Aus­tralia woos In­dia to coun­ter­bal­ance China

Global Times US Edition - - ASIANREVIEW - By Li Yang The author is a lec­turer at the School of Eco­nom­ics of He­nan Univer­sity. opin­ion@ glob­al­

On her re­cent two-day visit to In­dia, Aus­tralian For­eign Min­is­ter Julie Bishop said of the cur­rent China-In­dia bor­der stand­off, “My un­der­stand­ing is that this is a long-term dis­pute ... Aus­tralia’s po­si­tion is that ter­ri­to­rial dis­putes should be re­solved peace­fully be­tween the claimant coun­tries.” This in­ap­pro­pri­ate re­mark re­flects Aus­tralian politi­cians’ ig­no­rance about the event. There are no ter­ri­to­rial dis­putes at the site where the in­ci­dent takes place – In­dian troops crossed into China’s Dok­lam re­gion il­le­gally and re­fused to with­draw. Bishop’s In­dia visit amid on­go­ing Sino-In­dian ten­sions is a rep­re­sen­ta­tive for In­dia’s grow­ing sig­nif­i­cance in Aus­tralia’s strate­gic cal­cu­lus. In fact, the Turn­bull ad­min­is­tra­tion has made no se­cret of its in­ten­tions to deepen se­cu­rity co­op­er­a­tion with its In­dian coun­ter­part.

Tra­di­tion­ally, Aus­tralian strate­gists have largely ig­nored In­dia. But with the so-called “Indo-Pa­cific” strat­egy be­com­ing a pre­dom­i­nant mantra in Aus­tralia’s for­eign pol­icy, New Delhi soon be­came a nat­u­ral strate­gic part­ner and a pol­icy linch­pin in Can­berra’s re­la­tions with the re­gion. At the same time, the South China Sea is­sue, re­gional eco­nomic in­tegrity, and China’s Belt and Road ini­tia­tive (BRI) all have pushed Aus­tralia to en­thu­si­as­ti­cally en­gage In­dia – the lat­ter is deemed as one of the few coun­tries that can coun­ter­bal­ance China’s re­gional clout.

There is a co­in­ci­dence of sim­i­lar needs in In­dia as well. Aus­tralia’s re­sis­tance to en­ter into the so-called “Pax Sinica” res­onates with In­dia’s self- im­age as a dom­i­nant re­gional leader and re­luc­tance to play sec­ond fid­dle to China’s BRI. Thus, Can­berra’s ap­proach was warmly re­ceived in New Delhi.

Bi­lat­er­ally, Aus­tralia inked the Frame­work for Se­cu­rity Co­op­er­a­tion with In­dia in 2014, and vowed to re­in­force the re­la­tion­ship through joint mil­i­tary ex­er­cises, weapon sales, mil­i­tary train­ing and so on. AUSINDEX 2017, a week-long joint bi­lat­eral naval ex­er­cise, was con­ducted off the west coast of Aus­tralia in June. Tri­lat­eral co­op­er­a­tion in­cludes the Aus­tralia-In­dia-Ja­pan Tri­lat­eral Di­a­logue Se­nior Of­fi­cials Meet­ing and the Aus­tralia-In­dia-In­done­sia Tri­lat­eral Di­a­logue on the In­dian Ocean, and so on. At the re­gional level, Aus­tralia has proac­tively par­tic­i­pated in the In­dia-cen­tered In­dian Ocean RimAs­so­ci­a­tion for Re­gional Co­op­er­a­tion, the In­dia-led bi­en­nial Mi­lan ex­er­cises, and the In­dian Ocean Naval Sym­po­sium. In April 2017, Can­berra pro­posed to fol­low Ja­pan’s suit to join this year’s Mal­abar naval ex­er­cises. Al­though re­jected by New Delhi, this eye-catch­ing over­ture is widely re­garded as Can­berra’s at­tempt to re­vive the Ja­pan-ini­ti­ated, China-ori­ented quadri­lat­eral se­cu­rity di­a­logue among Aus­tralia, In­dia, Ja­pan and the US.

Schol­ars and com­men­ta­tors with In­dian back­grounds have pub­lished a huge num­ber of ar­ti­cles and re­ports which re­buke China’s re­gional ini­tia­tives and high­light In­dia’s predica­ment of be­ing stuck in Bei­jing’s “strate­gic en­cir­clement.” This word­ing may worsen Can­berra’s mis­judg­ments about China’s real in­tent.

The two po­lit­i­cally in­ti­mate part­ners, nev­er­the­less, have re­mark­ably lit­tle eco­nomic in­ter­course. Stim­u­lated by the land­mark Goods and Ser­vices Tax (GST) re­form and the abo­li­tion of the For­eign In­vest­ment Pro­mo­tion Board, the OECD Eco­nomic Out­look (2017) pre­dicts that In­dia will con­tinue to be the fastest grow­ing G20 coun­try. How­ever, In­dia’s pro­tec­tion­ist mea­sures re­main an in­sur­mount­able ob­sta­cle for Aus­tralia to seek closer en­gage­ment.

In 2016, In­dia ranked as Aus­tralia’s sixth largest ex­port mar­ket and 14th largest im­port mar­ket for goods and ser­vices, and Aus­tralia’s trade sur­plus amounted to AU$ 8.5 bil­lion ($6.85 bil­lion). This is by no means good news for the bud­get-con­strained Modi ad­min­is­tra­tion. Can­berra, on the other hand, vig­or­ously seeks greater ac­cess for Aus­tralian prod­ucts and ser­vices in the In­dian mar­ket. A corol­lary is New Delhi’s luke­warm at­ti­tude to­ward ne­go­ti­a­tions to con­clude the Aus­tralia-In­dia Com­pre­hen­sive Eco­nomic Co­op­er­a­tion Agree­ment. In­deed, In­dia has re­ceived Can­berra’s long-run com­plaints about high bar­ri­ers in key sec­tors. Be­sides, eco­nomic co­op­er­a­tion is also em­broiled in fre­quent spats over in­tel­lec­tual prop­erty and la­bor pro­tec­tion is­sues. In this vein, the two coun­tries’ chances to be each other’s sup­port­ive part­ner in off­set­ting China’s eco­nomic in­flu­ence are slim.

China re­spects Aus­tralia and In­dia’s com­mon in­ter­ests in devel­op­ing their “blue econ­omy,” or mar­itime-based eco­nomic ac­tiv­ity. In the mean time, Bei­jing is well aware that Aus­tralia is steer­ing a course of free rid­ing China’s de­vel­op­ment bonus, while con­cur­rently align­ing with “like-minded coun­tries” to demon­strate mus­cu­lar­ity. It is im­por­tant to em­pha­size, how­ever, that this hedge strat­egy may end with Aus­tralia miss­ing enor­mous busi­ness op­por­tu­ni­ties gen­er­ated by the BRI. Worse, it risks es­ca­lat­ing strate­gic com­pe­ti­tion and fur­ther in­creas­ing the prospects for a dan­ger­ous Indo-Pa­cific re­gion.

Il­lus­tra­tion: Liu Rui/GT

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