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22 September 2021updated 12 Oct 2023 11:24am

The nuclear tinderbox: why the Indo-Pacific is the new arena of great power rivalry

The Aukus pact is more than an arms deal. It is a glimpse of the future of geopolitics in the 21st century’s pivot zone.

By Jeremy Cliffe

It was a momentous and surprising announcement. On the morning of 16 September in Canberra, Australia’s prime minister Scott Morrison welcomed Joe Biden and Boris Johnson by video link and revealed to the world that their three countries had agreed a new partnership. Subsequently dubbed “Aukus”, it would involve the US and UK providing Australia with the technology to build nuclear-powered submarines, instead of the diesel-electric submarines it had ordered from France. The decision was met with apoplexy from France’s foreign minister Jean-Yves Le Drian, who called it a “stab in the back”, and glee from a British establishment that sees the deal as its “Global Britain” slogan come to life.

Yet Aukus is more than an arms deal. It is a template for wider American strategy in its century-defining contest with China, in the arena in which that contest will be decided: the Indo-Pacific – the maritime regions of southern and eastern Asia and the meeting point of US power (allies such as Australia, Japan, South Korea and India) and Chinese power. Aukus is a glimpse of the future.

Australia’s A$50bn submarine contract with France was signed in April 2016. Since then, Canberra’s sense of its own security has shifted. With its endless appetite for Australian mineral resources, China once looked primarily like a ticket to prosperity. Yet as Beijing’s military capabilities have grown (China’s defence spending has risen by 27 per cent over the past five years) so its treatment of Australia has become more aggressive; hitting it with trade tariffs, demanding recognition for its claims in the South China Sea and targeting it with aggressive “wolf warrior” diplomacy. That has moved Australia into close alignment with the US in the latter’s own, wider superpower competition with China.

Struck between the three leaders on the sidelines of the G7 summit in Cornwall in June, Aukus is an expression of that shift. “For Australia, it’s a huge deal,” writes Rory Medcalf, the head of Australia’s National Security College. “And in a military sense almost existential.” It also reveals three important things about US intentions.

The first is that the US is serious about countering China in the Indo-Pacific. The Biden administration has proclaimed this to be its defining goal, yet until recently had produced more talk than deeds. The submarine deal marks a new phase of action. “It shows that there is life left in the US and its allies,” says James Crabtree of the International Institute for Strategic Studies in Singapore. “Aukus shows allies like Australia wanting to throw their lot in with Washington, and a level of purpose from the US that has been recently lacking in Asia.” Australia’s decision to go with the nuclear submarines was a long-term vote of confidence in American power; the vessels will be interoperable with those of the US navy’s Pacific Fleet.

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The second is that Aukus shows the US plans to share its technology. As Adam Tooze wrote in the New Statesman on 10 September, strategists in Washington, DC believe “ultra-advanced technology, not GDP, will be the decisive factor” in the 21st-century world order. Aukus confirms his argument. But by endowing a partner state with nuclear propulsion technology and opening the door to pooled cyber, artificial intelligence and quantum computing advances, it also proposes a networked form of that technological supremacy. “The US is making sharing its technology with others a USP, something that China doesn’t do,” says Renata Dwan, deputy director of the Chatham House think tank. “Even close military alliances often limit technology sharing. This is potentially one of the most interesting aspects of the deal.” Crabtree agrees: “It was long said that the Americans had the sword, and the allies had the shield. But now that shield is getting spikier.”

[see also: What does the new Aukus alliance mean for global relations?]

Third, the Aukus deal reveals how that system of alliances should work. Some see in it the kernel of a new US-led alliance – an Indo-Pacific Nato. There may be some banding together of the Aukus trio and other groups such as the intelligence-sharing Five Eyes (the US, the UK, Canada, Australia, New Zealand), and the “Quad” (the US, Japan, Australia, India); Japan wants to join the Five Eyes, for example. “You could see a scenario where some of these [groups] begin to merge,” says James Black of the Rand research organisation. “But the challenge will be: how do you prevent them from becoming a lowest common denominator?”

Pivot zone: certain geographic points in the Indo-Pacific, such as the Taiwan Strait, the Strait of Malacca and the Nine Dash Line in the South China Sea, are especially sensitive

More likely than the merging of groups is a multiplicity of groups doing different things. These would range from inner-circle structures such as the Five Eyes and Aukus to other groupings like the EU, the “Quad +” (the Quad, plus South Korea, Vietnam and New Zealand), the ASEAN group of south-east Asian states and the 11-member CPTPP trade partnership. This geometry is said to reflect a shift away from blocs and towards more specialised groupings. It means an evolution of America’s old “hub and spoke” bilateral relationships with Indo-Pacific allies into more of a network; consider, for example, Japan’s defence equipment and technology-sharing deal with Vietnam, signed on 11 September. And it creates room for cooperation with partners such as Vietnam and the Philippines that, as James Black puts it, “may be more economically aligned with one country [China] and more strategically aligned with another”.

The thinking behind this US approach – a growing military presence marked by networked technological supremacy and a patchwork of intersecting alliances – is that it will match the pace of China’s rise, maintain a balance of power, and thus prevent conflict. In a Foreign Affairs essay in 2020, Michèle Flournoy, a former defence under-secretary, wrote: “It will take a concerted effort to rebuild the credibility of US deterrence in order to reduce the risk of a war that neither side seeks.” Joe Biden’s strategy seeks to serve that goal.

Yet it is not risk-free. There was a certain stability in the big bloc, closed-circuit US-Soviet power conflict centred on Europe that will not be present in the kaleidoscope of different military, economic and technological relationships emerging in the US-China power conflict. With so many moving parts, unclear red lines and rising military activity, the danger of misunderstandings and missteps is growing. And the channels for resolving these tensions are limited: dialogue between Washington and Beijing withered under the Trump administration and has not recovered, and the White House has no “red phone” to Zhongnanhai, the headquarters of the Chinese Communist Party, for emergency discussions as it had to the Kremlin in the Cold War.

The risk of collisions or spontaneous confrontations will only rise as more vessels patrol the waters and more ambitious military exercises are carried out. Certain geographic points are especially sensitive: Taiwan and the Taiwan Strait, the Koreas, the contested Himalayan regions on the India-China border, the Strait of Malacca (through which a quarter of all world trade flows) and the South China Sea, where China is aggressively asserting its claim to the disputed territorial waters encircled by the so-called Nine Dash Line. It recently transpired that Beijing last year interpreted a US naval exercise as a preparation for a possible attack.

It may be only a matter of time until another Trump-like figure, perhaps more dangerous and determined, occupies the Oval Office. It may also be only a matter of time until China tries to seize Taiwan. The thought of either scenario, combined with several years of militarisation and complex alliance-building in the Indo-Pacific, is alarming.

But it is a reality to be confronted both by the US and allies such as the UK and Australia, which are now arranging themselves in lockstep with Biden’s strategy. On 16 September Johnson’s predecessor Theresa May asked: “What are the implications of this pact for the stance that would be taken by the UK in its response should China attempt to invade Taiwan?” It was not an unreasonable question. “A war in the region involving the US and China in the next ten to 15 years is plausible,” asserts Crabtree. The Indo-Pacific is the pivot zone of the 21st century, where it is reasonable for governments like Britain’s to seek a role. It is also a tinderbox.

[see also: The new age of American power]

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This article appears in the 22 Sep 2021 issue of the New Statesman, Great Power Play