Initiation of the first official level talk for the formation of Quad was concluded on November 12, 2017, prior to ASEAN summit in Manila. The outcome was near predictable. It was 10 years since quad was first talked about but Australia was not too inclined. Last year the Pacific Commander-in-Chief, Admiral Harry Harris suggested that time was ripe to get Australia onboard and make the existing triangle of India, Japan and the US a diamond or quad. It may be recalled that Australia was hesitant and so was India to include Australia in the MALABAR series of Naval exercise till recently. What outcomes can we expect from the Quad?

US elections in 2016 has thrown up many imponderables. President Trump is more inclined to make America inward looking by gradually descaling US presence from the world stage. China has utilised the opportunities created by the US in the past and become the world’s second largest economy behind the US. It has also strengthened the military and is challenging the unipolarity of the US. During its ascend, China also became assertive in the South China Sea making all its smaller neighbours nervous. It has challenged the very rule based world order and threw to the winds, the judgement of Permanent Court of Arbitration of the ICJ by violating UNCLOS. China has made a case for G2 world order challenging the sole superpower status of the US. There is uncertainty about the Trump administration’s future course of action in the Indo-Pacific. The increased cooperation between Japan and India is understandable given the proximity of China and its assertive behaviour. The cooperation between the two countries spans across investments in infrastructure, cooperation in Bay of Bengal initiative, Asia Africa highway project and increased maritime security cooperation. Japan’s entry into MALABAR naval exercises made the bilateral arrangementa triangle.

Overall, with China on one hand and Japan-India on the other, 21st century seems to be turning truly into an Asian century. Compulsion of the US to push for Australia’s inclusion in Quad needs to be seen in this background. Is the US alarmed by the thought of Asian rise in this century when it scales down its own presence in the Indo Pacific? What makes Australia a reluctant partner?

Ever since Quad meeting took place in Manila, discussions in Delhi have centred around two expected outcomes. First, would the combined Naval combat power of four nations, ie, US , Japan, India and Australia contain the Chinese in the Indo-Pacific? There are arguments for and against this proposition, given the uncertain durability of US pivot to the region and the issue of interoperability of the combat platforms amongst the Quad navies. Of the Quad, only India has unresolved land borders with China whereas both Japan and India have vast maritime economic interests in the region and therefore likelihood of contestation with China. US has strongest military presence in the region and can restrict Chinese aggressive ascent. Australia is not even remotely affected nor does it posses strong naval combat power. Restricting assertive Chinese rise in the Indo-Pacific therefore will possibly be by Japan and India. The combat power of India is on an upward trajectory while PM Abe has received required majority in the Diet to make amends to Japan’s pacifist constitution.

Second, will the Quad provide an alternative to Chinese economic Belt Road Initiative? China is the largest trading partner to over 100 countries in the world but also has very significant economic relations with Australia. China laps up 27.5 percent of all of Australia’s export worth AUD 85.9 billion and hands out to Australia AUD 21.2 billion surplus trade. On the other hand, US gives Australia AUD 25.4 billion deficit trade. Chinese tourists have spent over USD 31.8 million in 2016. China is also a very important export destination of Japan and India. Some commentators like Jeff Schubert, of the higher school of Economics in Moscow have written in the South China Sea Post on 18 Nov 17 that “Participation in the Quad would mean that India is spreading itself too thin and needlessly provoking China by impinging on its vital maritime security interstates in a similar way as it is attempting to do in Central Asia. It is harmful to both India and Australia.” We may have disagreements.

While Australia’s intertwined economic relationship with China will be addressed in the following paragraphs, as far as Indian trade with China are concerned there are some relevant issues. China has a surplus trade of nearly USD 60 billion with India; therefore, if Chinese actions pose security concerns for India and the volume of trade declines, the larger economic losses will be that of China. Additionally, China is aware of its own vulnerabilities in the Indian Ocean, and the more it increases its presence, the more will it expand its vulnerabilities. Beijing has calculated this risk rightly, which could perhaps be one of many reasons for its backdown in Doklam. In fact, China’s energy security is heavily linked to peace and stability in the Indian Ocean and will continue to be so for a few decades. Contrarily, Indian PM Modi’s aggressive initiatives of ActEast and SAGAR have the potential of scaling up prosperity and security of the entire SE Asian region and IOR littorals. The Act East process is linked to India’s own development of its North Eastern States. Therefore, the neighbouring countries find India firmly committed, whereas BRI and MSR do not give similar levels of comfort.

Australia has tightrope to walk between Chinese economic penetration and its alliance with the US for security. Chinese influence is very visible in the daily lives of Australia’s population. Mandarin is now the second most spoken language in Australia. There are 59 Chinese language newspapers which are all pro Beijing. Australia is also top Chinese student market. Series of incidents of Chinese students versus Australian University professors on touchy subject of territorial disputes in South China Sea led to Foreign Minister Julie Bishop’s warning to the Chinese students to respect freedom of speech. The commentary in various forums in Australia recommends that Government must not upset China because people have a level of comfort with China’s contribution to the economy. It is unlikely that any government will upset its vote bank.

Reports earlier this year revealed that two Chinese billionaires, suspected to be Chinese agents, donated millions of dollars across political spectrum in recent years. In Australia, Chinese power is exercised through a complex mix of influence peddling, political donations, infrastructure developments, agricultural purchases, media influence, oversight of Chinese students and plain espionage, reports Southeast Asia website’s Daily Brief (19 Oct 2017). Recently however, the government has banned foreign funding to political parties in Australia.

Professors Mark Benson and Jeffry Wilson have written that the “Australian economy is now structurally dependent on narrow economic ties with China that are extremely vulnerable to exogenous shocks.” China has history of curbing trade when its neighbours anger it. Professor Hug White of ANU has written that Australia should make a China choice and seek to resolve this divide once for all. Yet there appears to be little appetite among Australian population for such decision shift in foreign policy realm. A continuation of business as usual could be the order of the day.

Worldwide, security cooperation amongst nations are reflective of closer economic ties. With President Trump having walked out of TPP, China is likely to fill in the space. Indo-Pacific countries, particularly Japan and Australia, will find it difficult to restrict Chinese assertiveness, particularly in the South China Sea and the Pacific, given their economic dependence and uncertainty about US commitment. Reluctance of Australia to join Quad in the last decade and little effort to diversify its trade could restrict her ability to take tough calls against China. It is for no other reason that Australia, despite being a close ally of the US, has declined to join FONOPS in South China Sea. In the recently published Foreign Policy White Paper, Australia has annunciated “to support a balance in the Indo-Pacific favourable to our interests and promote an open, inclusive and rule based region, Australia will also work more closely with region’s major democracies, bilaterally and in small groupings. In addition to the United States, our relations with Japan, Indonesia, India and Republic of Korea are central to this agenda.”

The paper identifies the quickly shifting power equation in the region and Australia finding it difficult to achieve desired levels of security and stability for its own economic growth. Australia also ponders over its dilemma to find a balance between her economic compulsions with China and unacceptable assertiveness of China which is flouting the established rule based world order. It goes on to say “the government is committed to strong and constructive ties with China. We welcome China’s greater capacity to share responsibility for supporting regional and global security. We seek to strengthen our Comprehensive Strategic Partnership for the benefit of both nations”.

“Quad has filled the winds in India’s sails” as Admiral Arun Prakash has written and rightly suggests India must stay with the Quad for economic consolidation and strategic autonomy. He has also pointed at the possibility of Quad becoming pentagonal or hexagonal partnership in future but “there is no reason for China to suspect containment or ganging up.” This possibly points at a cooperative framework which will fulfil peacetime maritime responsibilities in the region rather than a naval combat mechanism which will militarily prevent China from committing unlawful activities. It is expected that with the new power equations, there would be much space for diplomacy to negotiate future adherence to rule of the law in the Indo Pacific region and maintain stability for economic growth of all.

Vice Admiral Shekhar Sinha, PVSM, AVSM, NM and Bar is the former Commander in Chief Western Naval Command & former Chief of Integrated Defence Staff. He is Member, Governing Council, Centre for Security Studies, India Foundation.

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