The New Cold War
America, China, and the Echoes of History
In the U.S. National Defense Strategy published in January 2018, Washington announced the return of great power competition, branded China a “strategic competitor,” and called for a “free and open Indo-Pacific.” Despite these rhetorical developments, however, there remain lingering questions surrounding the Trump administration’s episodic engagement with the region, its failure to coordinate with allies on major issues, and inadequate resourcing for initiatives outside the military realm.
These concerns will be on the mind of many of the national leaders gathering in Singapore for the Association of Southeast Asian Nations (ASEAN) and East Asia summits, and then in Papua New Guinea for the Asia-Pacific Economic Forum (APEC), this week. Conspicuously absent from the gatherings is U.S. President Donald Trump, who has chosen instead to send Vice President Mike Pence. In contrast, Chinese President Xi Jinping is hosting a meeting with the leaders of the Pacific island states in Papua New Guinea ahead of the APEC meeting.
Despite Trump’s absence, however, the United States and key regional allies are finally sharpening their focus on strategic competition with China for influence in the South Pacific. Across the island states of the South Pacific, Washington is working closely with Canberra, Tokyo, and Wellington and expending significant resources. Absent further coordination and resource commitment, however, the initial efforts of this emerging strategy are unlikely to help the region or offset the more troubling aspects of Beijing’s growing presence.
The island states of the South Pacific occupy only a small amount of territory in a vast ocean, and yet they are strategically vital to the United States and its regional allies—particularly Australia, New Zealand, and Japan. All of these countries have an interest in ensuring that commercial and military access across the Pacific remains free and unimpeded; denying a potentially hostile power the ability to project power against them; and expanding democratic institutions and liberal norms.
Over the past several years, Beijing has stepped up its activity across the Pacific, increasing its aid and investments. Pacific Island nations are undoubtedly tempted by Beijing’s deep pockets and willingness to commit to major development projects with few conditions. Of course, investments that meet local needs and support local growth should be welcomed. But in far too many instances in the South Pacific and elsewhere, Chinese investment is troublingly opaque, undermines national sovereignty, and privileges resource extraction over benefit to local communities. Furthermore, especially in the South Pacific, Chinese investment has often brought with it environmental degradation, corruption and crime, and increased strain on natural resources, including fisheries.
Across the island states of the South Pacific, Washington is working closely with Canberra, Tokyo, and Wellington and expending significant resources.
Unfortunately, much of this Chinese activity has taken place against a backdrop of regional neglect by Washington and its allies. Australia, New Zealand, and the United States have all cut aid to the region over the past decade and focused their attention elsewhere in the world.
There are, however, clear signs that this neglect is ending. In July, the U.S. State Department announced $113 million of new funding to expand economic engagement in the Indo-Pacific, and in September the United States committed to joining the Pacific Regional Infrastructure Facility, a hub providing technical assistance and research on infrastructure issues for the Pacific Island countries, to better coordinate the more than $350 million in annual contributions to the Islands. Congress recently created the Better Utilization of Investments Leading to Development (BUILD) Act, a $60 billion agency to spur private-sector investment, with the intent of eventually offering a high-quality alternative to China’s Belt and Road Initiative. Additionally, Congress has advanced, although not yet passed, a bipartisan Asia Reassurance Initiative Act that would authorize more than $7.5 billion in new funding over the next five years.
Japan, meanwhile, has made a significant commitment in Southeast Asia to promoting high standard, high-impact infrastructure investments with its $200 billion Partnership for Quality Infrastructure. Tokyo has also deepened its investment, aid, and partnership with the Pacific islands, building a climate change center in Samoa, boosting its regional diplomatic presence, expanding people-to-people exchanges, and increasing the number of business delegations it sends to the region.
New Zealand has made assistance to its Pacific neighbors its top priority. This past spring, Prime Minister Jacinda Ardern signaled her government’s “Pacific reset,” announcing a $714 million New Zealand dollar ($498 million) increase in New Zealand’s foreign affairs budget over the next four years, more development assistance and diplomatic presence across the region, and budgeting for additional people-to-people programs. Wellington also spent over two billion New Zealand dollars ($1.6 billion) on P-8A Poseidon aircraft, which will strengthen their maritime patrol capabilities, and enhance their ability to assist Pacific island nations with disaster assistance.
Perhaps the most dramatic initiative yet, however, was last week’s speech by Australian Prime Minister Scott Morrison. Heralding a new chapter in Australian-Pacific relations, Morrison asserted that Canberra was “returning the Pacific to where it should be—front and center of Australia’s strategic outlook.” Morrison committed two billion Australian dollars ($1.4 billion) for regional infrastructure projects and another one billion Australian dollars ($719 million) for Australian businesses operating in the Pacific. He also promised an increased Australian military presence in the region, a joint naval base on Manus Island, annual meetings between defense, police, and border forces, and new diplomatic posts in the Cook Islands, French Polynesia, the Marshall Islands, Niue, and Palau. These announcements come on the heels of the opposition Labor Party’s calls for a renewed focus the Pacific, suggesting that such measures will enjoy bipartisan support.
These recent moves all demonstrate the United States and its regional allies’ new focus on the strategic challenge, their willingness to commit more resources, and their understanding that strategic competition demands giving the island states of the Pacific a viable and attractive path to sustainable development. Taken together, these initiatives now resemble the coordinated effort of an alliance of like-minded states working in pursuit of a common objective. Moreover, this is just a start. There are multiple interested parties—France, India, South Korea, Taiwan, and the United Kingdom, among others—who could also choose to work together more closely in the region.
The United States has an opportunity to lead the way in integrating these efforts. It should start by better coordinating with its allies the ongoing lines of engagement. As New Zealand Foreign Minister Winston Peters underscored in March, “We need to better pool our energies and resources to maintain our relative influence.” It is currently almost impossible to gain a holistic picture of the actions each government is undertaking, let alone understand the sum total of their efforts. Coordination should start by delineating ongoing efforts, adjusting overlapping ones, prioritizing among them, and determining which nations are best equipped for which types of missions.
Coordination also requires a coordinator, which could take several different forms. Appointing a U.S. ambassador-at-large for the Indo-Pacific would be the simplest way to accomplish this. Washington should identify an individual with long experience in the region, expertise in economics and finance, and the ear of Congress and the White House to play this role.
The United States also needs to spend more on the region. After cutting the budgets for the State Department, USAID, and the Peace Corps, the White House and Congress should boost funding and add positions across the Indo-Pacific. Furthermore, following the U.S. midterm elections, the Democratic Party–led House of Representatives will have the opportunity to reaffirm its commitment to national security by significantly increasing funding for the Pacific.
If the United States is willing to spend more, it can urge others to do the same. Encouraging other like-minded nations to think of the Asian summits as an annual donors’ conference would help encourage a race-to-the top mentality. The focus should be on determining how best to deliver needed projects, reduce poverty, and strengthen institutions. Perhaps the best way to achieve these goals would be through an agency similar to the U.S. Millennium Challenge Corporation, which offers accountability for donor and recipient countries alike through competitive selection of projects and transparent fiscal oversight.
The United States also needs to realize that its concern about Chinese attempts to extend its influence in the region is not necessarily a primary concern for Pacific Islanders. It is true that a growing number of Pacific states resent China’s coercive activities, but this could easily become true for the activities of any external power in the region. The lesson here is to approach the strategic challenge by seeking to earn trust. This is favorable terrain for U.S. private sector engagement that is market driven, meets high standards for safety, and drives growth rather than weighs down countries with unsustainable debt.
Finally, when the United States thinks about its involvement in the Indo-Pacific, it must simultaneously think of the strategic whole and the distinct geographic parts. Attention on the Pacific is overdue, but it cannot come at the expense of either Northeast or Southeast Asia. In practice, this means encouraging greater cross-pollination of regional security concerns and economic opportunities.
Many of the efforts required to keep the region free and open are already under way. The challenge is that Washington and its allies are undertaking them without sufficient coordination, prioritization, or regard to comparative advantage. But with a robust commitment to pooling resources and working collectively, the United States and its allies have the potential to provide both a real counterweight to China and numerous opportunities for sustainable development for the region.