QUAD is a grouping of four nations—India, the US, Japan, and Australia—that was formed to contain growing Chinese aggression in the region. The idea behind this coalition was to ensure a free and open. Indo-Pacific and the establishment of a rule-based order. QUAD was the brainchild of former Japanese PM Shinzo Abe, who saw potential in this grouping to maintain balance in the region. In recent times, there has been a momentous development in the grouping, with leaders of member states carrying out in-person meetings. Conversely, China won’t take it lying down and is trying everything to weaken this group. Australia has become the first nation to succumb to Chinese pressure tactics. In this piece, we’ll discuss why Australia was the weakest link in the alliance.
RECENT TRIP TO CHINA
The recent visit of Australian PM Antony Albanese to China is seen as a major jolt to the QUAD. This high-level visit came after a trade war between China and Australia over the past few years. During this visit, PM Albanese hailed 50 years of diplomatic relations between the two nations. He further underlined the importance of communication between both nations. PM Albanese stated that Australia has an interest in the continued stable growth of China’s economy and its ongoing engagement with the world. During his press conference with his Chinese counterpart, PM Albanese said Australia, along with other countries in the region, has an interest in continued stable growth in the Chinese economy and its ongoing engagement with the world. Furthermore, a strong relationship between the two countries was “beneficial into the future.”
Australian PM Anthony Albanese with Xi Jinping.
This visit marked a momentous shift in Australian policy vis-à-vis China. Officials from both sides have confirmed that they have decided to resolve all trade issues. China agreed to lift its bar on Australian wine, barley, coal, and other products. In return, Australia agreed to restart annual meetings between the two nations, which were halted during Scott Morrison’s tenure. President Xi, during his meeting, warned PM Albanese regarding “bloc politics,” indirectly referring to AUKUS and QUAD. Analysts believe this visit came as a shocker to the Biden administration, which is trying to rally Indo-Pacific nations against Chinese aggression. It is evident that Australia is towing down its stance against China. Many believe that with the US embroiled in Ukraine and Israel, Australia finds itself isolated in countering China’s aggression, thus this visit to normalise relations. Whether or not it will reap any fruit has to be seen in the future.
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AUSTRALIA’S VULNERABILITIES
Australia’s vulnerability vis-à-vis China has always been a matter for debate among Quad members. Due to its proximity to China, coupled with its insignificant firepower and paltry economy, Australia has always been questioned for its utility. Keeping the military aspect aside, the major bone of contention is the oppressive economic dependence of Australia on China. Australia’s economic reliance on China is a weak link in the Quad’s stance against Chinese dictatorial designs in the Indo-Pacific. To make things worse, China knows this vulnerability and leaves no stone unturned to punish Australia for its anti-China stance. Economic coercion has always been the top pick for China to further its hegemony, either through debt traps or trade wars. Ever since Australia registered its active participation in Quad, China initiated a trade war to arm-twist Australia to back off.
The following points will illustrate Australian economic dependence on China:
- China is Australia’s largest two-way trading partner in goods and services, accounting for nearly one-third, or 32.2 per cent.
- China is the sixth-largest foreign direct investor in Australia ($46.3 billion in 2021), accounting for 4.4 per cent of total foreign direct investment.
- Both countries also signed the China-Australia Free Trade Agreement (ChAFTA), which entered into force on December 20, 2015.
Australia’s trade dependence on China.
- Despite trade restrictions that began in early 2020, 35–40% of Australian exports go to China, and 20% of imports come from China. Chinese nationals constitute the largest number of international students and inbound tourists, thus contributing to the tourism sector.
- China imposed 212% tariffs on Australian wine exports, which, at their peak in 2020, accounted for $1.2 billion and made up 18% of export volume and 40% of value.
- China is also the largest importer of iron ore, which is the cornerstone of Australian economics. iron ore exports, which, depending on price, equate to up to 10% of Australian GDP. China alone accounted for 82% of Australia’s iron ore exports in 2019.
These figures alone are enough to demonstrate the edge China has over Australia in terms of trade. Precisely, this overdependence is the reason Australia is trying to diversify its exports. Australia plans to increase trade with regional partners considered more strategically aligned with Australia. As a result, Japan’s share jumped to 17.8 per cent—up from 11.6 per cent—while India’s reached 6 per cent (up from 3 per cent). Though it’s easier said than done, given the sheer volume, it’s very difficult to replace China. India emerged as a silver lining, given its massive market and growing economy. Furthermore, both India and Australia are in discussions to sign a free-trade agreement. But, as it said, Rome wasn’t built in a day; it would take years for Australia to diversify and overcome its economic reliance on China.
IMPACT ON QUAD AND A WAY FORWARD
Despite all its shortcomings, Australia is still an important pillar of the Quad and a crucial ally in curbing Chinese influence in the region. Australia, located between the Pacific and Indian oceans, acts as a sentinel to check China’s naval activities. Furthermore, Australia holds a strong influence in the Pacific Island nations, a region of great interest for China. Australia also acts as a logistics support centre in the Pacific region. Therefore, losing Australia would be detrimental to the Quad. Hence, it’s pertinent for the members to not let China cut out Australia under economic coercion. The recent visit by the Australian PM to China is an initial warning sign for the same. We must not forget that China has already succeeded in poaching Australia once in the past. It was during the budding phase of Quad in 2008 that Australia pulled out under pressure, claiming that it excluded China.
Today, the stakes are much higher than they were in 2008; more so, Quad is the need of the hour. Hence, it’s high time for Quad to expedite economic reliance initiatives among partners to counter economic coercion from China. Furthermore, member states should also kick in bilateral or trilateral agreements to bolster trade relations. The Supply Chain Resilience Initiative is one such collaboration between Australia, India, and Japan to promote national supply chain policy and principles in the Indo-Pacific. India, at the individual level, must strive to deepen economic ties with member states. For starters, a free trade agreement with all member states is paramount.
India-Australia 2+2 Dialogue, 2023.
Though Australia isn’t a lost cause yet, despite the recent visit, there is a lucid understanding in Australia about the hegemonic intentions of China. This was recently voiced by Australian Deputy PM Richard Marles during the 2 + 2 dialogue in India. During the visit, he unequivocally called China the biggest security concern for Australia and India. Furthermore, he emphasised the importance of deepening comprehensive ties between the two countries. It’s fair to say that all is not lost, but the signs are evident. Moreover, it’s always wiser to work on precautions than cures. Currently, there is no immediate impact on Quad, but to ensure it remains that way, the members must push up their engagement. Quad is pivotal for maintaining tranquillity in the Indo-Pacific, and its dismantling is the last thing the region wants to witness.
CONCLUSION
Australia indeed appears to be the weakest link in Quad, but that shouldn’t jeopardise its functioning. Bolstering its members through cooperation in the face of aggression has been the core philosophy of the Quad. It’s time to walk the talk. India, on its part, should also come up with innovative initiatives to enhance economic reliance among member states. India also plans to invite all heads of quad members as chief guests on its Republic Day in 2024. This could provide a platform to display solidarity among members and to exchange new ideas to deal with future uncertainties. Whether this proposal materialises and how the members will respond, has to be seen. But, rest assured, each member must play their part in strengthening the quad and ensuring that nothing dents its unity.
