research / Research reports

Australia’s strategic hedging in the Indo-Pacific: A ‘third way’ beyond either China or the US

April 08 2019


Australia’s growing economic relations with Beijing in the past decade, in the midst of the rise of China, has sparked a continuing debate inside Australia about whether China is a friend or foe of Australia and accordingly about the premium that ought to be placed on the Australia-US security alliance. It has given rise to some assessments that Australia is now faced with a choice between China and the US. This paper, however, puts forward an argument that this binary choice is misplaced and that Canberra should avoid choosing one side at the expense of another. It makes the case that as a middle power, Australia should instead use ‘strategic hedging’, a combination of engagement and indirect/soft balancing strategy, to insure itself against the potential of China’s regional domination amid uncertainty about US strategic commitment to the Asia-Pacific region. Australia should continue its economic engagement with China and maintain its robust political and military ties with the US while seeking the opportunity to broaden the breadth and depth of its relations with other regional states. The 2017 Australian Foreign Policy White Paper has, to a certain extent, implicitly adopted this hedging policy by promoting the use of a mixture of balancing and engagement strategies to counter China’s regional domination. However, Australia’s hedging policy has yet to reach its full potential and can currently be described as ‘under-hedging’, i.e., not doing enough to reduce uncertainty about the future and risk. While the Turnbull government (2015-2018) had showed a strong commitment to working with the US, Japan and India in building a ‘free and open Indo-Pacific’, and the Morrison government has maintained this commitment, the weakest links of Australia’s hedging are in the failure to institutionalise the Quad, the informal strategic dialogue comprising Australia, the US, Japan and India, and to enmesh regional powers, notably India and Indonesia. Without enlisting more partners more firmly to its side, Australia is often sidelined by the other three members of the Quad and acts quite alone in the Indo-Pacific region.

Author: Lai-Ha Chan (Ph.D. in International and Asian Studies, Griffith University, Australia) is a Senior Lecturer in the Social and Political Sciences Program, School of Communication, Faculty of Arts and Social Sciences, University of Technology Sydney, Australia. Lai-Ha was a Fung Global Fellow in the Princeton Institute for International and Regional Studies, Princeton University, New Jersey, United States in the academic year 2016-2017. Since 2016, she has been an External Associate of the Centre for the Study of Globalisation and Regionalism, the University of Warwick, UK.

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