Late 2018 saw tensions rapidly escalate in the South China Sea following a dangerous encounter during a U.S Freedom of Navigation exercise in September. The USS Decatur came within 45 yards of a People’s Liberation Army vessel on September 30. The confrontation took place near Gaven Reefs, one of China’s man-made military outposts in the Spratly Islands.
The incident followed a month of diplomatic hostility between the two nations after the U.S Ambassador to China was summoned by the Central Military Commission to lodge China’s formal protest over new sanctions on Chinese defence personnel. Beijing also cancelled a planned visit to Washington by a PLA Navy chief and denied a request by the USS Wasp for a port call in Hong Kong to register their displeasure with U.S foreign policy.
Further signs of fraying tensions between the two nations, who are involved in a broader dispute over U.S President Trump’s trade policy, were evident as U.S Defence Secretary Mattis withdrew from his scheduled visit to China later that month.
These latest provocations in the long-running saga of the South China Sea have unsettled some in capitals around the Asia-Pacific. In a statement, Australian Defence Minister Christopher Pyne regarded the “use of intimidation or aggressive tactics as destabilising and potentially dangerous.” The Minister’s comments represented one of Australia’s more pointed responses to Chinese naval activity – a marked departure for the Australian government, which is typically mum on the issue.
For years, the Australian government has walked a fine line between the United States, its strongest ally, and the People’s Republic of China, its largest trading partner, on the South China Sea debate. Whilst the Australian Government continues to look to the United States to provide leadership on the matter, the U.S. government looks to Australia to step up to ensure regional security.
There appears to be growing recognition within Canberra, the Australian capital, that the status quo cannot continue. Members of the government and opposition parties have urged the cabinet to adopt a more rigorous strategy to counter China. Chinese investment in Pacific nations threatens to cause a struggle for power similar to that of the South China Sea, and it is high time for Australia to explicate and proactively pursue its national interests of regional security and reliable trade.
Battle for Pacific Dominance Shifts
Today, the contest for the South China Sea has been won and lost for China and the western powers. China has, and will continue to, zealously defend its foothold. While freedom of navigation operations are a worthwhile and necessary expression of confidence in the rules-based order, they are also tantamount to a geopolitical save-face by the United States, who have so roundly managed to cede control over the situation.
With this reality in mind, Australia must now shift its attention closer to home. The long-arm of Beijing rapidly descends the equator. China’s One Belt, One Road Initiative now stalks regional dominance in a frontier far more decisive to Australia’s national security: The Pacific Islands. The one trillion dollar initiative seeks to develop a modern silk road, creating land and sea trade routes that stretch from Europe to the southernmost parts of Australasia in an effort to bolster Chinese economic prosperity and influence. To do so, the Xi administration has been busily investing in infrastructure in over 70 countries, but the project has raised concerns in foreign capitals.
To achieve its One Belt, One Road vision, the PRC has offered cheap loans to countries like Laos, Pakistan and Papua New Guinea to hire Chinese firms to construct infrastructures such as ports and railroads. The extraordinary size of the loans has given rise to accusations of ‘debt-trap diplomacy’ should the beneficiaries be unable to repay their debts.
In 2017, the Sri Lankan Government handed a strategic port over to the PRC in a debt equity swap deal following warnings it would no longer be able to service its Chinese debt. The then-Australian Foreign Minister Julie Bishop received a terse reaction in China’s daily papers when she warned this sort of debt-trap diplomacy presented an existential risk to Pacific nations’ sovereignty.
Forward Defence Backtracking
Since WWII, the Commonwealth of Australia has unofficially maintained a strategic policy designed to guard its sphere of influence: Forward Defence. The doctrine commits Australia to deploying forces to protect its interests in Southeast Asia and keep the region neutral. OBOR poses a threat to this neutrality. In recent years, OBOR has extended to Pacific nations in what Pentagon official Randy Schriver described as “pernicious meddling.” Pernicious or not, Australia needs a policy response.
In what is the most significant challenge to Forward Defence since the Vietnam War, the island nation of Vanuatu signed on to OBOR in early 2018. The Secretary of the Australian Department of Foreign Affairs and Trade, Frances Adamson, said the Department harbours grave concerns Chinese infrastructure could lead to a direct military threat to Australia.
The PRC’s big spend in Vanuatu has been on constructing a larger airfield and a new port. Vanuatu is just 1200 miles off the Australian Eastern Seaboard, meaning any equity swap arrangement, similar to what occurred in Sri Lanka, would place the PLA Navy within striking distance of the United States’ most steadfast ally in the Pacific region. In light of this situation, Australia ought to consider why Vanuatu and other Pacific nations are turning to Beijing, rather than Canberra, to fund their development.
Largely forgotten by the United States and subject to Australia’s declining foreign aid budget, it is understandable that the Pacific Islands have sought investment for economic development from China. But, at a time when the United States is already losing allies in the region, those committed to the rules—based world order must step up to court countries like Vanuatu.
Australia and United States ought to demonstrate a genuine interest in the development and integration of the Pacific Islands into international trade to bolster regional security and force Chinese expansion into retreat.
At present, there is no long term strategy to resolve tensions in the South China Sea or prevent a repeat of the situation in Australasia. The United States and Australia will need to act swiftly if they are to prevent the Pacific Islands running the course of the South China Sea.