Pearls and Irritations

The big strategic question for Australia coming out of the Ukrainian war concerns the lessons China might draw and what impact that will have on US-China competition, and therefore Australia’s security.

The hope of the Morrison government is that the global response to Russian aggression will deter China from invading Taiwan. A more likely prospect is that China will detect a way to substantially shift the strategic calculus in East Asia to its advantage.

While the war is radically transforming the security situation in Europe, the changes in Asia also will be momentous. How this will play out remains unclear, but Australia should pay close attention to two trends.

Countries like the United Kingdom, Germany, and France were showing more willingness to deploy maritime assets to the South China Sea. However, for decades to come the Europeans now will prioritise their own strategic environment. That will be a setback for the US’s Indo-Pacific strategy.

Further, coming on top of the Afghanistan debacle, the US’s limp military response to the invasion will energise the nascent movement toward a European military capability separate from NATO. The transatlantic alliance relationship is too important to the Europeans to be abandoning it. However, the need to manage crises on the European periphery without the US will strengthen the push for strategic autonomy. American claims of leadership will be gradually eroded.

Observing from Beijing, the Chinese cannot miss the US reluctance to use military force when confronted by a significant nuclear armed opponent. This will be factored in future Chinese policy. That Russia’s possession of nuclear forces was an effective deterrent means that China will be weighing the advantage in seriously boosting its own strategic nuclear forces.

President Biden has been adamant on this score. Biden’s public explanation for not engaging militarily has two strands. A no-fly zone that many are urging is ruled out explicitly because a war with Russia would be nuclear. An argument that could turn deterrence arguments in East Asia on their heads. This might be the biggest strategic impact for Australia.

Biden’s second argument is that Ukraine is not in NATO and NATO is a defensive alliance. This might, in combination with the US’s refusal to engage a nuclear power, have US allies in the region thinking through the implications for their own security arrangements. America’s unwillingness to use military force could sow doubt among regional allies like Japan and South Korea about the firmness of US security commitments regarding China, and over American policy on North Korea.

American has been intransigent, dismissing Russia’s central concerns about the expansion of NATO toward its borders and the unacceptability of Ukraine becoming a NATO ally. It was unprepared to concede any ground at all, even though war was the likely outcome. Applying crushing punitive sanctions on a declared near peer adversary as an alternative to military conflict seemed to satisfy US policy objectives.

China will come under international pressure to not ease the impacts of the sanctions. Together China and Russia have been contesting what they see as US hegemony, and on important political and economic issues their positions have coincided in numerous fora. In Central Asia China’s Belt and Road initiative and Russia’s security concerns has given rise to complementary interests.

Trade between China and Russia grew by 35.9% in 2021 to a record $146.9 billion, and Russia is China’s second-biggest oil supplier and third largest gas supplier. The largest share of China’s state sector financing goes to Russia. America’s dominance of international finance has seen Russia and China use their own currencies for bilateral trade since 2014. Chinese currency accounted for thirteen percent of Russian foreign currency reserves in June 2021, while Moscow’s US dollar holdings dropped from forty six percent to sixteen percent since the annexation of Crimea.

China is not the only nation that has to find a balance between its national interests and the sanctions on Russia. India is resisting being drawn into the US’s struggle with Russia, making the Quad appear to be less than the strategic association of like-minded partners that some Australians claim. The notable abstaining voters in the recent UN General Assembly condemnation of Russia-China, India, Pakistan, South Africa, Uganda, Vietnam, and Bangladesh-account for close to half the world’s population.

The Chinese dissatisfaction with the rules-based international order might be further entrenched. The Russian aggression was unarguably contrary to customary and treaty international law. Russia breached peremptory norms of sovereignty that the Chinese strongly support. However, they might look at the handing over the Golan Heights to Israel, or the Western Sahara to Morocco, and the second Iraq war, among other instances, and wonder if these rules are applied uniformly.

Australian policymakers need to consider the prospect of China boosting its nuclear capability, perhaps with the aid of Russia, to the point where America is deterred from any military action in East Asia. This would completely undermine generations of Australian strategic policy. Australia cannot be certain that the US would not be deterred from coming to Australia’s defence by an enhanced Chinese strategic nuclear capability, especially if Russia also offered China its nuclear umbrella.

The strategic situation in Australia’s region is changing. Regional nations are not as lined up behind the US crusade as many thought. America’s commitment to enforcing the stability and rules-based order not as firm as believed. Nuclear capability provides China with an option for blunting America’s military might. This could lead to a nuclear arms race in the Pacific.

In a crisis over Taiwan, or anywhere else in Asia, Australia cannot be guaranteed America won’t again resile from conflict and declare its treaty frame work in Asia to be purely defensive. The reflexive default to ANZUS and American hegemony must be called into question.

Wars don’t end when the fighting does, and the consequences of the Ukrainian war will flow through the international environment for decades. Although Eastern Europe is far from Australia, threats to the fundamental assumptions of Australia’s strategic policy can already be discerned.