‘Quad’ version of Belt and Road feels like a South China Sea Watch
Australia, like others, will surely realize that in terms of its own national interests, BRI’s economic benefits outweigh the prospect of antagonizing its top trade partner
The Quad – comprising the United States, Japan, India and Australia – was set up a decade ago, ostensibly as an Asia-centered security cooperation mechanism. Funnily enough, Beijing always suspected it actually represented a containment strategy.
Last November, in Manila, the Quad met on the sidelines of the Asean and East Asia summits. Their topic of discussion: “alternatives” to China in terms of pan-Asian infrastructure financing.
Then came a recent think tank summit in New Delhi. As reported by Asia Times, the alleged star of the show was Admiral Harry Harris, soon to leave his post as head of US Pacific Command in Hawaii to become the next US ambassador to Australia.
Harris had already told Congress America must prepare for the possibility of war with China. And he insisted Australia would help “uphold the international rules-based system” in the Indo-Pacific.
In New Delhi, he said: “The reality is that China is a disruptive transitional force in the Indo-Pacific, they are the owner of the trust deficit in the region.” He was apoplectic in stressing that Beijing’s “intent is crystal clear” to dominate the South China Sea and that its military might soon rival American power “across almost every domain.”
Significantly, Vice Admiral Tim Barrett, Australia’s Chief of Navy, called for concrete action against the PLA’s Navy in the South China Sea.
This all fits into Washington’s recent terminological pivot from “Asia-Pacific” to “Indo-Pacific,” with the new emphasis – inbuilt in the new Pentagon Defense Strategy – that China is a “revisionist power” bent on undermining the “international, rules-based order,” especially via “predatory economics” which will find full expression through its New Silk Roads, or Belt and Road Initiative (BRI).
So, the increasing perception in Beijing that the Quad is out to undermine BRI comes as no surprise.
Don’t mess with my ChAFTA
An “unnamed senior US official” was quoted in the Australian Financial Review earlier this week as saying the Quad’s strategy is “nascent” and “won’t be ripe enough to be announced” as Australian Prime Minister Malcolm Turnbull visits the US.
The Quad strategy, added the official, should be seen as an “alternative” rather than a “rival.” With Turnbull, as well as Foreign Minister Julie Bishop and Trade Minister Steven Ciobo, preferring to keep mum, it’s fair to wonder what’s really goin’ on.
China is Australia’s top trading partner, as well as a crucial source of investment. After much hand-wringing, a Memorandum of Understanding (MOU) on BRI cooperation was finally signed between Beijing and Canberra last September.
China and Australia already had a bilateral investment treaty (BIT), which has existed for three decades now. In 2015, they added a China-Australia Free Trade Agreement, known as ChAFTA. Inbuilt in this agreement is a review of BIT in 2018.
“The reality is that China is a disruptive transitional force in the Indo-Pacific, they are the owner of the trust deficit in the region”
Admiral Harry Harris
Deepening its involvement in BRI would allow Australia to attract more projects on its own soil, while also expanding the reach of its pan-Asian infrastructure investment ambitions.
According to the Asian Development Bank (ADB), pan-Asia infrastructure investment must reach a staggering US$1.7 trillion a year to allow “developing Asia… to maintain its growth momentum [and] tackle poverty.”
Australian businesses are undeniably into BRI. There’s even a lively Australia-China Belt and Road Initiative – a forum established to help Australian business gain clarity on BRI opportunities. China and northern Australia have started to build particularly strong ties.
Aussies, like Indians, joke that Australia never flinches in terms of putting its national interest behind that of the US. Australia has long taken its lead from Washington; former Prime Minister Kevin Rudd had the rare talent among Anglosphere leaders of being able to speak Chinese, but even his administration was not particularly close to Beijing.
But informed Australians know – just as informed Brazilians or Argentinians know – that the key issue exercising the US is the degree to which other countries’ closer commercial and investment relations with China strategically impinge on Washington’s interests.
Quad vs. BRI, the redux
Australia could perhaps use a few hints from another Quad member, Japan, on whether the Quad is likely to be just another “pivot to Asia” mechanism, replacing the Obama / Hillary version but still conceived by Washington as a vehicle for strategic containment of China.
Tokyo has pledged to come up with an ambitious US$200 billion for the infrastructure investment game. Australia could never match that.
What we have here is essentially Tokyo – and the ADB – competing head-on against Beijing and the Asia Infrastructure Investment Bank (AIIB), to extend loans around the world, including to an array of African nations (already Beijing’s clients) and even to Russia.
The key issue exercising the US is the degree to which other countries’ closer commercial and investment relations with China strategically impinge on Washington’s interests
And yet Japan’s Ministry of Foreign Affairs does not even try to disguise the real purpose: “Japan will promote strategic and effective development cooperation to advance its foreign policy, including the ‘Free and Open Indo-Pacific Strategy.'”
The Japanese are careful to emphasize that this ‘Free and Open Indo-Pacific Strategy’ implies building “high-quality infrastructure” – a not-exactly subtle dig against Chinese competition.
So the stage is set for an “Indo-Pacific” Quad against BRI. The either-or overtones are certainly not helpful to the interests of the needy in scores of emerging pan-Asian nations.
Canberra certainly does not have what it takes – fund-wise – to splurge on regional infrastructure building. In terms of Australian national interests, BRI’s economic benefits certainly outweigh antagonizing its top trade partner. Australia should aim to be a bridge, not a wall.
BRI, as seen from Beijing, is open: you can join in any time you want, do whatever you want, and help whoever you choose. Compared to BRI, the Quad strategy looks like too little, too late. Trade and investment? Not really. More like a pumped-up South China Sea Watch.