How can Asia avoid a clash between the US and China?

What can be done to prevent the US-China strategic competition spilling over into armed conflict? In this article, adapted from a speech to a symposium organised by the Beijing-based Asia Pacific Exchange and Cooperation Foundation, Colin Heseltine makes the case for the two big powers to recognise that each has a role to play in the region and resolve conflict through existing regional forums.

The Indo-Pacific region is clearly in a state of strategic flux. Momentous changes are occurring, due largely, but not exclusively, to the growth of China’s influence. The strategic competition between the United States and China is potentially setting the stage for a return to a bi-polar international order of confrontation between two great power peers. It is to be expected in these circumstances that the order constructed since World War Two will undergo significant changes, and that during this process many countries will feel unsettled and challenged.

New organisations with regional strategic significance are appearing or being given new life in response to this changing order, including the Shanghai Cooperation Organisation, the Quadrilateral Security Dialogue, and the tri-nation AUKUS between Australia, the UK and US. None of these presently constitute formal alliances, military or otherwise, although the Quad has developed a military dimension with joint exercises such as Malabar involving its four members. AUKUS is a security partnership, based on Australia’s longstanding relationship with both the US and the UK, and permits technical exchanges aimed at upgrading defence capabilities.

Both the Quad and AUKUS build on longstanding relationships. Australia has had a significant partnership with Japan since 1957 and has recently been upgrading bilateral security links. Australia and India have fought in conflicts together since World War One, including at Gallipoli, both are members of the Commonwealth, and they recently enhanced ties through membership of the Quad. Britain and the US are Australia’s two oldest security partners.

Australia also is enhancing other regional relationships. It has long had a substantial economic relationship with South Korea, and during President Moon Jae-in’s visit to Australia last week (the first from that country since 2012) the two countries established a Comprehensive Strategic Partnership.

None of this should come as a surprise to China. While China has not been mentioned in official communiques from the Quad and AUKUS, the consolidation of these relationships is a response to China’s growing power and influence and the perception in member countries that this poses a threat to regional stability and security. Deng Xiaoping’s often quoted “China should hide its capabilities and bide its time” has clearly reached the end of its shelf life.

China’s actions in the South China Sea, its rapid increase in military spending, and its strong posture recently towards Taiwan, are seen in some quarters as signs of a growing China threat. Even China’s Belt and Road Initiative is seen by some as having strategic military objectives.

For its part, the US sees itself as facing a strategic competitor unlike any other. Secretary of State Antony Blinken has said that only China can truly challenge the global system and the rules-based international order, which the US was instrumental in building after 1945, and which have benefited China enormously.

Blinken has said the US approach to China will be “be competitive when it should be, collaborative when it can be, and adversarial when it must be”.

China, for its part, no doubt sees the US disproportionately focusing on the third of these. China has, following the collapse of the Soviet Union, apparently identified the US as its key rival, and one that is determined to confront, and even contain it. Australia, as a formal security ally of the US for 70 years, is predictably supportive of the US in its approach to China.

This is what underlies the current downturn in the Australia-China bilateral relationship. Although each side blames the other entirely for this situation, both have made what I would call serious diplomatic missteps leading to relations being at their lowest point since diplomatic relations were established in 1972. This downturn has been extremely rapid – only in November 2014, the relationship reached a high point when President Xi Jinping visited Australia and addressed the Australian parliament, a rare honour for a visiting head of state. China was then and still is, Australia’s largest trading partner, and the largest source of students and an important source of tourists, at least until the start of the pandemic last year.

From a situation in which China was viewed very positively by Australians only a few years ago, it is now, according to opinion polls, seen by most Australians as a national security threat. According to one opinion poll this year, 63 per cent of Australians regard China as more of a security threat to Australia than as an economic partner; five years ago, according to the same poll, it was the reverse – 79 per cent considered China as more of an economic partner than as a security threat.

The Australian public’s attitude towards China hardened dramatically when the latter imposed trade sanctions against a number of Australian exports. In my view this was a big mistake by China. Expressing displeasure at the Australian government by punishing ordinary individual Australian companies only served to harden attitudes against China and play into the hands of anti-China hawks who want Australia to reduce its economic relationship with China. Moreover, China’s trade sanctions have not worked – most of the exporters have found other markets. But the damage has been done – sentiment against China in Australia has intensified. This is what we could call, not “win/win”, but “lose/lose”.

It is against this background that Australia has developed its participation in the Quad and AUKUS.

Countries of the region, especially ASEAN, are viewing these developments cautiously. China is for each of them their number one trading partner but attitudes towards China vary considerably. In particular, differences between some Southeast Asian countries and China over maritime issues such as fishing and drilling rights in their Exclusive Economic Zones have raised serious concerns. These of course must be balanced against the huge economic benefits they derive from China. Most have quietly welcomed the role of the United States in the region, seeing it as providing a peaceful strategic environment. They do not want, under any circumstances, to see the region become one of great power strategic rivalry that could boil over into conflict. Clearly, they fear that rivalry between the US and China carries the potential for this to happen and to undermine one of ASEAN’s core principles as laid down in its Charter, namely its centrality in shaping a regional architecture that is “open, transparent and inclusive.”

The challenge ahead is to ensure the Indo-Pacific strategies of countries in the region, and beyond, engender peaceful competition and collaboration among the big powers, without conflict. This should be the focus of all countries as the regional order evolves. Above all there must be recognition and acknowledgment by the two big powers that each has a role to play in the region, and that neither should be marginalised or contained.

Quad leaders participate in talks in Washington, D.C., US - September 24, 2021. Image credit: The White House, Flickr.

How best can this be achieved?

While mini-lateral bodies such as the Quad and AUKUS have emerged, there are longstanding regional organisations — ASEAN, APEC, the Asian Regional Forum and the East Asia Summit — that must be allowed to play an important part in helping the region to adjust to the changing order. This can only happen if the major powers are prepared to work within these bodies and, despite their shortcomings, work to build their credibility.

ASEAN has an especially important role to play. It occupies a key strategic position, geographically straddling both the Indian and Pacific oceans. Importantly, a core element in ASEAN’s external relationships is its focus on inclusivity, in other words getting other powers into the same room rather than excluding them. This should be a fundamental principle of future Indo-Pacific strategies.

Despite its members having different attitudes towards China and the US, ASEAN has political influence and is well positioned to promote a peaceful, open and inclusive Indo-Pacific. It has long maintained a hedging strategy in relation to the two big powers – quietly persuading the United States to maintain its presence in the region and, at the same time, engaging with China and other significant regional powers. This strategy provides a sensible approach to managing big power rivalry in the region, provided the big powers are prepared to go along with it. The US has, in the past, tended to be frustrated by ASEAN’s slow consensus-driven decision-making processes and sceptical about ASEAN’s ability to deliver outcomes. The US needs to work on the strengths of ASEAN, not its weaknesses.

China, which is actively involved with ASEAN, needs to ensure that it gives substance to President Xi Jinping’s statement at the recent ASEAN-China summit that China “will never seek hegemony, still less bully smaller countries”. A good start would be to conclude a Code of Conduct in the South China Sea, where disputes have created disharmony and concern among maritime ASEAN countries.

The principle of ASEAN centrality, mentioned earlier, is a worthy one. If the Indo-Pacific strategies of the US and China build genuine credibility for, and give support to, this principle, rather than paying lip service to it, we will have a firm basis for building a peaceful competitive, collaborative and inclusive strategic environment in the region. This implies that non-ASEAN powers would need to surrender regional agendas and initiatives to ASEAN. This might be hard for the big powers to accept Certainly there are concerns among some ASEAN countries that groups like the Quad and AUKUS might undermine ASEAN centrality.

Australia, ASEAN’s oldest dialogue partner (since 1974), has strongly endorsed ASEAN centrality and has recently established a Comprehensive Strategic Partnership with ASEAN underscoring Australia’s commitment to ASEAN’s central role in the Indo-Pacific. This is a significant starting point for any country in developing constructive Indo-Pacific strategies. China, too, last month established a Comprehensive Strategic Partnership with ASEAN and “unswervingly” supported ASEAN centrality. US Secretary of State Blinken briefly acknowledged ASEAN centrality and the US intention to keep working “with and through” ASEAN in his speech on the Indo-Pacific in Jakarta on 14 December.

It will be important for groupings such as the Quad and AUKUS to ensure that their activities are not only complementary to the work of existing regional groups, especially ASEAN, but also strengthen and support them. The Quad has been mindful of this, focusing on initiatives to strengthen regional activities in areas such as pandemic control, climate change, supply chains and science and technology and stressing what it stands for, not against.

Indo-Pacific strategies that do not have robust and comprehensive economic, technological and social components, and which narrowly focus on security aspects or present Indo-Pacific rivalry between the two big powers as an ideological one, are bound to fail. Areas such as infrastructure development, connectivity, technology, supply chain networks, public health and climate change are ones in which major powers can usefully compete and collaborate with each other and work closely with regional countries.

Efforts by either of the big powers to exclude the other from regional economic groupings will only frustrate and antagonise regional countries who stand to gain from collaborative participation by all countries. Efforts to make membership of regional trade groups another strategic battleground between China and the US will only undermine the Indo-Pacific strategies of those who pursue them.

Two new trade groupings — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) — provide new impetus to Indo-Pacific strategies. The US has not joined, or even applied to join, either of them. China is a member of RCEP and has applied to join the CPTPP. In the US, domestic political differences over the benefits of globalisation have undermined public support for trade agreements that don’t meet the standards the US sets for them. This, in my view, is a serious flaw in the US’s Indo-Pacific strategy. The US has enormous economic resources and capabilities that form the basis of its Indo-Pacific strategy, but by not joining regional trade groups it is creating an imbalance in the eyes of regional countries between the US’s security and economic interests in the Indo-Pacific. China, on the other hand, is in a strong position to strengthen its Indo-Pacific strategy by leveraging its RCEP membership and using this to advance its Belt and Road Initiative activities.

Australia’s Indo-Pacific strategy has recognised the importance of a comprehensive approach. While it is has taken a firm security stance by participating in the Quad and AUKUS, it has also recognised that this has given rise to concerns among some ASEAN countries. It has, therefore, strongly supported ASEAN centrality, joined both the RCEP and the CPTPP, and thus signalled its commitment to a free, open and inclusive Indo-Pacific.

The Indo-Pacific is clearly a contested strategic region in which the two major powers are openly competing for influence. This has the potential to spin out of control and lead to instability and conflict. This is by no means inevitable provided all powers in the region develop Indo-Pacific strategies that encourage the management of differences within existing regional architecture and ensure their economic and technological competition remains constructive.

Colin Heseltine is a senior adviser to Asialink.  He was Australian Ambassador to the Republic of Korea (2001-05), head of Australia's representative office in Taiwan (1992-97) and deputy head of mission in the Australian embassy in Beijing (1982-85 and 1988-92). He also was a board member of Sino Gas and Energy (2011-18), an Australian-listed company developing unconventional gas assets in Shanxi province, China.

Banner image: Still from Zoom meeting for the ASEAN-China Special Summit to Commemorate the 30th Anniversary of ASEAN-China Dialogue Relations - November 22, 2021.

This is an edited version of a presentation at a recent symposium on Indo Pacific Strategies organised by the Beijing-based Asia Pacific Exchange and Cooperation Foundation. The symposium drew speakers from around the Indo Pacific region.