The China Challenge: An Australian Perspective


By Brendan Sargeant

China has always loomed large in Australia’s strategic imagination.

It is a major Asian power with vast economic and strategic potential. It has a long history of cultural and political engagement across the Indo Pacific and it borders the Eurasian landmass as well as the Pacific Ocean. It has a large and diverse diaspora. There has been a Chinese presence in Australia since the earliest days of settlement. China has shaped Australian social policy and challenged our national identity through its large presence in the world and the energy of its diaspora communities.

China has had a profound influence on Australia’s strategic policy over decades.

Its influence will continue to be enormous in every dimension of our national life.

In the Australian strategic policy assessments, from the 1940s to the 1970s, China was seen as a threat.

How this threat was framed was very much a reflection of the moment when assessments were written and the shifting dynamics of the Cold War.

In the 1970s, Australian strategic thinking began to move away from the idea of China as a direct threat to Australia, but it continued to recognise that it would remain a country of substantial political and strategic consequence.

In the 1980s and 90s, defence policy shifted to a focus on the direct defence of Australia and a priority for the capacity to undertake military operations in our near region. China was not part of the thinking behind this shift.

Since the 2000 Defence White Paper, strategic policy has recognised that the strategic relationship between China and the United States is the single most important element of the regional security architecture.

This understanding laid the foundations for the recognition that Australia had to develop a strategic relationship with China that included a defence relationship.

Economic security drives rising military power

Recent decades saw a broad consensus emerge in the defence policy community that China’s military development was commensurate with its emerging economic power. China’s developing military power was described as a natural outgrowth of its economic development and a reflection of its need to secure its broader strategic interests, particularly as it is a country that is dependent on trade and external resources for its development.

China’s economic and military growth has now changed the Indo-Pacific strategic environment irreversibly. It is the major trading partner for most countries in the Indo-Pacific. It has begun to challenge the strategic primacy of the US. It is more assertive militarily, most notably in the South China Sea with its island building to secure its disputed territorial claims.

Defence White Papers from 2009 have responded to this change, but the response has varied, reflecting uncertainty in Australian thinking about the strategic and security consequences of China’s growing power. In sequence, the White Papers embody three subtly different strategies to what they considered to be the primary strategic challenge for Australia – the rise of China.

The 2009 White Paper argues for a much stronger ADF and reasserts the alliance with the US as a core element of Australia’s defence and security. It also identified the possibility of a direct military threat to Australia from a major Asian power, which some interpreted as China, though the document was not explicit on this.

The 2013 White Paper introduced the idea of the Indo-Pacific as an enabling policy framework that sought to position China as part of a larger security community. The central strategic challenge was to develop a regional architecture capable of managing the interests of that community as a whole without necessarily being dominated by any single power. That White Paper also recognised the centrality of the US alliance for Australian security.

The 2016 White Paper suggested that Australia’s security interests were not necessarily tied to our geographic position but resided more broadly in how the global system functioned. It emphasised the importance of support for a rules-based global system. Australia’s strategic interest was in a China that continued to accommodate to the existing rules-based order.

The 2017 Foreign Policy White Paper introduced a more sombre tone in its assessment of the strategic implications of the rise of China.

What these policy documents do, when read in succession, is chart the increasing complexity of the strategic challenge that China now represents.

Countries develop defence relationships for many reasons. The future might hold a crisis that requires that the countries work together. This is easier if they know each other.

Defence links are built on mutual strategic understanding

A defence relationship can be an important part of the broader pattern of relations between countries, as well as a sign of the maturing of the broader bilateral relationship. What countries will do together in the area of defence can indicate the level of trust they have in each other’s strategic intentions. Defence relationships can enable influence and understanding in both directions. They can be important for confidence building because they enable and strengthen capacity to understand the difference between what a country says it is doing and what it actually does.

Perhaps most importantly, a defence relationship increases understanding on both sides as to how either country might use its military forces in a crisis. It can provide insight into how defence culture is shaped by how a country thinks about its strategic environment, its geography and its history. Most importantly, it can help understand how these influences translate into operational capability and decision making. This knowledge is as important for allies as it is for potential adversaries. To understand a country’s strengths and weaknesses and how it might use its military force in a crisis enables more effective response and management of escalation or de-escalation.

No country’s interests are completely congruent with the interests of other countries. Countries will therefore always reserve some capacity to act independently. This necessarily establishes the limits of trust and the limits of any defence relationship. The central question governing the future development of the defence relationship between Australia and China is: what are the limits?

Australia and China have developed defence engagement and defence cooperation steadily since the late 1970s. There was a visit in 1978 to China by the senior Defence official Paul Dibb, which led to the exchange defence attaches a couple of years later. There was a goodwill visit by HMAS Swan in 1981. The Joint Services Staff College visited China for the first time in 1982. In 1998, General Chi Haotian, was the first Chinese Defence Minister to visit Australia. This visit saw the establishment of an annual strategic dialogue at senior officials level, which has continued.

In 1999, Defence Minister John Moore visited China and since then every Australian Defence Minister has visited, and there have been regular visits to Australia by Chinese counterparts. Ship visits both ways are now a regular occurrence. China participated in the combined Naval Exercise Kakadu in 2017 for the first time. There has also been limited training between the Australian and Chinese armies in Australia. In addition, Australian staff colleges have had Chinese students attend and there have been regular study visits to Australia by Chinese military personnel. China is now a regular destination for senior Australian military personnel. One of the more significant engagements in recent years was Australian support for the Chinese deployment into the Indian Ocean to search for the wreckage of Malaysian flight MH370.

Even as engagement has increased, we have seen China expand its presence and capacity for the exercise of coercion, particularly through island building and militarisation in the South China Sea. Australia has also been concerned at China’s expansion of  activities in the Pacific, particularly with the possibility that China may seek to establish some form of permanent military presence through access to basing rights in one or more of the Pacific island countries.

The strategic relationship is therefore one of engagement and increasing competition. Capability building by Australia and the further development of other strategic relationships across the Indo-Pacific, such as with Japan and India, represent, in part, a strategic response to China’s increasing military presence. Another important element of Australia’s response is the continuing affirmation of the centrality of the alliance with the US to Australian security and the development of capabilities that not only provide for the defence of Australia, but also strengthen Australia’s capacity to operate with the US.

The defence relationship with China has seen steady but slow growth with the central element of it still being personal contact and dialogue at the senior levels reinforced by reciprocal visits. The relationship is contextualised by competing and fundamentally incompatible strategic objectives. For China, a strategic goal is to weaken Australia’s commitment to the US alliance and for Australia to more visibly accommodate Chinese economic, political, and strategic interests. This would include recognition of China’s primacy as the pre-eminent power in the Indo-Pacific.

Australia’s strategic goals include retaining the alliance with the US as the central pillar of our security. This means supporting continued US presence and strategic primacy in the Indo-Pacific and supporting China’s participation in the global rules-based order in ways that support our interests.

These strategic goals are not compatible and they are not likely to shift for the foreseeable future. The strategic relationship is therefore likely to be characterised by continuing engagement and limited defence cooperation, but increased competition as China seeks to expand its strategic space and its conception of its legitimate interests. This competition will continue for as long as the Indo-Pacific strategic order remains contested.

How the defence relationship evolves will be a very important indicator of the state of the broader strategic relationship. It is in Australia’s national interests that we continue to develop the defence relationship with China, but the reality of that relationship is the inherent asymmetry as a result of size difference and the very different strategic challenges each military has to respond to. China does not have much experience as a modern major power. It is developing strategic capability but has limited experience in using it as an instrument of national power. Few of its military personnel know much of the world beyond China. Just as it is important for us to understand the Chinese military, it is important that they understand the world. How we build the defence relationship in the future must recognise this broad context.

Defining the limits of cooperation

Both Australia and China should understand and be explicit as to where the limits of cooperation lie. This enables cooperation in areas where interests converge, and the effective management of challenges where they do not. For Australia, observance of international conventions such as the United Nations Convention on the Law of the Sea are non-negotiable. Our participation in the alliance relationship with US and in other regional security forums is similarly non-negotiable. China has its own set of non-negotiable interests. These will not change. The challenge will be managing them effectively without destabilising the relationship as a whole and putting at risk areas of cooperation where our interests are mutual.

We should increase the level and frequency of visits and dialogue, personnel exchanges and shared training activities. The value of strategic dialogue, study visits, and other defence activities is the awareness that it brings of the perspectives and culture of participants. It is important that Australia and China understand each other, their perspectives on the world and how this translates into strategy and operational practice.

The focus of strategic dialogue should be directed at increasing a mutual understanding of differing perspectives on the regional strategic environment, but also on how and where crises might occur. This has the benefit of strengthening the capacity to manage a crisis between our countries, should one occur, or to be able to work together in response to regional problems when they occur.

Not all crises involve potential military conflict. There are many where military capabilities provide the only capacity to respond. Natural disasters are one such example, but there are also regional security challenges that engage the interests of all countries – such as terrorism or piracy, or the need for search and rescue. The search for the missing Malaysian airline is a recent example of very substantial cooperation between Chinese and Australian military forces.

Australia and China should increase military exercises, particularly in the maritime domain. This recognises that the Indo-Pacific strategic environment is primarily a maritime environment and both countries have an over-riding strategic interest in the security of that environment and its sea-lanes. Exercises and the development of protocols for managing potential incidents while building the capacity to work together would strengthen engagement and build capacity.

There will be crises in the bilateral relationship, and these will put cooperation at risk. Australia has often used the defence relationship to send signals to other countries when they do something that displeases us. We should resist the temptation with China. We need to understand China, which does not mean condoning its behaviour. We particularly need to understand it’s evolving thinking on strategy and the use of military force. The best way of maintaining that understanding is to continue to engage in an active defence relationship.

Brendan Sargeant is honorary professor at the Strategic and Defence Studies Centre at the Australian National University. From 2013 to 2017 he was associate secretary in the Department of Defence.

This is (an edited version of) the essay first published by Asia Society Australia under its Disruptive Asia series: China Special Edition.

Disruptive Asia is a thought-leadership project by Asia Society Australia launched in 2017.

It presents – through long-form essays – new perspectives and policy recommendations on how Asia’s rise is impacting Australia’s foreign policy, economy and society and how Australia should respond. 

Disruptive Asia deliberately looks at both external aspects of Australia’s relationship with Asia (foreign policy, business connectivity, international education) and their domestic implications and manifestations (community relations, leadership diversity, education settings and capabilities).