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The post-Cold War era has come to an end and in its place an an intense strategic competition – principally between the US and China – will shape the world to come.
Our region will not be immune from this dynamic – in fact, we are at the very centre of it.
This competition is being accompanied by even greater investments in conventional and – regrettably – non-conventional forces.
Recorded military spending in the Indo-Pacific region has increased by almost 50 per cent in the past ten years, with China engaging in the biggest conventional military build-up in the world since the Second World War.
In the year 2000, China had six nuclear-powered submarines. By the end of this decade, they will have 21. In the year 2000, China had 57 major warships. By the end of this decade, they will have 200.
These investments are shifting the balance of military power in new and uncertain ways. We are in an environment where the risk of miscalculation increases, and the consequences are more severe.
And as China’s strategic and economic weight grows, it is seeking to shape the world around it.
For a country like Australia this represents a challenge.
Because we are an island trading nation. We have an increasing reliance on trade for our national income. In 1990 trade represented 32 per cent of our GDP. By 2020 that had risen to 45 per cent of our GDP.
And the physical manifestation of that trade are our sea lines of communication.
The rules of the road at sea are everything for us. We are deeply invested in the existing global rules-based order such as the UN Convention on the Law of the Sea and ideas like freedom of navigation. When this rules-based order is placed under pressure our national interest is deeply engaged.
Of course, Australia values the most constructive and productive relationship we can have with China. This has underpinned the steps to stabilise our relationship with China that the Albanese Government has taken since coming to government. And we are now seeing this reflected in the removal of trade impediments between our countries.
Yet the way this era of great power contest will unfold is unclear. And the outcome of the contest is uncertain.
What is manifestly clear is that Australia and all countries in the Indo-Pacific have a vital interest in maintaining a region where state sovereignty is protected, international law is followed, the global rules-based order is respected, and nations can make decisions free from coercion.
The mess our Government inherited combined with the serious challenge of the moment demanded that at the outset of our government we engage in foundational thinking.
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Some commentators have been fixated on the precise level of Australia’s defence capability in the short term, in the event of a worst-case contingency. This analysis lacks wit. It misses the point that no middle power in the Indo-Pacific is solely capable of developing or deploying the scale or breadth of military forces that powers like China and the US can.
This is obviously not the strategic cat that we are trying to skin.
Australia’s challenge lies in the future beyond this. And here we must invest in the next-generation capabilities the ADF needs to address the nation’s most significant military risks in the cyber, space and missile age.
In simple terms, this means building a more potent defence force capable of deterring any potential adversary from taking actions against Australia or our interests.
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Source: Australian Department of Defence
Speaker: The Hon. Richard Marles MP, Minister for Defence and Deputy Prime Minister of Australia
Format: Speech
China Policy Research 