Australia’s Strategic Posture Issues for Congress Updated October 9 2020 Congressional Research Service https crsreports congress gov R46571 SUMMARY Australia’s Strategic Posture Issues for Congress R46571 October 9 2020 Bruce Vaughn Australia is responding to increased uncertainty in its strategic environment by developing a new Specialist in Asian Affairs strategic posture that will likely allow it greater flexibility to act independently In new strategic documents Australia has outlined plans to increase its defense spending acquire key combat systems and further develop strategic and defense ties and bilateral relations with Japan India Southwest Pacific states and others in the region while also seeking to maintain and strengthen its alliance relationship with the United States Some have described these changes as the most significant changes to Australia’s strategic posture in a generation This report is to inform Members seeking a better understanding of the strategic implications for the United States of the evolving strategic posture of one of the United States’ key allies in the Indo-Pacific Australia’s evolving strategic posture has significant implications for congressional decisionmaking on U S defense procurement expenditures and for oversight of U S strategy and defense posture in the Indo-Pacific region as well as congressional efforts to protect and strengthen U S alliances more generally The report focuses on diplomatic strategic and defense ties and does not focus in depth on trade or people-to-people ties The United States’ changed posture towards alliances and the Indo-Pacific region under the Trump Administration and rising tensions in Australia’s bilateral relations with China appear to be key drivers behind Australia’s efforts to develop and enhance its strategic posture While Australia seeks to deepen its alliance with the United States its steps towards developing its own defense capabilities and its efforts to develop strategic relationships with others imply increasing uncertainty about overreliance on its American ally While tensions between Australia and China have been rising since 2015 they have become particularly acute following Australia’s May 2020 call for an inquiry into the origins of the Coronavirus pandemic Key points of tension in the bilateral relationship between Australia and China include China’s restrictions on some imports from Australia Australia’s opposition to Chinese efforts to exert control over the South China Sea Chinese cyber-attacks against Australia China’s apparent attempt to influence Australian politicians China’s efforts to develop a Belt and Road Initiative BRI agreement with the State of Victoria despite the Australian Federal government’s decision not to sign on to the BRI perceived Chinese efforts to restrict academic freedom at Australian universities Australia’s support for a political solution that upholds Hong Kong’s freedoms and the investigation and detention of members of the Australian media in China Details of Australia’s planned changes to its strategic posture and defense policy are articulated most recently in Australia’s 2020 Defence Strategic Update the 2020 Force Structure Plan and in recent speeches by Prime Minister Scott Morrison Morrison has compared the economic and strategic uncertainty of the present with the “existential threat” that Australia faced when the global and regional order collapsed in the 1930s and 1940s The 2020 Defence Strategic Update cautions that Australia “must be better prepared for the prospect of high-intensity conflict ” After a period of lengthy deployments in Iraq and Afghanistan Australia has refocused its strategic priorities closer to its borders in the northeast Indian Ocean Southeast Asia and the Southwest Pacific Details of recent developments in Australia – U S bilateral relations which also inform Australia’s shifting strategic focus are articulated in the Australia-U S Ministerial AUSMIN Joint Statement of 2020 Uncertainty about the U S commitment to remaining a security guarantor in the Indo-Pacific and tensions with China also are driving a perception that the risk of conflict in Australia’s back yard is rising and developing Australia’s strategic and defense ties with regional partners appears to be an increasingly important aspect of Australia’s overall posture Australia and Japan signed a Joint Declaration on Security Cooperation in 2007 a Comprehensive Partnership in 2008 a Special Strategic Partnership in 2014 and in July 2020 Prime Minister Morrison and then-Prime Minister Shinzo Abe held a virtual summit and added an agreement on space cooperation to their Special Strategic Partnership In June 2020 Prime Minister Morrison and Prime Minister Narendra Modi of India signed a Mutual Logistics Sharing Agreement and announced the elevation of their bilateral ties to a Comprehensive Strategic Partnership CSP Australia is reportedly seeking an invitation to join India’s Malabar naval exercise which includes naval forces from the United States and Japan Australia is also intent on protecting its long-standing role as a key security partner in the Pacific and Prime Minister Morrison’s Pacific Step Up policy also identifies the South Pacific as one of Australia’s highest foreign policy priorities The strengthening of Australia’s strategic posture has the potential to bolster U S strategic objective in the Indo-Pacific by alleviating burden sharing concerns enhancing security in the South Pacific and developing interoperability and military exercises while also strengthen ties among the like-minded Quad nations Australia’s renewed focus on its more immediate strategic neighborhood however does have the potential to limit its participation in future coalition operations in more distant theatres of operation Congressional Research Service Australia’s Strategic Posture Issues for Congress Contents Introduction 1 Congressional Focus 1 Regional Tensions and Uncertainty Driving Australia’s Strategic Posture 3 Tensions in Australia-China Relations 4 Uncertainty with the United States’ Commitment to the Region and Alliances 5 Australia’s New Strategic Direction 8 The 2020 Defence Strategic Update 8 Growing Australia’s Defense Capabilities 9 Deepening the U S -Australia Partnership in the Indo-Pacific 11 Developing Regional Strategic Partnerships 13 Trilateral Relations with the U S and Japan 13 Japan 14 India 14 Pacific Step Up 16 The Quad 17 Five Eyes 18 Five Power Defence Arrangements FPDA 18 Potential Implications for Congress 19 Strategic Context 19 U S Indo-Pacific Strategy and the Quad 20 Burden Sharing 20 Defense Exercises and Interoperability 20 Out of Area Deployments 21 Arms Imports 21 Figures Figure 1 The Indo-Pacific 4 Figure 2 Australia’s Defense Spending 10 Appendixes Appendix Australia-China Tensions 22 Contacts Author Information 27 Congressional Research Service Australia’s Strategic Posture Issues for Congress Introduction The U S -Australian defense and intelligence relationship is one of the United States’ closest security partnerships Its foundation is the Australia-New Zealand-United States ANZUS alliance of 1951 Australia has fought side by side with the United States in most of its key conflicts including World War I World War II Korea Vietnam and more recently in Iraq and Afghanistan The two nations are members of the Five Eyes intelligence group and have a Free Trade Agreement and many people-to-people ties In the view of some analysts “Australia is embarking on the most significant reorientation of its strategic policy settings in more than a generation ”1 while others have described Australia’s new defense paradigm as marking a “pivotal moment in modern Australia’s military history ”2 For many years Australia’s strategic outlook was based on a view that it enjoyed a relatively benign security environment and that it did not have to choose between its history and its geography 3 as a result it could pursue both a close strategic relationship with the United States and a close trade relationship with China Australia’s strategic outlook now views Australia’s strategic environment as more unstable and uncertain and prone to interstate conflict than it did a few years ago The Australian Department of Defence’s 2020 Defence Update released in July 2020 states “The security environment is markedly different from the relatively more benign one of even four years ago with greater potential for military miscalculation ”4 This report explores the drivers of Australia’s changing strategic posture before discussing the specific policy adjustments Australia is undertaking The report also examines the geopolitical context of Australia’s strategic and defense relationships in the Indo-Pacific Congressional Focus Given that Congress is considering or has recently considered a number of pieces of legislation related to Australia and America’s alliances in the Indo-Pacific see map below this report seeks to provide background information and context for congressional decisionmakers considering such legislation and conducting oversight of related issues In 2017 before his death the following year Senator John McCain expressed his “unwavering support” for the alliance with Australia and stated that Australia is one of America’s oldest friends and staunchest allies We are united by ties of family and friendship mutual interest and common values and shared sacrifice in wartime … Americans value our historic alliance honor the sacrifice of the Australians who have served and are serving by our side and remain committed to the safer freer and better world that Australia does far more than its fair share to protect and promote 5 In May 2020 Senators Jim Inhofe and Jack Reed published an article “The Pacific Deterrence Initiative Peace Through Strength in the Indo-Pacific ” in which they put forward their intention Ashley Townshend and Brendan Thomas-Noone “Australia Steps up in Defence of the Indo-Pacific Order ” The Diplomat September 1 2020 2 Geoffrey Barker “Australia’s New Defence Paradigm ” The Strategist Australian Strategic Policy Institute July 7 2020 3 Rupert Darwall “John Howard’s Australia ” Policy Review Hoover Institute August 2005 4 The Department of Defence Government of Australia “2020 Defence Update ” 5 Corky Siemaszko “Sen McCain Makes Nice with Australia After Trump’s ‘Blunt’ Talk with PM ” NBC News February 2 2017 1 Congressional Research Service 1 Australia’s Strategic Posture Issues for Congress to establish a Pacific Deterrence Initiative PDI as part of the National Defense Authorization Act for Fiscal Year 2021 6 The Pacific Deterrence Initiative will enhance budgetary transparency and oversight and focus resources on key military capabilities to deter China The initiative will also reassure U S allies and partners and send a strong signal to the Chinese Communist Party that the American people are committed to defending U S interests in the Indo-Pacific 7 In the article the two Senators also stated that “in the Indo-Pacific that foundation of deterrence is crumbling as an increasingly aggressive China continues its comprehensive military modernization ” They also called for “a credible balance of military power” and asserted that the United States’ “allies and partners in the Indo-Pacific are watching closely and wondering whether they will be able to count on America ” Among other priorities the PDI seeks to reassure allies and partners of America’s commitment to the Indo-Pacific and help allies and partners build the capabilities they need to protect their sovereignty Senators Inhofe and Reed stated that this is not a partisan issue and described the Pacific Deterrence Initiative as a complementary effort to the previous Asia Reassurance Initiative Act ARIA of December 2018 8 An article published by Senators Cory Gardner and Jim Inhofe in July 2020 described how the PDI would complement ARIA and stated U S allies like Australia are already making the tough choices while braving Beijing’s bluster and bullying … B y remaining open to trade while refusing to trade away fundamental values Australia has set a proud example … Australia should not be alone in this effort The United States stands with our allies 9 Significant other bills beyond S 4049 and H R 6395 the National Defense Authorization Act for Fiscal Year 2021 provide context for this report including          S 4272 STRATEGIC Act H R 7797 BLUE Pacific Act Boosting Long Term U S Engagement in the Pacific S 4300 A Bill to Amend the ARIA of 2018 to Require the Secretary of Defense to Carry Out the PDI H R 6613 Indo-Pacific Deterrence Initiative S 2547 Indo-Pacific Cooperation Act H Res 1020 and S Res 609 Recognizing That for 45 Years Papua New Guinea and the United States Have Shared a Close Friendship S 3905 Intelligence Authorization Act for Fiscal Year 2021 H R 2047 and S 985 Allied Burden Sharing Report Act and H R 1811 and S 985 Countering the Chinese Government and Communist Party’s Political Influence Operations Act 6 The Pacific Deterrence Initiative follows the European Deterrence Initiative which was created in 2014 in response to rising threats from Russia “The Pacific Deterrence Initiative—Peace Through Strength in the Indo-Pacific ” United States Senate Committee on Armed Services May 28 2020 7 Sen Jim Inhofe and Sen Jack Reed “The Pacific Deterrence Initiative Peace Through Strength in the Indo-Pacific ” War on the Rocks May 28 2020 8 Sen Jim Inhofe and Sen Jack Reed “The Pacific Deterrence Initiative Peace Through Strength in the Indo-Pacific ” War on the Rocks May 28 2020 9 Sen Cory Gardner and Sen Jim Inhofe “Renewing America’s Commitment to the Indo-Pacific ” The Diplomat July 2 2020 Congressional Research Service 2 Australia’s Strategic Posture Issues for Congress Regional Tensions and Uncertainty Driving Australia’s Strategic Posture Australian policymakers increasingly view the rise of China and strategic competition between the United States and China as a principal driver of strategic dynamics in the Indo-Pacific While tensions between Australia and China its key trade partner have been mounting in recent years difficulties between them have increased significantly since Australia called for an inquiry into the origins of the Coronavirus Disease 2019 COVID-19 pandemic Liberal Party Prime Minister Scott Morrison now views open conflict in the region as no longer inconceivable Morrison stated on July 1 2020 that we have not seen the conflation of global economic and strategic uncertainty now being experienced here in Australia in our region since the existential threat we faced when the global and regional order collapsed in the 1930s and1940s 10 Prime Minister Morrison has explained Australia’s changing strategic outlook through a number of recent speeches In a speech to the Aspen Security Forum in August 2020 Prime Minister Morrison stated that “the configuration of power in global politics has changed … the liberal rules and norms of what has been known as the American Century are under assault ” He then went on to describe an international society in the Indo-Pacific that is “under strain ” Today the Indo-Pacific is the epicentre of strategic competition Tensions over territorial claims are growing The pace of military modernisation is unprecedented Democratic nations face new threats from foreign interference Cyber-attacks are increasing in frequency and sophistication Disinformation is being used to manipulate free societies The trade rules that have allowed us to prosper have not evolved to meet new challenges And economic coercion is increasingly employed as a tool of statecraft 11 Australia’s view of its region as an increasingly contested space when set in the context of Australia’s strained relations with China and its increasing uncertainty with the United States’ level of commitment to Australia and the region is shaping Australia’s new strategic posture According to Morrison “a critical priority is to build a durable strategic balance in the IndoPacific For more like-minded nations to act more cohesively more consistently more often To align ”12 Morrison’s view of a strategic environment that is increasingly unstable and dangerous is shared by former Labor Party Prime Minister Kevin Rudd who wrote in August 2020 that “The once unthinkable outcome—actual armed conflict between the United States and China—now appears possible for the first time since the end of the Korean War ”13 Peter Hartcher “Scott Morrison is Not Going to Duck This Crisis ” The Sydney Morning Herald July 4 2020 Prime Minister Scott Morrison “Address Aspen Security Forum ‘Tomorrow in the Indo-Pacific ” August 5 2020 12 Prime Minister Scott Morrison “Address Aspen Security Forum ‘Tomorrow in the Indo-Pacific ” August 5 2020 13 Andrew Tillett “US-China Tensions Could Lead to War ” Australian Financial Review August 4 2020 10 11 Congressional Research Service 3 Australia’s Strategic Posture Issues for Congress Figure 1 The Indo-Pacific Source Map prepared by Hannah Fischer and Amber Wilhelm with CRS Notes There are different definitions of the geographic scope of the Indo-Pacific region Tensions in Australia-China Relations For many years Australia has sought to balance its trade relationship with China with its strategic relationship with the United States This appears to be increasingly difficult for Australia as its relations with China continue to deteriorate particularly in the wake of Australia’s calls for an inquiry into the origins of the COVID-19 pandemic and increasing China-U S tensions Many observers point to 2014 as the high point in Australia-China relations when President Xi Jinping addressed a joint sitting of parliament in Canberra the same day a Free Trade Agreement between the two countries was announced 14 Since then tensions have been steadily growing 15 Areas of friction between the two nations include differences over China’s territorial claims in the South China Sea as well as accusations in 2019 by China that Australia was expanding restrictions on Huawei and ZTE 16 Other issues include   concern in 2018 that China was seeking port access in Vanuatu which many in Australia considered provocative 17 the apparent attempt by China to gain influence over Australian politicians such as former MP Sam Dastyari in 2017 18 Emma Griffiths “Xi Jinping in Australia ” ABC News Australia November 17 2014 Cait Kelly “Panda Pals to Barely Speaking How Australia’s Relationship with China Fell Apart ” The New Daily August 28 2020 16 Fergus Hunter and Jennifer Duke “‘Unreasonable’ China Claims Australia Has Expanded 5G Restrictions ” Sydney Morning Herald December 17 2019 17 “Chinese Military Base in Pacific Would Be of ‘Great Concern ’ Turnbull Tells Vanuatu ” ABC News Australia April 9 2018 18 Datyari was involved in a China donations scandal that led to his resignation from the Senate “Sam Dastyari 14 15 Congressional Research Service 4 Australia’s Strategic Posture Issues for Congress   new Australian legislation in 2017 to curb foreign interference in the country and Australia’s decision to block the sale to China of critical infrastructure such as the AD$10 billion19 sale of New South Wales power grid AUSGRID in 2016 20 See the Appendix for a detailed discussion of areas of friction in AustraliaChina relations A view now exists among some observers that China is offering “the same bargain with Australia that it has with the Chinese people a promise of prosperity in exchange for obedience and censorship ”21 While Australian intelligence and defense circles are reportedly concerned with China’s influence in Australia and its region Australian business interests remain more focused on the importance of trade with China to Australia’s economy According to one observer “In no country is there such a profound rift between the business community and security ”22 China has placed restrictions on some aspects of trade with Australia and is reportedly the source of cyberattacks against Australia 23 There are also tensions related to China’s Belt and Road Initiative 24 and according to polling data the Australian public is increasingly concerned with China Issues such as academic freedom at Australian Universities attempts to influence Australian domestic politics Hong Kong and the questioning and detention of Australian journalists have also been areas of tension in the bilateral relationship China is the fifth largest source of foreign direct investment FDI Australia with a total population of approximately 25 million is home to approximately 1 2 million people of Chinese ancestry many of whom migrated to Australia over the past decade 25 There were over 250 000 Chinese students26 and 1 4 million Chinese tourists in Australia in 2018 27 Uncertainty with the United States’ Commitment to the Region and Alliances The American defeat of the Japanese in the Battle of the Coral Sea in WWII and many other shared battles have done much to shape generations of Australians’ views of the strategic importance of the United States to Australia While Australia continues to look to the United States as a key security partner many Australians feel the alliance has been weakened under President Trump’s Administration Australian Senator to Quit After China Scrutiny ” BBC News December 12 2017 19 On September 11 2020 one Australian dollar equaled 73 cents U S 20 Peter Hartcher “Revealed Why the Sale of Ausgrid to Chinese Buyers Was Vetoed ” Sydney Morning Herald May 28 2018 21 Mark Harrison University of Tasmania as quoted in Damien Cave “Australia’s China Challenge ” New York Times May 20 2019 22 Linda Jakobson China Matters as quoted in Damien Cave “Australia’s China Challenge ” New York Times May 20 2019 23 Ariel Bogel “Why China Is Being Blamed for Cyber Attacks Against Australia ” ABC News Australia June 19 2020 24 “The Belt and Road Initiative reminiscent of the Silk Road is a massive infrastructure project that would stretch from East Asia to Europe Some analysts see the project as a disturbing expansion of Chinese power ” Andrew Chatzky and James McBride “China’s Massive Belt and Road Initiative ” The Council on Foreign Relations January 28 2020 25 Frances Mao “How Reliant Is Australia on China ” BBC News June 17 2020 26 “Double-Digit Growth for Australia’s Foreign Enrollment in 2018 ” ICEF March 20 2019 https monitor icef com 27 “1 42 Mln Chinese Visitors Arrive in Australia in 12 Months to September 2018 ” Xinhua September 1 2019 Congressional Research Service 5 Australia’s Strategic Posture Issues for Congress The strategic consequences of President Trump’s decision to withdraw from the Trans-Pacific Partnership which the United States had championed under former President Barack Obama significantly affected Australian and regional perceptions of the United States’ commitment to the Asia-Pacific region Perceptions that the United States was becoming less engaged with other security forums also played a role in shaping regional states’ views of the United States’ commitment to the region 28 Supporters in the United States and Asia promoted TPP on the basis that it would link the United States with 11 other Asia-Pacific countries and help liberalize trade market reform and America’s competitive industries Supporters also argued that it would support the United States’ strategic interests by strengthening the United States’ leadership in Asia by strengthening both the liberal international order and key regional partners The TPP was a key component of the Obama Administration’s Rebalance to Asia strategy and the U S withdrawal from the TPP is said to have “exacerbated regional doubts about U S international leadership and its role in Asia ”29 President Trump’s decision to withdraw from the TPP also “led various Australian commentators to question Washington’s commitment to maintain a viable economic and strategic presence in the Asia-Pacific ”30 According to another analyst “Removing the U S from the TPP increases uncertainty among U S allies about the reliability of the U S across a range of foreign and economic matters ”31 Some policymakers in the United States took a similar view Former Senator John McCain described the decision to withdraw from the TPP as “a serious mistake that will have lasting consequences for America’s economy and our strategic position in the Asia-Pacific region ”32 President Trump’s early statements and actions towards Australia in particular and alliances in general caused concern among some strategic observers in Australia According to one analyst “staunch allies such as Japan and Australia find the president’s unpredictable style deeply unsettling ”33 In July 2016 candidate Trump stated “If we cannot be properly reimbursed for the tremendous cost of our military protecting other countries … then yes I would be absolutely prepared to tell those countries ‘congratulations you will be defending yourself ’”34 This position which is a reversal of past U S policy is a cause for concern for many in Australia 35 President Trump’s actions were viewed by some in the press as “injecting new uncertainty in the U S -Australia relationship” and reflecting the “transactional view he takes of relationships even when it comes to diplomatic ties with long-standing allies ”36 President Trump described his first call with former Prime Minister Malcolm Turnbull as “the worst call by far ” according to media reports 37 Ties were strained at that time by objections within the Trump Administration to a Mathew Davies “Repairing the US-ASEAN Relationship ” East Asia Forum March 14 2020 Timothy Heath “Strategic Consequences of U S Withdrawal from TPP ” RAND March 27 2017 30 William Tow “President Trump and the Implications for the Australia-US Alliance and Australia’s Role in Southeast Asia ” Contemporary Southeast Asia 39 1 2017 31 Mireya Solis “Trump Withdrawing from the Trans Pacific Partnership ” Brookings March 24 2017 32 Jordain Carney “McCain Trump Withdrawal From TPP a Serious Mistake ” The Hill January 23 2017 33 John Lee “Down Under Doubles Down on Checking China ” Hudson Institute July 27 2020 34 Damian Paletta “Clinton vs Trump Where They Stand on Foreign Policy Issues ” Wall Street Journal reference to a July 20 2016 Trump interview with the New York Times http grapics wsj com elections 2016 donald-trumphillary-clinton 35 Ben Westcott “Does Australia Want Turnbull to Save the Relationship with Donald Trump ” CNN May 3 2017 36 Greg Miller Philip Rucker “No G’Day Mate On Call with Australian Prime Minister ” Washington Post February 3 2017 37 Greg Miller “‘This Was the Worst Call by Far’ Trump Badgered Bragged and Abruptly Ended Phone Call with Australian Leader ” Washington Post February 2 2017 28 29 Congressional Research Service 6 Australia’s Strategic Posture Issues for Congress refugee-settlement agreement concluded under the Obama Administration and President Trump’s statements that U S allies needed to pay more for U S support 38 After their rough start relations between the Trump White House and the Australian government began to improve The April 2017 visit to Australia by Vice President Mike Pence and what was generally viewed as a positive meeting between Trump and Turnbull aboard the retired aircraft carrier USS Intrepid for the 75th anniversary of the Battle of the Coral Sea on May 4 2017 helped to put the relationship back on track after its rocky start 39 President Trump subsequently hosted Prime Minister Morrison for a State Dinner in September 2019 40 While bilateral relations with Australia have generally improved uncertainty and general concerns over President Trump’s policies towards the United States’ allies continue One article published in Foreign Policy states From the beginning he Trump has questioned the value of NATO cozied up to dictators and berated long-standing U S allies such as Australia Canada and Germany He rejects the United States’ postwar internationalist strategy of forward defense and deterrence through prepositioned forces And his hostility is not just rhetorical In June Trump blindsided the German government by approving a plan to cut 9 500 troops stationed in Germany 41 By calling into question whether the United States would honor its allied commitment to NATO and discussing the withdrawal of the United States from the alliance Trump has undermined the United States’ credibility in the eyes of many alliance partners 42 Former National Security Advisor John Bolton has stated that it is “highly questionable” whether President Trump would keep the United States in NATO According to Bolton my first reaction to Trump’s German troop drawdown was this is the beginning of the end … I think the alliances with Japan South Korea Australia are question marks at this point 43 President Trump’s periodic references to reducing the number of U S military personnel stationed in South Korea and stalled negotiations over U S -ROK cost-sharing arrangements have prompted concerns about the U S commitment to the U S -South Korean alliance 44 These concerns grew in June 2020 after reports emerged that the Pentagon had provided President Trump plans to draw down troops in South Korea “amid a deadlock over the U S ’s demand for more funding” to cover the cost of U S troops stationed in South Korea 45 Such statements and actions by the Trump Administration may have had an effect on Australian national security Jane Wardell and Roberta Rampton “Tense Call Between Trump and Australian Leader Strains Longtime Ties ” Reuters February 1 2017 39 “Trump Australia’s Turnbull Hold First Meeting in Move to Clear Air After Tense Phone Call ” Reuters May 4 2017 40 Michael Collins “After a Rocky Start with the Aussies Donald Trump Hosts State Dinner for PM Scott Morrison ” USA Today September 20 2019 41 Sam Winter-Levy and Nikita Lalwani “Will America’s Alliances Survive the Trump Era ” Foreign Policy July 14 2020 42 Max Bergman and James Lamond “Why Trump’s Troop Withdrawal From Germany is Only the Beginning ” Foreign Policy August 8 2020 43 Z Budryk “Bolton Worried About Biological Weapons NATO Withdrawal If Trump Is Reelected ” The Hill June 23 2020 44 Barbara Starr and Kylie Atwood “Concern Growing US and South Korea Could Fail to Reach an Agreement on Troop Cost-Sharing ” CNN February 20 2020 45 Jeong-Ho Lee “South Korea Troop Cut Speculation Grows After U S Comment ” Bloomberg News July 22 2020 38 Congressional Research Service 7 Australia’s Strategic Posture Issues for Congress decisionmakers’ calculations of the extent to which it is prudent to rely on their alliance with the United States While strong support has existed for the ANZUS alliance among both Australian elites and the general public for many years there are now signs that its popularity with younger Australians is weakening When asked “How important is our alliance relationship with the United States for Australia’s security ” in Lowy Institute46 Polls 87% in 2012 stated that it was either “very important” or “fairly important ” That number dropped to 78% of Australians polled in 2020 47 According to the poll 25% of Australians aged 18 to 29 view the alliance as “very important” to Australia’s security compared with 43% across all age brackets Further 16% of 18 to 29 year olds have “some confidence” in President Donald Trump while 28% have “some confidence” in China’s Xi Jinping 48 Australia’s New Strategic Direction Australia is responding to a perceived deteriorating security situation and growing Chinese influence within Australia and its region by not only looking to its own defense but by also “looking to help alter the balance of power in the Indo-Pacific ”49 In particular Australians are responding to concerns about increasing pressure on a rules based order the relative decline of the United States’ geopolitical position and its ability to maintain a balance of power in the IndoPacific region and “an acceleration in China’s use of coercive statecraft backed by its proliferation of sophisticated anti-access area denial systems which threaten to bring about a Chinese sphere of influence ”50 While Australia continues to value its alliance with the United States and look to it as a primary security partner it is developing a more independent strategic posture by increasing its defense budget see Figure 2 and military capabilities and by developing strategic ties with like-minded states such as Japan and India and reengaging with the South Pacific 51 The 2020 Defence Update states “it is the government’s intent that Australia take greater responsibility for our own security It is therefore essential that the ADF Australian Defence Force grow its self-reliant ability to deliver deterrent effects ” Prime Minister Morrison who favors a rules-based order has highlighted that building an Indo-Pacific alliance with like-minded states is a priority at a time when the pace of militarization in the region is accelerating 52 The 2020 Defence Strategic Update The Morrison government released its Defence Strategic Update on July 1 2020 The government plans to provide the Australian Department of Defense with total funding of approximately AD$575 billion over the next ten years 53 with the defense budget expected to “The Lowy Institute is an independent nonpartisan international policy think tank located in Sydney Australia ” https www lowyinstitute org 47 “Importance of the US Alliance ” Lowy Institute Poll 2020 https poll lowyinstitute org 48 Kate Clayton and James Blackwell “Young Australians Turn from the US Towards Asia ” Lowy Institute 2020 49 John Lee “Down Under Doubles Down on Checking China ” Hudson Institute July 27 2020 50 Ashley Townshend and Brendan Thomas-Noone “Australia Steps up in Defence of the Indo-Pacific Order ” The Diplomat September 1 2020 51 Van Jackson “The Risks of Australia’s Solo Deterrence Wager ” War on the Rocks July 20 2020 52 “Australian PM Says Building Indo-Pacific Alliance Will Be ‘Critical Priority ’” Reuters August 4 2020 53 Australian Goverment Department of Defence “Defence Strategic Update Fact Sheet ” http www defence gov au 46 Congressional Research Service 8 Australia’s Strategic Posture Issues for Congress grow from AD$42 billion in 2020 to AD$74 billion within a decade 54 Australia had the 13th largest defense expenditure in the world in 2019 55 According to one analyst the 2020 Defence Strategic Update and the 2020 Force Structure Plan promises to pivot Australia’s strategic posture from a largely defensive force primed for coalition operations to a conventional deterrence role with an elevated focus on lethality and Australian-led military operations within the country’s immediate environment 56 In launching the Strategic Update Prime Minister Morrison stated “we have moved into a new and less benign strategic arena ” He also highlighted that his government had directed the Department of Defence to prioritize the Australian Defence Forces’ “geographical focus on our immediate region the area ranging from north-east Indian Ocean through maritime and mainland Southeast Asia to Papua New Guinea and the south-west Pacific ” As a consequence the Strategic Update may have implications for Australian participation in coalitions with the United States in more distance theatres such as the Middle East While Australia remains prepared to make such contributions outside its area of strategic priority “we cannot allow such considerations of contingencies to drive our force structure ”57 The 2020 Strategic Update marks key changes to Australia’s strategic posture and defines new strategic objectives to “shape Australia’s strategic environment to deter actions against Australia’s interests and to respond with credible military force when required ”58 These strategic objectives are leading Australia to grow its defense capabilities refocus the U S Australia alliance on the Indo-Pacific and strengthen Australia’s key regional security partnerships Morrison also noted that these objectives require force structure and capability adjustments which would require “developing capabilities in areas such as longer range strike weapons cyber-capabilities and area denial systems ”59 Observers have interpreted actions outlined in the Strategic Update as signaling that Australia is serious about deterrence and armed conflict in the Indo-Pacific region 60 While Australia continues to try not to antagonize China some observers believe that “only China’s coercive turn can account for the dramatic upgrade of our Australia’s martial mindset posture and capabilities ”61 Growing Australia’s Defense Capabilities The Morrison government committed in the 2020 Defence Strategic Update to invest significantly in new and upgraded defense capabilities The Defence Update document states that “the Government will provide Defence including the Australian Signals Directorate with total funding over the decade to 2029-30 of AD $575 billion including approximately AD $270 billion of investment in Defence capability ” The Morrison government committed to provide AD$42 2 billion of funding to the Department of Defence including the Australian Signals strategicupdate-2020 54 Euan Graham “Australia’s Serious Strategic Update ” IISS Analysis July 3 2020 55 Lucie Beraud-Sudrea “Global Defence Spending ” IISS Military Balance Blog February 14 2020 56 Euan Graham “Australia’s Serious Strategic Update ” IISS Analysis July 3 2020 57 Prime Minister Scott Morrison “Launch of the 2020 Defence Strategic Update ” July 1 2020 58 Australian Government Department of Defence “Shape Deter Respond ” https www defence gov au StrategicUpdate-2020 docs 2020_Defence_Strategic_Update 59 Prime Minister Scott Morrison “Launch of the 2020 Defence Strategic Update ” July 1 2020 60 Rod McGuirk “Australia Plans $190 Billion Defense Boost over Decade ” Associated Press June 30 2020 61 John Lee “Everyone Knows We’re Arming Up Because of China ” Hudson Institute https www hudson org Congressional Research Service 9 Australia’s Strategic Posture Issues for Congress Directorate in 2020-21 62 This funding is then planned to grow to AD$73 7 billion by 2029-30 The defense budget has also been “decoupled from GDP forecasts to avoid the need for adjusting Defence’s plans in response to future fluctuations in GDP ”63 Figure 2 Australia’s Defense Spending 2011-2020 Source Graph prepared by Kirt Smith with CRS based on IISS Military Balance Janes Trading Economics and media reports Notes Values provided are in absolute terms and not adjusted for inflation $1 A$1 38 9 11 20 The $42 billion AUD in defense spending for 2020 is an estimate and could change depending on reporting data in the future Australia is purchasing a number of significant weapons systems as part of its Strategic Update These include already announced weapons procurement decisions and a modernization and expansion of the navy and other new weapons Under the Defence Update Australia is to continue to acquire 72 F-35A Joint Strike Fighters JSF as well as improved air launched munitions replacement fleets for the C-130J Hercules transport and KC-30A air-to-air refueling aircraft MQ-4C Triton remotely piloted aircraft P-8A upgrades and eventual replacement of E-7A Wedgetail airborne early warning aircraft Capability investment is to also include “new investment in missile defence capabilities for deployed forces ”64 Australia also plans to replace older ships and submarines and expand its fleet Australia is to continue with existing plans to acquire 12 new Attack Class submarines upgrade the existing Collins Class submarines and acquire Hunter Class frigates the Joint Strike Fighter and the Boxer combat reconnaissance vehicle Australia also plans to continue investment in twelve Arafura Class offshore patrol vessels six new Cape Class patrol boats and “up to eight new vessels optimized for mine countermeasures and hydrographic survey ”65 Australian Government Australian Signals Directorate “About ASD ” https www asd gov au about Australian Government Department of Defence 2020 Defence Strategic Update p 53 https www defence gov au StrategicUpdate-2020 docs 2020_Defence_Strategic_Update 64 Australian Government Department of Defence “Air Factsheet ” http www defence gov au 65 Australian Government Department of Defence “Maritime Factsheet ” http www defence gov au 62 63 Congressional Research Service 10 Australia’s Strategic Posture Issues for Congress Australia is also investing in emerging technologies such as “remotely piloted or autonomous systems” capabilities to “counter emerging space threats and ensure space access … high speed missile systems to provide government with more deterrence options and directed energy weapons ”66 As part of its effort to acquire stronger deterrence capabilities the government announced that it will buy the AGM-158C Long Range Anti-Ship missile from the United States for AD$800 million 67 The 2020 Defence Update includes “a development test and evaluation program for high speed long-range strike and missile defence including hypersonic weapons leading to prototypes to inform future investments ”68 By prioritizing its more immediate neighborhood Australia seeks to contribute to maritime security in the Southwest Pacific and provide “maritime surveillance patrols in critical sea lanes in the Indian Ocean and the South China Sea ”69 Among other measures the 2020 Force Structure Plan seeks to support Australian sovereignty and self reliance through Increased weapons inventories expanded domestic munitions capacity additional fuel storage capacity and increased domestic industry participation to provide a more durable supply chain and strengthen sovereign industrial capabilities to enhance the ADF’s self reliance 70 Deepening the U S -Australia Partnership in the Indo-Pacific Australia views itself as a “staunch and active ally of the United States ”71 Its strategic disposition is also of increasing importance to the United States’ strategic posture in the Indo-Pacific at a time of increasing strategic uncertainty in the region Key aspects of this relationship include the annual AUSMIN talks intelligence sharing weapons procurement bilateral and multilateral military exercises and joint operational deployments The AUSMIN talks include the U S Secretary of State the Secretary of Defense as well as the Australian Minister for Defence and the Australian Minister for Foreign Affairs The AUSMIN consultations are the principal forum for bilateral consultations between Australia and the United States 72 The July 2020 AUSMIN meeting in Washington was significant for shifting the alliance’s attention away from the Middle East to focus more firmly on the Indo-Pacific Australian Defence Minister Linda Reynolds called for deepening defense cooperation with the United States while also declining to commit Australia to Freedom of Navigation Operations FONOPs in the SCS Foreign Minister Marise Payne added that Australia has “no intention of injuring” its relationship with China while also committing to working more closely with international groupings including the Quad and Five Eyes 73 Some have described Australia’s presence at AUSMIN as well as Australian Government Department of Defence “2020 Force Structure Plan Factsheet ” http www defence gov au Michelle Grattan “Scott Morrison Pivots Australian Defence Force to Meet More Threatening Regional Outlook ” The Conversation June 30 2020 68 Daniel Hurst “Australia to Aquire Long Range Missiles as PM Warns of Dangerous Post-Covid World ” The Guardian June 30 2020 69 Australian Government Department of Defence “Australia’s Defence Force Posture and Engagement Factsheet ” http www defence gov au 70 Australian Government Department of Defence 2020 Force Structure Plan http www defence gov au 71 Australian Government Department of Defence 2020 Defence Strategic Update https www defence gov au StrategicUpdate-2020 docs 2020_Defence_Strategic_Update 72 Australian Government Department of Foreign Affairs and Trade “AUSMIN- Australia-United States Ministerial Consultations ” https www dfat gov au 73 The Quad or Quadrilateral Security Dialogue facilitates strategic dialogue between the United States Australia India and Japan Katrina Manson and Jamie Smyth “Australia Treads Careful Line on China in US Meeting ” 66 67 Congressional Research Service 11 Australia’s Strategic Posture Issues for Congress policies articulated in the Defence Update as demonstrating “confidence and independence in the alliance ”74 The AUSMIN 2020 Joint Statement articulated a number of shared concerns perspectives and developments The statement reiterated the alliance’s focus on the Pacific and stated that the United States and Australia are “working side by side including with ASEAN India Japan the Republic of Korea and Five Eyes partners to strengthen our networked structure of alliances and partnerships ” Through their Joint Statement the two nations also expressed their deep concern over China’s actions that are eroding Hong Kong’s autonomy and freedoms as well as “the PRC’s campaign of repression of Uyghurs” in Xinjiang It also “affirmed that Beijing’s maritime claims are not valid under international law … that the PRC cannot assert maritime claims in the South China Sea based on the nine dash75 line ” Australia reaffirmed its commitment to trilateral dialogues with Japan and the United States and Quad consultations with the U S Japan and India The Joint Statement also noted that Australia’s Defence Update will enable Australia to “make its strongest contribution to shared security interests in the Indo-Pacific be better able to project military power and deter destabilizing actions at a longer range ” The principals also committed to “increased and regularized maritime cooperation in the region as well as the Indian Ocean” and the “potential expansion of Marine Rotational Force-Darwin joint training exercises to include additional partners and allies ” The Secretaries and Minsters also “affirmed the value of bilateral collaboration on a number of areas of defense technology such as hypersonics integrated air and missile defense electronic and undersea warfare space cyber critical minerals and other technologies ”76 The two nations also agreed to establish a strategic fuel reserve in Darwin Australian Defence Minister Linda Reynolds and U S Ambassador Arthur Culvahouse announced plans to bolster military facilities in the Northern Territory in September 2020 Together the United States and Australia plan to spend approximately AD$8 billion upgrading Northern Territory air and naval facilities over the next decade 77 The joint statement also articulated that the two nations “continue to prioritize close and continuing cooperation on supply chain diversification … and continued development of a U S Australia Critical Minerals Plan of Action to improve the security of critical minerals in the United States and Australia ” Bilateral cooperation on the diversification of rare earths78 supply appears to be progressing China currently produces 70% to 90% of the world’s rare earths which are critical for defense applications including systems such as the F-35 aircraft each of which contains an estimated 417 kilograms of rare earths 79 The 2020 AUSMIN Joint Statement welcomed an announcement that Lynas80 signed a contract with the U S Department of Defense Financial Times July 28 2020 74 Lindsey Ford and Ashley Townshend “In Annual Meeting a New Direction for US-Australia Alliance ” Brookings August 4 2020 75 Marina Tsirbas “What Does the Nine-Dash Line Actually Mean ” The Diplomat June 2 2016 76 U S Department of State “Joint Statement on Australia-U S Ministerial Consultations AUSMIN 2020 ” July 28 2020 https www state gov joint-statement-on-australia-u-s-ministerial-consultations-ausmin-2020 77 Jane Bardon “Australia and US Promise to Bolster Northern Australia’s Strategic Defences ” ABC News Australia September 9 2020 78 Hobart King “Rare Earth Elements and Their Uses ” https geology com articles rare-earth-elements 79 Genevieve Feely and Rhys De Wilde “Its Time to Take an Alliance Based Approach to Securing Rare-Earths Supplies ” The Strategist ASPI August 6 2020 80 According to its website Lynas Corporation is an integrated source of rare earths from deposits in Western Australia “Lynas Corporation ” https www lynascorp com Congressional Research Service 12 Australia’s Strategic Posture Issues for Congress for a feasibility study for a rare earth separation facility in the U S and reaffirmed support for “exploration of new approaches to diversification and the maintenance of reliable and secure supply chains ”81 Lynas is the largest Australian company involved in the mining and processing of rare earths It controls the Mt Weld deposits in Western Australia which account for about 8% of world output of rare earths 82 The Joint Statement also welcomed the development of a U S Australia Critical Minerals Plan of Action Australia which is a party to the United Nations Convention on the Law of the Sea UNCLOS moved its policy position in July 2020 to align more closely with the United States’ position on China’s claims in the SCS by supporting UNCLOS and the 2016 award by the Arbitral Tribunal that heard the case brought by the Philippines against China 83 While Australia reportedly continues to resist U S calls to participate in Freedom of Navigation Operations FONOPS Australian naval and air forces regularly transit the SCS and are reportedly looking to increase the number of joint naval exercises in the SCS that it conducts with the U S Navy 84 Australian ships deploying to joint exercises in the Philippines Sea were reportedly confronted by Chinese naval forces in the summer of 2020 85 Developing Regional Strategic Partnerships Given its growing perception that the risk of conflict in the Indo-Pacific region is rising Australia is prioritizing developing ties with regional Indo-Pacific partners through strategic agreements joint exercises and new military-to-military arrangements that will both expand Australia’s operational flexibility and grow its partners’ capabilities to contribute to regional security This is particularly evident in Australia’s pursuit of more multilateral cooperation in the region as well as its focus on further developing strategic and defense ties with Japan and India and with Pacific Island countries through Australia’s Pacific Step Up policy Some observers have criticized the Strategic Update for not taking Indonesia a close neighbor a democracy and a significant security partner more into account 86 Trilateral Relations with the U S and Japan The United States bilateral alliance relationships with both Australia and Japan are reinforced by trilateral relations among the three nations This holds true too for Australia In 2018 the three nations signed a trilateral Memorandum of Understanding to operationalize the Trilateral Partnership for Infrastructure Investment in the Indo-Pacific 87 In June 2019 the Defense Ministers of the three countries agreed to a Strategic Action Agenda that would strengthen U S Department of State “Joint Statement on Australia-U S Ministerial Consultations AUSMIN 2020 ” July 28 2020 https www state gov joint-statement-on-australia-u-s-ministerial-consultations-ausmin-2020 82 Frank Holmes “Australia May Be the Saving Grace for the Rare Earths Market ” Forbes November 6 2019 83 Carl Thayer “Australia Abandons Its Neutrality on the South China Sea Maritime Disputes ” The Diplomat July 27 2020 84 Daniel Hurst “Australia to Step Up South China Sea Defence Cooperation with US—But Won’t Commit to Patrols ” The Guardian July 29 2020 85 Anthony Galloway and Eryk Bagshaw “Australia-US Looking to Ramp Up Military Exercises in South China Sea ” Sidney Morning Herald July 28 2020 86 Indonesia is Australia’s largest neighbor and has at times figured prominently in Australian regional security planning particularly as part of the struggle against Islamist militancy Evan Laksmana “Australia’s Strategic Appetite Should Take More Account of Indonesia ” East Asia Forum July 19 2020 87 The White House “Joint Statement of the Governments of the United States of America Australia and Japan ” November 17 2018 81 Congressional Research Service 13 Australia’s Strategic Posture Issues for Congress trilateral cooperation build partner capacity in collaboration with regional partners increase the complexity and sophistication of trilateral exercises demonstrate every nation’s right to freedom of navigation and overflight in accordance with international law and improve shared situational awareness through enhanced information sharing 88 The Australia-Japan-United States Defense Ministers meeting was held in July 2020 The meeting’s joint statement “reaffirmed their joint commitment to enhance security stability and prosperity in the Indo-Pacific region in keeping with their shared values and long-standing alliances and close partnerships ”89 Japan Australia places great value on its strategic relationship with Japan which has developed significantly in recent years Australia and Japan signed a Joint Declaration on Security Cooperation in 2007 a Comprehensive Partnership in 2008 and a Special Strategic Partnership in 2014 Australia and Japan have also initiated an annual fighter jet exercise Bushido Guardian Some observers expect that Japan will also increase its participation in the Australia-United States Talisman Sabre exercise 90 During his 2018 visit to Australia then-Prime Minister Abe visited Darwin which Japan attacked in 1942 during the Second World War One observer wrote at the time that “by acknowledging the history of military conflict between the two countries Tokyo will provide a more solid footing for the burgeoning security partnership ”91 In July 2020 Prime Minister Morrison and then-Prime Minister Abe held a virtual summit and added an agreement on space cooperation to their Special Strategic Partnership Prime Minister Morrison stated that the meeting “presents a timely opportunity to reaffirm the shared principles values and global outlook that reinforce one of Australia’s closest regional partnerships As likeminded democracies we are natural partners with shared interests ”92 Australia and Japan have been negotiating a Reciprocal Access Agreement that would codify rules related to hosting visiting troops Such an agreement is viewed as facilitating the bilateral movement of troops between Australia and Japan to enable more frequent and larger scale joint exercises 93 It was also reported in August 2020 that Japan Australia and India began discussion on a trilateral Supply Chain Resilience Initiative to reduce their dependency on China 94 India The Australia-India strategic and defense relationship has also evolved rapidly in recent years Bilateral defense relations between India and Australia began with a 2006 memorandum on Defense Cooperation and a 2009 Joint Declaration on Security Cooperation Strategic dialogues between Canberra and New Delhi include annual Defense Policy Talks and an annual Track 1 5 Defense Strategic Dialogue 95 During Prime Minister Modi’s 2014 visit to Canberra Australia and India agreed to extend defense cooperation to cover research development and industry U S Department of Defense “Australia-Japan-United States Strategic Action Agenda ” June 1 2019 U S Department of Defense “Australia-Japan-United States Defense Ministers Meeting Joint Statement ” July 7 2020 90 Grant Wyeth “Japan and Australia Deepen Defense Ties ” The Diplomat November 25 2019 91 Lauren Richardson “Abe’s Visit to Australia Raising the Stakes ” The Lowy Interpreter November 15 2018 92 Andrew Tillett “Morrison Abe to Strike Space Deal But Defence Pact Elusive ” The Financial Review July 8 2020 93 Lauren Richardson “Abe’s Visit to Australia Raising the Stakes ” The Lowy Interpreter November 15 2018 94 “India-Japan-Australia Supply Chain in the Works to Counter China ” The Economic Times August 21 2020 95 “Defence Engagement ” Australian High Commission New Delhi https india embassy gov au 88 89 Congressional Research Service 14 Australia’s Strategic Posture Issues for Congress engagement They also formalized annual defense minister summits and made plans to conduct regular maritime exercises 96 A Framework for Security Cooperation between Australia and India was established in 2014 based on “converging political economic and strategic interests ”97 Prime Minister Modi and then-Prime Minister Turnbull committed themselves in the framework to “deepening the bilateral defense and security partnership ” and welcomed progress achieved through this Framework They also shared a desire “to ensure that Indian Ocean architecture keeps pace with regional issues and addresses emerging threats and challenges in the region ”98 The first AUSINDEX exercise was held off Visakhapatnam India in 2015 Australia is also a participant in India’s multilateral Milan exercise In 2019 India hosted the AUSINDEX biennial bilateral military exercise which focused on anti-submarine warfare 99 During their virtual meeting in June 2020 Prime Minister Morrison and Prime Minister Narendra Modi signed a Mutual Logistics Sharing Agreement which allows the two nations to share military bases for logistics support and announced the elevation of their bilateral ties to a Comprehensive Strategic Partnership CSP 100 A Defence Science and and Technology Implementing Arrangement was also agreed to in June 2020 101 The CSP is to further strengthen the two nations partnership and “contribute to a more secure open inclusive and prosperous Indo-Pacific ”102 Both nations agreed to deepen and broaden defense cooperation through military exercises and “to develop new ways to address shared security challenges ” They also affirmed their commitment to have Foreign and Defense Ministers meet in a 2 2 format at least every two years In the CSP the two nations also reaffirmed their vision for a “free open inclusive and rules-based Indo-Pacific region ”103 It was reported in July 2020 that Australia would also likely be invited by India to join the 2020 Malabar naval exercise which also includes naval forces from the United States and Japan This has been viewed as a “sign that shared national security concerns over China’s perceived expansionism in the region is bringing the two countries closer together ”104 If Australia joins the exercise it would be the first time since 2007 that all four Quad countries have participated in a joint military exercise India’s reservations on inviting Australia to join Malabar have reportedly stemmed from its doubts about Australia after Australia pulled out of the first iteration of the Quad grouping in 2008 under former Prime Minister Kevin Rudd India’s reluctance to include Indian Ministry of External Affairs “India-Australia Bilateral Relations ” August 31 2017 Australian Government Department of Foreign Affairs and Trade “Framework for Security Cooperation Between Australia and India 2014 ” November 18 2014 https www dfat gov au geo india Pages framework-for-securitycooperation-between-australia-and-india-2014 98 David Brewster “The Australia-India Framework for Security Cooperation ” Security Challenges vol 11 no 1 March 2015 See also David Brewster India as an Asia Pacific Power London Routledge 2012 99 “India-Australia Bilateral Defence Exercise Will Deepen Strategic Ties ” The Economic Times March 28 2019 100 Harsh Pant and Premesha Saha “India’s Pivot to Australia ” Foreign Policy July 21 2020 101 Australian Government Department of Defence “Australia and India Sign Defence Arrangeemnt ” https www minister defence gov au 102 Prime Minister of Australia “Joint Statement on a Comprehensive Strategic Partnership Between Republic of India and Australia ” Media Statement June 4 2020 https www pm gov au media joint-statement-csp-republic-indiaaustralia 103 “Joint Statement on a Comprehensive Strategic Partnership Between Republic of India and Australia ” https www pm gov au sites default files media csp-joint-statement pdf 104 Aarti Betigeri “India Australia and Containing the China Challenge ” The Interpreter July 21 2020 96 97 Congressional Research Service 15 Australia’s Strategic Posture Issues for Congress Australia in Malabar may also be attributable to concerns that including Australia would antagonize China There are unconfirmed reports that Australian Indian and Indonesian Ministers for Foreign Affairs are planning to meet virtually to bolster regional cooperation in the Indo-Pacific 105 This meeting will reportedly be followed by a meeting of the three nations Defense Ministers 106 The Indonesia-Australia Comprehensive Economic Partnership Agreement entered into force on July 5 2020 The agreement seeks to foster economic cooperation between the two nations 107 The three countries held their first Senior Officials Trilateral Dialogue meeting in November 2017 108 In September 2020 India Australia and France held their first trilateral framework meeting focused on enhancing cooperation in the Indo-Pacific The three nations discussed economic and geostrategic challenges and agreed to hold the trilateral talks annually 109 Pacific Step Up Morrison’s Pacific Step Up policy identifies the South Pacific as one of Australia’s highest foreign policy priorities 110 The 2020 Defence Update references the Pacific Step Up policy and the Boe Declaration adopted by Pacific Island Forum and states that “Australia is enhancing its security cooperation with Pacific countries including through expanded ADF training activities infrastructure development maritime capability and people-to-people links ” Australia remains the region’s largest grant donor with AD$1 4 billion in 2019-2020 official development assistance to the region 111 While Australia provided Pacific Island nations $5 87 billion in grant assistance over the period 2011-2017 China provided $518 million in grant assistance and $5 2 billion in loans 112 In 2019 Australia set up a Pacific Support Force which employs a “mobile training team to strengthen capacity resilience and interoperability throughout the region ”113 Australia has also opened a new Office of the Pacific within the Department of Foreign Affairs and Trade to coordinate Australia’s deepening engagement with the Pacific 114 In August 2020 Prime Minister Morrison pointed to Australia’s “special responsibility” to the South West Pacific and once again highlighted the importance of his government’s Pacific Step Up policy towards the Pacific Island countries 115 Under the Commonwealth Pacific Maritime Andrew Tillett and Emma Connors “New Bloc of Australia India Indonesia Takes Shape Amid China Fears ” Australian Financial Review September 4 2020 106 “Foreign and Defence Ministers of India Australia Indonesia to Meet Amid Concerns over China ” Hindustan Times September 2 2020 107 “Indonesia-Australia Comprehensive Economic Partnership Agreement ” https dfat gov au 108 S Godbole “What About India Indonesia Australia The New Trilateral ” Brookings September 19 2018 109 “India France Australia Hold First Trilateral Dialogue with Focus on Indo-Pacific ” The Times of India September 9 2020 110 Australian Government Department of Foreign Affairs and Trade “Australia’s Pacific Engagement ” https www dfat gov au geo pacific engagement Pages stepping-up-australias-pacific-engagement 111 Australian Government Department of Foreign Affairs and Trade “2019-20 Australian Aid Budget Pacific at a Glance ” https www dfat gov au about-us corporate portfolio-budget-statements Pages 2019-20-aus-aid-budgetpacific-at-a-glance 112 J Hollingsworth “Why China Is Challenging Australia for Influence over the Pacific Islands ” CNN July 22 2019 113 Paul Osbourne “Australia Creating Pacific Support Force ” The Canberra Times July 23 2019 114 Australian Government Department of Foreign Affairs and Trade “Office of the Pacific ” http www dfat gov au 115 Prime Minister Scott Morrison “Address Aspen Security Forum ‘Tomorrow in the Indo-Pacific ’” August 5 2020 https www pm gov au media address-aspen-security-forum-tomorrow-indo-pacific 105 Congressional Research Service 16 Australia’s Strategic Posture Issues for Congress Security Program Australia is in the process of replacing older patrol vessels in 12 Pacific Island countries and Timor Leste with 21 new Guardian Class Patrol Boats 116 The first of these boats was commissioned by Papua New Guinea PNG in February 2019 117 The Pacific Maritime Security program also includes “integrated regional aerial surveillance and efforts to strengthen regional coordination ”118 Australian concerns that China may be seeking access to port facilities or potentially a military base in Australia’s Pacific neighborhood have grown in recent years Former Australian Prime Minister Malcolm Turnbull responded to reports that China was seeking to build a naval base in Vanuatu by stating that “We would view with great concern the establishment of any foreign military bases in those Pacific Island countries and neighbours of ours ”119 Plans were announced in November 2018 for Australia to partner with Papua New Guinea and the United States to develop the Lombrum Naval Facility on Manus Island Papua New Guinea 120 now appear to be uncertain Manus Island was a key allied air and maritime base of operations during World War II Vice President Pence pledged American support for the project while attending the APEC Summit in Port Moresby in November 2018 121 In August 2019 it was announced that the first phase of plans to upgrade the deep water naval base had been completed Upgrades reportedly include a new wharf maritime infrastructure facilities long-range communications and troop barracks At the time it was reported that “The base will host Australian and U S naval ships as part of a deal signed with Papua New Guinea and is seen as a potential counter to China’s rising influence in the contested South China Sea ”122 Upgrades to the Momote airport near the Lombrum base are being done by the China Harbour Engineering Company which is reportedly a subsidiary of one of the companies that constructed artificial island bases in the South China Sea 123 It was reported in June 2020 that the PNG government indicated it would review its agreement with Australia 124 There was some speculation in the media that “If the deal gets revoked it could provide China with an opportunity to have its own base in the region ”125 The Quad In 2017 Australia India Japan and the United States revived their Quadrilateral Dialogue also known as the Quad after a lengthy hiatus former Prime Minister Kevin Rudd had withdrawn Australia from Quad discussions in 2008 out of concern that they were in conflict with Australia’s economic interests with China Geostrategic considerations as opposed to trade considerations Austal “Guardian Class Patrol Boat Pacific Patrol Boat Replacement ” https www austal com ships guardianclass-patrol-boat-pacific-patrol-boat-replacement 117 “Pacific Security Bolstered as First Guardian Class Patrol Boat Commissioned ” Navy Daily February 12 2019 118 Australian Government Department of Defence “Pacific Maritime Security Program ” http www defence gov au 119 Hugh White “Australia Must Prepare for a Chinese Military Base in the Pacific ” The Guardian July 14 2019 120 Katharine Murphy “America to Partner with Australia to Develop Naval Base on Manus Island ” The Guardian November 17 2018 121 Tim Fish “Australia U S Set to Expand Papua New Guinea Naval Base ” USNI News November 23 2018 122 “First Stage of Manus Naval Base Opens ” The Canberra Times August 24 2019 123 Thomas Shugart “A Chinese Built Airport Next Door to a Key Australia-US Naval Base ” The Interpreter August 7 2020 124“PNG to Review Deal with Australia for Naval Base on Manus ” Radio New Zealand June 12 2020 Issac Nicholas “Govt to Revisit Lombrum Base Deal ” PNG Post Courrier June 12 2020 125 “Can Australia Lose a Strategic Naval Base to China in Papua New Guinea ” The Eurasian Times June 12 2020 116 Congressional Research Service 17 Australia’s Strategic Posture Issues for Congress now appear to be more prominent in Australian decisionmakers’ minds The group has the shared aim of a free open and inclusive Indo-Pacific region 126 The Quad countries have a common interest in maintaining a stable balance of power in the region freedom of the seas an open rulesbased economic order to counter debt-trap diplomacy and to limit the use of coercion by a state to assert territorial claims 127 Cooperation among Quad countries has increased as China continues to challenge the interests of individual Quad countries and the rules based order in the Indo-Pacific Observers see deepening military cooperation among Quad countries as having the potential to deter China’s attempts to alter the status quo in the region 128 While India has been reluctant to invite Australia to participate in its Malabar naval exercise which it holds with the United States and Japanese navies it now appears that it could do so 129 This decision may be influenced by increased tensions on the India-China border in the Himalaya at Doklam in 2017 and more recently along the Sino-Indian border between Ladakh and Tibet in 2020 130 The United States Navy held parallel naval exercises with Quad countries in the Philippines Sea and the Indian Ocean in July 2020 131 Five Eyes Australia is a member of the “Five Eyes” intelligence alliance with the United States the United Kingdom UK Canada and New Zealand The group was formed in the aftermath of World War II through a multilateral agreement for signals intelligence cooperation The group is viewed as the world’s most significant intelligence alliance 132 There is reportedly some discussion to expand Five Eyes membership and scope to include Japan133 and address trade vulnerabilities in areas such as medical supplies or rare earths China has supplied much of the world’s rare earths which are critical to the production of mobile phones and laptops and have widespread applications for defense Australian MP Andrew Hastie who chairs the Australian Parliament’s Joint Committee on Intelligence has spoken on Five Eyes countries’ supply chain vulnerabilities and the need to “mitigate one another’s weakness and yes there is a potential to build a free trading bloc ”134 Five Power Defence Arrangements FPDA Australia continues to be an active member of the Five Power Defence Arrangements FPDA regional security group The FPDA is a nonbinding defense pact established in 1971 that includes U S Department of State “U S -Australia-India-Japan Consultations ‘The Quad’ ” May 31 2019 https www state gov u-s-australia-india-japan-consultations-the-quad 127 Lavina Lee “Assessing the Quad Prospects and Limitations of Quadrilateral Cooperation for Advancing Australia’s Interests ” The Lowy Institute May 19 2020 128 Grant Wyeth “Why Has Australia Shifted Back to the Quad ” The Diplomat November16 2017 129 Harsh Pant “India’s Pivot to Australia ” Foreign Policy July 21 2020 130 Jeff Smith “Democracy’s Squad India’s Change of Heart and the Future of the Quad ” War on the Rocks August 13 2020 131 “US Japan India and Australia Simulate ‘Quad’ Drill in Indo-Pacific ” Nikkei Asian Review July 22 2020 132 V Tossini “The Five Eyes—The Intelligence Alliance of the Anglosphere ” https ukdefencejournal org uk 133 Ankit Panda “Is the Time Right for Japan to Become Five Eyes’ ‘Sixth Eye’ ” The Diplomat August 15 2020 134 Patrick Wintour “Five Eyes Alliance Could Expand in Scope to Counteract China ” The Guardian July 29 2020 126 Congressional Research Service 18 Australia’s Strategic Posture Issues for Congress Australia Malaysia New Zealand Singapore and the United Kingdom The FPDA holds several annual military exercises including Air Defense Exercises Exercise Bersama Lima Exercise Bersama Shield and Exercise Suman Warrior The FPDA continues to promote interoperability and increases security cooperation among members 135 Britain’s Prime Minister Boris Johnson has called for a more Global Britain and a more active role for the United Kingdom in the IndoPacific in the post-Brexit era 136 A more active regional role for the United Kingdom could build on its existing ties to the region through its relationships with FPDA countries The new carrier HMS Queen Elizabeth will reportedly deploy to the Indo-Pacific on its maiden voyage in 2021 137 There is also speculation that the carrier may be based in the Far East 138 Potential Implications for Congress Strategic Context The strengthening of Australia’s strategic posture raises the question for Congress of how best to support and leverage this to maximize U S strategic objectives operational plans and values in the Indo-Pacific strategic environment The implications for the United States of changes in Australia’s strategic posture are related to the United States overall strategic vision for the Indo-Pacific and what role alliances should play in that Those favoring a strategy in which the United States actively seeks to promote its values and interests by remaining engaged in the Indo-Pacific region will likely welcome Australia’s strengthening of its capabilities and strategic relationships in the region and beyond Others favoring a less engaged role for the United States may also support the strengthening of a likeminded ally that could shoulder a larger role in support of regional security and stability An informed assessment of Australia’s changing strategic posture and its implications for the United States may be better understood in a broader context of American grand strategy toward Asia and the Pacific or the Indo-Pacific as a whole A comprehensive overview of the history of the United States strategic engagement with Asia and the Pacific has found that If there is one central theme in American strategic culture as it has applied to the Far East over time it is that the United States will not tolerate any other power establishing exclusive hegemonic control over Asia or the Pacific Put another way for over two centuries the national interest of the United States has been identified by key leaders as ensuring that the Pacific Ocean remains a conduit for American ideas and goods to flow westward and not for threats to flow eastward toward the homeland 139 Within this context the development of a key American ally’s strategic posture has the potential to be of significant strategic value to the United States According to one recently articulated view changes in Australia’s defense planning could alter the basic security dynamic in the Indo-Pacific region—and correspondingly the U S approach to competition in this region The questions now is whether Washington Li Jie Sheng “The Future of the Five Power Defense Arrangements ” The Diplomat November 1 2019 Alan Crawford “Boris Johnson’s Global Britain Collides with Reality ” Bloomberg July 22 2020 137 Stephen Kuper “Royal Navy Commits to Indo-Pacific Carrier Deployment ” Defence Connect July 15 2020 138 Lucy Fisher “Britain Set to Confront China with New Aircraft Carrier HMS Queen Elizabeth May Be Base in Far East ” The Times July 14 2020 139 Michael Green By More Than Providence Grand Strategy and American Power in the Asia Pacific Since 1783 New York Columbia University Press 2017 p 5 135 136 Congressional Research Service 19 Australia’s Strategic Posture Issues for Congress will notice the significant change in its most trusted Pacific ally’s posture whether it will choose to cooperate with Canberra’s efforts to pull off its new strategy and whether it will treat this as a useful model for other allies and partners 140 Some argue that in an Indo-Pacific region where relations between the United States and China have become increasingly strained and at a time when China’s power and assertiveness are rising the need to be able to work with friends and allies such as Japan Korea or Australia to maintain regional stability and promote shared interests is extremely important 141 Others have argued that U S allies and partners in the region “remain confused even doubtful” of America’s espoused commitment to the Indo-Pacific region and that as a result the United States needs to demonstrate more clearly that it “fundamentally believes in the strategic importance of alliances and partnership” to restore confidence in the United States 142 U S Indo-Pacific Strategy and the Quad By developing its own Indo-Pacific-focused regional defense posture while also developing its strategic relationships with Japan and India and seeking to maintain its alliance with the United States Australia is strengthening key linkages among Quad partners A stronger defense posture when combined with enhanced strategic linkages with Japan and India could do much to allow the Quad to deter and respond to regional security challenges should the need arise One option for Congress is to take advantage of Australia’s developing ties with India and Japan and find ways to encourage and support further investment in developing the Quad A stronger more capable Australia which shares values and strategic interests with the United States with close coordination with other American allies and strategic partners will likely do much to support U S regional objectives Burden Sharing For many years some U S defense planners have been concerned that United States allies do not spend enough on defense 143 This view contends that friends and allies should be doing more to share the burden of defense spending The strategic investments in Australian defense systems incorporated in the 2020 Defence Update see Figure 1 do much to address concerns that Australia could be doing more to shoulder the burden of defense spending If as planned Australia continues to increase its defense spending in the years ahead Congress could urge other friends and allies to follow Australia’s lead Defense Exercises and Interoperability Australian military forces have enjoyed a high level of interoperability with U S forces The United States and Australia participate in a number of bilateral and multilateral defense exercises together including Exercise Talisman Sabre which involves over 33 000 Australian and U S military personnel Such exercises enable improved effectiveness of jointly operating military forces Continuing to work closely with Australia as it develops its military forces may help Zach Cooper and Charles Edel “Australia Is Having a Strategic Revolution and It’s All About China ” Foreign Policy July 22 2020 S 141 Jeffrey Hornung and Scott Harold “As Covid-19 Makes Clear U S Allies in the Indo-Pacific Not the Money They Pay to Host U S Forces Are the Value Proposition ” RAND June 12 2020 142 Yuki Tatsumi “Needed Restoration of U S Credibility in the Indo-Pacific ” Stimson September 18 2020 143 Colby Lutz and Darrell Driver “Burden Sharing Dilemmas and NATO’s Tumultuous Summer ” War Room U S Army War College September 27 2018 140 Congressional Research Service 20 Australia’s Strategic Posture Issues for Congress maintain high levels of interoperability between U S and Australian forces Such exercises and training may also expand to include other allies and defense partners which could further develop U S interoperability with regional friends and allies This presents Congress with an opportunity to urge the Administration to enhance bilateral exercises to further improve interoperability and where appropriate to include other regional partners Out of Area Deployments Refocusing on Australia’s nearer geostrategic region may have implications for Australian deployments with the United States farther afield One potential downside for the United States to Australia’s new strategic posture is the possibility that Australia will be more reluctant than in the past to join U S -led military coalitions beyond what Australia considers to be its area of immediate strategic interest While it may be less likely to participate than in the past in the Middle East or elsewhere beyond Australia’s area of immediate strategic interest Australia could remain open to considering potential future requests for such deployments This raises the possible question for Congress of what the implications or tradeoffs could be for operations in other theatres Arms Imports Australia became the world’s second-largest weapons importer in 2018 144 It was the secondlargest arms export destination for U S arms exports in 2019 145 Australia has traditionally been one of the world’s largest importers of American armaments Recent key purchases include 72 F-35 JSFs 12 EA-18G Growler airborne electronic attack aircraft and 15 P-8 Poseidon maritime surveillance and patrol aircraft A continued close strategic relationship with Australia particularly at a time when Australia is significantly increasing defense procurement would likely facilitate continued United States defense sales to Australia One potential question for Congress is how it could best help facilitate such trade to maximize the United States’ economic as well as strategic interests Andrew Greene “Australia Now World’s Second Biggest Weapons Importer Behind Saudi Arabia ” ABC News Australia September 29 2019 145 “US Arms Exports by Country 219 ” Statista http www statista com 144 Congressional Research Service 21 Australia’s Strategic Posture Issues for Congress Appendix Australia-China Tensions COVID and Trade Sanctions Australia was one of the most vocal and early advocates for an independent inquiry into the origins and early handling of the coronavirus outbreak This stance displeased Beijing 146 China threatened economic action in response and carried through by imposing barriers to Australian barley and beef and by discouraging its students and tourists from going to Australia after Australia called for an inquiry into COVID-19’s origins at the World Health Assembly China also announced an anti-dumping investigation into Australian wine exports to China in August 2020 147 Such efforts to intimidate and coerce Australia and shape its behavior through China’s economic leverage were not well received in Australia Prime Minster Morrison stated “I’m never going to trade out values in response to coercion ”148 China’s actions have highlighted for many in Australia the need to diversify Australian export partners and lessen Australia’s reliance on China Australia is vulnerable to China’s actions because China is Australia’s largest trading partner accounting for almost a third of Australia’s exports in 2019 149 Despite rising political tensions and China’s economic actions against certain aspects of trade with Australia Australian exports to China reached a record AD$14 6 billion in June 2020 with China accounting for 48 8% of all Australian goods exports at that time 150 Australia’s trade surplus increased 174% to reach AD$10 6 billion in March 2020 151 The surge in demand for Australian commodities such as iron ore coal and gold were a key part of the increased demand An economist at the Australian National Bank stated “China’s share of Australian exports is growing despite political head winds ”152 There are increasing calls on corporate Australia to diversify their trade relationships to lessen Australia’s reliance on the China market and make Australia less vulnerable to coercion from China 153 Influence Operations A recent report by the Australian Strategic Policy Institute ASPI an independent and nonpartisan think tank has accused the Chinese Communist Party’s United Front Work Department UFWD the agency responsible for coordinating influence operations of eroding democratic systems while boosting the Chinese Communist Party’s influence abroad 154 According to ASPI Daniel Hurst “Australia Hails Global Support for Independent Coronavirus Investigation ” The Guardian May 18 2020 147 Bill Birtles “China Launches Second Probe into Australian Wine ” ABC News Australia August 31 2020 148 S Dziedzic “China Seems Intent on Using its Economic Heft to Intimidate Australia ” ABC News Australia June 12 2020 149 Frances Mao “How Reliant Is Australia on China ” BBC News June 17 2020 150 J Smith and T Hale “Australia’s Record Trade Surplus on Back of China Demand ” Financial Times https www ft com 151 Wayne Cole “Gold Rush Improving China Demand ” Reuters April 2020 152 J Smyth and T Hale “Australia Reports Record Trade Surplus on Back of China Demand ” Financial Times 2020 153 Heath Baker “Managing Chinese Economic Risks Means More Than Diversification ” The Interpreter July 28 2020 154 Max Walden “China Rejects Report Alleging ‘Important Magic Weapon’ Wielding Covert Influence in Australia ” ABC News Australia June 16 2020 146 Congressional Research Service 22 Australia’s Strategic Posture Issues for Congress the UFWD’s efforts to reach beyond the borders of the People’s Republic of China PRC into foreign political parties diaspora communities and multinational corporations is an exportation of the CCP’s political system and undermines social cohesion exacerbates racial tension influences politics harms media integrity facilitates espionage and increases unsupervised technology transfer 155 Included in a list of groups to be targeted by the UFWD are overseas ethnic Chinese their relatives in the PRC and overseas and returned overseas students Efforts aimed at the target groups are “designed to bring them under the party’s leadership not merely to neutralize any opposition they may pose but also to have them serve as platforms for further efforts ” The Australian Federal Police AFP and the Australian Secret Intelligence Organization ASIO are investigating an alleged plot to infiltrate the New South Wales NSW parliament through the office of a NSW Member of Parliament MP 156 In June 2020 Australian authorities raided NSW MP Shaoquett Moselmane’s residence as part of an investigation into alleged influence operations by China 157 Moselmane was not charged at the time but he was suspended from the Labor Party Moselmane had praised China President Xi Jinping in April 2020 for his “unswerving leadership” in responding to the coronavirus and had reportedly taken nine privately funded trips to China since entering the NSW state parliament in 2009 These trips were reportedly at least in part funded by Chinese government agencies When asked about the case Prime Minister Morrison stated “We won’t cop anyone coming and seeking to interfere in our political system ”158 Polls and Public Sentiment According to 2020 polling data Australians’ trust in China has fallen to a new low The Lowy Institute’s polling data found that 23% of Australians said they “trust” China “to act responsibly in the world” as compared to 52% who did in 2018 Although 22% of Australians polled believed China’s President Xi Jinping would “do the right thing regarding world affairs ” that was half of what it was in 2018 As a point of comparison 73% had confidence in Japan’s Prime Minister Shinzo Abe The poll also found that 94% of those polled felt that Australia should “reduce our economic dependence on China ”159 When asked in 2015 whether China was “more of an economic partner” or “more of a security threat ” 77% responded that China was more of an economic partner In 2020 that dropped to 55% while those describing China as “more of a security threat” increased from 15% in 2015 to 41% in 2020 160 Cyberattacks Australia is experiencing an increase in the frequency scale and sophistication of cyber espionage and attacks which intelligence officials reportedly describe as a “relentless Alex Joske “The Party Speaks for You Foreign Interference and the Chinese Communist Party’s United Front System ” Australian Strategic Policy Institute June 9 2020 156 Sean Rubinsztein-Dunlop and Echo Hui “Australia Revokes Chinese Scholar Visas and Targets Media Officials Prompting Furious China Response ” ABC News Australia September 9 2020 157 “Chinese State Media Accuse Australia of Raiding Journalists’ Homes ” BBC News Spetember 9 2020 https www bbc com news world-australia-54083583 158 “Australian Lawmaker Investigated in China Influence Probe ” The Diplomat June 26 2020 159 Weizhen Tan “Australians’ Trust in China Falls to Record Low ” CNBC June 24 2020 160 “Australians Pessimistic About Economic Outlook and Even More Suspicious of China ” The Conversation June 23 2020 155 Congressional Research Service 23 Australia’s Strategic Posture Issues for Congress increasingly aggressive campaign by China to spy on disrupt and threaten the country’s government vital infrastructure and most important industries ”161 Based on advice from the Australian Cyber Security Centre Australian Prime Minister Morrison and Minister for Defence Linda Reynolds stated in June 2020 that Australian organisations are currently being targeted by a sophisticated state-based cyber actor This activity is targeting Australian organisations across a range of sectors including all levels of government industry political organisations education health essential service providers and operators of other critical infrastructure 162 The Australian Signals Directorate reportedly concluded in March 2019 that China’s Ministry of State Security was responsible for cyberattacks against the Australian Parliament and Australia’s three largest political parties 163 The Australian National University was reportedly subject to a large scale data hack from a “sophisticated operator” in 2018 164 It was reported in 2017 that a hacker stole information related to the Joint Strike Fighter the P-8 and C-130 aircraft and several Australian naval ships from an Australian defense contractor in 2016 165 The hackers reportedly could have been from a criminal group or have been state sponsored 166 Prime Minister Morrison has described cyberattacks against Australian targets as increasingly sophisticated and dangerous A 2020 hack involving the Indonesian Embassy in Canberra used a new cyberattack tool named Aria-body that allows hackers “to remotely take over a computer to copy delete or create files and to carry out extensive searches of the device ” according to press reports Cybersecurity experts say Aria-body has been traced to the Chinese military 167 In 2013 Australian journalists reported that a server in China was used to steal the plans for the new headquarters of the ASIO 168 In June 2020 Prime Minister Morrison announced that his government would do more to boost the cyber capabilities of the Australian Signals Directorate and the Australian Cyber Security Centre The Australian government released its Cyber Security Strategy in August 2020 The strategy is to invest AD$1 67 billion over 10 years to protect Australia’s citizens businesses essential services and critical infrastructure from “the most sophisticated threats ”169 Damien Cave “Australia Spending Nearly $1 Billion on Cyberdefense as China Tensions Rise ” New York Times June 30 2020 162 Australian Government Department of Defence Joint Statement of Prime Minister Scott Morrison and Minister for Defence Linda Reynolds “Statement on Malicious Cyber Activity Against Australian Networks ” June 19 2020 163 Colin Packham “Australia Concluded China Was Behind Hack on Parliament Political Parties ” Reuters September 15 2019 164 “ANU Data Breech Stretching Back 19 Years Detected ” ABC News Australia June 3 2019 165 “Hacker Codenamed Alf from Home and Away Stole Secret Data on Joint Strike Fighter Jets and Surveillance Planes ” ABC News Australia October 11 2017 166 David Wroe “Hacker Codenamed in Honor of ‘Alf’ from Home and Away Stole Sensitive Data About Australian Military Projects ” The Sydney Morning Herald October 11 2017 167 Damien Cave “Australia Spending Nearly $1 Billion on Cyberdefense as China Tensions Rise ” The New York Times June 30 2020 168 “China Blamed After ASIO Blueprints Stolen in Major Cyber Attack on Canberra HQ ” ABC News Australia May 27 2013 169 Australian Government Department of Home Affairs “Australia’s Cyber Security Strategy ” http www homeafairs gov au 161 Congressional Research Service 24 Australia’s Strategic Posture Issues for Congress Australia and China’s Belt and Road Initiative The Australian Federal Government has not signed Australia up to China’s Belt and Road Initiative BRI which seeks to develop China’s trade routes across the globe largely by extending loans and investing in local infrastructure Instead Australia along with the United States and Japan is a member of the Blue Dot Network which seeks to promote high standards of transparency sustainability and developmental impact 170 Despite the federal government’s reluctance to join the BRI the Australian state of Victoria reached an agreement with China on a Memorandum of Understanding to join the BRI in 2018 171 In describing the BRI deal with Victoria Australian Prime Minister Morrison stated “It is not a program that the Australian government has signed up to it is not the Australian government’s foreign policy and all states and territories should not be doing things that act inconsistently with the federal policy ”172 Home Affairs Minister Peter Dutton described the BRI as “a propaganda initiative from China that comes with an enormous amount of foreign debt ”173 In August 2020 Prime Minister Morrison announced a plan under which all such agreements would have to be registered with the federal government where they would be subject to scrutiny and those found against the national interest would be canceled 174 Academic Freedom and Values Recent events have stoked debate in Australia over the role of values in Australia’s relations with China Australian media reports are concerned that a close relationship with China is causing Australia to compromise its values This concern is evident in reporting on academic freedom in the education sector From 2013 to 2019 the export income generated from foreign students rose steadily 175 Education exports are generally Australia’s third or fourth largest export and reached approximately AD$40 billion in 2019 making it the country’s fourth largest export behind iron ore coal and gas that year 176 Chinese students are the largest foreign student cohort representing 33% of foreign student enrollments in Australian universities in 2019 By one estimate Chinese student fees are worth AD$12 billion per year to Australian universities 177 In early August 2020 the University of New South Wales UNSW deleted social media posts critical of China’s actions in Hong Kong following an online backlash from Chinese nationalists Australian Liberal Senator James Paterson responded by accusing the university of “craven behavior” in valuing the revenue from Chinese students more than academic freedom The article that created the controversy was based on comments by Human Rights Watch Australia Director and UNSW Adjunct Lecturer Elaine Pearson calling for action to address the “rapidly Mercy Kuo “Blue Dot Network The Belt and Road Alternative ” The Diplomat April 7 2020 Josh Taylor “China’s Belt and Road Initiative What Is It and Why Is Victoria Under Fire for Its Involvement ” The Guardian May 25 2020 172 Anthony Galloway and Michael Fowler “‘Inconsistent with Foreign Policy’ Morrison Urges Victoria to Scrap Deal ” The Age June 11 2020 173 Josh Taylor “China’s Belt and Road Initiative What Is It and Why Is Victoria Under Fire for Its Involvement ” The Guardian May 25 2020 174Michael Grattan “Scott Morrison Wants Federal Control over State-Based Agreements with Foreign Governments Like China ” The Conversation August 27 2020 175 “Export Income from International Education Activity in Australia ” Statista http www statista com statistics 176 John Ross “Australian International Education ‘A Cheap Fix’ Says Federal MP ” Times Higher Education May 4 2020 177 Robert Bolton “Unis Fear $12b Hit as Chinese Students Stay Home ” Financial Review April 28 2020 170 171 Congressional Research Service 25 Australia’s Strategic Posture Issues for Congress deteriorating” human rights situation in Hong Kong UNSW reportedly has more than 16 000 Chinese students who make up approximately a quarter of UNSW’s student body 178 A University of Queensland student protesting China’s human rights record with Tibetans Uighurs and residents of Hong Kong was suspended by the University for two years in 2020 179 This action also called into question academic independence at Australian universities China’s Counsel General in Brisbane who has taught courses at the university has accused democracy activists of “anti-China separatist activities” and praised counter-protestors who support China 180 According to one academic “Beijing’s influence on campuses is responsible for widespread selfcensorship by universities and academics in Australia and New Zealand ”181 In August 2020 Australia’s parliament appeared ready to establish a probe by its security and intelligence committee into allegations of foreign interference at Australian universities 182 Hong Kong In response to China’s Hong Kong National Security Legislation and crackdown on prodemocracy Hong Kong activists Prime Minister Morrison announced that Australia would suspend its extradition treaty with Hong Kong and offer safe haven to many Hong Kong students and graduates living in Australia 183 In response the Chinese Embassy in Canberra released a statement that it “strongly deplores and opposes the groundless accusations and measures announced by the Australian government … T hey have blatantly interfered in China’s internal affairs ”184 Press Freedom Australia updated its travel advisory for China in July 2020 to warn that Australians could be subject to arbitrary arrest in China following media reports in China accusing Australia of waging an espionage offensive 185 Australian citizen Yang Hengjun a former Chinese official and democracy advocate has been held in isolation at a state security detention center in China on espionage charges for over a year The Australian government has rejected the allegations against him and called for his release 186 Fergus Hunter and Eryk Bagshaw “‘Craven Cowardice’ UNSW Condemned for Deleting Posts Critical of Beijing ” Sydney Morning Herald August 3 2020 179 “University of Queensland Student Suspended for Two Years After Speaking Out on China Ties ” The Guardian May 29 2020 180 O Patrick “Student Known as Vocal Critic of China Faces Expulsion from Australian University ” Washington Post April 16 2020 181 O Patrick and E Stokes “China’s Influence on Campus Chills Free Speech in Australia New Zealand ” Washington Post August 9 2019 182 “Australia to Investigate Foreign Interference at Universities Amid China Concerns ” Agence France Press August 31 2020 183 Stephen Dziedzic “What’s Behind Australia’s Response to the Chinese Government’s Crackdown on Hong Kong ” ABC News Australia July 11 2020 184 Daniel Hurst “China Accuses Australia of ‘Gross Interference’ After Offer of Safe Haven for Hong Kong Visa Holders ” The Guardian July 9 2020 185 Daniel Hurst “China Travel Warning Australian Told They May Be at Risk of Arbitrary Detention ” The Guardian July 7 2020 186 Ben Doherty and Lily Kuo “China Set to Indict Australian Academic Yang Hengjun on Espionage Charges ” The Guardian March 25 2020 178 Congressional Research Service 26 Australia’s Strategic Posture Issues for Congress China reported in August 2020 that Cheng Lei who is an Australian citizen was being held under “residential surveillance at a designated location ” Prior to being detained Cheng Lei was a high profile Australian television anchor for the Chinese government’s English news channel Ms Cheng has reportedly not been charged 187 Cheng’s detention has raised concern that she has been taken as a hostage by China 188 Two Australian journalists sought refuge in Australian diplomatic missions in China after being questioned by police The Australian government was able to negotiate their departure from China Australian media outlets no longer have any journalists working in China 189 Author Information Bruce Vaughn Specialist in Asian Affairs Disclaimer This document was prepared by the Congressional Research Service CRS CRS serves as nonpartisan shared staff to congressional committees and Members of Congress It operates solely at the behest of and under the direction of Congress Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role CRS Reports as a work of the United States Government are not subject to copyright protection in the United States Any CRS Report may be reproduced and distributed in its entirety without permission from CRS However as a CRS Report may include copyrighted images or material from a third party you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material Bill Birtles “Cheng Lei Australian Anchor for China’s Government-Run English News Channel CGTN Detained in Beijing ” ABC News Australia August 31 2020 188 Clive Hamilton “Cheng Lei Is a Strange Choice for a Diplomatic Hostage ” The Sydney Morning Herald September 1 2020 189 James Griffiths and Julia Hollingsworth “Australian Journalists Evacuated from China After Five Day Stand Off ” CNN September 8 2020 187 Congressional Research Service R46571 · VERSION 3 · UPDATED 27