Report

Australia Draws a Line on China

Canberra’s had enough of trade embargoes and Chinese grievances—and is ready to draw a line.

By , a senior staff writer at Foreign Policy, and , Foreign Policy’s Pentagon and national security reporter.
Australian Prime Minister Scott Morrison speaks to the media.
Australian Prime Minister Scott Morrison speaks to the media during a press conference at Australia’s parliament in Canberra, on Nov. 25, 2019. Tracey Nearmy/Getty Images

Australian defense officials and politicians alike are striking an increasingly hawkish tone on China. This week, it was revealed that a former top general warned his troops last year of the “high likelihood” of war with China. This comes just days after Australian Defense Minister Peter Dutton raised eyebrows with his assessment that Chinese bullying of Taiwan could lead to a regional conflict.

Canberra’s more muscular posture, coupled with an increase in defense spending even amid the pandemic, spells an unusually confrontational approach toward China for a country that once tried to balance its economic relations with its largest trading partner against its decades-old defense commitments to the United States. Washington is repaying Canberra’s efforts, redoubling diplomatic and military engagement with Australian counterparts to jointly plan any response to Chinese aggression toward Taiwan. 

Australian defense officials and politicians alike are striking an increasingly hawkish tone on China. This week, it was revealed that a former top general warned his troops last year of the “high likelihood” of war with China. This comes just days after Australian Defense Minister Peter Dutton raised eyebrows with his assessment that Chinese bullying of Taiwan could lead to a regional conflict.

Canberra’s more muscular posture, coupled with an increase in defense spending even amid the pandemic, spells an unusually confrontational approach toward China for a country that once tried to balance its economic relations with its largest trading partner against its decades-old defense commitments to the United States. Washington is repaying Canberra’s efforts, redoubling diplomatic and military engagement with Australian counterparts to jointly plan any response to Chinese aggression toward Taiwan. 

Beijing’s diplomatic and quasi-military aggression has grown sharply in the last year. Concerted Chinese pressure—and pushback—has popped up all over the map. By mooring swarms of vessels around Whitsun Reef, a maritime feature in the Spratly Islands within the Philippines’ exclusive economic zone, China has managed to anger one of the few countries that had coddled Beijing so far. “China, my friend, how politely can I put it? Let me see … O … GET THE FUCK OUT,” Philippine Foreign Minister Teodoro Locsin Jr. tweeted on Sunday. Meanwhile, Japanese and Taiwanese warships teamed up to fend off another Chinese incursion near the island that Beijing considers part of its territory and where it has run an intense program of aerial intrusions since last fall. 

As in the United States, this has sometimes produced warnings of imminent danger that may be overblown. But the military and economic challenge posed by Beijing is very real—and a stiffer Australian spine matters because, among some U.S. allies and partners in the region, China’s dual drive for territorial hegemony and economic supremacy has met with an equivocal response. Philippine President Rodrigo Duterte, whose country’s independence is guaranteed by the United States, overlooked Chinese land grabs in the South China Sea and wooed Chinese President Xi Jinping, even against the wishes of his own military and public. New Zealand, a member of the Western Five Eyes intelligence-sharing agreement, has been—until very recentlyreluctant to put its own economic relationship with Beijing on the line over a bunch of unknown reefs, rocks, and atolls.

But Australia has become a test case for resistance to Beijing’s territorial aggrandizement and its economic and political coercion. Since last year, China has poleaxed the Australian export-led economy with a slate of punishing tariffs, even while building up its military position in the disputed South China Sea. 

“It’s kind of like the canary in the coal mine,” said Heino Klinck, who was the U.S. deputy assistant secretary of defense for East Asia until January. “The Chinese have made it clear that they are going to pull out all of the stops to try and put Australia in a box. It’s not just about Australia. It’s just that the Chinese have decided if they can put the Aussies back into a box, that sends a message to everyone else.” 

In years past, Australia, like many of its neighbors, tried to have it both ways—enjoying a booming economic relationship with China while sheltering under a security umbrella provided largely by the United States. Australian leaders, such as former Prime Minister Kevin Rudd, have often tried to serve as go-betweens with Beijing to soften the hard edges of Beijing’s rise while maintaining lucrative exports in iron, coal, and other raw materials needed by the world’s second-largest economy. 

That deep economic synergy between the Australians and the Chinese, who buy more than one-third of Australia’s raw exports, has given Beijing what it sees as the power to talk down to Canberra in a tone it might not use with other close U.S. partners and allies in the region, such as Japan. That’s combined with China’s “wolf warrior” diplomacy, in which nationalistic and insulting comments are a path to promotion within the Ministry of Foreign Affairs—to disastrous ends. The crudeness of the insults thrown at Australia has often prompted fierce reactions from across the Australian political spectrum.

“They can’t understand why a country they see as dependent would be acting this way,” said Alex Gray, a former deputy assistant to former U.S. President Donald Trump and now a senior fellow with the American Foreign Policy Council. “It’s almost personal in a way it’s not with other countries.” 

The mood in Australia began changing after an investigation by the popular TV show Four Corners in 2017 on Chinese influence within local politics, prompting a series of further reports, lawsuits, and mutual accusations. But it was the coronavirus that put a sharp end to any optimism about China. When Australia came out as one of the first countries calling for an independent inquiry into the origins of the virus’s explosion in China’s Wuhan province, Beijing exploded. The response was aimed directly at Australia’s weak point: its lucrative exports to China. Beijing either limited imports of or slapped punitive tariffs on critical Australian exports, such as iron, coal, barley, wheat, wine, and sheep. In all, Chinese pique cost Australian exporters at least $3 billion last year, a drop in the bucket for the overall economy but a killer blow for some sectors that had come to rely on the ever-growing Chinese market. China recently reaffirmed a five-year punitive tariff on Australian wine imports.

“You’re probably familiar with the Chinese idiom ‘kill a chicken to scare a monkey,’” Klinck said. “The original sin was the Australians calling for an independent inquiry into COVID. That’s when the Chinese decided to punish the Australians as well as to deter anyone else from taking an independent approach.” 

Australia has already started to recalibrate many aspects of its relationship with China, nixing loads of Chinese investment projects and placing more than 1,000 other proposed deals under review. The recent cancellation of a signed memorandum of understanding over the Belt and Road Initiative between the state of Victoria and China, using new legislation that allows the federal government to overrule state deals, was taken as a particular insult by Beijing.

From Australia’s point of view, the looming showdown with China over hegemony in the Pacific Ocean is, in some ways, existential. In the last two decades, China’s navy has transformed from a coastal defense force to one of the world’s premier blue water navies, with a shipbuilding program that outpaces any other country in history—and certainly any peer rival, let alone the United States. It also has a hugely ambitious state-led program to build and subsidize fishing fleets and maritime militia that can impose Beijing’s will on everything from Vietnamese oil rigs to Philippine fishing grounds. Now, that growing arsenal is turned toward Taiwan—and vulnerable countries in the region. 

The United States has, since at least China’s first bald-faced affront in 2012 at Scarborough Shoal near the Philippines, sought to fend off Chinese advances but without a clear plan of where or how hard to push back. For now, the U.S. Navy can still stay in the ring. But as Chinese surface ships slip off the dry docks in ever greater numbers, crunch time is coming. The belated U.S. response to rebuilding a Navy that will see mass retirements of both surface ships and long-range aircraft in the next few years won’t bear fruit until nearly the end of the decade. Any U.S. retreat from the Western Pacific in the meantime—as some have called forwould spell disaster for the smaller states that have so far managed to stand up to China’s coercion.

“In case of a failure of deterrence, or were U.S. forces driven or withdrawn from the region, the effects on our allies’ and partners’ ability to maintain freedom of action as independent democracies would be dramatically negative,” said Tom Shugart, a former U.S. Navy Captain now at the Center for a New American Security, in testimony before Congress in March.

During World War II, with the entire country mobilized, and Liberty ships being floated with abandon, the United States managed to build as much as 18.5 million tons of shipping a year. In 2019—at peace—China floated 23 million tons of new shipping, and they weren’t all container ships. 

“If you are thinking we are okay, this is the largest shipbuilding nation in the history of the human race,” Shugart told Foreign Policy.

Since Australia’s founding in the late 18th century, said Hugh White, an expert on defense issues at the Australian National University, it has relied on an Anglo power to keep Asia safe, and especially to guard its trade-heavy sea lanes. Britain did that job until 1942; the United States has done it since. Now, all bets are off. 

“We don’t have a model for how Australia lives in an Asia that is not dominated by a great-power ally,” White said, harkening back to Australia’s lurch toward Washington during the dark days of World War II, when Britain essentially pulled up the drawbridge to focus on the war in Europe and Africa. “We’re finding it very hard to imagine that the same thing might happen—that America might fail us.” 

For U.S. policymakers, there are lessons of abandonment closer to hand. In 2017, when South Korea deployed a U.S.-made missile defense system key to fending off North Korean attacks, China put the squeeze on Seoul with trade restrictions and other coercive economic measures. The United States, which needed South Korea on the front line, failed to back up its long-time ally with concrete support. 

Former U.S. officials and experts have seen the episode as a cautionary tale: a chance to dole out more economic aid and cooperation to offset Chinese pressure. Both Canberra and Washington expect a so-called 2+2 meeting between U.S. Secretary of State Antony Blinken, U.S. Secretary of Defense Lloyd Austin, and their Australian counterparts later this year to cement broader ties and reaffirm a 70-year-old alliance. 

“I think there’s a growing consensus in Australia just like there’s a growing consensus in the U.S. about the true nature of Beijing,” said Eric Sayers, a visiting fellow at the American Enterprise Institute and former special assistant to the commander of U.S. Indo-Pacific Command. “The China optimist crowd is dwindling. It’s dying off. It certainly is here, and I think it is in Australia because the evidence is just kind of overwhelming. It can’t be ignored.”

Keith Johnson is a senior staff writer at Foreign Policy. Twitter: @KFJ_FP

Jack Detsch is Foreign Policy’s Pentagon and national security reporter. Twitter: @JackDetsch

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