Sino-Australian Security Dilemma:

Introduction

From the 1990s, Australia has been greatly concerned about the relations it has with China in

terms of the booming economy. On the other hand, Canberra has been concerned about the

security alliance it has with the United States of America1. There have been warnings that the

future of Australia will be covered in tensions on choosing between China and the United States2.

The inability to make a choice between he two countries puts Canberra in a difficult position to

make choices. The first choice that Canberra can make is to renounce its economic relationship

with China, or betray China and maintain a relationship with the United States3.

From the Battle of Hamel in WWI to the worldwide war on terror, Australia and the

United States have been on each other’s side for the past century4. Furthermore, the US came in

and replaced the United Kingdom in giving Australia protection after the 1951 “Australia, New

Zealand, United States Security Treaty (ANZUS)”5. From 1951, the ANZUS Treaty has a

foundation for the defence policies in Australia, and a kept the alliance between Australia and the

US. Therefore, the global policy of the US directly influences the foreign policies of

Australia6.On the other hand, the rise of China for the past few years into becoming an economic

powerhouse has also had a great impact on the foreign policy of Australia. Therefore, Australia’s

economic and security environment is greatly influenced by these two countries7. Any conflict

1
Lowell Dittmer and Baogang He, ‘Introduction : Australia ’ s Strategic Dilemma’ (2014) 54 Asian Survey 215.
2
Richard Zalski, ‘Australia’s Economic and Security Dilemma: US or China?’ [2013] E-International Relations 1
<http://www.e-ir.info/2013/01/06/australias-economic-and-security-dilemma-us-or-china/>.
3
Dittmer and He (n 1).
4
Chien-jung Hsu, ‘Australia ’ s Strategic Dilemma : The Australia-US-China Triangle’ Prospect Journal 93.
5
Malcolm Cook, ‘Australia and U.S. -China Relations : Bandwagoned and Unbalancing’ (2016) 26 Joint U.S. Korea
Academic Studies 43 <http://www.keia.org/sites/default/files/publications/kei_jointus-
korea_2015_final_lowres.pdf>.
6
Hsu (n 4).
7
Dittmer and He (n 1).

1
between them can have detrimental effects on the economic and strategic security of Australia8.

Both Beijing and Washington care about the attention of Canberra. The policies of Australia

seem to find a balance between both China and the US. Based on the claims of Dr Hugh White,

“The government was surprised that China reacted as negatively as it has to the decision to have

Marines rotate deployments through Darwin, and I think they’ll be very careful not to risk further

displeasure from China by doing anything that suggests they’re supporting a US military build-

up in Asia” 9. The rise of China is both an advantage and problem for Australia. What interests

do these countries have in the South China Sea Islands? What is Canberra doing to deal with the

dilemma? And what should Canberra do to avoid future dilemma? Generally, this paper will look

at the dilemma that exist due to the relationship between China and Australia. Furthermore, it

will discuss the approaches that Australia has in place in dealing with dilemma.

Literature Review

History of the South China Sea Region

The South China Sea is around 3.5 million square kilometres, and the sea carries more

$3trillion in trading activities annually, thus making it an important economic hub to the world10.

The term “South China Sea”11 is dominantly used and it came into existence due to early interests

of the European in the sea. The Europeans wanted to make a trading route from Europe to South

Asia, as a way harnessing the trading opportunities with China. In the 16th century, the

8
Hsu (n 4).
9
Zalski (n 2).
10
JD Kenneth Boutin, ‘Beyond Interdependence: Economic Security and Sino-American-Australian Trilateralism’
(2015) 70 International Journal 372.
11
Zalski (n 2).

2
Portuguese called it the China Sea. After a while, in a way of differentiating it from other nearby

water bodies, the name changed to South China Sea12.

The South China Sea is a significant commercial gateway for the world’s largest

shipments, hence a critical strategic and economic region of the Indo-Pacific13. Furthermore, the

region is a site for a number of complex territorial disputes that have led to tension and conflict

within the region and in the entire Indo-Pacific. The South China Sea is bordered by the

Cambodia, Brunei, Indonesia, China, Malaysia, Vietnam, Taiwan, Philippines, Singapore, and

Thailand14. Due to its economic proliferation, the South China Sea region is one of the most

disputed regions on the Southeast Asia15. Furthermore, the region has more potential for armed

conflicts. The countries that form part of the region have been in constant conflict over the claim

of the waters, islands, and rocky outcrops like Spratly Islands and Paracels. It is common to have

confrontations between fishing boats and official vessels of various countries. The main

contributor to all the confrontations is the quest for the countries to possess the natural resources

and contribute to their economic growth. The South Sea region is rich in oil, natural gas, fish,

and minerals16. To have a possession of all these resources, the various countries lay claim on the

various Islands and rocks in the South China Seas and East, and want to exclusively exploit the

fish in the sea and minerals in the sea bed. Every country, in a way of not wanting to start a

conflict, defends its version of history. Governments are pushed to go out of their way to protect

their national interests, thus leading to dangerous incidents17.

12
M Beeson and J Wilson, ‘Coming to Terms with China: Managing Complications in the Sino-Australian
Economic Relationship’ (2015) 11 Security Challenges 21.
13
Euan Graham, ‘National Interests and the Role of Major and Middle Powers in the South China Sea : Australia ’ s
Cautiously Calibrated Approach’ [2016] National Asian Security Studies Program Issue Brief 1.
14
David Brophy, ‘Australia’s China Debate in 2018’ in Jane Golley and others (eds), Power (2019)
<https://www.jstor.org/stable/j.ctvfrxqkv.26%0AJSTOR>.
15
Cook (n 5).
16
Beeson and Wilson (n 12).
17
Beeson and Wilson (n 12).

3
 Importance of the South China Sea Region

The South China Sea is one of the most important environmental and economic regions

globally. Greater than half of the fishing vessels across the world are found in the region, and

millions of people depend on the sea for livelihoods and food18. Furthermore, the region has

tremendous strategic importance since it has huge reserves of natural resources like gas and oil.

China is dedicated to getting the South China Sea because of its strategic advantage and the

trading activities that the country is capable of doing. The region has contributed to tremendous

economic growth of China. Furthermore, other countries like the United States and Australia

have also benefited from the South China Sea region. The analysis below will give a detailed

discussion of the importance of South China Sea Region to different countries, how China has

used militarization, and how Australia and the United states have defended their territories.

Furthermore, the analysis section will discuss the Sino-Australian security dilemma, operation

gateway, and how the different alliances have helped deal with the Chinese threat.

Analysis

Importance of the South China Sea Region to Different Countries

Australia

18
Baogang He, ‘Collaborative and Conflictive Trilateralism : Perspectives from Australia , China , and America’
(2014) 54 Asian Survey 247.

4
 The south China Sea region plays a significant role to Australia. The region defines the

relationship that exists between Canberra and China. China is a leading trade partner to

Australia, which accounts for more than 25% of the goods in Australia and a higher percentage

for commodities like iron ore. However, the foreign investment of China in Australia is less than

5%19. Beijing has been given detailed status as a strategic partner including having high-level

political contacts and bilateral defence. Nonetheless, the South China Sea has played a critical

role in driving the debate between China and Australia. The South China Sea does not only

benefit Australia materially, in terms of trade and operations of the armed forces, but it also

offers a maritime frontier, thus fulfilling its strategic intentions20.

Furthermore, Australia has a direct military interest in terms of accessing the South China

Sea by its air force and navy teams. Australia has interactions with the Five Power Defence

Arrangements (FPDA) which has offered the country advanced sea and air exercises in the South

Sea Region for decades. It has also carried out the RAAF from Malaysia since the 1980s21. In

latest news from Australia, the Southeast Asia has been identified as a critical part of Australia’s

engagement in defence. If Australia has no access to the South China Sea, its defence partnership

with Vietnam in compromised. Therefore, the South China Sea region has both strategic and

economic benefits to Australia.

United States of America

The South China Sea has become significant to the US because of the challenge from

China on the contribution of the country to the Pacific war. The regional order after the war was

linked to the presence of US, which made the environment for trading and economic growth
19
Derek McDougall, ‘Australian Strategies in Response to China ’ s Rise : The Relevance of the United States’
(2014) 54 Asian Survey 319.
20
AD Mclennan, ‘Australia’s Security Dilemma’ [2002] Feature Article 21.
21
Kenneth Boutin (n 10).

5
possible since there was no threat of conflict or war. Furthermore, the presence of the US

ensured thar the territorial disputes and claims were resolved through negotiations, and not the

power of the military22. The process made it possible for all countries to benefit from the trade in

the South China Sea. The concern that America has with the South China Sea is associated with

the effort of China to take control over the resources the region offers. China wants to take over

the region but other countries claim the area too. Therefore, the United States of America knows

the benefits of the region and would not want China to take over control23.

China

China greatly benefits from the South China Sea. Being an economic powerhouse, China

uses the sea to import and export goods, services, and expertise from different countries

including Japan and Australia. The region has tremendously contributed to the economic growth

of the country. Furthermore, the region offers space for the Chinese military to do their activities

especially in training. With these benefits in terms of economy and security, the Chinese

government wants to take over the South China Sea. China wants to fully enjoy the economic

benefits that come with the region24.

China’s Military Capabilities in the South China Sea Islands

China has expanded into the South China Sea with over 1 million square kilometres.

Furthermore, it has militarized the region for the past several years, thus creating a complex

security environment25. With China’s effort to take over the South China Sea, the country has

22
Mohan Malik, ‘The Australia-U.S.-China Triangular Relationship’ (2006) 18 The Korean Journal of Defense
Analysis 151.
23
McDougall (n 19).
24
Simon Norton, ‘Barriers to Cooperation with the Chinese Government: The Case of the Australia-China
Extradition Treaty’ [2019] Australian Strategic Policy Institute 11.
25
Graham (n 13).

6
used displays of its modern capabilities during patrols and training exercises of the navy. These

moves are meant to force other countries out of their territories in the South China Sea26.

The first way in which China is using militarization “is the strengthening of the PLAN’s

South Sea Fleet (SSF)”27 which is part of the South China Sea in its areas of operation. As much

as the equipment that SSF had in the past were inferior, it now boosts of superior weapons that

have been indigenously developed in China for the past 10 years. The SSF plays a significant

role in the military duties of China. Apart from developing weapons, the SSF has had its

infrastructure upgraded including the expansion of the “Yulin Naval base at Sanya on Hainan

Island”28. The other way in which China has been deterring claimants of the South China Sea is

by the use of patrols and training exercises. The exercises show the power of the Chinese naval,

hence supporting the Chinese sovereignty and claims for maritime rights. For example, in 2006,

the SSF organized some task force consisting on frigates, four destroyers, and a supply ship to

carry out a training in the South China Sea. In 2008, another ship was used to carry out exercises

in the South China Sea, with the exercises continuing up to 2010. According to the Commander

of the Chinese forces, the aim of the exercises was to protect the maritime territory of China29.

Since 1996, the military attention of China has been on defending the seaboards on the

eastern side of the South China Sea and making all ways possible to undermine the deterrence of

the U.S. The greatest fear of Beijing is that one day the island might be possessed by the military

troops of the U.S. Since 2009, China has been using all the military resources at their disposal to

26
M Taylor Fravel, ‘China’s Strategy in the South China Sea’ (2011) 33 Contemporary Southeast Asia 292.
27
Fravel (n 26).
28
Fravel (n 26).
29
Fravel (n 26).

7
protect their territory in the South China Sea. Furthermore, China is using all diplomatic means

to accomplish its interests in the island30.

The Security Dilemma

For the past four decades, the Sino-Australian economic, diplomatic, and security

connections have been strengthened31. China’s tremendous economic growth for the past two

decades have been of great benefit to the economy of Australia. At the moment, China is

Australia’s great trade partner in terms of imports and exports32. However, the United States

disputes this claim and insists that it has been in business with Australia for the longest time, and

China has no right to take the credit for Australia’s economic growth33. The demand from China

has shifted from raw materials to manufactured products and expertise. Because of the economic

influence that China has on the world, Australia has a decision to make in terms of developing

the Sino-Australian relationship34. According to He, “Although the census remains that Australia

would not have to male this choice, opinions differ on how Canberra should respond to China’s

rise, and the changing dynamic between the U.S. and China”35. Therefore, Australia can choose

to or not to make a choice, though the dilemma still exists36.

As the economic status of China rapidly rise, Australia is doing all it can to adjust its

priorities in Asia. Furthermore, Australia has become an important exporter of raw materials to

countries in Asia. Australia exports raw materials to countries like Japan, China, South Korea,

India, and the United States. Between 2012 and 2013, Australia exported goods to China worth

30
Weihua Liu and Yufan Hao, ‘Australia in China ’ s Grand Strategy’ (2014) 54 Asian Survey 367.
31
Hsu (n 4).
32
Malik (n 22).
33
Hsu (n 4).
34
Beeson and Wilson (n 12).
35
He (n 18).
36
Kenneth Boutin (n 10).

8
more than $70 billion and imported good worth $1.7 billion37. All these materials go through the

South China Sea. The President of China, Xi Jinping has the interest “to tie Australia into

China’s ‘One Belt, One Road’ Initiative”38. Similarly, the Prime Minister of Australia, Turnbull,

is supporting the initiative and working towards establishing the relationship with China. On the

contrary, the US president, Donald Trump terminated the Trans-Pacific Partnership (TPP)

which was the main supporting system to Australia’s trade policy39. It is unlikely that the US will

come back to being a member of TPP, and China is working towards becoming a key player in

the economy across the globe. This move lives Australia with a decision to make since the

country economically benefits from China, while it has security relations with the United States

of America40. Apart from trading, in 2012, China provided about 30% of international students to

Australia, and more 5 million tourists within a period of 10 months41.

What America and Australia have Done to Address the Security Dilemma

Australia has been able to use diplomacy in strengthening its relationship with both the

US and China. Diplomacy in this case was focused on “information sharing and costly

reassurance”42. Information sharing involved sharing insights on issues connected to China with

the aim of sustaining the relationship or minimizing the friction between China and the US. On

the other hand, costly reassurance included reassuring the US that the relationship between

Australia and China would not affect the alliance between Australia and the United States43.

37
McDougall (n 19).
38
Hsu (n 4).
39
Beeson and Wilson (n 12).
40
Dittmer and He (n 1).
41
McDougall (n 19).
42
McDougall (n 19).
43
Hsu (n 4).

9
 Militarily, the U.S. and Australia formed the “Australia American Alliance”44 as a way of

dealing with the threats from China. Australia has a sophisticated, versatile, and capable defence

force that has the ability to rapidly respond to a wide range of challenges or contingencies.

Furthermore, the response is capable due to the close collaboration with the forces from the U.S.

According to Robert Garran, “The alliance has significant practical benefits, especially in the

support it provides for Australia’s military and intelligence capabilities”45. The Australian

defence force constitutes of ships, submarines, aircrafts, and three-brigade Army force, and is

always ready to take action in Asia, especially in dealing with the Chinese threats in the South

China Sea. However, Australia needs to protect its territories, while at the same time maintaining

a mutually beneficial and respectful relationship with China46.

Furthermore, to show the Australian-American alliance, Australia hosted over 2,000 US

Marines in Darwin in 201147. Beijing saw this a provocation for a cold war. China has seen this

alliance as an initiative to destabilize East and Southeast Asia. Since China dominates the

defence spending in Asia, it looks at the alliance between Australia and United States as a threat

to its claim of the South China Sea48. Also, in 2019, the U.S. navy conducted nine free navigation

operations known as “freedom of navigation operations”49 (FONOPS) in the South China Sea as

a way of challenging the claims of China over the Islands. This move put United States and its

allies like Australia at loggerheads with China. U.S. views the patrol of China in the sea as

44
John Blaxland, ‘Strategic Balancing Act: Australia’s Approach to Managing China, the USA and Regional
Security Priorities’ (2017) 13 Security Challenges 19 <https://www-jstor-
org.virtual.anu.edu.au/stable/pdf/26465614.pdf?ab_segments=0%2Fdefault-2%2Fcontrol&refreqid=search
%3A14da35a4ab64d87e605d1a207dc2fc3f>.
45
Blaxland (n 44).
46
Blaxland (n 44).
47
Graham (n 13).
48
John Lee, ‘Australia’s 2015 Defence White Paper: Seeking Strategic Opportunities in Southeast Asia to Help
Manage China’s Peaceful Rise’ (2013) 35 Contemporary Southeast Asia 395.
49
Liu and Hao (n 30).

10
excessive. On the contrary, the Chinese patrols are meant to signal other claimants that their

patrols are unlawful and irritating50.

Operation Gateway

Operation gateway operating out of Butterworth in Malaysia as part of the Five Power

Defence Arrangements (FPDA) was operating under the command of Royal air Force (RAF) and

the Royal Australian Air Force (RAAF). The FPDA and the Operation Gateway help Australia in

carrying out its maritime surveillance in the South China Sea and the Indian Ocean. Celebrating

its 60th anniversary at Butterworth, RAAF remains the single military facility that is used by

Australia to conduct peacetime operations in the Southeast Asia. However, both RAAF and

FPDA have been dismissed by the Chinese government on the claim that they are perpetrating a

cold war51, the same way China accused the alliance between Australia and the United States.

Role of Alliances in Addressing the Threat

The Australia-United States Ministerial Consultations (AUSMIN) is held on a regular

basis with the aim of rebuilding China, Iraq, ending terrorism and enhancing the countries

cooperation when it comes to defence. Australia and the U.S. have maintained their defence

partnership through this alliance. However, China sees the partnership as a threat, and is doing

all it can in dividing Canberra and Washington. However, the shared values and strategic

benefits between the two countries has made it easy for them to support the alliance and deal

with the threats from China52.

50
Lee (n 48).
51
Graham (n 13).
52
Malik (n 22).

11
 Another alliance is the Australia, New Zealand, United States Security Treaty (ANZUS)

that was formed in 195153. From 1951, the ANZUS Treaty has been on the forefront in protecting

the defence policies of Australia. Furthermore, this alliance maintains the Australia-US alliance

that focuses on addressing the security threats from China. In general, the global policy of the US

directly influences the foreign policies of Australia, thus helping in putting in place measures

that help with dealing with the South China Sea threats54.

Trans-Pacific Partnership (TTP) was a trade alliance formed by several countries

including the United States and Australia. However, when President Donald Trump took over

office, he withdrew the USA from the partnership. This partnership was meant to protect

Australia from the trade policy imposed by the Chinese government.55 For the longest time,

China has had a voice in determining the trade policies in the South China Sea, since it is a

country that claims to hold the highest trading capacity in the region. However, the United States

did not like this claim and wanted to help Australia in securing its position, since it participated

in a lot of trading activities with China in the South China Sea56.

The last alliance that helped in dealing with the Chinese threats is the Five Eyes (FVEY).

The alliance comprises of countries like Canada, Australia, New Zealand, the United Kingdom,

and the United States. The aim of FVEY was to monitor communications in the Southeast region

and the Soviet Union. The information collected was then used for defence intelligence and

human intelligence. The information came in handy for Australia and the United States because

53
Cook (n 5).
54
Hsu (n 4).
55
He (n 18).
56
Norton (n 24).

12
they were able to know what China was planning in regard to the South China Sea trade and

militarisation57.

Conclusion

The Sino-Australia security dilemma has put Australia in a difficult situation. The

country has a decision of whether to take sides with the United States of America or to side with

China. However, both countries are tremendously beneficial to the growth and development of

Australia. Australia needs to stick with the United States due to its contribution to Australia’s

defence systems. On the other hand, Australia must keep a strong relationship with China

because of the trading activities it has with China. Therefore, what Australia has done to deal

with the dilemma is to balance out its relationship with both the U.S. and China. Furthermore,

militarisation and formation of alliances has come in handy in dealing with the Chinese threat.

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15