June 17, 2011



India, Australia and Asia-Pacific Security in the context of the latest Shangri-La Dialogue

Dr John Lee

C3S Paper No 812

June 14, 2011

Thank you (Australian High Commission in India, especially David Holly – Consul-General, and Tim Huggins.)Thank you also to my hosts at the Centre for Contemporary China Studies, Centre for Asia Studies, and the University of Madras.

I have been asked to speak about regional security, especially as it relates to India and Australia in the context of the Shangri-La Dialogue that was just held in Singapore two weeks ago. This is a wonderfully broad and important topic and I’ll try my best to do justice to it.

For those of you who might not know about the Dialogue, it is the annual meeting of Defence Ministers from almost 30 countries. Importantly, the Dialogue draws the Defence Ministers from all the major regional players – the US, India, Japan, Russia, the UK, Indonesia, Australia, and China. For the first time in the ten year history of the Summit, China sent a ministerial level official in Minister of National Defence, General Liang Guanglie (also a member of the Central Military Commission and a State Councilor.)

I was invited to attend as a member of the four-person non-governmental Australian delegation.

When your Minister of State for Defence M M Pallam Raju addressed the Dialogue, he spoke about military and especially naval modernization, the uneven spread of military and strategic transparency in the region, the possibility of an emerging Asian arms race, and the importance of freedom of navigation for all trading nations from the Gulf of Aden, through the Indian Ocean, past the Malacca Straits and through the South China Sea.

Minister Pallam Raju also spoke highly about regional multilateral initiatives such as the ASEAN Regional Forum, the ASEAN Defence Ministers Meeting Plus initiative, and of course the Shangri-La Dialogue. Showing that New Delhi is quickly learning how to speak ASEAN, phrases such as ‘consensual decision making’, ‘cooperation against common threats’, ‘shared security’ and ‘shared decision-making’ was used.

None of this would be any surprise to you. But not once did Minister of State for Defence Raju mention the word ‘China’ – despite the fact that Chinese military modernization and doctrine, Chinese in-transparency, and also its behavior in land and maritime disputes with India, Japan and in the South China Sea is the single collection of factors creating concern in the region.

In fact, the Ministers from Malaysia, Japan, Indonesia, Singapore and South Korea all only made reference to China in very banal and unexceptional terms. Only Secretary Gates from America and the Vietnamese Defence Minister addressed the issues and concerns of China’s rise explicitly.

Now, there is obviously an element of protocol here – it is not good diplomacy or diplomatic etiquette to single out one country – especially one as big and important as China.

Instead, as you all know, every major country in the region are all trying to reap as much economic benefit from China’s rise, but hedging against China. This is a reflection of the fact that China is both an economic partner, and strategic competitor and potential threat of all key capitals in the region.

It is also a reflection of geo-politics in the region. The major barriers against future Chinese dominance (assuming that China continues to rise as rapidly as it is) in East and Southeast Asia are an engaged America and a still powerful Japan. Secretary Gates went to great lengths in his Keynote at the Dialogue to reaffirm that American engagement and interest in the region is bi-partisan, genuine, robust and unchanging.

The point is that no one knows the extent of relative American decline and whether time is on China’s side or not. In the absence of such information, everyone is hedging against China but no one explicitly wants to admit that they are doing so. That is just the way East and Southeast Asians do strategy.

This widespread hedging activity is no secret. But the interesting question is the different ways countries such as India and Australia (but also some other key players) are attempting to implement this hedging strategy. And this is what I want to spend the next 15 minutes talking about.

I will break it up into two parts:

1. Looking at what the big powers in the region are doing: Japan, South Korea and India;

2. Looking at what the smaller powers – especially in SE Asia and also Australia – are doing.

You can go to just about any capital in the world and if you ask its leaders and strategists what they are hoping to achieve, they all will say the same thing:

è - “a stable, prosperous Asia focused on economic development rather than big power conflict.”

If you ask them how they will try to help manage China’s rise, they will also all say the same thing:

è - “maintain good relations with the US, promote increased regionalism and multilateralism, and security cooperation on transnational issues such as piracy and terrorism.”

Well, I do not doubt any of this but while all countries agree on want they ultimately want – a prosperous and stable Asia – their tactics will be different.

So in my mind, if we want to know how these countries will do, we need the kind of limitations they face and therefore what they are trying to achieve.

Japan, South Korea & India

I think all three countries want the same strategic outcomes but are coming at it from different historical positions and mindset – so the security processes will be a little different. Let me explain.

All hold immense suspicions about Chinese longer-term intentions, have serious ongoing disputes with the Chinese, and both want continued American primacy in Asia into the long-term. I won’t speak too much more about South Korea.

Seoul will mirror many of the tactics used by Japan and will be preoccupied in the foreseeable future with the North Korean issue. Instead, I will focus a little more on Japan and India.

Japan has used both bilateral and multilateral soft strategic containment policies to preserve a geostrategic hierarchy where America remains preeminent even if it is in relative decline.There is early evidence that India is catching on to this game-plan – even if the language in New Delhi is still very much about maintaining strategic independence.

But if the aims are similar, the mindsets in Tokyo and Seoul, compared to New Delhi are very different.

There is currently strategic confusion in Japan – not just because of the enduring paralysis in government and pressing priorities such as its stagnant economy and responding to disasters such as the recent tsunami and nuclear disaster – but because the prospect of American unipolarity – which Tokyo has relied on to protect it and act as a check against the Chinese – is possibly coming to an end.

At the same time, Japan is grappling with a situation where its strategic elites recognize that Japan needs to take more responsibility for its own security while its social elites, some political elites and general population are not enthusiastic about accepting much more of a security burden.

So this means that Japan will deepen its military relationships with the US and India as much as domestic political pressures allow. But interestingly it is trying to take a much more active role in multilateral forums for the following reasons:

  1. 1. Multilateral forums are one way Japan and South Korea compete with China for influence without causing instability. Given that Japan is an entrenched leader within the various forums in East and Southeast Asia, it will not want to risk being out-maneuvered or isolated by China within these platforms. Bear in mind that other smaller Asian countries will want Japan’s involvement so that China cannot over-whelm these smaller countries in any multilateral context.
  2. And this is quite interesting – given the domestic social/political constraints, multilateralism is a way for Japan to exercise leadership and ‘compete’ with China without looking like it is ‘being too assertive’, thereby incurring the anger of domestic sources. In most Asian countries, exercising leadership in a multilateral context is always much more applauded amongst social and economic elites than unilateral or bilateral maneuvers.

But Japan and South Korea has to walk a fine line. It will want security multilateral forums to remain weak (in the sense that hard security matters are excluded and that there are no firm security obligations on signatories) because (unlike China) it has strong bilateral security relationships with a number of countries and will not want any multilateral forum to inadvertently dilute these.

Bear in mind that any significant multilateral forum in Asia has to include China. Tokyo and Seoul would therefore not want to offer Beijing a greater security role and voice than it currently has under a multilateral process.


India shares very similar strategic goals with Japan and South Korea but comes to it from a different position and mindset to Japan.

India is only just beginning to see itself as not just a great power but also a relevant and engaged great power in the Asia-Pacific. Your strategic elites appear to be still attempting to build a lasting foreign policy consensus amongst political, social and economic elites when it comes to Asia-Pacific policy.

Unlike Japan, India is not in as strong a position to exercise leadership within any existing or future East and Southeast Asian security institutions for several reasons:

  1. 1. Unlike Japan, India has no tradition or strategic culture of exercising leadership within multilateral institutions, let alone existing ones in Asia. Indians are nowhere near as confident, patient or tactically astute as say China in working through multilateral processes.
  2. 2. India has only relatively recently began to view itself as a East Asian and Southeast Asian power rather than just a South Asian one. Therefore, unlike China for example, it is starting from a much lower base in terms of establishing its strategic leadership credentials in the region.
  3. 3. Even though India is one of the two great and defining civilizations in Asia, Indian culture and the Indian diaspora do not play the same eminent role that Chinese culture and diasporas have played in Asia over the past one hundred years – even when China was weak. India generates much less inherent interest amongst social elites throughout Asia. Although political and strategic elites throughout Asia appreciate the potentially critical security role India might play, there are few social or economic elitespushing India’s leadership cause in most Asian countries – especially compared to China.
  4. 4. Even though the Indian economy has been growing at a China like pace since the early 1990s, there is still doubt (within India and in the region) whether India can continue to rise at such a pace. Because of this perception, very few smaller countries if any will explicitly stand behind the Indian banner in any multilateral context.

For these reasons, India will ‘tolerate’ multilateral forums as a necessary but sometimes annoying or frustrating process that one must go through to build its image as a constructive and engaged Asian power.

But I have very little doubt that the way ahead will be to prioritize bilateral and mini-lateral security relationships to preserve a strategic and tactical balance of power with China very much in mind. This is very much India’s mindset at the moment.

So I expect India to be very resourceful and energetic in building bilateral security relationships with the US, Japan and countries such as Singapore and Indonesia (especially with respect to naval cooperation in the East Indian Ocean.) This is helped by the fact that these countries are all quite happy to give India naval hegemony in the waters immediately hugging its landmass.

But interestingly, I also expect India to focus seriously on building strong political and security relationships with those countries that (like itself) are not yet skilled at the multilateral game. Here I’m talking about Vietnam in particular and perhaps also Thailand – especially given that they share similar suspicions about China.

Before I continue, let me make just a few brief comments about the emerging US-India security partnership.

As you all know, the US-India nuclear deal did much to pave the way for deepening cooperation between the two countries, especially between the two navies. Both countries have the obvious common interest of keeping China in check. Although I think the term ‘security partnership’ is an appropriate phrase to describe the relationship between the two countries, there are significant barriers moving forward.

In my mind, one of the most significant is the growing problem of mismatched expectations. From the American perspective, American will grow increasingly impatient for tangible Indian security and economic commitments, cooperation and even concessions – written down explicitly in documents, declarations and the like. This is the American way, and what Washington expects in its genuine commitment to ‘help India rise as a great power’ in Condi Rice’s words.

But from the Indian point of view, they never entered into any such grand agreement. As far as India is concerned, by merely rising – and therefore providing a natural balance and check against China, and by providing a massive economic market for global firms – New Delhi is fulfilling its side of the bargain. Yes, it was America that paved the way for the Indian waiver for the Nuclear Suppliers Group but that doesn’t mean the Indian nuclear industry should have to buy from American firms. It also doesn’t mean that Indian arms procurement should look to America first, and past its traditional ally Russia, for military hardware. And even if the military-to-military relationship continues to improve, New Delhi will not want to formalize any commitments in order to retain as much strategic independence as possible.

The emerging US-India partnership is one of the big strategic events over the past decade as far as I’m concerned but these mismatched expectations will have to be narrowed.

SE Asia

Let me now move to SE Asia. Yes, these countries are busy hedging. But ‘hedging’ is taking different forms. Let me separate countries into two categories: Those countries with a big-power mentality – namely Indonesia and Vietnam – and those who see themselves as the small fish existing in a world of giants.

I will first move on to the smaller SE Asian countries. There are a small number of countries that are not so much hedging but really looking to cash in on China in the short-term – with little thought about any longer term strategy.

Here, I am talking about Cambodia and Sri Lanka.

For other small countries such as Singapore, Malaysia, and possibly the Philippines to a lesser extent, they will base the hedging strategy not just on preserving a strategic relationship with the US but also on using ASEAN to create the appearance of strategic weight and size in order to enhance their relevance – in other words, they are trying to pull off a clever magician’s trick in their dealing with larger powers. In this context, insisting that multilateral forums should be hosted by ASEAN is an attempt to ensure:

  1. 1. They can engage China economically and also strategically from an apparent position of greater collective strength
  2. 2. Through the appearance of collective strength, they keep Washington interested and engaged in the region on ASEAN’s terms
  3. 3. They retain some control over their destiny in a world of giants.

Because American power is needed more than ever – especially after the year of assertive behavior by China in 2010 – we are also seeing countries such as Singapore and Malaysia put a lot of behind the scenes effort to ensure that America is as engaged and effective within these institutions as possible. In other words, where once the hedging strategy was based almost exclusively on deepening bilateral and military ties with the Americans, it is now also based on ensuring that America rather than China is the dominant player in multilateral forums in the region.

Note that ASEAN states can only be successful as long as the big powers – US, China & Japan are prepare to play along. Currently, it is convenient for the big powers to play the ASEAN game for a number of reasons (and I can talk about that in discussion if you like), so the status quo suits these smaller SE Asian powers for the moment.

The larger SE Asian powers such as Indonesia and Vietnam are content to play along with the other ASEAN members for the moment. But they are different to the smaller ASEAN countries in a number of respects.

First, even though they do not want to provoke any argument with China, they will not be bullied by a bigger power. In this sense, they have a ‘big power’ mentality, see themselves as significant powers in SE Asia, and are more willing to directly stand-up to or even confront China (not now) but in the future.

Second, they are not going to put too many eggs in the ASEAN basket. Sure, they want ASEAN to exist and to continue to play the role that it does; but both countries have a more self-help (rather than multilateral) view of security hedging – particularly in light of ASEAN’s continued reluctance to speak openly and squarely about security competition and tension in the region.

Therefore, if these countries continue to rise economically, they will become significant strategic players in their own right – meaning they will very conspicuously increase their regional military capacities and pursue increasingly meaningful and robust security alliances with countries such as the US, India and Japan.

But if their reforms falter, then they will grudgingly revert to the ASEAN-based strategy of the smaller powers.


Australia is an interesting country in the context of emerging security strategies in the region.

For the past one hundred years, we have had a pretty simply grand strategy: as an island, we attach ourselves to the dominant naval power of the day which was Britain prior to WWII and America after WWII. It was also a happy coincidence for us that the dominant naval power of the day was both Anglo-Saxon (so we shared similar values) and also our largest trading partner. In this sense, trade and security priorities were generally in alignment.

Well, for the first time in our history, our most important strategic ally (in America) is no longer our most important trading partner (which is now China.)

To make matters more complicated, our most important security ally is a strategic competitor of our most important trading partner.

Like everyone else, we are hedging – managing the economic relationship with China, generally downplaying strategic competition, but working hard to ensure that we remain the closest ally of the Americans. Remember that Australia has joined America in every major war undertaken by Washington since WWII – the only country that has done so. Much of the reason behind this is alliance management – and ensuring that America remains willing to sacrifice blood and treasure on our behalf.

Yet, with the perception of American relative decline, our strategists and leaders are forced to understand and engage Asia in a way, and with much more depth, than we have had to in the past.

While we are also following the hedging blueprint of every other major country in the region, there are some differences in style and also substance.

For one, because we remain America’s closest ally in the region, we are much more explicit about whose side we are ultimately on – as our Prime Minister Julia Gillard reaffirmed in Washington several months ago. Moreover, we are quite explicit about the belief – perhaps more so than any other country in the region – that deepening our comprehensive security relationship with America is much more important to our future well-being than improving our bilateral relationship with China. Indeed, our bilateral relationship with China is all about seeking economic opportunities while retreating into issue-avoidance platitudes in the discussion of security matters.

Second, like most countries in the region, we seek to entrench the informal American-led hub-and-spokes strategic model – that is, with security and order being based on America’s formal and informal network of security relations and partnerships with countries such as Japan, South Korea, Australia, Singapore, Malaysiaand increasingly India.

However, for the first time, we are looking at comprehensive security partnerships and improving inter-operability platforms with other spokes. It is no coincidence that the Australian Defence Minister Stephen Smith reminded the room at the Dialogue that “the enduring strengths of Japan and South Korea should be acknowledged.”

This is the thinking behind the 2007 Joint Declaration on Security Cooperation between Japan and Australia with foreign affairs and defence ministers meeting regularly (Singapore is the only other country where we have this 2+2 ministerial level meetings.) The Japan-Australia Acquisition and Cross-Servicing Agreement might sound bureaucratic but it is a huge step toward achieving significant operational and logistical coordination between the two militaries. America is the only other country that Japan has such an agreement with.

Likewise, the Joint Statement on Enhanced Global and Security Cooperation between Australia and South Korea is seeking a similar result. This was South Korea’s first such bilateral security declaration with a country other than the United States.

Significantly, the Declaration is explicitly placed in the context of strengthening tactical and operational cooperation between the spokes of the San Francisco hub-and-spokes system.

Currently, security and operational cooperation is publicly premised on joint efforts against threats such as proliferation (eg., Proliferation Security Initiative which involves naval exercises between US, Japan, South Korea and Australia), humanitarian relief, piracy and international crime. But no one is in any doubt that countering the capabilities of the Chinese PLA Navy is at the forefront of thinking.

More generally, Australia will take the lead from the US: and this brings us to the Australia-India relationship.

Whenever there is significant deepening of strategic and military cooperation between America and another country, Australia will not be far behind. In an environment where the inevitable move towards burden-sharing essentially means inter-operability between American militaries and its allies and partners, this is one way to entrench and deepen the US-led security structure in Asia, further Australian interests, and enhance our relevance.

This is behind the Australian applications to take part in the US-India Malabar naval exercises.


In the last few minutes, I want to address something which has been missing from my presentation: how does China feel about all of this, and what are their prospects?

Well, the Chinese are far from stupid. They know exactly what is going on. In his address at the Dialogue, for example, Minister of Defence Liang spoke out against the persistent ‘Cold War’ mentality in the region. He is of course referring to the existence of alliances and security partnerships with the US and between other security partners, and more broadly to the hedging strategy designed to inhibit China’s options.

Now, size and capability matters – and China is already a more than formidable presence in the region. Nothing I am about to say is to deny this fact. The Chinese plan has always been to ease America out of Asia. But my suspicion is that the more China rises economically, the more frustrated a strategic power it will become.

There are several reasons why I think this will be the case.

The record shows that the more China rises, the more intensely key states hedge against its rise, and the more likely they are to balance and bandwagon in order to ensure that America remains the pre-eminent strategic actor in the region.

True, being the second largest economy in the world and an indispensable economic player means that it is now unthinkable to want to contain China in the Cold War sense of the term.

But without hyperbole, I would say that China remains the loneliest rising great power in history. It’s only genuine allies are Burma, North Korea and Pakistan – even Russia cannot be counted amongst its true friends. Every major power in Asia is moving closer to Washington – and taking on a greater security burden and improving cooperation with the American military – even as China’s economic importance deepens.

Why this preference for America over China?

The first, obvious reason is that China has outstanding land and maritime disputes with almost all major powers in Asia. America doesn’t.

Second, free and open trade (which is the lifeblood of growing prosperity in the region) has depended on American naval power and the hub-and-spokes structure for over five decades. In contrast, China quite correctly sees this security structure as a ready-made one to inhibit its strategic options. Therefore, even though it has benefitted from it, it wants to eventually revise and dismantle such a security structure. Other states fear the revisionist tendencies of China in this context, and fear the implications of a Chinese-led region.

Third, the fact that America is not geographically based in Asia works to its advantage. As a foreign leader, it requires greater levels of acquiescence from Asian partners to retain its presence in the region (such as basing rights.) If asked to shift its base – as occurred in the Philippines in 1991 – America will do so peacefully, even if it is resentful. In contrast, a dominant Asian power would not need the same level of regional acquiescence to maintain its military footholds. America has to constantly negotiate the terms of its presence in Asia – China would not.

Well, what about the argument that Chinese economic leverage will eventually force key Asian states to realign their allegiances away from America and towards China?

Well, China cannot truly dominate economic activity and exercise strategic leverage proportionate to its economic size until it becomes the dominant centre for domestic consumption in Asia. Until that happens, it cannot use the carrot of market access and stick of market denial to demand strategic compliance. But China’s domestically driven fixed investment and export-led model of growth is preventing that from happening – and will do so for the foreseeable future.

Being the dominant processing-trade hub, rather than the end consumer of products and services, does not give you enormous leverage. For political reasons that won’t change, Beijing does not grant significant access to foreign companies in the best and most lucrative sectors of the economy. Instead, China will have to rely on pure bulk, economic size and military muscle to get its way and fundamentally change the regional strategic structure and environment. For a number of reasons, and as formidable as it already is and could be, it will lack the economic weight and military resources needed to compel Asian neighbours to accept a Chinese-led order and reject a US-led one. I’m happy to talk about why this is the case in the time for discussion if there is interest.


If I am correct, the challenge ahead will be to manage a profoundly frustrated and dissatisfied rising Chinese power.

But that is a whole new topic.

I have covered a lot of territory so am happy to talk further about anything I have said over the time we have now for questions…

(Given above is the full text of a speech delivered by Dr John Lee, Visiting Fellow, Hudson Institute Washington and Research Fellow, Centre for Independent Studies, Sydney, Australia, at a lecture discussion, organized jointly by The Chennai Centre for China Studies, Center for Asia Studies, and the University of Madras (Dept. of Politics and Public Administration, in association with Australian Consulate General in Chennai, at Chennai on 13 June 2011. )

Dr John Lee can be reached at email: jlee@hudson.org

No comments: