We acknowledge and we celebrate the first Australians on whose Traditional lands we meet and we pay our respects to the elders of the Ngunnawal people past and present Colleagues friends ladies and gentlemen welcome to the National Security College Here at the Crawford school here at the Australian National University and a particular welcome to our colleagues and collaborators in this evening's event from the Strategic and Defense Studies Centre in the Coral Bell School also at ANU I'm also especially pleased to welcome some of our distinguished guests notably the ambassadors of Philippines and Norway and senior diplomatic representatives from the missions of Vietnam the United States Indonesia France and Singapore I think that's an indication of the global importance of the security issues that we're here to discuss tonight Now for those of you who don't know me. My name is Rory Medcalf. I'm the head of the National Security College It was my privilege to be recently appointed as the second head of the College after Michael the strange our founding head The discussion that we will shortly have about the is about the security challenges in the South China Sea and this is in part a Reflection of the evolving mission of this college It's not only a training institution to the Australian National Security Community and many of you are familiar with that training and some of Our alumni here tonight, but it's also a platform in my view for a better standard of policy debate and policy understanding right across the spectrum of security issues here in Australia and We can't afford the reality. We can't avoid. I'm sorry the reality that the South China Sea is Ultimately an Australian national security issue as well as a challenge for so many other countries now This is for multiple reasons Australia's security ultimately depends on a rules-based regional order and any damage to that order through coercion or risk-taking or Unilateral assertiveness by any country as we've seen in these contested waters in recent years equates with damage to our interests Secondly, Australia's vital lifelines and trade routes to and from our top three trading partners from China Japan and South Korea run through those waters third the tensions in the South China Sea are testing American resolve American credibility and diplomatic dexterity and America is Australia's ally and therefore these are tests for us to Fourth as the region comes to terms with how to incorporate a powerful China and its legitimate interests The way that China behaves when its interests brush up against those of smaller powers Provides a test case for us all to watch very very closely and Fifth if tensions in these waters were to escalate into conflict Australia would not be able to pretend that it's not our business. It will affect our interests no matter what So this evening's discussion is enormously timely now Just last week not far from here The South China Sea made global headlines when the commander of the US Pacific Fleet Admiral Harry Harris warned of the perils around China's so-called great wall of sand That is of course the rapid program of island building including potential military infrastructure That is changing facts in the water and building a new status quo in the waters that China contests with the Philippines and Vietnam Now it's a pity in my view that the negotiation of a code of conduct to manage the tensions and the disputes Seems to be proceeding with rather less taste in the work of those very efficient Chinese bulldozer drivers and dredge operators Now the Admiral's speech could perhaps have been more delicately worded, but in my view his point was a reasonable one and Not an intrinsically dangerous or escalatory one as some observers have been quoted as describing it a similar point has previously been alluded to by Assistant Secretary of State Danny Russell and is now being repeated perhaps more diplomatically By Defense Secretary Ash Carter on his timely visit to the region The island building is a new kind of provocation to which no country yet has a credible response So tonight's event as I've said is timely and my predecessor of the college and his team had I think very good prescience and judgment in commissioning the research project on which tonight's event is based It's after all in a sense a book launch for an excellent collection of chapters And I should at this point show the book an excellent collection of chapters by some leading experts in the field Looking at political Legal and regional security perspectives on the South China Sea dispute I recommend the book of course published by Ritledge, but also its predecessor occasional paper Published by the National Security College, which I believe you can obtain for a rather reduced price than an important academic time Now shortly, we're going to hear brief presentations from the editors of the book Dr. Lezik Tosinski and Professor Chris Roberts and I congratulate the editors on this achievement as well as from one of the Contributors associate professor Brendan Taylor the head of the strategic and defense studies Center There are areas of focus will include the perspectives of Vietnam and the Philippines Countries whose views must be counted as strongly held just as those of China are I Should also give apologies at this point for those of you who've come here under false pretenses because my colleague professor Michael Wesley Head of the Coral Bell school and another of the books contributing authors is unable to join us this evening But we'll have opportunities to engage with him on these issues at a later date I should note also that the book contains some particularly useful and insightful Chapters or a chapter on legal aspects of the dispute from professor Don Rothwell head of the school of At the ANU College of Law and I again look forward to our opportunities in the future to conduct a future event with Professor Rothwell to look more squarely at the legal aspects of the disputes particularly the Philippine case for arbitration and China's own interpretations of the law of the sea so to conclude my opening remarks and to open up a wider set of presentations and discussion. I want us all to think about five questions First, what are the security risks arising from continued tension in the South China Sea? Second, what are the contours of a possible resolution to these disputes? Thirdly, is resolution a realistic option? Fourth, do dispute management and confidence building measures comprise a more feasible set of options for preventing conflict and how would these work? More feasible that is than resolution is resolution in fact a pipe dream and finally What are the options before the international community if the present situation including the island building continues? So five questions for us to ponder as we listen to the presentations from my colleagues after their presentations And that is presentations from from Lezek Buzinski from Chris Roberts and from Brendan Taylor I look forward to moderating a discussion on these and other questions and we'd really like your contributions to that discussion So just a reminder the event is on the record. Please switch off your phones if you haven't already What you ask and what you say is on the record and that's that's I think very valuable for transparency in this discussion I do of course encourage tweeting so if any of you are looking at your phones during the discussion I know you'll be doing it for the right reasons. I will now invite our first speaker Dr. Lezek Buzinski to take the stage Well, I'm very pleased to see so many turn up at this book launch I want to I've sketched out a few ideas that I want to present to you today in The very limited time I have available first is why This project was launched and what we were concerned about When we approached the previous director and asked him for support Which he very kindly gave Why the South China Sea? Let me then make a few broad remarks because it isn't we see it as Multidimensional has two essential dimensions The first is that it is a matter of Legality that's a legal issue involved for the ASEAN claimants Vietnam the Philippines in particular less so Malaysia and Indonesia Indonesia doesn't consider itself a claimant less so Brunei Because they seek to have their claims supported and confirmed by international law and Unclos the other part of the story is China Whose legal claim is of very dubious value and Bases its claim upon the so-called nine-dash line which doesn't meet legal criteria and Historical rights and we have a tension between these views One is or approaches one invokes contemporary international law and unclos Which China has agreed to support and the other is Based largely but not entirely upon so-called historical rights a very dubious nine-dash line and so we have a China that is what raising or Resorting to what I call the power of insistence in order to have its claim accepted by others and Why go to such lengths? What is China doing? I've looked at this issue for many decades since it because since it blew up for us young in 1988 when there was a clash between Vietnam and China and ASEAN became worried about this issue. We see consistency in China's approach and We wonder why why go to the to the lengths of Reclaiming these reefs building possible airfields upon them and so forth because This is an area of potential strategic rivalry Between China the US and China Japan I Would hesitate and I would certainly will not use a word crisis that there are some Observers of the South China Sea who talk in terms of an imminent crisis Potential war and so forth all that I regard as rather fanciful and what I mean by strategic rivalry the word strategic is a very hackneyed term It's often banded about without explanation And what I mean is That there is a contest for positional rivalry over rivals or potential rivals using the South China Sea And there are two such areas in East Asia One is the Korean Peninsula And the second is the South China Sea Taiwan drops out of the area But I see linkages here As regards the South China Sea Dominance over the area would give China control of the trade routes and Would possibly deny what the United States seeks to Protect in that area, which is freedom of navigation Dominance of the area would also allow China China's Navy egress To the into the Taiwan streets streets to meet or to counter An American effort to protect Taiwan in the event of conflict with the mainland and Would also allow the Chinese Navy access to the Malacca streets and And to protect China's oil lifeline Now if you look at China's maritime geography Look at it from the point of view of the Navy There were a few points where China's Navy can have access to the external sea the wider ocean not from the north Because that is where Japan is building up its Navy a dangerous place Not in the center because you have Taiwan there Which is linked to the US only the south remains and look at it from the naval perspective And given what the Chinese have said about the importance of protecting their oil lifeline slocks The South China Sea becomes an important area in order to Preserve access to the open sea for these purposes There's a connection with Japan again. It involves Japan not just the US We cannot cast this issue entirely in terms of Sino-US rivalry Because dominance over this area would give China a way of squeezing Japan when you link the Sengaku dayu dispute and the rivalry between Japan and China with the South China Sea You can understand how Japan looks at the issue and why Japan is indeed concerned Now in the book We looked at China's claim because the Chinese claim indisputable sovereignty and that the area is Ancient Chinese territory both claims are of very recent origin hardly ancient Because dynastic China had little contact with this with this area and An analysis categorical analysis of maps Chinese British Spanish French maps some of which are in the National Library here They show that the area was outside dynastic China's area of interest It was a maritime frontier and With the border in the Ming dynasty dynasty at least following the coastline so what we have is China which is relying upon the power of insistence as I put it in the orchestration of maritime surveillance agencies to obtain acceptance of a dominant position in the area and To have that position accepted by ASEAN without fighting simply by incremental steps Intended to wear down resistance from rivals or opponents Vietnam and the Philippines and to have them eventually accept what They may they which and to have them present the inevitable This is very much in keeping with What has been written about Chinese strategy in the way China operates to avoid war, but to press on in order to Up to secure one's position Without the risk of conflict in the book Jiang Jiang Who wrote on China wrote that China is positioning itself for negotiations over the issue and may In time Negotiate when the circumstances are if they are favorable He doesn't go into when they would be favorable But it's a question we can ask We had Renata de Castro in the book our Philippine colleague who argues that the loss of Scarborough shawl to China in 2012 was a classic low-key nonviolent way of squeezing out pushing out the claimants China obtained this shawl with minimal cost We had Do Tan Hai Who seated in front of us another contributor? Who wrote on Vietnam and the Vietnamese claim and how Vietnam indeed struggles with this issue? We had the legal perspective from Don Roth war who examined Some recent developments in international law and how they affect the issue and We had the American perspective from Ralph Emers who looked at the American pivot the Obama administration's pivot into the area, which was to a large extent Stimulated by events that we have discussed Perhaps we'll be discussing today in the South China Sea the future we have a chapter which covers the future and The Philippines let me mention that the Philippines Appeal to an arbitral tribunal under an X7 of unclos to clarify China's claim and Do its rights the rights allocated to it? To resources within its exclusive economic zone and that was indeed surprising for the Chinese I was in the Philippines Manila recently asking Filipino lawyers about this about their appeal and It seems that the Chinese were very much surprised But the Philippines would do this they wanted The Filipinos to be quiet like the Vietnamese or the others not to raise the issue publicly And not to embarrass the Chinese But the Filipinos are a nation of lawyers Everything is public for them. They will go to law now it seems to me and it seems to some of the Legal experts I've spoken to about this appeal that The tribunal is unlikely to wash its hands of the issue. Maybe there may be Attemptation on the part of some to do this. I look China is a big power. This is a complicated issue We don't get involved China has Claim that the tribunal has no jurisdiction therefore no decision will be made but the tribunal is At least the judges justices in the tribunal or all very familiar with uncross and lived with uncross all their lives although their professional lives and if they avoid this issue and the legal issues raised Uncross will have little value So it seems To me and seems to others who've looked at this issue That the tribunal will have to examine and Cannot and not and will have to avoid the temptation to skirt around the issue Will have to examine Philippine rights to the exclusive economic zone and those rights have been guaranteed assured by uncross And that is where the trouble is with China. It may Avoid the issue of the nine-dash line, which is also part of the Philippine appeal Because China has not presented documents supporting that issue But it cannot avoid the issue of Philippine rights and the exclusive economic zone China may accept the ruling and work towards illegal settlement and bring its position in line with law That is the best case scenario that a China in the future may do that because It will benefit ultimately benefit from law as a major trading power and as its economic interests and investments abroad Become vulnerable to disruption It'll be in China's interest to reach the law protection however Perhaps it's too logical for politics in China China may not forge Or may then an internal consensus in internal consensus, which is extremely difficult in that kind of political situation may not be forthcoming over this issue And it may ignore the ruling It may slide into legally unsubstantionable positions as it becomes more assertive In trade intellectual property protection as well as maritime disputes That's the worst case scenario if that happens then I think China's actions and China's assertiveness will stimulate the format formation of coalitions security relationships Involving the aggrieved us young claimants not just the United States but Japan as well and On the outside India It will Bring together various combinations involving external powers regional claimants and and Part claimants as I would put Indonesia in that area In that worst case scenario regional security would be the worst for it at that point. I would stop Good evening first of all just like to start by thanking Rory for his very kind remarks and and Introduction and also to thank the National Security College for the research grant that was provided that led to both the the occasional paper Conference and eventually this this book on the South China Sea As well as the fieldwork that Lesok and I participated in that also contributed to Some of the content in what I hope are some of the key chapters within the book Today I'm just going to I guess give a bit of an overview of some of the key Developments without going into too much detail and then some focus on the regional implications a little bit about the perceptions that we have come across in the region about these developments and Some brief remarks about the implications just in terms of the importance of the South China Sea of For those of you that are less familiar Depending on what figures you look up look at up to 50% of global trade in travels through the sea lanes of communication up to 50% of Hydrocarbons also travel Through this so there are key issues not just about the center of the South China Sea being open to shipping etc, but also some of the Straits such as Malacca Straits Lombok Straits and Sunda Straits It's actually represents 25% of South China Sea's protein needs that's through fishing That's 10% of the world's protein Requirements, so it's quite a key resource in terms of food Hydrocarbons well, I'll leave you to look at the book But there are you know a very diverse array of Estimates and some of the highest estimates perhaps unsurprisingly come from Chinese Institutes which may also play into a skewed Perceptions about the importance of the region on certain fronts We've also seen a little bit of a or increased analysis about the importance of the area as a marine environment reef shoals etc and the recent sort of land reclamation that was mentioned earlier being Undermining some some of of that you can see here a Rough picture of for example the unilaterally imposed a fishing ban each year by China and Just a list of some of the other recent developments, which I won't Go into detail with each of them individually, but last year we did see some Disconcerting events concerning at the oil rig deep sea oil rig 981 by China and we saw fairly large Relatively very large protests within Vietnam leading to the deaths of some Chinese Citizens and this is a little bit of a taste I think of the level of nationalism that is under the surface and is often an under Estimated component of a number of the claimants and I would put the three top in terms of the risk of nationalism affecting policy being in China Vietnam and also the Philippines from the Chinese perspective going into Beijing I guess two years ago now and also in looking at public statements and scholarly analysis, etc There is the argument within Beijing that they themselves are responding to provocations Statements or submissions under one class, etc. Dating back to 2008 or 2009 the US Secretary of State at the Comments at one of the ASEAN regional forum Meetings as being an example of internationalization Which is something that China really wants to resist and and I guess at Another level which is not infrequent the statement that China has indisputable sovereignty If it's indisputable, there is no dispute so therefore it can do anything it likes because it is actually its own backyard so This becomes a somewhat circular argument in discussions say for example that Lezek and I held in the South China Sea so we used to hear the word creeping assertiveness perhaps we can say a kind of Attempt perhaps misguided if we look at things in terms of international or a more strict interpretation of international or and what Judges etc in say the Permanent Court of Arbitration would actually see through as a Strategy, but we do see the attempt to exercise effective control over these and other shoals and reefs and you can see the quote from one Senior military officer general rank Who stated they will come a time when no one will remember that we not only rightly held sovereignty over the Paracel Islands But also did control them until their occupation at the end of the Vietnam war Of course, there are different interpretations, but from the League of Nations to UN Charter We have the concept that there is no right of conquest and so there's a whole debate associated with Things like Woody Island etc as to what is the right position there in terms of ownership and and how that issue can be resolved but as In line with this creeping sovereignty you can see here an image of the various ships which also included PLA Navy Ships in this image and up until a few years ago The large sort of consensus was that the Chinese Navy was staying out And not part of a coordinated effort, but we've seen that change Significantly in the in the last couple of years and here are some recent images from early this year of the extent of land reclamation Taking place. This is a picture or image of Mr. Freeth area Of course other countries have also been claimant states have been involved in reclamation over the years It's not just China Perhaps the one exception would be Brunei as far as the five or so claimant states are Concerned this is a dredging as a 2012 of Johnson reef and Here we can see fiery cross reef in the Spratly chain of islands and the establishment of a possible runway which again I would argue is has more of a strategic implication rather than a legal implication It has the implication of being able to extend power resupply efforts Project power across the South China Sea with some analysis arguing that there is at least perhaps a contingency in the future a contingency or a plan To establish something like an aid is an air defense identification identification zone similar to what we saw a few years back in Northeast Asia Woody island part of the Paracel Island chain is one of the sites of the most Work and has gone on for the longest time well before the recent sort of news Coverage of areas concerning the Spratly Island, but again significant developments taking place there also, we have imagery of Increase imagery of PLA Navy ships in their presence in various locations in the South China Sea and some analysis to suggest that the One of the outcomes of some of the early reclamation in the last couple of years Land reclamation has been the ability to have one Ship such as this permanently in the region on rotation But with the increased facilities that China now holds being able to maintain a resupply of that Vessel but really you know in terms of just how much of a Challenge in terms of security, etc. I think it's it's useful to put in context For example trends in military expenditure if we look in the East Asian context from the Cyprii military database China has quite an impressive If I can use that word rate of increase in its Expenditure, but if we take things at a global level, we still see North America US and Canada well above the total expenditure of China although China coming close to the total expenditure as of 2012 with the European Union, but the story doesn't end there because if we think in terms of if I can sort of twist a term from economics When they say GDP and purchasing power parity terms I guess I'll tweak that and and use the term purchasing power parity Differentials so we're not comparing you know oranges with oranges what China can achieve with its budget in terms of funding Personnel in terms of manufacturing military equipment in terms of designing new technology is a completely different pardon the the reference kettle of fish to Say what the US can do with four times or whatever The the money so that I think there needs to be some further Considered discussion of course transparency an issue there But just in terms of some of the achievements that China is making for example last year 50 naval ships Are said to have been commissioned Possible second aircraft carrier by 2018 we have armed Coast Guard ships Being produced on an unprecedented scale up to 10,000 tonnage in size And statements such as by Admiral Locklear Now just in my last couple of slides here. I guess it's important to Think about China's aim and what it could be seeking to achieve Lezich has talked In in part about that I think if you if we look at the stationing of Chinese assets What's taking place the whole picture it does at least point to some disconcerting contingencies that Agencies within Beijing if not the party itself are at least keeping in mind for use under certain circumstances I'll come to that in a moment. However This is not without Costs and recent behavior or not without costs. We see Vietnam for example Entering into a contract and has received already part of its order for six fast attack kilo class submarines from Russia and other countries Increasing their expenditure not to a point of an arms race But nonetheless seeking to increase the level of deterrence against a future action From China and perhaps to deter such actions in in the future Perhaps countries are seeking a little bit more strategic diversity Reassessing their partnerships. We saw in the last couple of weeks an enhanced comprehensive partnership between Australia and Vietnam entered into which had More than a dozen references to one class South China Sea regional security, etc So we can see what is very much on the minds of countries as they seek to forge stronger relations and I would Find it hard to imagine that recent events do not tie in and certainly the specific reference to South China Sea Indicates that one general mentioned to me in Vietnam that as far as relations or a shift in Relations to be warmer with or closer with India is concerned Vietnam started if anything 10 years too late, but they're seeking to make up for lost time now We see a statement by Japan's Prime Minister Standing next to the Filipino president saying we stand shoulder to shoulder The interest effectively stating the interests of the two countries the Philippines and Japan are the same and there's links to earlier comments Tonight as as well We see the Philippines also Raising or citing its treaty with the United States somewhat awkward initial Response perhaps or at least perhaps not accurately a hesitant response but a strengthening of The US position in favor of the treaty over the last couple of years Which I think is a natural response to other developments that I've highlighted including those orchestrated by Bay Beijing Vietnam for example is looking at joint exploration with Indian and Russian state-owned enterprises which also raises the risk of say a cable-cutting incident by Chinese Vessels as being closer to being an incident with the state itself Policies of economic diversification the 200% increase it's still limited in the scheme of things but a 200% increase in trade in recent years between Vietnam and India Meanwhile on the other side we may have some countries of the bandwagon in 2010 the Chinese ambassador to Brunei stated that that the two countries were negotiating a sort of a MOU on Joint exploration. There's nothing stated for the next couple of years until it was announced in the last year or two And so this also links to what we have seen as a fragmentation of what was some earlier unity and then collective statements and declarations in the 1990s and the pursuit of a code of conduct that led to a compromise position on the 2002 declaration on conduct of the parties in the South China Sea We've also saw the inability of ASEAN for the first time in its 45 or 50 year history to come to the conclusion of a joint communique because of the insistence by the Philippines and Vietnam on certain references to recent developments at a foreign minister's meeting as the end foreign ministers meeting in Penong Pen in 2012 Indonesia played a key role in sort of reconciling that Issue but a situation of carrots and sticks trade agreements arrangements Investments and aid to some of the smaller countries and if you have a country like Laos where the GDP is perhaps six billion Dollars or thereabouts. It doesn't take much of China's budget to have a significant impact and thereby influence through its aid and investment so We also see a very different Alignments at the strategic level Treaty partners of the US in the case of the Philippines to other countries that are much more closely aligned with a US now I Agree with Lezik that Indonesia is not officially a Claimant state, but we have in recent years actually seen a heartening of Indonesia's position as well in response This is a cost of China's actions Where for example various senior defense officials have stated that Indonesia's territorial Interests do conflict with the nine-dash line with China's maritime Acclaims I Have been out to other agencies such as out in Bogor and in discussions and presentations with those or one particular agency Security agency out there The the discussion was not what role can Indonesia play? How does it actually defend its interests the one agency that steadfastly? States that is not a dispute it seems to be Foreign Ministry or Kemlu at this point in time It's perhaps a useful diplomatic device because if you look at the sooner gas field the continental shelf the EEZ Etc. It does actually conflict with the nine-dash line So but by being a neutral Honest broker as such perhaps Indonesia has been able to play more of a role Than it might otherwise have had and so there are there's an important debate to be had there as to what path and direction Indonesia should take in the future second last slide Here just in terms of the factors mitigating the risk of conflict Of course, I've mentioned the the damage to China's reputation the strategic repercussions Of course China is not independent of the global economy It also relies on on many factors associated with this including investor confidence, etc Both my predecessors tonight have referred to international law and uncross if a country is Exceptionalist with regard to its legal obligations as a Signatory state to uncross how does one trust with regard to its obligations? under WTO or other Areas so this also has ramifications for assessments of risk on a much more comprehensive Basis then of course sometimes it's it's forgotten, but there are similarities in the two socialist systems between Vietnam and China and there is a long history of relations and there are mechanisms, etc to That can come into play To reduce tensions out appropriate junctures in time The other the other issue is perhaps more recent assessments by Beijing itself of the counterbalancing that we're seeing within The region and then there is also the cost for from a Chinese perspective of say greater Third-party involvement whether that's saying a diplomatic level by Australia and perhaps through that enhanced comprehensive partnership or Other developments that we've already had noted with regard to Japan and the United States So for my final Sorry, this is actually second-last slide in terms of Beijing's Contingencies, I do think we can see that under certain circuit Well, that it is actually an actively pursuing a blue water naval Or a projection Capacity the projection of power across the entire sub region through these land reclamation activities There may be Calculations here there's often an assumption about or too much focus in my opinion between What China does how the US reacts, etc. There may be in this may be a misguided Position but there may be a belief within certain quarters at certain actions especially if it's done on incremental basis can be Maintained below a level that would incite a US or Western collective response So if the US has kept out of the picture then what position do the navies of say Southeast Asia have To resist anything that China has in some form of grand strategy to use Brendan Taylor's sort of terminology in some of his informative articles on a variety of subjects The other side of the coin however is we are dealing with authoritarian countries in in some instances in the case of of China performance legitimacy continued economic growth the continued advancement of people's way of life Lifestyle, etc. Is key This can tie into the issue and calculations about the importance of access to energy and resources nationalism as I've already mentioned and linked to this identity is a problem one Peking University scholars said if you ask a 50 year old on the streets of Beijing to draw a map of China He will draw a map of mainland China If you ask a 20 year old he or she will draw a map with a giant sort of tongue hanging down That is the China and the South China Sea. This is part of every student's education according to this Professor this may create a kind of trap To which even in the future under circumstances there might be circumstances where the Central Party Wish to make a compromise, but what is their capacity to do so without a significant domestic backlash And so therefore we have this kind of stalemate occurring between the parties To this dispute on top of that its identity by leaders and beyond as sort of perhaps Seeking to reassert its Middle Kingdom status from centuries and millennia past and and also a Respond to or or overcome or whatever It's so called century of shame or paraphrases thereof so final slide Here I think it's safe to say we will continue to see regional disunity in fact I think as someone who primarily specializes in ASEAN the the outlook In the political and security seers of cooperation for ASEAN is increasingly dire given the political And strategic nexus between economic relationships and also Strategic relationships and this is not separate from issues of whether you are authoritarian or democratic either with some exceptions We we also see and I think this ties in with lezak's comments increase connectedness between Southeast Asia Northeast Asia Japan etc and South Asia India for example, and so this Connectedness also ties into the greater Risk of great power Involvement indeed perhaps the South China Sea can be seen as a kind of proxy Perhaps for reasons that it is seen as being lower risk, which may in fact End up being the the opposite But as a proxy for some of the strategic rivalry and easier to play out again a miss assessment Then say in other parts societal stresses For desertification environmental degradation corruption Etc will also play into the predictability of China's behavior its planning even within China some people concede at the idea or the concern that certain aspects of reactionary Although I think overall we are seeing very coordinated activity between Coast Guard military, etc. And certainly I Do also re-emphasize earlier comments about South China Sea being a test for future Chinese behavior As a great power and then so this is something that is of particular importance to Australia to see how Responsible is and how it reacts and some of the statements I And lezak as well heard in Beijing were very disconcerting in This regard and for Australia itself I do worry that we see not just what's happening in the South China Sea but issues with Japan Etc. And yet last financial year 36.7% of our exports went to China My colleague Andrew Carr just wrote to me today and And and also highlighted that 50.1% of Australia's total exports are minerals and and fuel such or hydrocarbons Etc. And I think there's an important debate to be had in maybe reassessing some of the presumptions of the Australian economic model and the sustainability of our current pathway or trajectory given that What will remain for the future is the fact that the US is our key Security ally and how does this sit or how will this sit? If we have a situation in the future where perhaps for the world to have a slightly alarmist tone Here comes closer to some formal level hyper potentially of peak global GDP But certainly if not that Increased resource scarcity and competition over resources and increased pressure over economic development both in the developed and Developing worlds if we think about global climate change and other issues and bring that all into the picture We've actually got a very challenging few decades or next century ahead So hopefully that might provoke some questions for later on. Thank you very much Thanks very much Ori for the opportunity to to co-host this evening's event and also Congratulations on your appointment as head of the NSC after being friends from afar over many years It's really just so exciting to have you here and to be working together and it's also a privilege to be able to Share the podium with two such long-standing friends Chris and Alicia on their very special Evening tonight. I think that Chris and Alicia have really done a wonderful job Really highlighting just how assertive Chinese behavior has come become over the past Half decade or more in the South China Sea. I think few if any in the room would would dispute that proposition. I Think often less acknowledged. However is is just How much more assertive Australian thinking and approaches to the South China Sea has also become in recent times It's just over two years ago on the night like like this in fact And just just down the road at the ANU that the then foreign minister Bob Carr gave a speech in which he reiterated that it was Australia's position not to take sides in the South China Sea disputes and we outlined a number of options in which The claimants might productively move towards managing their differences Today when officials refer to the management of the South China Sea disputes It's much more in terms of deterring China of opposing and resisting Chinese coercion and this is matched by a policy and in public debate That's also become much more hard-edged and in terms of how Canberra should be approaching the South China Sea Now part of the reason for this is of course that we've had a change of government a couple of changes of government during that period and let's be clear that be clear as Lesha Conchriss has said Part of this is also a product of the fact that the Chinese behavior has become more assertive during this period But what worries me though is that this really quite significant shift To the approach that that Australia is taking is based upon three Underlying assumptions each of which I think is quite questionable and which haven't been subjected to sufficient scrutiny The first of those assumptions is that Australia has an active interest in the South China Sea because of our economic dependence This is an argument that's been made tonight because of the fact or the supposed fact that 60% of our trade Passes through this this body of water Now to be fair to everyone who's used this statement tonight or the statistic It's one that's used very frequently and I'm honestly not sure exactly where the figure comes from But I do know however that it's actually very hard to make these sorts of estimates and By my own estimates the 60% figure is actually rather suspect and I'm I make This this rather bold assertion for a number of reasons I think if you look at at where Australian shipping to Japan goes most of that generally goes east Of of the Philippines and thereby is well clear of either of that the China sees If you look at our shipping that goes to the north of China and to Korea that will generally Go through the East China Sea rather than the South China Sea and it's really Only our trade to southern China Hong Kong and Vietnam That most of that does pass through that the South China Sea and that of course includes the very significant LNG traffic From Northwest Australia to China Well taken together that that certainly sounds to me like a lot less than 60% of Australia's trade and just as importantly if you consider China's Considerable dependence upon the energy trade in particular It's hard for me at least to conceive of a situation in which Beijing would see benefit in actively seeking to obstruct the passage of that that shipping a Second assumption driving the shift in Australian thinking on the South China Sea Relates to the the evolving balance of military power in this part of the world Now according to this line of reasoning Chinese actions in the South China Sea are undermining the capacity of the United States to project power across this body of water Because Australia has long had an interest in maintaining a favorable balance of power in Asia The assumption here is that we stand the best chance Of doing this by banding together with the US allies and partners with a view to checking China's growing power and Influence in the South China Sea again. I think this is a somewhat questionable Assumption it's certainly true that the People's Liberation Army has made impressive gains over the past two decades and These have almost certainly shifted the balance of military power between China and a number of Southeast Asian countries Namely Vietnam and the Philippines Yet I also think it's important not to overestimate what these gains have meant in terms of the larger US China military balance And I commend to you here a recent article that's been published by my SDSE colleagues Paul Deb and John Lee In this article entitled why China will not become the dominant power in Asia Paul and John estimate that a proxy that China is currently approximately 20 years behind the US and high technology weapons They point out correctly in my view that the PLA is a force without any modern combat experience including experience in the complexities of Anti-submarine warfare operations and Even as China does play catch up It's important also to point out that the US despite its own considerable financial pressures of recent years is a military That's not standing still as it continues to invest in Technological game changes that could actually shift the US China military balance further in America's favor in the future Now against that backdrop and looking at this from a purely Australian perspective Should we be banding ever closer together with like-minded countries as an additional way of ensuring Against any shift to a less favorable regional balance of power not necessarily in my own view It's worth making the point here that China's strategic coercion Impacts very differently upon countries across the Asia Pacific and that most of these countries have very different motivations and Interest stake than we do This factor line makes highly coordinated approaches to Chinese strategic coercion very difficult to achieve Japan and the Philippines for instance see Chinese strategic coercion more through the relatively narrow lens of their respective territorial disputes with Beijing Is Nick Bisley from La Trobe University? And I have recently argued in a paper on the East China Sea when responding to Chinese strategic coercion It is critical for Australia to be careful not to be drawn prematurely into others disputes particularly in relation to issues or episodes where our own interests are not clearly at stake Last but not least a third questionable assumption underpinning Australia's shifting approach Suggests that Beijing's actions in the South China Sea Reflect the carefully calibrated grand strategy to establish a Southeast Asian sphere of influence and which is a strategy Which is ultimately designed to evict the United States from the broader Asia Pacific or the end of Pacific is a term that Rory has been closely associated with Now this is a very complex Subject of course and there are some in the audience and including my very dear friend and and colleague professor Richard Rigby He really has taught me everything that I know about China who are much better placed to comment on this particular subject than I am And it may well be the case that that Xi Jinping does have in his top drawer some grand plan locked away But even if he does I would argue that the gap between the conception and the execution of any grand strategy is a substantial one One need only ask the Obama administration or the US for instance Which has been doing really serious grand strategy now for many decades, but which is struggling at present I would argue to implement what I think is quite a neatly conceived rebalancing of the strategy or pivot as some prefer to call it and the highly diverse and in difficult Asia Pacific region So I don't think we should assume for a moment that China will find this task any less challenging Indeed China's greatest challenges in executing any grand strategy could well come from within Some of you will have no doubt seen Linda Yuckit since excellent work on the subject Where she argues that Chinese coercion in the South China Sea is a product of what she calls fractured authority She's talking there about some of the domestic problems Which drive China's South China Sea policies and which allow a myriad of maritime actors to push their own agendas Many of you will have also seen a very controversial reason I call by the respected China scholar David Shamba in which he argues that significant political change in China could happen sooner Rather than later and at the end game of Chinese Communist rule in China is already underway Now in the final analysis, I think many would argue that these arguments go too far and in raising them here My aim is not to suggest that we simply all sit on our hands and wait for the morning where we wake up and find that China has Disintegrated hope is never a good basis for any strategy And I'm not sure that any of us or many of us certainly would hope for for such an outcome in any case Instead yet these arguments that are put forward by the likes of Yuckit and Shamba do remind us of the importance of continuing to develop a much Better understanding of the type of China that we are trying to influence at that as a path that we choose to go down For a strong China will almost certainly erect very differently to the same stimuli Than a weak and fragmented one As we contemplate these questions and the other assumptions underpinning the really quite significant shift that I believe has taken place in Australia's approach to the South China Sea Leshik and Chris's new book provide a perfect place to start Questions or comments, please on any aspect of what we've spoken about this evening I'll take one up there and maybe one other one in reserve We'll start with you and we'll go to the next please any to introduce yourself if you don't mind What do you think the role of Next we'll take one more Before just so that you get a chance to have your say everybody one more question or comment from from the group You've come here with all the answers already. Okay Look, I might just add one to that mix as well. That is it's really probably question for Brendan Because I think I appreciated your Analysis, I guess of the Chinese perspective I didn't hear from you what you think a reasonable or alternative set of strategies from China might be What do you think is the the best possible approach the region can hope for from China? I'd like you to think about that one while long what Chris answers the first question Thank you Yeah, I I think countries such as Indonesia have played a critical role if we look at for example the the the days and weeks that follow the joint communique in 2012 and Foreign Minister then Foreign Minister Marty Natalia Gower I'm told personally drafted the six-point plan in response and an undertook something like in 72 hours trips to Cambodia Vietnam and the Philippines to get a at least a sort of a compromised position and To alleviate the tensions and so that's an example of a country that is a is a You know definitely a middle power a rising emerging regional power that has had a long history of of a role It of course represents one third of ASEAN in terms of both populace and Economy so it also has that privileged position as a founding member and the first among equals as the Southeast Asians would say But nonetheless combined efforts of other middle powers including Australia perhaps This enhanced comprehensive partnership with Vietnam also sends important signals Together with many other activities and statements that Australia can can make and and be active in Including exercises etc in the South China Sea That will affect the overall cost benefits analysis by China So I think any Approach has to be plural it has to be you know multi-level Multidimensional legal diplomatic Maybe a few sticks and carrots comprehensive Through multilateral institutions through as many countries as possible all sending as much as is feasible common united signal that sort of exceptionalist behavior Breaches of one class etc is not something that's going to be tolerated and will have real and tangible costs for Beijing. Thank you Thanks and Brendan my question about China's perspective maybe maybe going also to the point about you know Is the current Chinese? Patent of behavior is something that the region should accept And what are some alternative Chinese patterns of behavior that we could reasonably expect? Yes, no absolutely Rory and thanks for that question and thanks also for not trying me out of the room There's probably a lot that I said that you wouldn't agree with that. We've agreed on friendly terms over many years But I think I mean your question is is a very is a very good one and the way I'd react to that would be by The first thing I'd say is that that the I see China is very very much a reactive power or there are elements of Reaction in its approach Two things and I think it's the sort of power that that the harder it gets pushed the harder it Pushes pushes backs not the only power to do that but by virtue of its sheer size I think when it does push back that the ramifications of that are often more Significant and I think what we what we see and I think Chris hollowed it Holiday's very well in his remarks about land reclamation that we see a situation at the moment where I mean China is guilty of a lot of the Things it's doing in the region, but it's not the the only guilty party in the region I think that we do see elements of action reaction going on in elements of an emerging Security dilemma so I mean it's easy for me to say sitting behind an academic desk But I what I would prefer to see would be a little bit of easing off And and just for us to see what happens for a while I do think that we do have time on our on our side I think that yes, I think that I think that some of the Some of the discussions at the moment certainly about the I mean these military outposts that China is established in the South China Sea I I I can see that over over time they could become very significant strategically and militarily But I think at the moment that's that's not the case. I think we do we do have some Some time to see how the situation of all I think is less its Presentation highlighted beautifully. This is as a strategic question That's one that I think is going to play out over a not over the longer term It's certainly over a medium term and if we if we do ease off and see that that there is no change in Chinese behavior then I'll I'll concede that that You're right Then that's that's a good question. There's that what and what is the time frame and I don't have a good answer for that But but certainly trying to get away from this action reaction dynamic that I that I think is actually intensifying it But at the moment in that some countries in the region are actually looking to see that intensify I think we're gonna have another conversation about this will reconvene sort of hopefully in the not too distant future There's a question for you unless there's something another question from the audience perhaps Yeah, we'll take it. She will take one from the back and then we'll take yours George will take both I haven't seen your hand up Richard, but I know it's there We'll take three one Please introduce yourself, please And do you think that any up for Japan takes with the influx of Austria's position Or the dispute given the increasing strategic type between the two countries Thanks, we'll take that and then Richard Rigby and then George Brennan Richard Two observations that are sometimes made and I just like to see what Panda What is that China actually controls considering less of what it claims has compared to any of the other claims They can try to go big claim, but actually it's not actually controlling very much at all and This is one reason for Activism and that activism is further heightened by the existence of models itself where There's a necessity to prove that you are actually Ineffective control and so on and so forth and perhaps they they read back the lack of activity over Visibly the dialogue said cuckoos as well. I think we better not be making up to say we've got a show that we do So we're being serious about So that's two things that are set up to do so Does anybody in the book saying a thing about Taiwan because Taiwan is obviously relative The PRC claims are based on Taiwan's claims, which are actually marginally bigger when I was recently in Taipei We're sent personally by the president to go and look at the Exhibition that have been put on you know presenting those claims I Thanks, so one question on Japan Series of comments and questions from Richard and George will take yours as well And I think we might have room for one more. I want to give the panellists say smorgasbord questions that they can pick and choose from so George The complexity of Chinese internal dynamics You know, we've been talking about China as a monolithic thing, which we all understand it isn't Of course, the China should be happy to see Taiwan for a number three in that context So, you know, there's China is China is far more on the land power than the amount of power and it's Complex it has a nasty set of things all out So Muddy the waters for us beautifully there George I Actually towns and from low-eat so she does we had your hand up earlier and put it down again, but I'm going to put you on the spot I think you had a comment or Christian as well I just came back from a research trip where a couple of these issues came up and there's a very strong sense That China's restraint for 20 years has been abused by the other claimants in the region and I got this from everyone I spoke to in China That's not surprising But there is a dilemma that goes with that that the Chinese themselves seem to be facing and don't quite know the best way to Get out of the dilemma is this they feel that their restraint is being abused And therefore there's a there's a need to to build something to catch up as Brendan articulated They're far behind but they're trying to respond to the to what others have been doing The region is then pushing back and saying well, this is illegitimate Even though what we've done before and there's no space for a discussion on that issue That's the first point is there a way for there to be some discussion On the legitimacy of what every one of the region has done over 20 years for it all to be open and negotiated And secondly, following on from that if that discussion is not possible on the only answer that comes from Washington and the region Is arbitration? There's another problem because China doesn't recognize the legitimacy of the arbitration process In its entirety and that's not just because it doesn't view arbitration as being An accurate venue a good venue for discussing sovereignty issues It actually has problems with the legitimacy of the laws and the courts and individuals involved So is there room in the opinion of the panel to open up the debate about arbitration more broadly To actually accommodate or at least discuss Chinese concerns and find ways to address them because there does seem to be some For China to find a legal mechanism by which you can start to talk about these issues Thanks, Ashley. We've got a whole set of thoughts here for the panel to respond to I'm going to ask lesek first and lesek you can Pick and choose from among those that I would especially want to hear what you have to say on japan Yeah I think the question was the direction of the question was what's the link between Japan and australia with reference to the south china sea and would japan's moves in the south china sea actually uh strengthen or Uh push japan to develop uh corresponding title relations security relations with australia I think that was the gist of the the question It seems to me yes japan is um becoming much more involved under the abe shinsou government And the japanese are very concerned they look at the map And they see china's moves In the south and they see how china's moves may result if that is if china ends up by dominating the area Despite their assurances that freedom of navigation will be maintained The japanese certainly will not trust trust the chinese with respect to to that and They see that it will result in a very costly rerouting of trade and shipments of oil around that area And that worries them very deeply so their moves are related to vietnam and the filipines not australia Now where australia comes in uh is over the senkaku taiyo issue the japanese have attempted to get Uh draw australian support over that issue that issue and as brendan has said has mentioned that australia has been Uh very reluctant to get involved over that issue um The second point about uh richard rigby's comment about China's claim is less than that of others. I just want to point out that Okay china controls the paracel islands Yeah, okay China controls the paracel islands. It also has controls Uh control seven features some say nine features, which it obtained after the 1988 clash with vietnam Now it sits on scarborough shoal. So you add another one and vietnam has Is occupied more features than china true, but um china occupies more features than malaysia or the filipines Um, so I would I don't think that china occupies less than the others less than vietnam I agree, but not less than the other claimants as regards taiwan um Yes, there was mentioned in the book about taiwan's 11 dash line That the original nine dash line in 1947 the original original claim was uh had 11 dashes and then two dashes were removed To conciliate vietnam and taiwan continued with the 11 dash line um, and you mentioned taiwanese occupation of itu aba that key island With it has It has a marine detachment there And there has been some speculation as to whether or not taiwan would act with beijing in this area since they have related Related claims, but as I understand the taiwanese position. There was a taiwanese official who said that taiwan would not cooperate with beijing over the south china sea we have someone from uh, a representative taiwan here who may like to confirm or uh add to that India's interest no that is a question for rory um, the last one about arbitration china's restraint and arbitration legal mechanism I personally think that um china I agree that arbitration is alien Very legal arbitration is very alien to the chinese at this moment It's uh, uh, chinese society has not evolved as a legal society And legal mechanisms are distrusted And uh, so so I don't think that china would respond very kindly to um, I would have the uh Arbitral tribunal would decide So my own inclination is that china will at least in a short term ignore the decision and perhaps lay the ground for some future acceptance but The immediate reaction would be uh to ignore The arbitral tribunal and I can't see on that basis I can't see how any legal mechanism could be established work with the china to work with the chinese They insist that history should be taken into account Um I've come across I've spoken to some chinese scholars about this about their conception of law That law should change international law should accommodate Uh, an uncle should accommodate chinese historical claims And law should not stay still it should change In which case if it changes with, um, every rising power's demands If you change it now it doesn't mean that next 10 years down the track you change it again According to new demands raised by china the law has to be more stable than that And they're demanding changes to international law to accommodate the rise and and yet Uh, many of the aspects that uh of law that they want to see change they accepted previously Uncross they signed on the line and they ratified uncross in uh, uh 2006 and 1995 And now as they become more powerful they seek changes because they feel that They should receive due respect From uh, and that should be uh, accorded by international law So the their understanding is would of of law is is considerably different from ours and uh, because it's meant to Reflect power relations and that would result in considerable instability So I can't see how a legal mechanism mechanism could be devised to propitiate the chinese in the uh, uh, in the way the question outlined until china understands the significance of law Um, I want to add something else about, uh, just a little reference here to about So Very very briefly about speaking to chinese scholars in beijing, which we have done. I've done that for many years Because the chinese scholars, uh in the various institutes, uh live in a very rigidly compartmentalized system and a little about the military a PLA Or what the party is doing and what the party thinks and I think that's one of the problems in reaching out to the chinese We may reach out to the scholars. We may reach out to the legal experts Though we're well versed in international law, but those who make the decisions are very often somewhere else Chris, um, you were very generous with your comments earlier. So please be parsimonious now because we're we're about to wrap up um, I I agree about uh, uh being a willing signatory to uh to ungloss albeit with exceptions or exemptions made on certain aspects of of uh arbitration Um, uh, but nonetheless, uh, there are aspects, uh That are clear such as a clause within ungloss that states that no party to a dispute Will amend or change or threaten the status quo Exasperate tensions, etc In other words, they must peacefully peacefully negotiate a change It is that that said it is true that vietnam for example occupies more features But also I guess is the question of quantity versus quality As well, and so the quality issue being forthcoming if not already airstrips etc and resupply surveillance capabilities etc beyond any other country out there In regard to its willing willingness or uh desire to reach a solution we've seen a lot of To put it bluntly some duplicitous behavior within asian Where uh, you know, there are statements sometimes where we we don't want multilateral approaches There are statements where yes, we will negotiate a code of conduct And then when the statements are made, uh, for example instead of a senior officials meeting taking place To work on certain aspects It's pushed down to a lower level knowing that the people at that level within an asian context won't have the authority To actually reach a conclusion that leads to anything. So it becomes just a stalling tactic whereby maybe linking to an earlier comment Today when it does finally agree if ever To some solution the new status quo is well and truly within its favor and what it's to completely and entirely comfortable with and in regard to perspectives in in China And the willingness to compromise it's quite alarming when the head for example of a government funded think tank sits there and states You know, we're not even interested in the central part of the south china See i've had military generals in some of the other in one of the other claimant states saying that's open We're willing to willing to have a negotiation here but this particular head said that We're interested directly in the eez of the claimant states because that's where the accessible oil is When i then asked That's transparency. Yes, when i then ask, but that you know is completely contrary to any interpretation of international law And why would anyone share? He said well, we're offering 50 50 percent share right down to the he didn't say the beach, but this is what it meant And then i said but no one would agree to give something that is absolutely not your and then the statement came up Well 10 20 years from now that 50 50 will be off the cards and we will have the capacity to just take it like that So so when you have statements and other statements that if they were to be public in the press would create You know protests in vietnam tomorrow So when you have controversial statements recklessly given by people in very senior positions with responsibilities That's Somewhat disconcerting so i might just leave it at that. Thank you I'm hoping that that was one of the people who lezeg referred to earlier. They actually may not know what's going on, but i have no I have no judgment on that Yo, I respect our peers everywhere. Um, i'm going to leave the the last comment from the panel to To you brendan and i'll give you a golden minute No worries rory. Um, and can i congratulate you on hurting three unreal academics? So so well, but just very very quickly a minute in response to leon's question and ashley's question. Welcome back. Actually, it's great to see you Again, leon, I think with respect to everyone anyone in the room From from japan, including your good self. I think japan is part of the problem Here, I think that um, for very understandable reasons japan is is an extremely Insecure position at the moment as the balance of military power between itself and china's shifts But once again, I don't think we should over estimate how quickly that is shifting But I think it is very very clearly shifting in chinese favor over over time But I think um, japan's involvement growing involvement in the south china sea I think is is is really fueling or one of the factors fueling this this Intensification of the security dilemma that I talked about particularly its assistance to the vietnam and the in the philippines I think a little further away in the east china sea. I think also Japan's refusal to to take its its own dispute with With china over the singhaku dao is to arbitration. I think it's letting china off the hook in the south china sea So so I think we if japan were to to give a bit on around there, which I think is unlikely. I think we We could potentially see some it's a moment. I think your point on australia is a very good one I think that we could I think we are seeing the potential for for japanese behavior in south china sea to To influence australia behavior to see a degree of of imitation on australia's side There have been some very respected analysts in this town talking about the possibility of australia making its defense engagement More meaningful by providing more assistance, particularly in the form of patrol vessels to To vietnam and and the philippines for instance I'm not sure and chris would be more of an authority of this and I would but I'm not sure that's something that would be Holy welcome to cross south east asia and it may in fact complicate our efforts to engage with them With that particular Subregion in the interest of time. Actually, I'll connect with with you afterwards cause already I think the audience would love to hear your views on on india and south china sea in a minute as well No, I'll give you 30 seconds. I know we're eating into valuable drinks and conversation time look On india, but on external stakeholders generally if I can call them that I mean You know we can we can argue about the numbers later about whose trade goes through the waters and how much of it and so forth But I think there's no question that the south china sea is globally significant as a as a key energy and and trade lifeline for a whole lot of countries in that sense It's not only about india or japan or countries that are not I guess southeast asian countries or claimant countries It in my mind the south china sea is a global challenge It is a global problem The fact that we now live in an interconnected Indo-Pacific region and the south china sea in a way is at the very heart of the indo-Pacific Means that this problem is going to remain everyone's problem including our european friends for that matter Who of course have very large stakes in the in the trade Going through those waters. So I'm going to end on that very ambiguous note. I guess I'm also going to say that the college will continue to convene both discussions and publications on this and related issues We certainly are not home to one point of view as you've heard tonight We're very pleased to host a diversity of views, but I think what's important as we put this debate a little bit more squarely on the table In australia. It's not an issue that can be can be brushed aside It's not an issue that can be overlooked given all of our other security concerns. So thank you to my Colleagues on the panel congratulations again to the authors of the book and one last time for the For the record for the camera. Here is the book. There is also an occasional paper published by This college. I invite you all to join us for for drinks and conversation. I also want to thank My colleagues particularly martin blazik our communications and events Organizer for putting this event together and andrew car from The strategic and defense studies center. We look forward to seeing you again here at the national security college very soon Congratulations and thank you