Publications and Podcasts
EVs are driving Beijing’s trade war on the West
Financial Review, 24 September 2026
https://www.afr.com/world/asia/evs-are-driving-beijing-s-trade-war-on-the-west-20260924-p60zce
CONTESTED GROUND: Weak, vulnerable, backwater – Australia’s choice between strategic camps and managed decline
Defence Connect, 5 August2026
No, the US isn’t asking for the keys to the ADF
The Strategist, July 18, 2025
https://www.aspistrategist.org.au/no-the-us-isnt-asking-for-the-keys-to-the-adf/
The case for boosting defence spending is compelling. We shouldn’t need US prodding
The Strategist, July 4, 2025
PM makes two big bets on nation’s defence
The Australian, June 4, 2025
Anthony Albanese is gambling Australia’s future defence and security on two fronts and he may lose on both.
First, the Prime Minister is betting he can convince US President Donald Trump and Trump’s Defence Secretary, Pete Hegseth, to accept the government’s minimalist plan for defence spending during the coming decade without doing serious damage to the US-Australia alliance.
Second, Albanese is gambling that, despite numerous official and external warnings, Australia will not need to fight a major war in the Indo-Pacific in the next 10 years.
Both bets are very risky: if Albanese loses one or both, Australia’s security will be severely damaged, possibly irretrievably.
Washington’s pressure on Australia and other Indo-Pacific allies to increase defence spending is strong and unwavering. It has several powerful drivers.
Most important is the challenge of Beijing’s surging military power, its extensive preparations to fight a major war, and its aggressive behaviour towards Taiwan, Japan, The Philippines and other regional democracies.
Another driver is the rapid rise of Beijing’s military-industrial strength, with China’s manufacturing output now double that of the US.
A further US concern is the prospect of having to confront a rapidly growing Chinese nuclear force and the possibility of a Chinese-Russian nuclear coalition that could deploy more than double the number of US nuclear weapons by 2035.
That risk is driving preparations for a rapid expansion and modernisation of the US nuclear arsenal. It also has spurred Trump to announce the urgent deployment of the Golden Dome system, to provide ballistic and cruise missile defence for the American homeland. This is expected to cost about $US175bn ($270bn).
The Trump administration is determined to reverse the erosion of its nuclear escalation dominance. Australia and all other allies should support this endeavour because it will enhance our deterrence power and limit our vulnerability to nuclear coercion.
In the face of these urgent demands, the Trump administration has set clear security priorities and determined that the US cannot do all of the heavy lifting. The allies must make much stronger contributions to their own and to collective defence.
In his address to the Shangri-La Dialogue, Hegseth made clear the Trump administration’s priority defence policy region is Asia.
In consequence, the European allies have been pressed to take much of the defence load in their region and accept the lead in underpinning the defence of Ukraine. Nearly all of the European allies have now agreed to substantially boost their defence spending.
Poland expects to spend 4.7 per cent of its GDP on defence this year. Lithuania plans to spend 5.5 per cent and Estonia 5.4 per cent next year, and Germany is hiking its defence budget by 75 per cent immediately, to 3.5 per cent of GDP. There are also reports Germany is planning a further rise, to 5 per cent, before the end of the decade.
In his speech, Hegseth contrasted the efforts of some Asian allies with the substantial spending commitments already made by America’s NATO partners when Europe faces a less formidable threat.
This is the context for Hegseth asking Defence Minister Richard Marles to lift Australian defence spending from its current 2 per cent of GDP to 3.5 per cent “as soon as possible”. During his plenary presentation, Hegseth appeared to be looking straight at Marles when he stated that, in the case of some allies, “tough love” was needed.
Albanese’s response so far has been to stick with the government’s plan to lift defence spending from its current 2 per cent of GDP to 2.33 per cent in eight years. “What we’ll do is we’ll determine our defence policy. And we’ve invested across the forwards, an additional $10bn in defence,” he said.
If the government fails to move on its business-as-usual, minimal-growth approach, the Prime Minister can expect a frosty reception from Trump if their anticipated meeting takes place on the margins of the G7 summit in Canada in 10 days. If Albanese is eventually invited to the Oval Office, a Zelensky-like dressing-down may be in store.
Australia’s alliance with the US is unlikely to be unscathed.
The second big security gamble made by Albanese and his colleagues is that Australia will not need to fight a major war in the coming decade. Indeed, it appears the government doesn’t even see a need to take additional steps to deter such a war occurring.
These judgments fly in the face of numerous official and unofficial assessments that the risk of China conducting a major operation to seize democratic Taiwan is high and, if it occurs, it is likely to trigger a major war between China and the US and its allies.
Hegseth reminded his audience that President Xi Jinping has ordered China’s military to be ready to conduct a major assault on Taiwan by 2027.
“There is no reason to sugar-coat it. The threat China poses is real and it could be imminent,” Hegseth said.
Albanese appears not to have come to terms with the shift of global power and potential conflict to East Asia during recent decades. In the event of such a crisis, Australia will be close to the primary battlefields and would likely be attacked at an early stage. Recent intense discussions in Washington and other allied capitals have confirmed that if war breaks out we should expect missile strikes, attacks on key defence bases and shipping, mining of some ports, special forces raids, sabotage and powerful disabling cyber attacks.
The government appears unconcerned that our military and our civilian population are grossly unprepared.
Regrettably, Australia’s strategic situation is even worse than this. America’s military and defence industrial capabilities have been allowed to run down so far that in the event of a major crisis, the US will struggle just to supply its own forces.
US polling also reveals public support for the commitment of American forces for the defence of allies and partners is weakening. Since the Vietnam War, the experience is that, even if a president commits forces at the outset of a crisis, the American public is unwilling to sustain major military operations abroad taking casualties for an extended period unless the US itself is directly threatened.
A further serious complication is that, during the past two years, Joe Biden and Trump have interfered in the campaigns of self-defence being fought by Ukraine and Israel.
Under both presidents the US has insisted allies accept US directions, even if this has meant handing over national territory to an authoritarian invader or surrendering core interests to a terrorist group. The lessons for Australia are stark. In contrast to the past, prompt, powerful, sustained and fully co-operative US support for Australia in a future crisis is now much less predictable and less likely.
The brutal truth is, in some circumstances we may need to fight to defend ourselves largely on our own.
In years past Australian politicians routinely stated the highest priority of the government is to protect the nation and its people. Albanese and his colleagues appear to have a different view. They have placed two very risky bets. The stakes for our future independence and freedom could scarcely be higher.
PODCAST: Australia needs to rethink defence strategy, with Dr Ross Babbage
In this episode of the Defence Connect Podcast, host Steve Kuper is joined by Dr Ross Babbage, CEO of Strategic Forum and senior non-resident fellow at the Center for Strategic and Budgetary Assessments.
The pair discuss a range of subjects following Babbage’s recent trip to the United States, including:
- Australia’s need to prepare for a more direct involvement in kinetic regional conflict in the Indo-Pacific – including recognising that we are no longer on the periphery of geopolitical competition.
- The multidimensional depth and facets of the challenges being posed by the People’s Republic of China: Babbage emphasises that China’s strategy includes economic coercion, hybrid conflict and soft power, and that Western assumptions about China’s integration leading to liberalisation have proven wrong.
- How Western governments have failed to effectively communicate the strategic risks to their populations: Babbage argues that public awareness is essential for national resilience and policy support, and that many in the public are willing to act once properly informed.
- Australia’s urgent need to expand and rethink its defence and industrial capabilities to meet the growing expectations of the new US Trump administration.
The ADF reserve system is obsolete. We need a dramatically expanded force
The Strategist, March 21, 2025
https://www.aspistrategist.org.au/the-adf-reserve-system-is-obsolete-we-need-a-dramatically-expanded-force
Australia needs to radically reorganise its reserves system to create a latent military force that is much larger, better trained and equipped and deployable within days—not decades.
Our current reserve system is not fit for purpose. It was designed many decades ago to support distant expeditionary operations, not the prospect of major war in our immediate region emphasised in the 2023 Defence Strategic Review (DSR).
With doubts growing about the reliability of our major ally, we have no choice but to prepare to defend ourselves—if necessary, largely on our own. This requires whole-of-nation preparations that were described in the DSR. The driving needs are to deter and provide effective defence against an aggressive China.
But the Review of the ADF Reserves, quietly released before Christmas, addresses none of this. At best, it is an administrative review that describes how management of the current system can be refined. It is an exercise in deck chair rearrangement, when we need a credible plan to build a far larger latent force that can be mobilised to carry much of the load if we must fight alone with little notice.
Commissioning this review of Australian Defence Force reserves was a key recommendation of the DSR. The DSR said:
The strategic risks we face require the implementation of a new approach to planning force posture, force structure, capability development and acquisition… It is clear that a business-as-usual approach is not appropriate.
The DSR said that the force structure was ‘not fit for purpose’ and that the country needed a larger defence force, greater war-fighting endurance and stronger national resilience.
The review of reserves doesn’t address these issues at all but does describe the current reserve system. It states that in early 2024 some 41,000 people were registered as ADF reserves, but they included 10,000 who had never rendered service. Some of the remaining 31,000 provided specialist skills that were in short supply elsewhere in Defence, some filled gaps in permanent units, and a few served as a base for ADF force expansion in future emergencies.
At best, the reserves review performs a process-reform function, suggesting tweaking of current systems for efficiency and effectiveness. It recommends three categories of reserve service, accelerated entry pathways, adoption of an approach of providing minimal essential training, and a further review of conditions of service. However, the review proposes a recruitment target of only another 1000 personnel by 2030.
This is clearly not what the authors of the DSR had in mind.
There are limits on how many permanent ADF personnel can be recruited short of major war. However, given our strategic circumstances, a steep increase in part-time personnel should be a priority.
Advanced democracies variously use three reserve force models. The first is an expeditionary one suitable for countries which are not directly threatened but whose militaries periodically deploy to fight in distant wars of choice. Britain, Canada, New Zealand and Australia use this model.
The second type is the homeland and theatre defence model. It is used by countries that face serious threats of direct attack with little warning and therefore need to be able to field a very large defence force to fight wars of necessity within a few hours or, at most, a few days.
Examples include: Finland which, with a population of 5.6 million, operates a force of 24,000 permanent military personnel and 254,000 trained and equipped reservists; Israel, which from a population of 9.8 million, fields 170,000 permanent force personnel and 465,000 active reservists; and Singapore, which, with a population of 6 million, can field 51,000 permanent force personnel and 253,000 trained and equipped reservists.
The third type is a hybrid, such as the US model. From a population of 340 million, the United States it has a permanent military force of 1.3 million supported by 807,000 well-trained and well-equipped reservists.
The reserves review should have asked which model was now most suitable. Our expeditionary model, inherited from forward commitments in Korea, Malaysia and Vietnam, is obsolete. It provides some operational capabilities but generates limited resilience and would require many years to expand the reserves to the size needed for major regional war, which we could face before the end of this decade.
We must rapidly transition to a homeland and theatre defence model or, possibly, some sort of hybrid model. We must quickly prepare a reserve force that is much stronger than what we have: better trained, equipped and organised, and much larger. It must be deployable within days.
We must simplify and accelerate the way we bring people into it and improve ADF access to the national skills pool. Many intelligence, cyber, transport, medical, maintenance and other roles can be filled by qualified civilians following short training periods.
This next-generation ADF reserves system demands big changes in leadership, culture and organisational habits. The government must explain the security challenges Australia faces, why major changes are needed and why people should enlist.
What’s needed now is an action plan to quickly develop a much larger ADF reserve force. We needed it yesterday.
Business as usual on China will ruin us
The Australian, November 23, 2024
Business as usual on China will ruin us | The Australian
Australia is confronted by three big changes in our strategic circumstances that are making our steady-as-you-go approaches to security and economic development untenable.
We face a markedly increased risk of war in the Indo-Pacific; the global economy is restructuring rapidly in adverse ways; and the Australian economy has stalled with essentially zero productivity growth, declining international competitiveness and a flight of much-needed investment.
If we ignore these fundamental changes in our circumstances we will see Australia reduced to a weak and vulnerable backwater state within a decade. We urgently need to recalibrate, develop a new vision for our future and launch serious reforms.
The most obvious strategic challenge is posed by China’s extensive preparations for war and the regime’s aggressive international behaviour. President Xi Jinping sees the tides of history flowing China’s way and he makes no secret of his intention to exploit them.
“The world is facing great changes unseen in a century … which brings great opportunities for the great rejuvenation of the Chinese nation … The great struggle, great project, great cause and great dream of our party are in full swing,” he has said.
At the core of this campaign, Xi repeatedly has stated his determination to seize the vibrant democracy of Taiwan: “Complete reunification of the motherland must be fulfilled and definitely will be fulfilled.”
China rapidly has expanded its military capabilities so it has by far the largest army, navy, air force and theatre ballistic and cruise missile forces in the Western Pacific. The junior general who led Taiwan contingency planning until late 2022 is now one of Xi’s two most senior military advisers. And 15 of the 24 members of China’s politburo have Taiwan experience, leading some analysts to describe it as a war cabinet.
In recent years China’s budgets have often given security and defence a higher priority than economic development. Xi calls this “integrating national strategies and strategic capabilities” and building China’s “Fortress Economy”. This huge resource redirection is probably costing between 1 per cent and 2 per cent of GDP growth each year.
The Chinese military has been practising for an invasion of Taiwan. Full-scale replicas of key strategic buildings in Taipei have been built, including the presidential offices and the foreign ministry, so army units can rehearse their assault plans. Similarly, full-scale replicas of American and allied warships and bases have been built in China’s western deserts to serve as targets for medium and long-range missile tests.
During recent exercises Chinese ships and aircraft have penetrated close to Taiwan and appeared to rehearse the initial phases of a major invasion. Recently Xi visited a paratroop regiment whose primary mission is to “liberate Taiwan”. Xi ordered the troops to make “all-out efforts” to improve combat preparedness.
CIA director William Burns has told a congressional committee that Xi has ordered his military to be ready to conduct a major assault on Taiwan by 2027.
The Chinese military makes clear that it is not only targeting Taiwan but also strategic facilities in Japan, South Korea, The Philippines and many more distant targets. Indeed, the Chinese military even has released a video of a simulated air and missile strike on the US’s Andersen Air Force Base on Guam.
Several official Chinese documents, such as the 2013 edition of China’s Science of Military Strategy, describe China’s “crucial maritime space” as including all of the Western Pacific and most of the Indian Ocean, extending well south of Australia and New Zealand. In the event of war, Chinese forces plan to operate across all of these regions as well as in the space, cyber and subversion domains. In the meantime, Chinese military and paramilitary forces have seized most of the South China Sea, they are occupying maritime features that are well within the exclusive economic zone of The Philippines, and they are harassing the territorial defence forces of Japan, The Philippines, Indonesia, Vietnam and others.
The US, Australia and many other allies and partners also are being subjected to ongoing cyber, influence, coercion, subversion and “disintegration” operations. These are designed to penetrate, divide, disrupt and weaken targeted societies and render them more vulnerable in the event of a crisis.
The risks posed by this situation are great. US President Joe Biden has been asked four times whether, if China attacks Taiwan, American forces would be committed to fight. On each occasion he stated without hesitation that they would. President-elect Donald Trump has yet to be asked the same question directly but he is reported to have stated in private conversations that deterrence of China is one of his highest priorities.
If China attacks Taiwan, it seems likely that US, Japanese and other allied forces would be involved from the outset. In those circumstances there can be little doubt that Australia’s interests, values and alliance obligations would see Australia also at war.
This raises important questions about why the federal government has not been honest with the Australian people about the risks of major war and taken serious steps to prepare our society and economy.
As things stand, we may have to deal with this huge challenge before the end of the decade with little advance preparation.
The second strategic challenge is the rapid restructuring of the global economy, driven by China dumping its vast manufacturing surpluses into global markets.
This, in turn, is triggering tariff and other emergency protective measures to be taken by the US, most of Europe, democratic Asia and increasing numbers of developing countries. The origins of this global economic crisis lie in the decision of the Clinton administration in the US to support China’s accession to the World Trade Organisation in 2001. At the time it was widely assumed that Beijing would abide by the WTO rules, its economic opening would lead to political liberalisation and China would become a “responsible international citizen”.
In joining the WTO, China promised to lower its tariffs, eliminate non-tariff barriers, protect the property rights of foreign investors and open its markets to American and other international producers. However, China kept very few of these promises. Instead, it heavily subsidised its own industries and used a wide range of other mercantilist practices to penetrate, and ultimately dominate, key foreign markets.
This has led to the widespread de-industrialisation of the US, Australia, Britain and most other developed economies. Entire industrial regions in the US and elsewhere have collapsed, and millions of people have lost their jobs. The strategic impact of this vast industrial transfer has been huge. In 2004, US manufacturing output was double that of China. But by 2020 Chinese manufacturing output was double that of the US. This industrial imbalance has grown worse during the past three years. When China’s economy failed to recover fully from the Covid disruptions, its housing sector contracted, consumption fell and many Chinese businesses stalled. This led Beijing to stimulate the economy in part by encouraging many manufacturers to continue expanding production capacity.
In several key product categories, including electric vehicles and solar panels, China has now built more production capacity than is needed to supply the entire globe. However, with domestic demand weak, the only way for many manufacturers to stay afloat has been to send their growing production surpluses into overseas markets at low prices.
This dumping of China’s manufacturing surpluses is considered intolerable by the US, most of Europe and many other countries. The tsunami of cheap Chinese products is destroying the strategic industries of many countries, undermining their economies and rendering them more vulnerable to any new economic or geo-strategic shocks.
Not surprisingly, a strong fightback is under way. Western investment into China is at its lowest level in 30 years. Many American and European companies are reducing their footprints in China and some are leaving entirely.
Tariff and other protective measures are proliferating. The US already has 50 per cent tariffs on Chinese semiconductors, solar cells and medical products. It also has 25 per cent tariffs on Chinese steel, aluminium and batteries, and 25-100 per cent tariffs on Chinese electric vehicles. Trump’s policy is to impose a 60 per cent tariff on all Chinese goods, with a possible 20 per cent additional tariff following.
Nearly all of Europe is introducing 27-48 per cent tariffs on Chinese electric vehicles, and 20-48 per cent tariffs on Chinese steel and other metals are being considered. Canada has imposed a 100 per cent tariff on Chinese electric vehicles and India has imposed 15-125 per cent tariffs on Chinese vehicles. India also has announced 30 per cent tariffs on most Chinese foods.
A rising number of developing countries also have joined the push back. Indonesia has imposed 200 per cent tariffs on Chinese textiles and other light manufactured goods, Turkey has introduced a 40 per cent tariff on Chinese electrical vehicles, and Brazil and Chile have announced tariffs on Chinese steel products.
What this means is that the era of unrestricted, high-efficiency globalised trade is over and the world trading system is fragmenting into three camps or blocs.
The first and largest grouping is the advanced economies led by the US, Europe, democratic Asia and, increasingly, democratic states in other parts of the world. The second grouping comprises China, Russia, North Korea, Iran and several smaller authoritarian states. The third group is made up of the undecideds and neutrals.
The trade and financial separation between the first two blocs is growing rapidly. But much of the trade within each bloc is intensifying. This is particularly the case in the second bloc where trade between China, Russia and North Korea is surging.
Australia is currently in the undecided, neutral group. At the Asia-Pacific Economic Co-operation and G20 summits, Anthony Albanese championed “open, inclusive and rules-based trade”. This sounds fine in theory but it reeks of naivety when the US, Europe, India and many other countries are busily building trade barriers to protect themselves against China’s trade tsunami.
When Xi incongruously joined the Prime Minister in championing free trade, Albanese found himself in partnership with the leader of the Chinese Communist Party opposing the interests of the US, Europe and most other allies, and he also surrendered what remains of Australia’s manufacturing sector to the Chinese flood.
What is worse is the absence of an honest government discussion about the changes under way in the international economy and a realistic strategy for ensuring future prosperity and security.
The third strategic challenge is that Australia’s economy is in poor shape to compete in the rapidly changing international environment. Across recent decades, successive Australian governments have abandoned whole industries to win the benefits of globalised efficiencies and international supply chains. So while mining, energy, agriculture and some service industries have done well, most manufacturing has disappeared. In the late 1960s manufacturing accounted for 26 per cent of Australia’s economic output. It now accounts for 5 per cent.
In the past three decades public sector spending at the federal and state levels has ballooned with the consequential taxation, regulatory and other burdens on industry and the broader community seriously weakening Australia’s competitiveness. Australia’s multifactor productivity growth is effectively zero per cent and the country’s international competitiveness ranking has fallen to 19th place, well behind Qatar, the United Arab Emirates and Saudi Arabia, and a very long way behind countries such as Ireland, The Netherlands and Denmark. Australia is no longer an attractive destination for foreign and even domestic investment. In recent years more investment has departed our shores than has arrived.
Unfortunately, many recent federal and state government policies have made this situation worse. Additional layers of red and green tape, surging electricity costs and falling electricity reliability, together with new constraints on industrial flexibility, have crippled many enterprises.
Especially important have been sector-wide industrial agreements, removal of the link between productivity improvements and wage determinations, same work, same pay regardless of worker experience, and related initiatives. In combination, these measures have made Australia a costlier and much less friendly place for business.
Perhaps worst of all has been the sovereign risk sprung by Queensland on several foreign corporations that have invested billions in developing gas, coal and other export operations, only to find the taxation levels increased markedly without consultation as soon as the operations started to return profits.
In this business-unfriendly environment it is not surprising that per capita GDP has fallen for the past six quarters, company bankruptcies have reached record levels and Australia’s international reputation has been seriously damaged.
There are three key things we need to do to turn this situation around. First, we need a season of honesty. The government must brief the nation properly on the serious challenges we now face. The media also needs to do a more professional job of analysing these issues.
Second, we need a vision for how Australia can achieve a new era of prosperity and security. Part of this vision should be a program for boosting our defences for the coming two to five years as well as for the longer term.
But the core of the vision should be a program to remake Australia into a great place to invest, to do business and to live. All Australians need to understand that if we are to enjoy sustained prosperity in the new environment we must quickly turn Australia into a highly preferred location for investments.
We need to focus primarily on attracting industries that build on Australia’s competitive advantages – such as our abundant mineral resources, traditionally cheap and reliable energy supplies, abundant land, skilled workforce and our relatively stable and predictable legal and political systems. Priorities should be investments in resource extraction and processing, and energy-heavy industries as well as some high-end design, technology and educational industries. Especially favoured should be the production of intermediate goods rather than highly complex manufactured products. Leading contenders should be processed metals and chemicals, pharmaceuticals, fertilisers and the production of a wide range of fabricated intermediate products – most intended for export.
China currently dominates most of these markets and many countries would welcome a highly competitive and fully trusted alternative supplier.
If we are to succeed, we need to reduce the costs and complexities of business operations. We need to cut corporate taxes to world-leading rates, reduce government overheads and simplify regulatory and industrial-relations frameworks. Major projects should be approved in weeks rather than decades.
Governments should not attempt to pick winners. They should focus instead on generating the favourable environments in which competitive international businesses can thrive. State governments should compete to attract the best investors.
Finally, we need to take a clear decision. If we continue on our current course of declining productivity, weakening industrial strength and falling standards of living, Australia soon will become a weak and vulnerable backwater state with very poor prospects.
Alternatively, if Australian governments inform the public about the serious challenges we face and lead a thoroughgoing process of economic and security reform, the way will be open for a new era of prosperity, international influence and security.
Deterrence and alliance power: Why the AUKUS submarines matter and how they can be delivered
The report on AUKUS published by the Lowy Institute can be downloaded at:
Australia is confronted by three big changes in our strategic circumstances that are making our steady-as-you-go approaches to security and economic development untenable.
We face a markedly increased risk of war in the Indo-Pacific; the global economy is restructuring rapidly in adverse ways; and the Australian economy has stalled with essentially zero.
Publications
No, the US isn’t asking for the keys to the ADF
The Strategist, July 18, 2025
https://www.aspistrategist.org.au/no-the-us-isnt-asking-for-the-keys-to-the-adf/
The case for boosting defence spending is compelling. We shouldn’t need US prodding
The Strategist, July 4, 2025
PM makes two big bets on nation’s defence
The Australian, June 4, 2025
Anthony Albanese is gambling Australia’s future defence and security on two fronts and he may lose on both.
First, the Prime Minister is betting he can convince US President Donald Trump and Trump’s Defence Secretary, Pete Hegseth, to accept the government’s minimalist plan for defence spending during the coming decade without doing serious damage to the US-Australia alliance.
Second, Albanese is gambling that, despite numerous official and external warnings, Australia will not need to fight a major war in the Indo-Pacific in the next 10 years.
Both bets are very risky: if Albanese loses one or both, Australia’s security will be severely damaged, possibly irretrievably.
Washington’s pressure on Australia and other Indo-Pacific allies to increase defence spending is strong and unwavering. It has several powerful drivers.
Most important is the challenge of Beijing’s surging military power, its extensive preparations to fight a major war, and its aggressive behaviour towards Taiwan, Japan, The Philippines and other regional democracies.
Another driver is the rapid rise of Beijing’s military-industrial strength, with China’s manufacturing output now double that of the US.
A further US concern is the prospect of having to confront a rapidly growing Chinese nuclear force and the possibility of a Chinese-Russian nuclear coalition that could deploy more than double the number of US nuclear weapons by 2035.
That risk is driving preparations for a rapid expansion and modernisation of the US nuclear arsenal. It also has spurred Trump to announce the urgent deployment of the Golden Dome system, to provide ballistic and cruise missile defence for the American homeland. This is expected to cost about $US175bn ($270bn).
The Trump administration is determined to reverse the erosion of its nuclear escalation dominance. Australia and all other allies should support this endeavour because it will enhance our deterrence power and limit our vulnerability to nuclear coercion.
In the face of these urgent demands, the Trump administration has set clear security priorities and determined that the US cannot do all of the heavy lifting. The allies must make much stronger contributions to their own and to collective defence.
In his address to the Shangri-La Dialogue, Hegseth made clear the Trump administration’s priority defence policy region is Asia.
In consequence, the European allies have been pressed to take much of the defence load in their region and accept the lead in underpinning the defence of Ukraine. Nearly all of the European allies have now agreed to substantially boost their defence spending.
Poland expects to spend 4.7 per cent of its GDP on defence this year. Lithuania plans to spend 5.5 per cent and Estonia 5.4 per cent next year, and Germany is hiking its defence budget by 75 per cent immediately, to 3.5 per cent of GDP. There are also reports Germany is planning a further rise, to 5 per cent, before the end of the decade.
In his speech, Hegseth contrasted the efforts of some Asian allies with the substantial spending commitments already made by America’s NATO partners when Europe faces a less formidable threat.
This is the context for Hegseth asking Defence Minister Richard Marles to lift Australian defence spending from its current 2 per cent of GDP to 3.5 per cent “as soon as possible”. During his plenary presentation, Hegseth appeared to be looking straight at Marles when he stated that, in the case of some allies, “tough love” was needed.
Albanese’s response so far has been to stick with the government’s plan to lift defence spending from its current 2 per cent of GDP to 2.33 per cent in eight years. “What we’ll do is we’ll determine our defence policy. And we’ve invested across the forwards, an additional $10bn in defence,” he said.
If the government fails to move on its business-as-usual, minimal-growth approach, the Prime Minister can expect a frosty reception from Trump if their anticipated meeting takes place on the margins of the G7 summit in Canada in 10 days. If Albanese is eventually invited to the Oval Office, a Zelensky-like dressing-down may be in store.
Australia’s alliance with the US is unlikely to be unscathed.
The second big security gamble made by Albanese and his colleagues is that Australia will not need to fight a major war in the coming decade. Indeed, it appears the government doesn’t even see a need to take additional steps to deter such a war occurring.
These judgments fly in the face of numerous official and unofficial assessments that the risk of China conducting a major operation to seize democratic Taiwan is high and, if it occurs, it is likely to trigger a major war between China and the US and its allies.
Hegseth reminded his audience that President Xi Jinping has ordered China’s military to be ready to conduct a major assault on Taiwan by 2027.
“There is no reason to sugar-coat it. The threat China poses is real and it could be imminent,” Hegseth said.
Albanese appears not to have come to terms with the shift of global power and potential conflict to East Asia during recent decades. In the event of such a crisis, Australia will be close to the primary battlefields and would likely be attacked at an early stage. Recent intense discussions in Washington and other allied capitals have confirmed that if war breaks out we should expect missile strikes, attacks on key defence bases and shipping, mining of some ports, special forces raids, sabotage and powerful disabling cyber attacks.
The government appears unconcerned that our military and our civilian population are grossly unprepared.
Regrettably, Australia’s strategic situation is even worse than this. America’s military and defence industrial capabilities have been allowed to run down so far that in the event of a major crisis, the US will struggle just to supply its own forces.
US polling also reveals public support for the commitment of American forces for the defence of allies and partners is weakening. Since the Vietnam War, the experience is that, even if a president commits forces at the outset of a crisis, the American public is unwilling to sustain major military operations abroad taking casualties for an extended period unless the US itself is directly threatened.
A further serious complication is that, during the past two years, Joe Biden and Trump have interfered in the campaigns of self-defence being fought by Ukraine and Israel.
Under both presidents the US has insisted allies accept US directions, even if this has meant handing over national territory to an authoritarian invader or surrendering core interests to a terrorist group. The lessons for Australia are stark. In contrast to the past, prompt, powerful, sustained and fully co-operative US support for Australia in a future crisis is now much less predictable and less likely.
The brutal truth is, in some circumstances we may need to fight to defend ourselves largely on our own.
In years past Australian politicians routinely stated the highest priority of the government is to protect the nation and its people. Albanese and his colleagues appear to have a different view. They have placed two very risky bets. The stakes for our future independence and freedom could scarcely be higher.
PODCAST: Australia needs to rethink defence strategy, with Dr Ross Babbage
In this episode of the Defence Connect Podcast, host Steve Kuper is joined by Dr Ross Babbage, CEO of Strategic Forum and senior non-resident fellow at the Center for Strategic and Budgetary Assessments.
The pair discuss a range of subjects following Babbage’s recent trip to the United States, including:
- Australia’s need to prepare for a more direct involvement in kinetic regional conflict in the Indo-Pacific – including recognising that we are no longer on the periphery of geopolitical competition.
- The multidimensional depth and facets of the challenges being posed by the People’s Republic of China: Babbage emphasises that China’s strategy includes economic coercion, hybrid conflict and soft power, and that Western assumptions about China’s integration leading to liberalisation have proven wrong.
- How Western governments have failed to effectively communicate the strategic risks to their populations: Babbage argues that public awareness is essential for national resilience and policy support, and that many in the public are willing to act once properly informed.
- Australia’s urgent need to expand and rethink its defence and industrial capabilities to meet the growing expectations of the new US Trump administration.
The ADF reserve system is obsolete. We need a dramatically expanded force
The Strategist, March 21, 2025
https://www.aspistrategist.org.au/the-adf-reserve-system-is-obsolete-we-need-a-dramatically-expanded-force
Australia needs to radically reorganise its reserves system to create a latent military force that is much larger, better trained and equipped and deployable within days—not decades.
Our current reserve system is not fit for purpose. It was designed many decades ago to support distant expeditionary operations, not the prospect of major war in our immediate region emphasised in the 2023 Defence Strategic Review (DSR).
With doubts growing about the reliability of our major ally, we have no choice but to prepare to defend ourselves—if necessary, largely on our own. This requires whole-of-nation preparations that were described in the DSR. The driving needs are to deter and provide effective defence against an aggressive China.
But the Review of the ADF Reserves, quietly released before Christmas, addresses none of this. At best, it is an administrative review that describes how management of the current system can be refined. It is an exercise in deck chair rearrangement, when we need a credible plan to build a far larger latent force that can be mobilised to carry much of the load if we must fight alone with little notice.
Commissioning this review of Australian Defence Force reserves was a key recommendation of the DSR. The DSR said:
The strategic risks we face require the implementation of a new approach to planning force posture, force structure, capability development and acquisition… It is clear that a business-as-usual approach is not appropriate.
The DSR said that the force structure was ‘not fit for purpose’ and that the country needed a larger defence force, greater war-fighting endurance and stronger national resilience.
The review of reserves doesn’t address these issues at all but does describe the current reserve system. It states that in early 2024 some 41,000 people were registered as ADF reserves, but they included 10,000 who had never rendered service. Some of the remaining 31,000 provided specialist skills that were in short supply elsewhere in Defence, some filled gaps in permanent units, and a few served as a base for ADF force expansion in future emergencies.
At best, the reserves review performs a process-reform function, suggesting tweaking of current systems for efficiency and effectiveness. It recommends three categories of reserve service, accelerated entry pathways, adoption of an approach of providing minimal essential training, and a further review of conditions of service. However, the review proposes a recruitment target of only another 1000 personnel by 2030.
This is clearly not what the authors of the DSR had in mind.
There are limits on how many permanent ADF personnel can be recruited short of major war. However, given our strategic circumstances, a steep increase in part-time personnel should be a priority.
Advanced democracies variously use three reserve force models. The first is an expeditionary one suitable for countries which are not directly threatened but whose militaries periodically deploy to fight in distant wars of choice. Britain, Canada, New Zealand and Australia use this model.
The second type is the homeland and theatre defence model. It is used by countries that face serious threats of direct attack with little warning and therefore need to be able to field a very large defence force to fight wars of necessity within a few hours or, at most, a few days.
Examples include: Finland which, with a population of 5.6 million, operates a force of 24,000 permanent military personnel and 254,000 trained and equipped reservists; Israel, which from a population of 9.8 million, fields 170,000 permanent force personnel and 465,000 active reservists; and Singapore, which, with a population of 6 million, can field 51,000 permanent force personnel and 253,000 trained and equipped reservists.
The third type is a hybrid, such as the US model. From a population of 340 million, the United States it has a permanent military force of 1.3 million supported by 807,000 well-trained and well-equipped reservists.
The reserves review should have asked which model was now most suitable. Our expeditionary model, inherited from forward commitments in Korea, Malaysia and Vietnam, is obsolete. It provides some operational capabilities but generates limited resilience and would require many years to expand the reserves to the size needed for major regional war, which we could face before the end of this decade.
We must rapidly transition to a homeland and theatre defence model or, possibly, some sort of hybrid model. We must quickly prepare a reserve force that is much stronger than what we have: better trained, equipped and organised, and much larger. It must be deployable within days.
We must simplify and accelerate the way we bring people into it and improve ADF access to the national skills pool. Many intelligence, cyber, transport, medical, maintenance and other roles can be filled by qualified civilians following short training periods.
This next-generation ADF reserves system demands big changes in leadership, culture and organisational habits. The government must explain the security challenges Australia faces, why major changes are needed and why people should enlist.
What’s needed now is an action plan to quickly develop a much larger ADF reserve force. We needed it yesterday.
Business as usual on China will ruin us
The Australian, November 23, 2024
Business as usual on China will ruin us | The Australian
Australia is confronted by three big changes in our strategic circumstances that are making our steady-as-you-go approaches to security and economic development untenable.
We face a markedly increased risk of war in the Indo-Pacific; the global economy is restructuring rapidly in adverse ways; and the Australian economy has stalled with essentially zero productivity growth, declining international competitiveness and a flight of much-needed investment.
If we ignore these fundamental changes in our circumstances we will see Australia reduced to a weak and vulnerable backwater state within a decade. We urgently need to recalibrate, develop a new vision for our future and launch serious reforms.
The most obvious strategic challenge is posed by China’s extensive preparations for war and the regime’s aggressive international behaviour. President Xi Jinping sees the tides of history flowing China’s way and he makes no secret of his intention to exploit them.
“The world is facing great changes unseen in a century … which brings great opportunities for the great rejuvenation of the Chinese nation … The great struggle, great project, great cause and great dream of our party are in full swing,” he has said.
At the core of this campaign, Xi repeatedly has stated his determination to seize the vibrant democracy of Taiwan: “Complete reunification of the motherland must be fulfilled and definitely will be fulfilled.”
China rapidly has expanded its military capabilities so it has by far the largest army, navy, air force and theatre ballistic and cruise missile forces in the Western Pacific. The junior general who led Taiwan contingency planning until late 2022 is now one of Xi’s two most senior military advisers. And 15 of the 24 members of China’s politburo have Taiwan experience, leading some analysts to describe it as a war cabinet.
In recent years China’s budgets have often given security and defence a higher priority than economic development. Xi calls this “integrating national strategies and strategic capabilities” and building China’s “Fortress Economy”. This huge resource redirection is probably costing between 1 per cent and 2 per cent of GDP growth each year.
The Chinese military has been practising for an invasion of Taiwan. Full-scale replicas of key strategic buildings in Taipei have been built, including the presidential offices and the foreign ministry, so army units can rehearse their assault plans. Similarly, full-scale replicas of American and allied warships and bases have been built in China’s western deserts to serve as targets for medium and long-range missile tests.
During recent exercises Chinese ships and aircraft have penetrated close to Taiwan and appeared to rehearse the initial phases of a major invasion. Recently Xi visited a paratroop regiment whose primary mission is to “liberate Taiwan”. Xi ordered the troops to make “all-out efforts” to improve combat preparedness.
CIA director William Burns has told a congressional committee that Xi has ordered his military to be ready to conduct a major assault on Taiwan by 2027.
The Chinese military makes clear that it is not only targeting Taiwan but also strategic facilities in Japan, South Korea, The Philippines and many more distant targets. Indeed, the Chinese military even has released a video of a simulated air and missile strike on the US’s Andersen Air Force Base on Guam.
Several official Chinese documents, such as the 2013 edition of China’s Science of Military Strategy, describe China’s “crucial maritime space” as including all of the Western Pacific and most of the Indian Ocean, extending well south of Australia and New Zealand. In the event of war, Chinese forces plan to operate across all of these regions as well as in the space, cyber and subversion domains. In the meantime, Chinese military and paramilitary forces have seized most of the South China Sea, they are occupying maritime features that are well within the exclusive economic zone of The Philippines, and they are harassing the territorial defence forces of Japan, The Philippines, Indonesia, Vietnam and others.
The US, Australia and many other allies and partners also are being subjected to ongoing cyber, influence, coercion, subversion and “disintegration” operations. These are designed to penetrate, divide, disrupt and weaken targeted societies and render them more vulnerable in the event of a crisis.
The risks posed by this situation are great. US President Joe Biden has been asked four times whether, if China attacks Taiwan, American forces would be committed to fight. On each occasion he stated without hesitation that they would. President-elect Donald Trump has yet to be asked the same question directly but he is reported to have stated in private conversations that deterrence of China is one of his highest priorities.
If China attacks Taiwan, it seems likely that US, Japanese and other allied forces would be involved from the outset. In those circumstances there can be little doubt that Australia’s interests, values and alliance obligations would see Australia also at war.
This raises important questions about why the federal government has not been honest with the Australian people about the risks of major war and taken serious steps to prepare our society and economy.
As things stand, we may have to deal with this huge challenge before the end of the decade with little advance preparation.
The second strategic challenge is the rapid restructuring of the global economy, driven by China dumping its vast manufacturing surpluses into global markets.
This, in turn, is triggering tariff and other emergency protective measures to be taken by the US, most of Europe, democratic Asia and increasing numbers of developing countries. The origins of this global economic crisis lie in the decision of the Clinton administration in the US to support China’s accession to the World Trade Organisation in 2001. At the time it was widely assumed that Beijing would abide by the WTO rules, its economic opening would lead to political liberalisation and China would become a “responsible international citizen”.
In joining the WTO, China promised to lower its tariffs, eliminate non-tariff barriers, protect the property rights of foreign investors and open its markets to American and other international producers. However, China kept very few of these promises. Instead, it heavily subsidised its own industries and used a wide range of other mercantilist practices to penetrate, and ultimately dominate, key foreign markets.
This has led to the widespread de-industrialisation of the US, Australia, Britain and most other developed economies. Entire industrial regions in the US and elsewhere have collapsed, and millions of people have lost their jobs. The strategic impact of this vast industrial transfer has been huge. In 2004, US manufacturing output was double that of China. But by 2020 Chinese manufacturing output was double that of the US. This industrial imbalance has grown worse during the past three years. When China’s economy failed to recover fully from the Covid disruptions, its housing sector contracted, consumption fell and many Chinese businesses stalled. This led Beijing to stimulate the economy in part by encouraging many manufacturers to continue expanding production capacity.
In several key product categories, including electric vehicles and solar panels, China has now built more production capacity than is needed to supply the entire globe. However, with domestic demand weak, the only way for many manufacturers to stay afloat has been to send their growing production surpluses into overseas markets at low prices.
This dumping of China’s manufacturing surpluses is considered intolerable by the US, most of Europe and many other countries. The tsunami of cheap Chinese products is destroying the strategic industries of many countries, undermining their economies and rendering them more vulnerable to any new economic or geo-strategic shocks.
Not surprisingly, a strong fightback is under way. Western investment into China is at its lowest level in 30 years. Many American and European companies are reducing their footprints in China and some are leaving entirely.
Tariff and other protective measures are proliferating. The US already has 50 per cent tariffs on Chinese semiconductors, solar cells and medical products. It also has 25 per cent tariffs on Chinese steel, aluminium and batteries, and 25-100 per cent tariffs on Chinese electric vehicles. Trump’s policy is to impose a 60 per cent tariff on all Chinese goods, with a possible 20 per cent additional tariff following.
Nearly all of Europe is introducing 27-48 per cent tariffs on Chinese electric vehicles, and 20-48 per cent tariffs on Chinese steel and other metals are being considered. Canada has imposed a 100 per cent tariff on Chinese electric vehicles and India has imposed 15-125 per cent tariffs on Chinese vehicles. India also has announced 30 per cent tariffs on most Chinese foods.
A rising number of developing countries also have joined the push back. Indonesia has imposed 200 per cent tariffs on Chinese textiles and other light manufactured goods, Turkey has introduced a 40 per cent tariff on Chinese electrical vehicles, and Brazil and Chile have announced tariffs on Chinese steel products.
What this means is that the era of unrestricted, high-efficiency globalised trade is over and the world trading system is fragmenting into three camps or blocs.
The first and largest grouping is the advanced economies led by the US, Europe, democratic Asia and, increasingly, democratic states in other parts of the world. The second grouping comprises China, Russia, North Korea, Iran and several smaller authoritarian states. The third group is made up of the undecideds and neutrals.
The trade and financial separation between the first two blocs is growing rapidly. But much of the trade within each bloc is intensifying. This is particularly the case in the second bloc where trade between China, Russia and North Korea is surging.
Australia is currently in the undecided, neutral group. At the Asia-Pacific Economic Co-operation and G20 summits, Anthony Albanese championed “open, inclusive and rules-based trade”. This sounds fine in theory but it reeks of naivety when the US, Europe, India and many other countries are busily building trade barriers to protect themselves against China’s trade tsunami.
When Xi incongruously joined the Prime Minister in championing free trade, Albanese found himself in partnership with the leader of the Chinese Communist Party opposing the interests of the US, Europe and most other allies, and he also surrendered what remains of Australia’s manufacturing sector to the Chinese flood.
What is worse is the absence of an honest government discussion about the changes under way in the international economy and a realistic strategy for ensuring future prosperity and security.
The third strategic challenge is that Australia’s economy is in poor shape to compete in the rapidly changing international environment. Across recent decades, successive Australian governments have abandoned whole industries to win the benefits of globalised efficiencies and international supply chains. So while mining, energy, agriculture and some service industries have done well, most manufacturing has disappeared. In the late 1960s manufacturing accounted for 26 per cent of Australia’s economic output. It now accounts for 5 per cent.
In the past three decades public sector spending at the federal and state levels has ballooned with the consequential taxation, regulatory and other burdens on industry and the broader community seriously weakening Australia’s competitiveness. Australia’s multifactor productivity growth is effectively zero per cent and the country’s international competitiveness ranking has fallen to 19th place, well behind Qatar, the United Arab Emirates and Saudi Arabia, and a very long way behind countries such as Ireland, The Netherlands and Denmark. Australia is no longer an attractive destination for foreign and even domestic investment. In recent years more investment has departed our shores than has arrived.
Unfortunately, many recent federal and state government policies have made this situation worse. Additional layers of red and green tape, surging electricity costs and falling electricity reliability, together with new constraints on industrial flexibility, have crippled many enterprises.
Especially important have been sector-wide industrial agreements, removal of the link between productivity improvements and wage determinations, same work, same pay regardless of worker experience, and related initiatives. In combination, these measures have made Australia a costlier and much less friendly place for business.
Perhaps worst of all has been the sovereign risk sprung by Queensland on several foreign corporations that have invested billions in developing gas, coal and other export operations, only to find the taxation levels increased markedly without consultation as soon as the operations started to return profits.
In this business-unfriendly environment it is not surprising that per capita GDP has fallen for the past six quarters, company bankruptcies have reached record levels and Australia’s international reputation has been seriously damaged.
There are three key things we need to do to turn this situation around. First, we need a season of honesty. The government must brief the nation properly on the serious challenges we now face. The media also needs to do a more professional job of analysing these issues.
Second, we need a vision for how Australia can achieve a new era of prosperity and security. Part of this vision should be a program for boosting our defences for the coming two to five years as well as for the longer term.
But the core of the vision should be a program to remake Australia into a great place to invest, to do business and to live. All Australians need to understand that if we are to enjoy sustained prosperity in the new environment we must quickly turn Australia into a highly preferred location for investments.
We need to focus primarily on attracting industries that build on Australia’s competitive advantages – such as our abundant mineral resources, traditionally cheap and reliable energy supplies, abundant land, skilled workforce and our relatively stable and predictable legal and political systems. Priorities should be investments in resource extraction and processing, and energy-heavy industries as well as some high-end design, technology and educational industries. Especially favoured should be the production of intermediate goods rather than highly complex manufactured products. Leading contenders should be processed metals and chemicals, pharmaceuticals, fertilisers and the production of a wide range of fabricated intermediate products – most intended for export.
China currently dominates most of these markets and many countries would welcome a highly competitive and fully trusted alternative supplier.
If we are to succeed, we need to reduce the costs and complexities of business operations. We need to cut corporate taxes to world-leading rates, reduce government overheads and simplify regulatory and industrial-relations frameworks. Major projects should be approved in weeks rather than decades.
Governments should not attempt to pick winners. They should focus instead on generating the favourable environments in which competitive international businesses can thrive. State governments should compete to attract the best investors.
Finally, we need to take a clear decision. If we continue on our current course of declining productivity, weakening industrial strength and falling standards of living, Australia soon will become a weak and vulnerable backwater state with very poor prospects.
Alternatively, if Australian governments inform the public about the serious challenges we face and lead a thoroughgoing process of economic and security reform, the way will be open for a new era of prosperity, international influence and security.
Deterrence and alliance power: Why the AUKUS submarines matter and how they can be delivered
The report on AUKUS published by the Lowy Institute can be downloaded at:
Australia is confronted by three big changes in our strategic circumstances that are making our steady-as-you-go approaches to security and economic development untenable.
We face a markedly increased risk of war in the Indo-Pacific; the global economy is restructuring rapidly in adverse ways; and the Australian economy has stalled with essentially zero.
Australia’s Job Now: A chapter in: Matt Pottinger (ed) The Boiling Moat: Urgent Steps to Defend Taiwan, Hoover Institution Press, Stanford, California, 2024.
The Challenge of Maximising Australia’s Deterrence Power
In Australia the goal of deterrence is mostly pursued in an ill-disciplined and incoherent manner. The selection, scaling and operational employment of defense and other strategic systems is usually driven by the need to replace current capabilities, operational habits, a military service’s preference, domestic political imperatives or by budgetary allocations. Almost as an afterthought, selected options are often said to enhance deterrence. This behavior is flawed if one’s primary goal is to deter military action by a major power.
There is a need for greater precision, especially when Australian decision-makers consider how best to deter specific events, such as a Chinese assault on Taiwan. Planning to maximize combat power or achieve other goals may be laudable but they are not the same as preparing to optimize deterrence. Deterrence involves using one’s actions to deliver the strongest possible psychological impact on the opposing decision-making elite so as to persuade them to desist, delay or otherwise alter their operations to one’s advantage. In order to have greatest impact, deterrence operations need to focus on credibly placing at risk things that the opposing leadership values highly or considers especially sensitive. Such threats or pressures do not necessarily need be overt or direct. Nor do threatening capabilities always need to be displayed. In some situations it may be sufficient simply to assert or imply the existence of a capability that can threaten a high value target for an opponent to be deterred.
For a medium power such as Australia, applying strong deterrence power against an opposing decision-making elite is a sophisticated form of signaling. It is the communication of a compelling message often using a combination of military and non-military instruments so that the opposing decision-makers become deeply concerned about the consequences that would flow if they act against the interests of Australia and its allies.
Not all types of deterrence work the same way. There are two main categories. First is offensive deterrence that, in its most basic form, threatens that: “If you hit me, I will hit you back harder and you will regret hitting me in the first place.” This might be called ‘cobra deterrence’. The second main category is defensive deterrence. This involves sending a strong message that: “If you strike me, you will get such a bloody arm that you will regret striking me.” This might be called ‘porcupine deterrence’. Both categories are relevant to Australia’s security challenges but careful planning is needed to get the balance right.
Also relevant is the leverage rating – or power – of a particular instrument or action to force an opponent to change course. How strong a leveraging effect will a particular initiative have on the opposing decision-making elite? When wishing to deter a Chinese attack on Taiwan will ‘Option A’ have a stronger psychological impact on Xi Jinping and his colleagues than ‘Option K’? It is important to note here that the views of the Chinese leadership should not be assumed to mirror-image those of allied leaders. The Chinese Communist Party’s key players have markedly different mindsets to those of Australian and other allied security planners and so decision-making in this area needs to be made with great care. Assessments of options for delivering deterrence power should be made using the advice of expert analysts who follow the Chinese leaders’ actions closely, can mimic their values and much of their thinking and accurately predict their next moves.
Then there is the question of the intensity rating of a particular deterrent measure and the manner in which it is expressed. For instance, if an Australian government document mentions that in the event of a military attack on Taiwan practical support would be delivered to the Taiwanese armed forces, the deterrence intensity rating might score 1 out of 10. However, if such a commitment to defend democratic Taiwan were publicly stated with strong emotion several times by the Australian prime minister, the intensity rating might rise to 3. Then, if such a commitment were delivered simultaneously with strong coordinated statements from the U.S. president and the Japanese prime minister, the intensity rating might rise to 7 or 8. So in weighing the deterrence power of various Australian options, it is not only the specific action that is relevant but also the way it is expressed or delivered and by whom.
Other important factors in weighing deterrence options are cost-effectiveness and the ease and speed with which they can be implemented. Some options would clearly be more demanding of human and financial resources than others. Preferred options may draw on extant skills and other resources and offer strong deterrence power quickly at modest cost.
A final and critical consideration when rating deterrence options is the level of shock that an action can deliver to authoritarian state decision-makers by suddenly short-circuiting their offensive plans. Is there an option that could take the opponent by surprise by rendering a key pillar of their strategic stance crippled or useless? Do Australia and its allies have an option that unexpectedly changes ‘the rules’, negating a key part of the opponent’s defense in a way that cannot be effectively countered? In other words, does Australia, in partnership with its allies, have a ‘third offset’ option – analogous to the American-led ‘first offset’ in the 1950s and the ‘second offset’ strategy in the 1980s? If the answer is ‘probably yes’, then this should be a core goal of Australian deterrence-led strategy.
What this discussion makes clear is that maximizing Australia’s deterrence of a war over Taiwan would not be simple. It is unlikely to be achieved by accident. It requires a careful weighing of the type of deterrence, the leverage power and the intensity of a wide range of options, their cost-effectiveness, the speed with which they can be delivered and their potential to psychologically disarm the opponent’s key decision-makers.
Many deterrence options would require the involvement not only of Australia’s defense organization and the country’s national security agencies but other government departments, business leaders, elements of broader Australian society and, in most cases, coordination with allies and security partners. In contrast to Australia’s military commitments during the last half century, maximizing deterrence of an expansionist China will require much more than contracting the task out to the Australian Defence Force to manage. It will need careful analysis of new multi-domain options, the fostering of a more innovative and fast-moving culture, a re-shaping of some organizations and operating within a society that is well informed, very supportive and actively involved.
All of this is possible, but it is far removed from current practice. This chapter considers briefly a menu of ten investment options that if delivered well could contribute significantly to Australia’s deterrence of a Chinese assault on Taiwan and its potential escalation to a major Indo-Pacific war. A key question is which of the options promises the strongest deterrence power in a cost-effective and timely way.
For more details about this book and purchase options, please visit:
The Next Major War: Can the US and Its Allies Win Against China?
This book is the product of two and a half years of intensive research and extensive consultation with leading experts in the United States, Australia and the broader allied community.
What is the Book About?
Key questions the book addresses include:
- How likely is a major war in the Indo Pacific?
- How would such a war begin?
- How are China and the United States preparing to fight such a war? (Actually, very differently.)
- What would be the driving goals and game plans of each side?
- What are each side’s strengths and weaknesses?
- How would such a war progress? What would be the primary phases?
- How long would such a war last?
- What would be the supply chain, business and broader economic dynamics of such a war?
- How ready are the two sides to fight and win such a war in this decade?
- And how could America and its allies prevail in such a calamitous contingency?
What Do Independent Experts Say?
“A timely, sobering, and essential read for anyone who wants to understand in detail how a major war in the Indo-Pacific would unfold, the strengths and weaknesses of the United States and China along with their partners, the likely economic and business impacts, and the measures that need to be taken now for the United States and its allies to deter China—and if necessary, to prevail. As concern grows that China will invade Taiwan before mid-century, the issues examined in this book are crucial for policymakers, militaries, academics, and business leaders to consider.”
Bonnie Glaser, Director, Asia Program, German Marshall Fund of the US
“In this prize jewel of a book, Babbage provides an eagle-eyed look ahead at the worst political, economic, and military crises in the near future—and, very importantly, a critical blueprint for averting these. Politicians, business leaders, journalists, and everyday citizens should read Babbage’s urgent roadmap for deterring—or, as may be necessary, winning—the war Beijing is cooking up.”
Matt Pottinger, former US Deputy National Security Adviser
“U.S. officials now warn of a growing risk of war with China. But how might such a conflict begin? How long would it last? And what factors would be most important in determining its outcome? The Next Major War is an outstanding book that offers the deepest and most wide-ranging analysis to date of these questions, going far beyond the usual comparisons of weapons systems and operational concepts to explore the economic, political, and societal dimensions of a possible future clash between the Pacific superpowers.” Aaron L. Friedberg, Professor of Politics and International Affairs, Princeton University
“In The Next Major War, Ross Babbage, one of Australia’s foremost strategic thinkers, provides a timely, insightful, and much-needed net assessment of the threat posed by China to the Indo-Pacific liberal international order—and how to meet it. The insights derived from Babbage’s study of the Indo-Pacific geopolitical chessboard and military balance exemplifies Clausewitz’s coup d’oeil—the ability to see the interrelationships among all the major factors shaping the intensifying rivalry between China, and the United States and its allies. The Next Major War is a serious, important, and timely gem that is mandatory reading for all senior officials charged with deterring Chinese aggression and, should deterrence fail, defeating it.”
Dr. Andrew Krepinevich, Jr., President and CEO, Solarium LLC; and Founder, former President, and CEO of the Center for Strategic and Budgetary Assessments
“Ross Babbage has produced a timely and clear-eyed study of the multitude of challenges posed by a resurgent China across the Indo-Pacific. His examination of alliance weaknesses—and the opportunities available to the US, Japan, Australia, and others in this dynamic environment—is highly relevant to government, military, national security, and scholarly communities across the globe.”
Mick Ryan, Major General, Australian Army (ret.)
“The Next Major War represents an appropriately sober appeal and is a sobering forewarning to the United States and its allies to take seriously the prospect of a major war with China. More than that, it is an urgent call to action to prepare for such an increasingly likely contingency. Babbage’s book will be of intense interest to soldiers and statesmen alike.”
Thomas G. Mahnken, President and CEO, Center for Strategic and Budgetary Assessments; and Senior Research Professor, Johns Hopkins SAIS
“The Next Major War is an absolute wake-up call for the national security / foreign policy / political ‘ruling classes.’ There’s a lot more to taking on China than building a 500-ship US Navy and getting the military part right. Changed mindsets in all parts of society are required—this includes leadership in the business world. This book lays out the dangers and what’s required to counter them. It offers perspectives that aren’t readily found in existing literature on the China threat issue. The book synthesizes a wide range of existing information on the topic in a way not done before, including the author’s original earlier research on Chinese and Russian political warfare, which is impressive on its own. This presents a new approach to analyzing and understanding the China threat, which is heavily covered by analysts and pundits, so producing a new or novel approach that stands out is no small feat. A strength of the book is its clarity; some of the topics—financial and economic, for example—can be hard to understand, yet these parts are clearly presented, which is also not easy to accomplish. The various conflict scenarios are easily laid out and flow well—another task that is not easy. As such, this book is a helpful tool for recognizing and understanding the range of issues and influences involved in national security matters—as well as the need for a broad perspective when assessing such topics.”
Grant Newsham, Colonel, US Marines (ret.) and former executive director, Morgan Stanley Japan
More Details and Options for Purchase
Purchase options and other information can be found at:
The Next Major War: Can the US and its Allies Win Against China?
Are the Indo-Pacific allies certain that their defence planning for the coming two decades is built on sound foundations? Many Western security analysts assume that a modernised version of their highly networked, combined arms operations will be able to prevail in any major conflict in the Indo-Pacific. 1 But is this right?
If there is to be a major war in the Indo-Pacific, it is likely to involve a struggle between China and a small number of supporters on the one hand and the United States and its allies and partners on the other. The precise sequence of events in such a catastrophe is difficult to predict but it is certain that Beijing will have as much, or even more, say over the shape of the conflict as Washington. This is a serious problem for the West because the core agencies of the Chinese government bring strategic cultures, strategies, operational concepts and priorities to the Indo-Pacific that are markedly different from our own. When viewed in this context, even an advanced version of conventional Western strategies and operations could prove seriously inadequate.
The Western allies need to ensure they plan to deter and, if necessary, to fight and win a future war, not just a part of a war, or even the wrong war.
There are at least ten reasons for doubting that the West’s perception of future war in the Indo-Pacific is sound.
In Which Way the Dragon?, CSBA Nonresident Fellow Ross Babbage and colleagues argue for a new, scenario-based approach to defense and security planning in the Indo-Pacific. Drawing upon expert analysis of current conditions, three to four overarching scenarios for China should be considered as potential guideposts over the next 15 years. Each outcome would include a series of lead indicators, allowing analysts to determine which future scenario China is headed towards, prepare for potential alternatives in advance, and make adjustments to strategies, operational concepts, and military and security systems when necessary. The end result should markedly reduce the uncertainties about the strategic environment in the 2035 timeframe and provide greatly improved foundations for confident decisions on security policy and capability development. In short, this approach offers a superior way of addressing the security challenges faced by the Western allies and their security partners in the Indo-Pacific.
Stealing a March: Chinese Hybrid Warfare in the Indo-Pacific: Issues and Options for Allied Defense Planners
Stealing a March: Chinese Hybrid Warfare in the Indo-Pacific: Issues and Options for Allied Defense Planners: Volumes 1 & 2 examines Beijing’s hybrid warfare campaigns, their origins, means and modes, level of success and possible future shape. It also assesses the primary options for U.S. and allied counter-strategy.
Winning Without Fighting: Chinese and Russian Political Warfare Campaigns and How the West Can Prevail: Volumes 1 & 2 assesses the role of political warfare in Chinese and Russian strategy. The report goes beyond diagnosing the challenge to offer a range of potential allied counter-strategies and proposes a new conceptual approach to such thinking.
Countering Comprehensive Coercion: Competitive Strategies Against Authoritarian Political Warfare
Countering Comprehensive Coercion offers policymakers a better understanding of the threat they face. It argues that Russian and Chinese malign activities should be viewed part of a unique form of authoritarian political warfare: comprehensive coercion. Unlike most Western nations, Russia and China have long histories of engaging in political warfare, deep insecurities that have driven them to embrace a particularly aggressive brand of political warfare, and highly centralized governments that enable them to integrate and coordinate the diverse elements of political warfare campaigns.
Meanwhile, democratic nations are particularly vulnerable to comprehensive coercion because the open nature of their societies provides many pathways for rivals to shape and influence, while gaps and seams across government agencies can make an effective response difficult to mount. Nevertheless, Countering Comprehensive Coercion also highlights how the targets of authoritarian political warfare campaigns can better position themselves to compete, not only by reducing their vulnerability but also by adopting more forward-leaning measures of their own.
What should the U.S. and its close allies do about China’s strategic expansion into the South China Sea?
Beijing now has overwhelming military, coastguard and maritime militia forces in this theatre and it has seized numerous reefs and dredged up new islands in operations that that the U.N’s Permanent Court of Arbitration has determined are illegal. Major military installations are being built in several locations. Three of these new islands, towards the middle of the South China Sea, will soon be capable of housing regiments of fighter-bomber aircraft and also of supporting sustained operations of significant numbers of ships. The rapidly changing strategic balance in Southeast Asia and the Western allies’ flat-footed response is encouraging several regional states to re-evaluate their long-standing security relationships.
This report argues that it is time for the U.S. and its close allies to clarify their goals in this theatre and develop a coherent strategy to counter China’s expansionist operations. It describes a surprisingly broad range of strategy and operational options that are potentially available for the Trump administration to pressure Beijing to moderate its behaviour, retrace some of its steps and deter the Chinese leadership from embarking on new, potentially more dangerous adventures.
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