As comprehensive competition between the United States and China escalates, U.S. policymakers need to understand how a crucial ally, Australia, is trying to come to terms with a tough new security environment.
By Rory Medcalf
Amid China’s push for preeminent power across the Indo-Pacific region, the United States and Australia need to ensure that their alliance is calibrated to withstand shocks and adjust to sustained strategic competition. Neither side can afford to take the alliance for granted. In particular, Washington cannot assume that Australians will automatically understand or agree with all measures that the United States is now taking to constrain Chinese power. Australia wants to prevent Chinese dominance of its region but will be selective about which measures of pushback to support.
THE NEED FOR A NEW ALLIANCE NARRATIVE
Australia and the United States are right to celebrate their shared history of standing side by side in conflict. However, sooner or later it will be counterproductive to keep claiming that a century of “mateship,” dating back to World War I, somehow guarantees complete alignment, come what may. Instead, an alliance narrative grounded in shared interests and values would be more realistic and sustainable. This must be a credible strategic narrative that makes sense to the broader public in Australia and to other nations in the Indo-Pacific. The tenor of that message needs to be confident but not complacent, competitive but not confrontational. Such a narrative should propel a more multidimensional alliance relationship than that to which both sides have been accustomed—one that extends beyond traditional defense to encompass emerging areas of international competition. Moreover, the diplomatic element of the alliance needs to go beyond bilateralism to engage and persuade a widening range of Asian partners to support web-like arrangements to moderate Chinese regional influence.
Broadly speaking, the alliance remains solid, enjoying bipartisan support in the Australian political system and high recognition of its importance in opinion polls. For instance, annual opinion polls by the Lowy Institute show that the percentage of Australians who consider the alliance to be either important or very important to national security is regularly over 70% and even 80%. However, Australia’s strategic context has changed profoundly in recent years. China-related security tensions in the Indo-Pacific are now at the forefront of those circumstances that could activate the alliance. The region is emerging as the global center of economic and strategic gravity. China is making a comprehensive, integrated push for power, effectively seeking preeminence not only in East Asia but across the wider Indo-Pacific, as underscored by the Belt and Road Initiative. This puts the future regional order in play and makes the alliance between the United States and Australia central to each country’s security posture, both regionally and globally.
Yet Australia’s own relations with China are complex, involving major trade and societal linkages alongside worsening security mistrust. At the same time, the Australia, New Zealand, United States (ANZUS) Treaty is rather general and rudimentary in the way it frames commitments for mutual defense support. Future interpretations of alliance obligations could thus rest heavily on politics. Following the re-election of the conservative government of Prime Minister Scott Morrison in May 2019, the ideological distance between Canberra and Washington will likely remain manageable. Nonetheless, democracies need to be open to new ways of imagining their relationship in order to maintain strong ties.
This openness should involve a readiness to acknowledge and address points of difference—notably, the big divergence on trade policy between the Trump administration’s use of tariffs and Australia’s bipartisan commitment to free trade. Australian policymakers are generally supportive of the United States’ newfound pushback against Chinese power. As a resident power in the Indo-Pacific, Australia has long prioritized keeping Washington engaged and dreads the idea of ever having to face an unfriendly regional hegemon alone. Australia is not averse to targeted U.S. efforts to stop Chinese interference and influence activities domestically or to restrict China’s strategic use of state-backed technology champions, notably Huawei. Indeed, Australia has led, not followed, the United States in identifying and acting on these new dimensions of security competition.
Yet Australia’s preference is for a U.S. response to China that competes rather than confronts, that deters rather than provokes. As a middle power reliant on trade—especially in commodities like minerals and agriculture—Canberra has an interest in sustaining globalization and free trade and in ensuring that Australia’s economy is not harmed by U.S. tariffs, whether directly or indirectly through their effects on China and global growth. As of the first half of 2019, the alliance had yet to come to terms with new U.S. economic and trade policies that deliver harm (however collateral) to allies’ immediate economic wellbeing, even if one of the effects of these policies is to constrain China’s power (and thus its ability to coerce a country like Australia) in the long term. COOPERATION ON AREAS OF COMPETITION
The alliance needs a toolkit that goes well beyond the military dimension. To be sure, defense and intelligence cooperation will remain bedrocks of the relationship, and military interoperability will remain a measure of effectiveness as well as commitment. The deployment of U.S. Marines to Darwin on “rotation” provides a basis for normalizing other forms of cooperation in the region, such as combined exercises with third countries. What may be missing are robust discussions about future contingencies and military force posture, including on mutual expectations of each side’s military contributions in a future crisis.
However, a truly contemporary alliance strategy will also need to encompass multiple emerging areas of power competition, such as geoeconomics, sensitive technology, foreign interference, and the diplomatic persuasion of regional countries.
Geoeconomics. Economics is becoming a central theater of international strategic competition. After decades in which the United States and most other developed democracies treated globalization as unstoppable and economics as a permanent zone of positive-sum interaction, the rude new reality is that others are following China’s example in recognizing economics as a principal domain of power rivalry. The economic dimension of the U.S.-Australia relationship has been minimally explained for many years, allowing a distorted popular narrative to take hold in which China is depicted as Australia’s foremost “economic” partner and the United States pigeonholed as a “security” ally. China is indeed Australia’s top trading partner, by a large margin, but the United States is far and away Australia’s leading investment partner. Investment involves trust; trade is transactional. The question of trust has come to the fore in the Australia-China economic partnership in recent years. Canberra has demonstrated a willingness to limit Chinese investment in critical infrastructure, such as electricity and telecommunications, on national security grounds.
Sensitive technology. Australia is also beginning to unpack, and in some cases unpick, the web of research links that its academic and private sectors have developed with Chinese counterparts (and however inadvertently, with the Chinese party-state). This review is based on the growing realization that such seemingly benign collaboration may benefit China in security technologies used to breach human rights and gain strategic advantage over Australia and its U.S. ally. However, Australian businesses and universities remain much less convinced than their U.S. counterparts of the need to reduce their exposure to China, or of the viability of doing so (not least given Australian universities’ reliance on Chinese student fees). There remains painful work ahead in attempting to reconcile national approaches on these issues. This will require dialogue that goes beyond standard government talks to engage academia and business.
Foreign interference. Intimate intelligence-sharing has long been a core activity of the U.S.-Australia alliance. Increasingly, this is likely to focus on Chinese capabilities, intentions, and activities in the new terrain of economic and technology competition. A difficulty, however, will be in conveying intelligence insights to constituencies beyond national security circles, such as business, academia, and civil society. This problem relates also to the need for Australia and the United States to coordinate closely in identifying and countering interference and influence operations by the Chinese Communist Party and its proxies. Canberra has been the leader on this issue in recent years, but it remains a subject of great sensitivity within Australia’s multicultural society. Having encouraged the United States to take Chinese interference seriously, Australia is now in a position to demonstrate that counter-interference activities can be conducted in ways that do not alienate Chinese-origin minorities.
Diplomatic persuasion. Another evolving terrain of competition with China relates to geoeconomic leverage throughout the Indo-Pacific region: that is, China’s use of infrastructure, loans, and development projects to exert influence over smaller countries under the Belt and Road Initiative. The United States and U.S. allies Japan and Australia are beginning to respond to this challenge. Notably, they have increased coordination of their own infrastructure- and capacity-building efforts, such as the electricity and digital connectivity initiatives announced for Papua New Guinea in November 2018. However, there are major challenges ahead. It would be counterproductive for the United States and its allies to compete with China in the sheer scale of funding and infrastructure being offered. Instead, Canberra, Washington, and Tokyo should play to their strengths by emphasizing project quality and governance. Australia will also be looking to the United States to ensure that its new geoeconomic commitments to the region are enduring and sensitive to the sovereignty and needs of partner countries. This is especially the case as Australia steps up its security and development assistance to smaller countries in its South Pacific neighborhood, where Chinese influence is growing.
Australian policymakers have concluded that their best hope of diluting and moderating Chinese power will involve building solidarity among regional countries in standing up for shared interests and an order based on sovereignty, the rule of law, and non-coercion. This objective is clear from a close reading of the 2016 Defence White Paper and the 2017 Foreign Policy White Paper that continue to inform Australian policy. Such a logic involves harnessing the scale, complexity, and multipolar character of the Indo-Pacific region. However, the success of this strategy will depend to a large degree on decisions taken in Washington, and in particular on whether the United States is able to expand and strengthen a diverse network of regional partners beyond key treaty allies Australia and Japan.
A crucial terrain for contending influence efforts will be Southeast Asia. In this context, Australian security planners will be troubled by any turn in U.S. policy or rhetoric that is insensitive to the interests or concerns of Asian partner countries. Reports of some Trump administration officials defining the U.S.-China rivalry as a “clash of civilizations” have been received poorly in Australia. This is not only because of the intrinsic falseness of such a template, but also because it endangers the solidarity of the many regional partner nations the United States needs to knit together to blunt China’s power play. Likewise, the Trump administration’s broader signals of disregard for the liberal international order are undercutting the U.S. calls for a united effort against Chinese influence in the Indo-Pacific, to the dismay of democratic allies like Australia. CONCLUSION
The United States and Australia have together faced many challenges, from the aggression of imperial Japan to the atrocities of Islamist terrorism, from North Korea’s nuclear provocations to the aftermath of natural disasters. The next phase of the alliance is likely to be focused on coping with worsening great-power tensions. The U.S. and Australian policy communities need to be prepared for the prospect that the emerging tension with China will be a long and comprehensive strategic competition, with security, diplomatic, economic, ideological, and domestic political dimensions. Leaders in Canberra and Washington need to be direct with one another, and with their populations, about this foremost strategic priority. Endnotes
 “Mateship” is a traditional Australian concept of friendship and has been the centerpiece of a public affairs campaign by the Australian Embassy in Washington, D.C., to define the alliance (past, present, and future). See “Mateship: Australia and United States,” Australian Embassy in the United States website, https://usa.embassy.gov.au/mateship.
 “Australia-U.S. Relations,” Lowy Institute Poll 2018, https://lowyinstitutepoll.lowyinstitute.org/australia-us-relations.
 Stephan Frühling, ‘Is ANZUS Really an Alliance? Aligning the U.S. and Australia,” Survival 60, no. 5 (2018): 199–218.
 Ian Satchwell, “Trumping Trade: Understanding the Australia–United States Economic Relationship,” Perth USAsia Centre, March 2017, http://perthusasia.edu.au/getattachment/Our-Work/Trumping-Trade-Understa....
 For a sense of the scale and intricacy of the challenge, see Alex Joske, “Picking Flowers, Making Honey: The Chinese Military’s Collaboration with Foreign Universities,” Australian Strategic Policy Institute, October 30, 2018, https://www.aspi.org.au/report/picking-flowers-making-honey.
 “U.S., Allies to ‘Transform’ Papua New Guinea with Electricity,” Associated Press, November 17, 2018, available at https://www.voanews.com/a/us-allies-to-transform-papua-new-guinea-with-e....
 Department of Defence (Australia), 2016 Defence White Paper (Canberra, 2016), http://www.defence.gov.au/WhitePaper; and Australian Government, 2017 Foreign Policy White Paper: Opportunity Security Strength (Canberra, 2017), file:///C:/Users/jziemkowski/Downloads/2017_foreign_policy_white_paper.pdf.
 Stephen Dziedzic, “Australian Government Sources Blast U.S. Official Who Described U.S.-China Clash as a Race Contest,” ABC News (Australia), May 3, 2019, https://www.abc.net.au/news/2019-05-03/analysts-blast-us-china-comments/....