A lot has been said about the challenge that Australia and other countries in Asia and the Pacific face in balancing their security interests with the United States and economic interests with China. The need to deal systematically with this challenge is sharpening as Beijing and Washington shift their conventional approaches to international relations. China has been more assertive in its foreign policy, especially in the South China Sea and in cyberspace. Meanwhile, there is concern that the United States under President Trump is abandoning its support for a rules-based and market-oriented global order and is championing an order that prioritises protectionism, unilateralism and the pursuit above all else of American interests.
The challenge is complex, risky and high-stakes, and the solution is not a binary choice between security or economics. The idea that Australia can opt for security with the United States by winding down its economic relationship with China does not bear scrutiny. This move would make Australia weaker (a strong economy is a bulwark for security), it would lessen Australia’s ability to influence China’s engagement and interests, and it would increase the likelihood of conflict with China. Similarly, the idea that Australia can pursue its economic interests with China by opting out of its security relationship with the United States is not on the table.
There is no one-time comprehensive solution to this challenge. Australia needs to approach it with guiding principles and a robust system of political oversight that can manage and adjust the implementation of these principles as circumstances change.
The solution needs to ground the principles of Australian policy in a broad definition of Australia’s national interest. This requires government to bring security and economic factors together at the outset when framing and implementing national strategies. Too often, ‘strategic policy’ is used exclusively to define security interests, with economic interests treated as an add-on. This makes our economic interests sound unstrategic and they are dismissed in the US–China debate as just the pursuit of business. Economic engagement is broader than this — it is also an essential element in building national wealth and power as well as in reinforcing and habituating a rules-based and market-oriented international order. Defining and implementing strategic policy inclusively as the fulcrum of security and economic interests broadens the range of strategic options available to policymakers.
The next step is to implement a policy that actively pursues these inclusive strategic interests. By proactively looking for ways to deepen the multiplicity of interests, plurality, good governance and balanced outcomes in China, in the United States and elsewhere in Asia and in the Pacific, Australia has more options to manage its interests with these countries.
The debate about China’s Belt and Road Initiative (BRI) is a case in point. If the threshold is that Australia cannot be part of anything that increases China’s influence or that could be seen as a slight against the United States (which is the tenor of much discussion about this issue), the options for engagement with China will remain seriously constrained. That will undermine the national interest. The question should rather be how to work with and engage China and others to lift the economic and social benefit of BRI infrastructure investment, how to build economic resilience and strong institutions across Asia and globally, and how to broaden countries’ interests in a rules-based order.
There are several economic opportunities on the table for Australia to further its strategic interests. Australia should be looking towards the ASEAN+6 trade and investment agreement, towards closer financial and economic cooperation in East Asia to prevent future financial crises, towards cooperation among G20 Asian economies, and towards the expansion of programs that build experience and understanding of our region (like the New Colombo Plan). From a genuinely strategic perspective, strengthening economic and social connectivity and governance in Asia should in no way imply a concurrent weakening of Australia’s or others’ security relations with the United States.
It is essential that both the security and economic elements of government are fully embraced in discussions of strategic interests. These debates should not be limited to just the ministers and agencies responsible for security. Economic ministers and agencies are not an add-on to security ministers and agencies in the proper exercise of strategic policy, and the reassessment of government processes and capabilities for achieving integrated strategic policymaking remains a high priority.
Realising an inclusive strategic policy is not just a challenge for government. Businesses, universities and other non-government bodies all have a role, a responsibility and a stake in getting national strategic policymaking right.
Gordon de Brouwer is advisor to the Asian Bureau of Economic Research in the Crawford School of Public Policy, The Australian National University. He is the former secretary of the Australian Government Department of the Environment and Energy.
This article first appeared in East Asia Forum.