limit any soft power ASEAN may otherwise be able to exercise, and negatively impact on the third challenge (to which I will come in a moment): ASEAN’s claim to continued ‘centrality’ in the operation of those regional organisations which are so crucial to the whole region’s future.

The second challenge is whether ASEAN is capable of providing any kind of effective collective response to external security threats. It has found it extraordinarily difficult to maintain cohesion in the face of a newly confident and assertive China which has been only too happy to create, or re-create – if it can do so without violent conflict – some kind of hegemonic, tributary relationship with its southern neighbours. In particular, with at least two of ASEAN’s members, Cambodia and Laos, now being effectively wholly owned subsidiaries of Beijing, it has proved impossible to reach consensus on any kind of sustained, substantive, collective reaction on the South China Sea issue. If there is to be push back against some of the more unacceptable dimensions of Chinese assertiveness, it’s not likely to come from ASEAN collectively with a strong negotiated Code of Conduct or anything else: its two most powerful players – Indonesia and Vietnam – are going to have to play a more active and assertive role.

The third big challenge is whether ASEAN can continue to credibly maintain its claim to ‘centrality’ in the continuing evolution of Asia-Pacific, and now Indo-Pacific, economic and security architecture. It can reasonably claim that role in relation to the current development of RCEP (the Regional Comprehensive Economic Partnership), initiated by Indonesia in 2011, which is widely seen as an attractive partial alternative to the originally US-driven TPP, although negotiations remain some distance from conclusion.

And it is true that APEC, the ASEAN Regional Forum (ARF) and now the East Asian Summit (EAS) have all been built up around a core of ASEAN members, utilising ASEAN + dialogue processes to get them started. ASEAN has played an acknowledged ‘strategic convenor’ role. But it is not clear that in recent years it has been contributing much, if anything at all, to initiating or implementing substantive agendas in any of these bodies. As former Indonesian Foreign Minister Marty Natalegawa puts it in his recent book, Does ASEAN Matter?: ‘ASEAN cannot rest on its laurels…it must instead actively earn its centrality and leadership in the region’s architecture building. Should ASEAN stand still, then at best its claimed centrality will increasingly ring hollow and ASEAN will be rendered redundant; or worse, it will be swept aside by dynamics beyond its control’.

The bottom line in all of this is not whether ASEAN will survive – which it surely will, and must in all our interests – but whether it will fully realise its potential. And on that the jury remains very much out.

Responding to the new geopolitical environment. Every country in the region will have ideas of its own as to how best to respond to the challenges posed by the geopolitical shifts I have been describing. Speaking from an Australian perspective, I have long argued – and I’m finding it interesting how much this approach is gaining traction even with very conservative analysts and policymakers, and also some resonance in the wider region – that the appropriate policy response to the big regional challenges we are all facing is ‘Less United States. More Asia. More Self Reliance. More Multilateral Engagement.’

As to ‘Less United States’, continued US engagement in the region is certainly highly desirable, and I am not in any way suggesting that Australia should walk away from our longstanding ANZUS alliance. But neither we nor anyone else in the region should be under any illusion that the US will be there for us militarily in any circumstance where it does not also see its own immediate interests being under some threat. While that was almost certainly also the reality under previous administrations, it has been thrown into much starker relief by Trump’s "America First” approach, and it should not be assumed that anything would be very different in a post-Trump era. We all need to prepare ourselves to live in Asia without America.

‘More Asia’ will mean different things for each of you, but for Australia has two dimensions: on the one hand, strengthening our relationships at all levels with key regional neighbours like India, Indonesia, Vietnam, Japan and South Korea, as a collective counterweight to a potentially overreaching China; and on the other hand trying to develop a more multidimensional relationship, not just a one dimensional economic one, with China itself. One of the most productive ways of building broader content into our, and perhaps others’, relationship with China might be to work more closely with Beijing on the whole range of global and regional public goods issues – from climate change to arms control, from terrorism to health pandemics, from peace-keeping to responding to mass atrocity crimes – on which China has in recent times been playing a more interested and constructive role than has generally been recognised.

‘More Multilateral Engagement’ is that same theme, pursued on a wider front. And ‘More Self-Reliance’ means for Australia, and perhaps again others as well, being more of a diplomatic free agent: adding to one’s national reputation and credibility with an activist foreign policy that is creative, proactive, value-adding and unconstrained by constant urge to look over one’s shoulder to Washington. But more than that, it does entail, in military terms, building defence capability that involves not only more bucks than we are usually comfortable spending but getting a bigger bang for each of them.

Staying Optimistic. While I have been painting a picture of the present geopolitical environment which is not wholly bleak, I do have to acknowledge that things could get quite a lot worse than they are now. Trump could be with us for not just another two but another six years, trailing both bilateral and multilateral wreckage all the way, to the point where US credibility will be hard put ever to recover. Maybe with one or two positive achievements along the way, including defusing North Korea, but only on the principle that enough monkeys playing randomly with enough typewriters might produce a Shakespearian sonnet.

US funding for the whole UN system could be withdrawn, plunging it into crisis. US relations with China could plunge into a hot war economically, with ugly global ramifications; and certainly into a real Cold War in security terms, quite possibly accompanied by a new nuclear arms race where China would no longer be a passive bystander, with others as a result tempted to join in. A number of flashpoints around the Asian region could quickly come close to ignition: Taiwan, China-Japan and China-India foremost among them.

The really critical issue is how much we have to fear these and other possible developments in our own region and further afield deteriorating to the point of outright war between any of the significant players. Some of you will no doubt think that I am now being both incorrigibly optimistic and incorrigibly naïve, but what gives me more confidence than anything else that the competition between the US and China – or any of the other troubling dynamics we are now witnessing (including Russian adventurism in Europe) – will not in fact lead to outright war, is the sheer unthinkability in this age of aggressive war as an instrument of state policy.

It has taken us centuries to learn that there is not only no nobility, but no national interest benefit that could possibly outweigh the costs in human life, immiseration and economic catastrophe of deliberately going to war. But I do believe that penny has finally dropped – with memory of the horrendous 20th century still etched in most leaders’ consciousness; with what we all know to be the huge destructive capability of present day technology (quite apart from nuclear weapons); and with the extraordinary degree of global economic interdependence between all the major actors through bond-holding, interlinked supply chains and all the rest, on a much greater scale than anything that existed between Britain and Germany before World War I.

That doesn’t mean that war, including nuclear war, cannot happen as a result of human or system error or miscalculation, with the risk of that now compounded by cyber sabotage. It can. And the frailties of human psychology – pride, perceived humiliation, ambition for power – can always create risks against which other states need to retain deterrent capability. Individual leaders do still matter, despite all the other underlying dynamics, interests and values at work, and history has shown us over and again that things can go catastrophically wrong, within and between countries, when the wrong people come to power. And we know all too well that when it comes to this crucial ingredient of leadership, there is an awful lot of pure chance in play.

So complacency would be wrongheaded. But so too would be defeatist pessimism. The crucial point is that in international relations, as in life itself, outlooks can be self-reinforcing. Pessimists see conflict, horror and sheer human idiocy of one kind or another as more or less inevitable, and adopt a highly wary and competitive approach to the conduct of international relations. But for optimists of all stripes and colours, what matters rather is believing in and nurturing the instinct of cooperation in the hope, and expectation, that decent human values will ultimately prevail. My own strong conviction is that if we cease to believe in the possibility of a safer, saner and better world, and the utility of working for it, we are never going to inhabit one.