The Australian government’s Defence strategic update charts a course for Australian imperialism in an era characterised by the rise of China’s power, intensifying interstate rivalries in the Indo-Pacific region and the possibility that military conflict could break out with little warning. The update, released in early July, will not ease tensions. By its own admission it is “a new strategic policy framework that signals Australia’s ability—and willingness—to project military power and deter actions against us”. To ensure other countries get the message, $270 billion will be spent on new weapons over ten years.
In unusually frank language, “China’s active pursuit of greater influence in the Indo-Pacific” is identified as the main threat to Australia. Tensions have been steadily escalating in recent months. There have been diplomatic spats over China’s handling of the COVID-19 pandemic and the Hong Kong democracy movement. Australian exports have been hit with trade sanctions. Claims abound of Chinese cyberattacks, military provocations or “interference” in Australian politics.
Yet for years, China’s surging economic development has been a goldmine for Australian capitalism, boosting exports in coal, iron ore, international education and more. China accounted for 33 percent of all Australian exports in 2018-19, dwarfing any other market, according to government trade figures. In a world where cold hard cash normally reigns supreme, and COVID-19 has triggered the worst global economic crisis in decades, why is the Australian state risking relations with such an important customer? For one thing, economic interests cannot be reduced to export markets. Access to sources of foreign capital is also vital to Australian capitalism. US investments in Australia totalled nearly $1 trillion in 2019. China has less than one-tenth of that. More fundamentally, international relations under capitalism are determined by more than immediate financial returns.
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Contrary to neoliberal daydreams, the development of capitalism internationally does not lead to a harmonious global order based on mutually beneficial trade and investment. Instead, economic struggle within one state is displaced into the international arena. Each nation’s capitalist class looks to its own home state to protect its interests internationally, for example by securing opportunities for exports or foreign investment, or gaining access to raw materials or labour supplies. Imperialism takes the form of generalised and systemic interstate competition, from which no individual capitalist state can afford to abstain.
Military force plays as important a role in this struggle as does wealth. But strategic competition has its own logic, which can’t be reduced to direct economic interests. At times of major conflicts such as the first and second world wars, imperialism becomes a fight to the death in which cost-benefit calculations are cast aside.
Australia is a mid-sized power within the global system of imperialism. It was the fourteenth largest economy in the world in 2019, according to International Monetary Fund estimates, making it a major economic player in Asia and dominant among Pacific island nations. This economic strength is matched by the strongest military in South-East Asia, with far greater capability to project force beyond its borders than any of its near neighbours.
Nonetheless, Australia is not a first-tier power. The threat of confronting a hostile Asian power single-handed is the enduring preoccupation of Australian strategic thought. Fear of China is nothing new, dating back to the nineteenth century, when it was a major factor leading to the White Australia policy. Australia has therefore always sought alliances with “great and powerful friends”. At first, this took the form of willing participation in the British Empire. After Britain’s power in East Asia was smashed by Japan in World War Two, the Australian ruling class turned to an alliance with the United States, the world’s largest economy and strongest military power.
The alliance is not proof of US domination or of an inferiority complex among Australian politicians, as claimed by left nationalists. Access to the latest military hardware, shared intelligence networks, diplomatic backing from the world’s most powerful nation: all these enhance the Australian state’s ability to pursue its own interests. In the last instance, the alliance provides an insurance policy against attack by other major powers. This has saved the Australian ruling class the expense, for example, of developing its own nuclear weapons.
Geographically isolated from its main strategic and economic partners, Australia has long been concerned that the maritime approaches to its north and north-east, including the Indonesian archipelago and the South Pacific islands, be under the control of friendly regimes. This is often expressed as a desire for “stability”, since any “failed states” might provide an opportunity for a hostile power to gain a toehold in a region. These could then be used as a launch pad for attacks on the Australian mainland, or more plausibly to threaten trade routes and military lines of communication.
For decades, any serious threat to Australia’s fundamental interests seemed a remote possibility. The United States’ military supremacy was unchallenged in East Asia, underpinning the neoliberal economic order based on the “Washington consensus”. This has been of enormous benefit to both Australia and the US, which therefore preach about “regional stability” and the “rules-based order”. The existing order always appears virtuous in the eyes of its architects; the rules of the game are always fair according to their authors.
Of course, Australian businesses have been only too happy to bank enormous profits over the past two decades, sustained by booming exports to China. They will continue to do so for as long as there is a dollar to be made. For a while, it seemed that Australia’s economic and strategic interests might not conflict. It was optimistically argued that Australia could even act as mediator to ensure China was peacefully accommodated under the aegis of continuing US strength in the region.
This no longer seems possible. Like all imperialist states, China is seeking strategic strength commensurate with its increasing economic power. It is no longer prepared to accept the existing regional order. Worsening antagonism between Beijing and Washington is expressed through ongoing trade disputes and the diplomatic fallout from COVID-19. The Defence strategic update acknowledges that “strategic competition, primarily between the United States and China, will be the principal driver of strategic dynamics in our region”.
There is no question which side Australia will choose. This will involve pain for some Australian capitalists. Agriculture companies recently begged for a “separation” of their sales in China from political tensions. This is fanciful. While alternative export markets can be found, there can be no substitute for US military power. And allowing China to become a regional hegemon without challenge is simply inconceivable.
In response to China’s challenge, the Defence strategic update envisages projecting Australian military power “from the north-eastern Indian Ocean, through maritime and mainland South East Asia to Papua New Guinea and the South West Pacific”. This vast swathe of the globe is considered Australia’s “immediate region”, a view that demonstrates enormous but longstanding ambitions.
The new factor is the assessment that conflict between major regional powers is increasingly likely and that Australia must be prepared for possible attacks with little or no warning. In response, the military is to be structured with the overriding aim of contesting the Indo-Pacific. Deployments to the Middle East in support of the US, for example, will still occur, but have a downgraded priority compared with the core focus of regional combat. This shift is reminiscent of the Obama administration’s “pivot to Asia” and, like that doctrine, may be difficult to implement fully. Nonetheless, it is an indication of intent.
The US alliance has not been made redundant and would still be relied on in case of any outright war with China. But there is a growing sense that, in other less serious contingencies, Australia must be capable of protecting its interests without assistance. This will not come cheap. So Australia’s military spending will increase, year after year, indefinitely. By 2029-30, the annual defence budget will be $74 billion per year, up from $42 billion in 2020-21. Previously announced purchases of modern fighter aircraft, ships and submarines have all been confirmed. But the shopping list has been extended to include longer range missiles, surveillance systems and satellites, drones, cyber warfare capabilities, bigger munitions stockpiles, hundreds of additional personnel and more.
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Military power provides essential leverage with both potential adversaries and allies, as states jostle for advantage and influence. In north-east Asia, Australia’s key relations are with Japan and South Korea. Among Asia’s most developed economies, they are long established trade partners. They share Australian concerns about China’s growing power and must contend with the proximity of Beijing’s nuclear-armed ally North Korea.
Australia has a formal security agreement with Japan, but, more importantly, all three countries are linked by military alliances with the US. As a legacy of World War Two and the Korean War, the United States maintains enormous naval and air force bases in both South Korea and Japan. Positioned within easy striking distance of China, they have prompted heavy Chinese investment in its navy, air force and missile technology for fear of being encircled.
At the other extreme of the Indo-Pacific, Australia is seeking closer ties with India, cosying up to the odious far-right regime of Narendra Modi. The world’s fifth largest economy, India is viewed as an alternative destination for Australian exports such as coal and international education. India has its own grievances with China and already conducts regular joint naval exercises with the United States and Japan, which Australia has sought to join.
China is pushing back against these attempts at containment in the Indian Ocean, which threaten its links to Europe, the Middle East and Africa. Late last year the New York Times reported that China may have concluded a secret deal to construct a naval and air force base in Cambodia. Another potential ally for Beijing is Sri Lanka, which is heavily indebted to China. Countering this influence is one reason Australia maintains friendly ties with the Rajapaksa government, despite its responsibility for genocidal war against the Tamils and their ongoing oppression.
The more immediately concerning region for Australia is, however, maritime South-East Asia. This is the area targeted by Australia’s military build-up. Increased naval power and long-range missiles, in particular, are intended to hinder any attempt by hostile forces to penetrate the maritime approaches to Australia.
The area is being destabilised by Chinese territorial claims in the South China Sea, which is a crucial shipping lane for many countries, including Australia. China has backed its claims by building military installations on a string of tiny islands. The US and its allies constantly demonstrate their resolve to press back against Chinese expansion, for example undertaking naval patrols close to disputed islands. Smaller countries in the area object to China infringing on what they also claim as their territory. But they must also be wary of the economic and strategic weight of their giant neighbour. Old patterns of influence and alignment can no longer be taken for granted, even among traditional Western allies like Malaysia, Singapore and the Philippines.
Indonesia is the single most important country for Australia within South-East Asia. Although not posing a threat itself, a hostile, weak or fractured Indonesian regime could allow a stronger power like China to use the archipelago as a base to act against Australian interests. Australia has therefore long sought to ensure Indonesia is controlled by a stable and friendly government, which could act as an auxiliary shield to Australia itself.
In the past, that meant supporting the murderous Suharto dictatorship and the occupation of East Timor. Today it means defending Indonesia’s “territorial integrity” against claims for self-determination in West Papua and an emphasis on “security cooperation” with the Indonesian military, notorious for human rights abuses.
Australia has few other bargaining chips in Jakarta. A trade deal that came into force in July may boost what is a relatively minor economic relationship for such close neighbours. But China will inevitably be of greater economic importance to Indonesia, already dominating trade relations and increasingly important as a source of capital investment and foreign aid.
The need for Australia to ward off Chinese influence is posed even more starkly in Timor-Leste, Papua New Guinea (PNG) and other small South Pacific nations. Prime Minister John Howard declared in 2006: “The Pacific is our backyard, and we are the country that has the prime responsibility for looking after the security exigencies as they arise”. This is Australian imperialism’s area of special concern, where even the United States must take a back seat.
In 2016, Australia announced the “Pacific step-up” policy, aimed at maintaining this pre-eminence. Aid funding, although still a tiny fraction of defence spending, increased to $1.4 billion in 2019-20, and is supplemented by a $2 billion loans scheme for infrastructure. This is in response to China’s Belt and Road initiative, which offers Pacific islands an alternative source of credit. Both major powers assume that whoever underwrites development projects will gain influence over local governments, all the more so in some of the world’s least developed economies. In 2018, Australia hurriedly stepped in to fund construction of a new undersea internet connection between PNG, Australia and the Solomon Islands, freezing out Chinese communications company Huawei.
By far the largest nation in the Pacific and an Australian colony until 1975, PNG is a jealously guarded part of Australia’s sphere of influence. Even before the global crisis induced by COVID-19, PNG faced severe financial problems. Australian aid amounts to 8 percent of the PNG government’s usual budget. Australia provided an extra $440 million loan in 2019 to cover a budget shortfall, since China was also reportedly prepared to help. A much bigger bailout is expected to be required this year. Financial dependence allows Australia to determine spending priorities, and Australian personnel are directly deployed in PNG’s military, police force and public service.
Military competition is also intensifying in the Pacific. Fearful of increasing Chinese naval activity, Australia has launched a Pacific maritime security program, which provides Pacific nations with naval patrol boats and aerial surveillance capability. In 2018, Australia concluded a deal to redevelop the Lombrum Naval Base on Manus Island, off the north coast of New Guinea. Originally constructed as a staging post in the offensive to drive Japan from South-East Asia during World War Two, the revitalised base will now help Australia and the US ward off China’s challenge in the Indonesian archipelago and south-west Pacific Ocean.
It’s a neat encapsulation of how Australia’s long-term strategic interests are being updated and reasserted. We have entered a frightening new phase of imperialist competition. Open war between China and the United States is neither imminent nor inevitable. Certainly, it is an outcome the Australian ruling class wants to avoid. But regional conflict at some level is no longer unthinkable. Australia’s latest manoeuvres only increase the danger.
