A new strategic environment
At the last Congress of the Chinese Communist Party in October, Xi Jinping was re-elected as General Secretary of the Party for a third term – and possibly for life. Even if it is for only one more term of five years, it will have a profound impact in terms of the security not just of the immediate Chinese region – the South China Sea and the East China Sea – but more broadly in our region, the Indo-Pacific and, indeed, beyond that to the entire world.
In his speech at the Congress, the word that Xi used most was “security”; the security of China. And what he understands by the security of China is broader than just mainland China because China has designs on areas beyond the mainland. Taiwan is the most obvious example – and the nine-dash line, which encompasses Taiwan. Then the first island chain of defence extends out to South Korea, Japan and the Philippines. More recently China has been active in our front yard, the South Pacific, especially the Solomon Islands.
So, the fact that Xi mentioned security so many times is an indicator of his intentions.
The second thing is that he mentioned again the desire of the Chinese Communist Party (CCP) regime to “reunify”, as it phrases it, with Taiwan. In other words, for the People’s Republic of China, the communist Government on the mainland, to take over Taiwan.
Yet, Taiwan has been independent, in fact, from mainland China for a long time – indeed, the communist regime has never ruled Taiwan. The only time that China itself in some way or other was responsible for Taiwan was during the latter years or the Qing Dynasty (1683-1895).
So, we need to be cognisant of Xi’s reiteration that Taiwan is in the sights of the CCP, as we do China’s increased activity in the Indo-Pacific region over the past few years.
Big changes in the last six year
The 2016 Defence White Paper was written during my time as Defence Minister, though it was only published after I’d ceased to be minister. At that time, Australia’s strategic outlook was concerned not just with the immediate region around us, our territorial security, but beyond that into the Indo-Pacific, and even further, given that we had recently been involved in our longest military conflict, mainly in Afghanistan.
However, what has happened since then has made our strategic outlook much more critical in terms of the immediate area of the Indo-Pacific, and indeed the territorial integrity of Australia itself. Since 2016, China has advanced into the East China Sea, where it is contesting islands with Japan, and it has built islands out of artificial reefs in the South China Sea. China is having disputes with almost every one of its neighbours, including the Philippines and Vietnam. It is also in border disputes with India and with other countries as well.
China became much more aggressive during Xi Jinping’s second term than it had been during his first term – which leads me to his third term, which has begun. I believe it will be even more aggressive again. Recently, American Secretary of State Antony Blinken warned that conflict with China may be closer than we think.
I believe there are two windows in which conflict is more likely. The more immediate window is the time from now until the Taiwanese election, which is due in 2024. If circumstances seem favourable, China might launch an invasion of Taiwan before the election there.
But a more likely window is in the next four to five years. Xi is not rash. I think this will be a very calculated decision. He will wait until the point comes when he believes he can win a conflict.
But that is certainly not clear at present. The fact that the Americans, Canadians, we Australians, I think the French the British, and others have continued transits of the China Sea with our naval vessels is indicative that the world has come together in that regard.
At the moment, the CCP is putting as much psychological pressure as it can on the people of Taiwan. I was there in July. My judgement is that it is not having a very great impact on the people of Taiwan. But nonetheless, it is a reality.
For example, one day when there were air-raid warnings in Taipei, the streets were cleared, but people got on with their lives after it. Having lived with this existential threat for such a long time, the Taiwanese are not easily scared in these matters.
The other thing is that it gives us – the Western supporters of democracy in Taiwan – an opportunity to do as much as we can to ensure that Taiwan itself is well prepared. Also, other nations that are prepared to act in concert can also contain China in the sense of letting China know that there are real risks involved in any move against Taiwan.
If there is one country apart from Taiwan which is in the firing line of the CCP, it is Japan. And Japan has become very aware of that lately. Under Shinzo Abe, Japan began on a very different course to what it had taken for a long, long time.
So, with regard to the future security of Australia, what is clear today, which was not clear in 2016, when the White Paper was published, is that we face a much more immediate threat than we did then.
That White Paper envisaged two time periods: a 10-year period and a 20-year period. It set out defence acquisitions over those two time periods and put in place a program for paying for them over the first decade of that extended period. What we find now is that that time frame needs to be shortened.
We need to get the equipment that we haven’t got at present. We need to accelerate the acquisition of naval vessels – submarines, in particular. We also need far more defensive missiles. We need to enhance our ability to interoperate with our allies’ forces, whether they be the Americans, our new partners under the AUKUS arrangements, or through the Quad arrangements.
Historically, Australia’s defence policy has been very tightly related to our alliances: ANZUS and other associations. In view of the new situation we face, we’ve got to strengthen our formal alliances. So, the alliance with the United States and the AUKUS arrangement have to be strengthened.
The governments of Australia, the United States, India and Japan have been working on the Quad Security Dialogue for some time. There is a sense right now that some real flesh has to be put on that structure, which it does not have at present. I think there is a willingness on the part of the parties to do it.
We also need to be building informal alliances with any country that is willing to work with us, even if it be in a limited way. I know from my time as defence minister that some other nations in the region share many of the misgivings that we in Australia have had about some of the developments in the neighbourhood, even though they might not necessarily say so in public.
Take, as an example, Vietnam. Our relationship with Vietnam has grown stronger and stronger. We have naval vessels that now dock in Vietnam; we have Vietnam wanting to cooperate with us in a strategic manner. This would have been unthinkable 10 or 20 years ago.
It is not going to end up in some form of Indo-Pacific NATO, at least in the short term. But meanwhile, we can be building bilateral relationships with particular countries, and those relationships will differ one from the other, but nonetheless, they are all important.
Ageing population, shrinking workforce
One factor in this equation is China’s ageing population. It is hard to measure exactly when the consequences of the one-child policy – which are in particular an ageing population and a shrinking workforce – are going to kick in. But my belief is that we will see the impact of this in a substantial way in about a decade’s time.
If you look at the graph of births in China, and overlay that with the graph of deaths, those two are coming together very rapidly. The Chinese birth rate officially is said to be about 1.16 children per woman of child-bearing age.
I suspect it is actually lower than that because the Chinese in the past have inflated the birth rate but when the real figures have come out sometime later, they have been much lower than the rate claimed. So, it is possible that the Chinese birth rate is about 1.0; it could be even lower than that. A birth rate of one child per woman – the replacement rate is 2.1 children per woman – means that you effectively (leaving aside immigration) halve your population every generation.
The fact that China is growing old but hasn’t yet grown wealthy puts a twin burden on the Chinese leadership and on the Chinese nation.
At the end of the century, it is predicted that the population may only be in the order of 400 to 500 million people. While that sounds like a huge number, compared with the 1.4 billion it is now it is a very significant diminution in the population. Four hundred to 500 million people would be back to the level of the Chinese population it the time the Qing dynasty was overthrown in 1912.
This means that Xi Jinping has a limited window, of maybe 10 years, to achieve his grand strategy for China.
Xi is 69. But Chinese leaders have considerable longevity, and no one is elected to high office in China until about the age of 60. My sense is that Xi now has total control. If you look at the membership of the Central Committee, which has just been selected, they are all very close supporters of Xi. There is no power-sharing with other factions, such as the faction that surrounded Hu Jintao; that is clearly not there now.
So, Xi is totally in charge. And I suspect that he will remain the General Secretary of the Communist Party of China for as long as he remains healthy and wishes to retain that position.
The other thing is that Xi has no obvious successor. The anti-corruption drives have been used for more than the purpose of getting rid of corruption in China. I think you’ll find that a lot of Xi’s potential rivals found themselves in jail or worse as a result of those drives.
Grey-zone warfare
China is already engaging in “grey-zone warfare”. One of the best examples of this is the use China makes of its “fishing fleet”. In the South China Sea in particular, China has hundreds of fishing vessels that could effectively be used to tie up the defensive capabilities of another nation. This use of the “fishing fleet” extends throughout the Indo-Pacific and the South Pacific.
Beyond that, there is cyber warfare: hacking into computer systems, whether they be in the public sector or the private sector. The fear is that a cyber attacker could actually close down things like your energy supplies.
Moreover, Australia is vulnerable to interruption to our supplies of liquid fuels, in which we are totally dependent on imports, and to communications. Goods and fuels, in particular, come to us by a number of routes. If those routes were interrupted, Australia would be in a very serious situation.
China’s outreach, if I can call it that, to Samoa, Tonga, the Solomon Islands, Palau, where it is looking to build ports and other facilities, could have very serious impacts on Australia should war break out.
So, we have to do everything we possibly can to be prepared for a Chinese attack on Taiwan. I don’t believe that there will be a direct military attack on Australia. It is a possibility. My former colleague Jim Molan wrote a book in which he discussed the possibility of a direct military attack, Pearl Harbor-style, on Australia. If it was to happen, I suspect the most likely target would be something like Pine Gap, because putting Pine Gap out of action would disrupt communications for our allies.
But the more likely scenario is an invasion of Taiwan. And the problem with that for Australia is that, if it is successful, it may embolden the Chinese leadership to go further; into the first island chain beyond Taiwan – Japan, South Korea and the Philippines.
China wants to ensure that it has the resources that it needs for its population for the future. That means ensuring that those resources can be supplied by places like Australia. China’s aim is not so much to build a huge military empire that spans half the globe, for example, but to ensure that it has got the right economic resources and to create vassal states in order to ensure that.
In that respect, one of the major challenges we face is the expansion of China’s influence into the South Pacific. To counter that, we have to increase our diplomatic exertions. This is not to criticise any past government – we dealt with diplomatic issues I believe in a way that seemed appropriate at the time. Even if you look back to the time of the last White Paper, nobody could have envisaged the pace of change which has occurred over the last five or six years. But things have changed markedly and we have to keep up.
In all fairness to the current Government, I think the actions of the Foreign Minister and others in reaching out to the Chinese leaders has been important. That has to continue. Importantly, we have to regard the diplomatic posts in the region as just as important as any other. Any post that is in our front yard must be a first-grade post, whether it is to a small country like the Solomons, or a large country like Indonesia, they are important to us because they are our immediate neighbours.
Moreover, we have to recognise the reality that China will buy influence. Right throughout the region China has been building infrastructure, whether in Timor Leste or anywhere else in our region. Now, we have reliable reports from the Solomons that China is actually prepared to pay money to members of Parliament, which we would not do because we regard it as improper.
But we have to be aware that it is happening. We need to have ways of countering that, not by following that practice, but by having very good relations with those countries.
In the old days, embassies and consulates dealt only with the government of the day in a particular country. Those day have gone. Our diplomats need to be dealing with all levels of society, including opposition parties and all members of parliament in these countries, not just the party that happens to be in government at the time.
One thing that we can learn from China is that there is no compartmentalisation of the national interest from trade. How China uses trade to promote the national interest is just as important as its naval or military resources and how they are used. Diplomacy is just another instrument in that promotion of the national interest.
Australia has to do the same. Now, I don’t mean that we should be moving towards a command economy like China, but we have to be aware that the way in which we trade with a country like China is important. China has imposed sanctions on our trade when something has upset them. We have to be as hard headed as China is in relation to the way we conduct all our affairs with China. Because if we are not, we are just going to be taken for a ride.
Legitimacy
In the face of population decline, which will lead to some economic decline, the CCP will have to fight to maintain its legitimacy.
Two factors enter into the discussion here. First, as I said earlier, it has brought economic progress to the country. It has taken a lot of people out of poverty and has brought about a better way of life for millions of people. And that is a great achievement.
However, I think most economists looking at the latest figures objectively, even if they believe the data, which I don’t, will conclude that China’s growth for the last 20 years has probably been about a third less than what the official data says.
Besides, China has lots of problems: the property bubble is nowhere near resolved; and the debt problem is very significant. A lot of companies that have manufacturing facilities in China are moving offshore to other countries in the region. These things are all going to hurt the economy. And that is going to be a danger.
Second, China is a totalitarian state with an apparatus of surveillance of the population that has never been seen before in the world. We have never seen the degree of control that China exerts at the present time. and one thing that the CCP will ensure as much as it can is the survival of the CCP.
This is part one of an article originally published in NewsWeekly.
