Hedging our bet — Should Canberra devise a ‘Plan B’ for its China strategy?

The Australian public is increasingly wary of Chinese aggression in the Indo-Pacific, with recent military confrontations a sober reminder of the palpable threat posed by President Xi Jinping’s regime.

A recent Lowy Institute Poll revealed that of 2,006 Australians surveyed nationwide, three-quarters (75 per cent) said a military threat from the CCP-led regime is either “very likely” (32 per cent) or “somewhat likely” (43 per cent) in the next 20 years.

In comparison, less than half (45 per cent) of surveyed respondents shared this sentiment in 2018, when the results were last published.  

The shift in public sentiment towards the Chinese threat has been largely driven by Canberra’s open criticism of CCP aggression in the Indo-Pacific, human rights violations within mainland China, economic coercion, and Beijing’s broader disregard for the rules-based order.

Australia’s foreign policy has shifted in accordance with these changing realities, with the former Morrison government adopting a harder line on China.

This new approach has been largely accepted by the new Albanese government, with Deputy Prime Minister and Minister for Defence Richard Marles recently calling for stronger defence cooperation with the United States to counter what he described as a military build-up “occurring at a rate unseen since World War II”.

Minister Marles stressed the US-Australia alliance “can’t afford to stand still” but would instead need to contribute to a “more effective balance of military power” in the Indo-Pacific, aimed at “avoiding a catastrophic failure of deterrence”.

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Chinese media has picked up on this rhetoric, with a recent editorial piece published by propaganda mouthpiece, Global Times, claiming Minister Marles has become one of Canberra’s “most aggressive actors against China”.

“Marles’ image as the new defence minister is now becoming blurred,” the piece read.

“From Tokyo to New Delhi to Washington, Marles’ string of comments on the so-called China threat make it increasingly difficult to distinguish him from his extremely anti-China Liberal predecessor Peter Dutton.

“In less than two months, Marles has rushed to reverse the outside world’s impression of him as being ‘rational’ toward China, and it has also raised more doubts about the willingness of the new Australian administration to improve relations with China.”

But has this hard line on China boxed Canberra in? Should Canberra devise a contingency plan?

According to Ben Scott, director, Australia’s security and the rules-based order project at the Lowy Institute, Canberra’s decision makers are depending on the United States to win this power competition with China.   

However, Scott claims this approach is “far from guaranteed”.

“The US has not been challenged by a rival like China before. Countering it will require a deft mix of diplomacy, geoeconomics and military deterrence,” he writes.

“Washington is alive to the challenge but preoccupied with security challenges elsewhere and beset by domestic problems.”

The analyst goes on to explore options for a “plan B”, enabling Canberra to “hedge against US deficiencies”.

This could include publicly distancing Australia from the US and withholding criticism about Chinese aggression both within and outside the mainland.

Scott cites Hugh White, emeritus professor of Strategic Studies at the Strategic and Defence Studies Centre of the Australian National University, who has called on Canberra to rule out military intervention in defence of Taiwan.

But Scott claims this approach would do little to “moderate China’s behaviour” and would be unlikely to garner public support.

Instead, he suggests Australia diversify its diplomatic relationships, putting “more eggs in other baskets”.

“The US-China standoff on global issues is essentially a game of chicken,” he observes.

“Third party intervention is needed to break the deadlock. A collective approach is needed, both because middle powers can’t manage great powers, and we live in a more multipolar world.”

Scott reflects on the 1972 US-USSR Incidents at Sea Agreement, which helped reduce miscommunication and miscalculation, adding this should serve as a precedent to set US-China “guardrails”.

Australia, he adds, should be included in any such agreement, given recent military confrontations with the People’s Liberation Army, including an interception of a Royal Australian Air Force P-8A Poseidon.

“By putting more emphasis on the management of great power relations, Australia is likely to find itself lining up more with countries in our region, especially those in South-East Asia which view the animosity between the US and China as a greater threat than one side or the other,” Scott continues.

“By recasting Australia’s objective as ‘strategic equilibrium’ during a recent speech in Singapore, Foreign Minister Penny Wong appealed directly to that sentiment.”

However, in order to achieve this equilibrium, Australia must be more active and apply “ambidextrous diplomacy”.

“As well as working with the US in China-balancing groups, such as the Quad and AUKUS, Canberra will have to co-operate more with groups that are demanding that both sides reduce the risk of conflict and increase co-operation on global issues,” he observes.

But the Treaty on the Prohibition of Nuclear Weapons could pose a dilemma, given Prime Minister Anthony Albanese’s commitment to sign the agreement prior to the federal election.

“Because no nuclear power has signed on, the treaty is largely symbolic and aspirational. There would, however, be at least some tension between Australia’s obligations under the treaty and its reliance on US nuclear deterrence,” he writes.

“But it is hard to see how Australia can reclaim its status as a leader in arms control without finding some way to reconcile the treaty and its US alliance commitments.”

According to Scott, Australia should accept the risks of sparking diplomatic tension in the United Sates to protect its broader strategic interests.

“Australia won’t be able to adopt a plan B without occasionally irritating Washington,” he concludes.

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