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The Group of Seven summit in Cornwall has restated America’s priorities with regards to China, but the shift is not necessarily in Australia’s interests. By Michael Clarke.

China and the G7

Scott Morrison with Boris Johnson at the G7 summit in Cornwall this week.
Credit: Adrian Dennis / AFP

The recently concluded “G7 Plus” summit in Cornwall has been hailed by the Morrison government as a success. In particular, the prime minister has asserted that there “was a very high level of awareness and a very strong level of support” for Australia’s “clear and consistent” stand in its relations with Beijing.

United States President Joe Biden also has celebrated the summit. He has pointed to the grouping’s final communiqué – which criticised Beijing for human rights abuses in Xinjiang, for the suppression of democracy in Hong Kong, and for the lack of transparency regarding the origins of the Covid-19 pandemic – as a demonstration that “America is back in the business of leading the world alongside nations which share our most deeply held values”.

Yet, such assertions tend to paper over some important dilemmas confronting the US and its allies in responding to China.

The high-minded rhetoric about “deeply held values”, while clearly consistent with Biden’s desire to demonstrate he is the antithesis of Donald Trump, both obscures the divergent interests that the US and its allies have with respect to China and reinforces the apparent drift towards framing competition with China in ideological terms. The former points towards the difficulties that Washington may have in co-ordinating collective action on China from a group of allies geographically removed from the centre of gravity of the Sino–US contest in Asia.

The latter, as the late political scientist Hans Morgenthau warned, risks weakening alliances “by obscuring the nature and limits of the common interests which the alliance was supposed to make precise and by raising expectations, bound to be disappointed, for the extent of concerted policies and actions”. There is thus a fine line between instrumental appeals to ideological solidarity and over-stretching the common interests that bind potential allies.

According to Kurt Campbell, deputy assistant to the US president and co-ordinator for Indo-Pacific affairs, and Laura Rosenberger, special assistant and senior director for China and Taiwan, the Biden administration’s approach to China is based on three pillars: “investing at home” to rebuild American socioeconomic and technological strength; reinvigorating the network of American “allies and partners”; and countering China where “we need to” and co-operating with China where “it is in our interests to do so”.

For President Biden, this approach is about ensuring the US can compete and win a rivalry that he believes constitutes no less than a “contest with autocrats … as to whether or not democracies can compete with them”.

In Europe, however, this ideological appeal converges with the immediate security and strategic interests America’s partners have with respect to Russia, rather than with the less-proximate challenge of China. Although the communiqué of the recently concluded North Atlantic Treaty Organisation (NATO) summit in Brussels has broken new ground by stating that China’s “ambitions and assertive behaviour present systemic challenges to the rules-based international order and to areas relevant to alliance security”, it is clear that alliance members do not prioritise China’s challenge in the same manner as they do Russia’s.

German Chancellor Angela Merkel’s view is symptomatic here. While acknowledging that “you cannot simply ignore China” in the European security context, particularly because of Beijing’s co-operation with Russia, Merkel nonetheless noted that “one must not overrate it, either”. French President Emmanuel Macron also questioned the organisation’s need and capacity to combat China. Others, such as Lithuania, pointed to the more proximate threats from Moscow and the economic benefits of “constructive” relations with Beijing.

Given Moscow’s annexation of Crimea, disinformation campaigns and electoral interference in the US and Europe, as well as cyber attacks on critical infrastructure, it is unsurprising that the NATO communiqué references Russia 62 times in contrast to China’s 10. It defines the country as a direct threat to European security.

But as well as this divergence on the relative threat posed by China and Russia, an additional factor standing in the way of Biden’s objective of rallying “nations which share our most deeply held values” to the cause of competition with Beijing concerns the question of capabilities. According to a report by the Center for American Progress, not only have European militaries “experienced decades of decline” but their “military hardware is in a shocking state of disrepair”. They simply lack “critical capabilities for modern warfare” such as “air-refuelling to support fighter jets, transport aircraft to move troops to the fight, and the high-end reconnaissance and surveillance drones”.

Given that Biden himself has identified the “Indo-Pacific” as “front and centre” of the emergent Sino–US competition, the real question – as Politico’s David Herszenhorn puts it – is about the relevance for a threat in Asia of “allies that can barely act on their own home turf”?

Prime Minister Morrison, however, has bought in to the Biden administration’s approach. In a speech to the Perth USAsia Centre, made en route to the G7, Morrison asserted that while Australia stood “ready to engage in dialogue with all countries on shared challenges, including China”, it would “defend” and work for a “world order that favours freedom over autocracy and authoritarianism”. After the conclusion of the G7, the prime minister returned to this theme when he defended the summit from Beijing’s criticism that it was simply a “small group” of developed nations attempting to “dictate” to the world by emphasising the grouping’s commitment to ensure an “inclusive” world order that “favours freedom”.

Canberra appears to be swimming with the American tide, under the assumption that Washington’s “all in” competition with China is an unalloyed good for Australia’s national security and strategic interests.

The problem, however, is that both Beijing and Washington’s mutual shift to overt “strategic competition” upsets the basis on which Australian security and prosperity has rested since the end of the Cold War.

Put simply, this rested on the apparent triumph of the post-Cold War neoliberal consensus, which posited that continued economic globalisation and political liberalisation went together. Australia experienced a benign strategic environment as the region came to be defined by increased economic prosperity that retained American primacy and profited from China’s desire to become embedded in the existing global order.

This state of affairs has been fundamentally altered by a range of factors. China’s translation of its economic weight into military power, strategic influence and assertiveness is one. Another is the cumulative effects of what we could term the 20-year crisis of American primacy, signposted by the disastrous invasion of Iraq in 2003, the 2008 global financial crisis, the attempted retrenchment of the Obama years and Trump’s turn to an “America First” posture.

China remains committed to its “Made in China 2025” policy, designed to make the country a “manufacturing superpower” by prioritising sectors crucial to the “fourth industrial revolution”. By this it means advanced technologies and robotics, biopharmaceuticals and high-performance medical equipment, and new generation computing. In May 2020, amid the ongoing trade war with the US, Chinese president Xi Jinping heralded a so-called “dual circulation” strategy emphasising the domestic economy through prioritising Chinese technological innovation and domestic consumption.

The Biden administration, for its part, has responded in kind. The $US250 billion US Innovation and Competition Act, passed by the US senate on June 8, not only identifies China “as a strategic, near-peer, global competitor of the United States” but asserts that to “out compete” China, the US must “strengthen” its domestic foundation by reinvesting in “market-based economic growth, education, scientific and technological innovation, and democratic institutions”.

The act will provide $US50 billion to subsidise semiconductor manufacturing, which will enable American industry to stave off China’s stated goal of becoming a global leader in this sector. There is also $US81 billion to the National Science Foundation to focus on artificial intelligence, robotics and biotechnology, and mandate a “buy American” requirement for government contracts and infrastructure projects.

Taken together, these developments present a challenge to what Morrison has underlined as Australia’s interest in seeing the maintenance of “a free and fair rules-based system for international trade founded on open markets”. While Australia should expect Beijing to double-down on its “state capitalist” approach, the American turn here should be of concern in Canberra, given the broader strategic dynamic that it indicates.

It is clear that much of the American strategic community identified that regaining the US’s military and economic edge over China is a central priority. But as Boston University assistant professor Joshua Shifrinson argues, that means “the foundations of US strength – something separate from US interests – are under duress, requiring competition to reverse the trends. By this logic, only relative American advantages will produce security, and losing the lead will compromise US interests.”

While the US may have committed to “restore” American “leadership” of a “liberal international order”, as demonstrated by Biden’s rhetoric in Cornwall and Brussels, it may prove to be preoccupied with strengthening the military-economic bases of American power rather than on rebuilding the extant international order. And this has significant implications for Australia.

This article was first published in the print edition of The Saturday Paper on Jun 19, 2021 as "Cornish patsies".

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Michael Clarke is a visiting fellow at the Australia–China Relations Institute, University of Technology Sydney.