‘Australia has to act; we have to build the region and the world we want. If we don’t, others will do it for us. And that means…we have to be more self-reliant and more ambitious. And…that requires true leadership.’

Shadow Australian Foreign Minister Penny Wong made a few key points in an interview this week that speaks to the bipartisan consensus developing within Australia about the crisis facing the international order, a kind of crisis not experienced since the 1930s. Another point made by Wong is important here- the recognition that Australia and other middle powers have agency and a role to play in upholding a rules-based international system in the face of a revisionist China and a disengaged United States. It’s within Canberra’s interest to seek common ground with nations who share a similar purpose and values and who too, don’t wish the region to become hostage to great power rivalry.

This week the US Secretary of State Mike Pompeo issued a statement rejecting China’s claims in the South China Sea, emphasising that ‘Beijing’s claims to offshore resources across most of the South China Sea are completely unlawful, as its campaign of bullying to control them.’ The US has more firmly reiterated that China’s harassment of the Philippines, Vietnam and other claimants in the SCS disputes is illegal and has, more significantly, issued a warning: ‘(t)he world will not allow Beijing to treat the South China Sea as its maritime empire.’

As the ABC points out, US policy on the South China Sea had previously been to adopt a neutral stance and insist on peaceful UN-backed arbitration between the claimant parties. Now, Washington has outrightly rejected China’s claims. Importantly, the statement does not include land features or territorial disputes but only maritime claims.

China has, unsurprisingly, reacted angrily, calling Washington’s accusations of it bullying other nations ‘completely unjustified.’ Beijing has blamed the US for sowing ‘discord’ between itself and its neighbours and ‘stirring up tension and inciting confrontation in the region.’

This comes days after the US announced sanctions on senior Chinese officials of the Chinese Communist Party for human rights abuses of Uighurs in the Xinjiang province and other restrictions on officials responsible for preventing foreigners from entering Tibet. The Chinese foreign ministry spokesman Zhao Lijian, last week, slammed US actions as ‘a serious interference in China’s affairs and…deeply detrimental to bilateral relations.’ China, this week, imposed reciprocal sanctions on US politicians and officials at the forefront of these moves.

Meanwhile, China this week has threatened to cut off rare earths supply to US defence industry giant Lockheed Martin in retaliation for the US $620 million military package that Washington has offered to Taipei, which includes upgraded Patriot surface-to-air missiles, logistical support and other services. Experts believe that such a move would signify a major escalation in the already troubled Sino-US relations.

Relations between Australia and China too continue to deteriorate in a similar vein. This fortnight, the Australian government announced that it would extend visas for and offer permanent residency and a pathway to citizenship to Hong Kong residents in the country after China imposed a draconian national security law in the autonomous city rendering the ‘One Country, two systems’ promise null and void. Canberra has also suspended the extradition treaty between Australia and Hong Kong. China attacked Australia’s decision calling it a ‘gross interference’ in its internal matters and ‘serious violation of international law and basic norms’.

In a bizarre tit-for-tat move (also in response to Canberra’s recent upgraded travel advisory to China), Beijing has issued a travel warning for its citizens considering travel to Australia, claiming risks of arbitrary detention and seizure of possessions by Australian law enforcement agencies.

Elsewhere in the Indo-Pacific too, China continues to ratchet up tensions.

The months-long Sino-Indian border clash in Ladakh witnessed further de-escalation this fortnight with both sides agreeing to withdraw troops 1.5 km away from the site of the standoff in Galwan valley, creating a ‘buffer zone’, off-limit to foot patrolling, for a period for 30 days. PLA troops are also said to be pulling back from the Hot Springs and Gogra areas.  This disengagement was preceded by special representative-level talks between the two sides, with Chinese Foreign Minister Wang Yi and Indian National Security Advisor Ajit Doval holding a phone call to resolve the situation on 5th July. While military-to-military talks continue, the situation in Pangong Tso remains tense, where although PLA troops have moved from Finger 4 to Finger 5, they are still entrenched within what India perceives as its own territory (the Line of Actual Control, according to India, runs at Finger 8).

Beijing, however, has opened up another battle front with India by claiming new territory of Sakteng in Bhutan, which abuts the Indian state of Arunachal Pradesh (and which China contests as its own and calls ‘South Tibet’). It’s interesting to note that this is an entirely new claim which has never before been uttered by Beijing, even amid border dispute negotiations in the past. Analysts believe that this is a tactic by China to apply pressure on India and to punish Bhutan for its close friendship with New Delhi. Bhutan, meanwhile, has protested against this perceived coercion and has issued a demarche to Beijing.

Significance to Australia

Secretary of State Pompeo’s statement on the South China Sea this week marks a significant turn in Sino-US relations and further intensifies the geopolitical competition between the two great powers in our region. But Canberra will largely welcome this statement as it too objects to Beijing’s increasing aggression vis-à-vis other claimant nations in the South China Sea and supports the upholding of the UNCLOS decision.

As Assistant Secretary of State for East Asian and Pacific Affairs, David Stilwell, remarked in his speech to the CSIS this week, the latest US policy demonstrates the US’ commitment ‘to stand firmly with…(their) Southeast Asian partners in defense of their sovereign rights’. This is likely to go a long way in reassuring countries in the region of the US’ support and resolve, even as they grapple with the realities of this new era of geopolitical rivalry between the US and China. This is unmistakeably an attempt by the US to make Southeast nations wake up to the threat of China’s grey zone tactics and coercion and to demonstrate US resolve to stand up for their rights by offering military and economic support to those countries that need them.

The battle lines for this geopolitical contest are firmly entrenched.

China has been embroiled in disputes with several nations in recent months and might be underestimating the resolve that those countries have, to assert and protect their rights. As Penny Wong mentioned in her interview, Australia and other like-minded nations need to remember that they have agency and a vital interest in maintaining an international order that is liberal, open and rules-based. And yet, with another round of staffing cuts to the Department of Foreign Affairs and Trade announced late this week, the likelihood of Australia meeting such an ambitious agenda seems to fade by the day.


Aakriti Bachhawat is a Researcher with the Defence and Strategy team at the Australian Strategic Policy Institute, and Research Assistant at the Griffith Asia Institute.