As global power dynamics shift and traditional alliances fray, Australia’s current grand strategies are reaching their limits.

A bold reimagining of national strategy grounded in complex interdependence to enhance resilience and safeguard long-term security and prosperity is needed.

Grand strategies have a  life cycle: they emerge, progress and end. This is inevitable. They involve interacting with intelligent others who, in pursuing their own objectives, cause a deliberate or unintentional decline in a grand strategy’s effectiveness.

Australia’s  twin grand strategies of balance of power and engagement are now reaching their end-of-life. It’s time for a change.

The balance of  power grand strategy involves collective defence with the US and implicitly targets China. However, America’s foreign policy actions have now become capricious, its support in times of trouble doubtful, and allies may soon be required to sharply  diminish ties with China – Australia’s largest trading partner. The shared values and interests that traditionally underpinned Australia’s US alliance relationship appear to be fading.

The  engagement grand strategy targets middle and smaller powers in Southeast Asia and the Pacific and uses broadly-based diplomatic, informational, military, and economic interaction. This grand strategy takes a pragmatic approach given the obvious importance of sustaining good regional relationships. However, it misses some significant aspects.

Australia’s fastest growing  two-way trading relations are generally elsewhere — Taiwan, South Korea, Vietnam, India and Japan — with the notable exception of Singapore. Moreover, Australia’s largest foreign direct investors are the US, UK, Japan, and Canada. Lastly, Australia’s largest migrant workforces are from the UK, India, China, New Zealand and the Philippines.

The context the two grand strategies were designed for is also evolving. There are broad structural realignments in the global economy as Asia rises, relative to others, and new  trade arrangements appear; America’s tariff war  against all is a tangible manifestation of this. There are intractable conflicts across the Middle East, Russia’s major war in Europe, and escalating Chinese military activities in the Western Pacific. Technological advances are rapidly transforming the primary, secondary, and tertiary industries, foreshadowing significant societal changes. In the background, the pace of climate change is  remorseless, with an  increasing number of weather-related disasters.

These factors mean there is a new stress on  resilience, that is the ability for a country to recover from a major shock – whether this is strategic, economic, technological, environmental or societal. To be resilient against such a broad range of possibilities, Australia and most nations need to connect with others in the international system through broadly-based diplomatic, societal, military, and economic linkages.

Some understanding of the impact of a disruption to international connectivity can be gained in noting that Australia’s two-way international trade in goods is equivalent to  some 40% of GDP. At the more personal level, many Australians rely on imported medicines with others having sizeable offshore investments through  their superannuation. Losing almost half of Australia’s GDP, access to critical medicines or superannuation savings would be an unwelcome prospect for all Australians.

For Australia, resilience requires reliably connecting with others internationally. Achieving this involves constructing multiple linkages across many nations so that losing any one connection has limited impact. Stressing linkages suggests  a form of complex independence where multiple formal and informal channels connect countries. Such an international order operates on shared understanding that states must bargain for gains, and through manipulating their interdependencies. Each state will have different short-term sensitivities and long-term vulnerabilities that can be purposefully exploited to obtain the objectives sought.

A new grand strategy 

Under a complex interdependence grand strategy, the ends sought would be sustaining those international linkages central to national resilience from major strategic, economic, technological or societal shocks. This objective requires building robust linkages with others that are problematical for them to break, whether intentionally, as China is prone to, or unthinkingly, as the US appears hell-bent on.

Developing such linkages will require the careful creation of asymmetrical interdependences that are able to be exploited in times of tension or abandonment. In devising ways to undertake such manipulative management, there are echoes of Machiavelli’s advice that it is best to be both loved and feared; playing hardball may, at times, be needed. The linkages with Australia must be in the hard-nosed self-interest of the other states to continue. Fuzzy talk of shared values or “we’ve always helped you” fall apart in the difficult times when international linkages are most threatened.

No one or two nations can provide the breadth or robustness of linkages that Australia’s resilience requires in this uncertain time. The intent would be to shape the multiple linkages into a durable connective web of relationships that was carefully balanced to be able to address a range of possible shocks. In devising such a web, a start might be considering Australia’s most  significant two-way trading partners: China, Japan, US, South Korea, India, Singapore, New Zealand, Malaysia, Taiwan, Thailand, UK, Germany, Indonesia and Vietnam.

Clearly apparent is that this framework considers security and prosperity in combination, rather than keeping them separate as done traditionally.

Grand strategies  involve both building and applying power. As an example, these aspects come together in high quality education: the essential underpinning of an innovative nation that others want to be associated with, and an important technique to attract international students and so build beneficial linkages into other nations.

The example highlights that Australian Governments would need to be interventionist. Robust linkages will not appear without planning and providing whole-of-society guidance. Intervention might be done indirectly by federal and state governments manipulating market and societal forces through using subsidies, tax credits, land grants, government procurements, investments, regulations and strategic narratives.

The new grand strategy would involve blending today’s balance of power and engagement grand strategies. Great and middle powers would now feature together, with their relative importance varying based on their place in Australian resilience considerations. One or two nations would no longer dominate debate or actions taken. Australia’s linkages with others would be shaped not by commercial pragmatism or defence alliance considerations, but by their assessed robustness in times of strategic, economic, technological or societal shocks.

Republished from Australian Institute of International Affairs, 6 May 2025

The views expressed in this article may or may not reflect those of Pearls and Irritations.