 Thank you very much for coming along today for the launch of this Lowy Institute report shifting waters China's new passive assertiveness in Asian maritime security by Ashley Townsend in the middle and Rory Metcalf on the on your left Now this marks the first formal bit of cooperation between the National Security College and the Lowy Institute for international policy Of course the Lowy Institute has an excellent reputation as one of Australia's pre-eminent think tanks on international security affairs And it's a great honor for the NSC to be associated in the formal sense With Lowy that said of course many of us at the NSC are in a sense of Lowy alumnus You could almost argue that there's a bit of a Lowy mafia within the NSC And we're delighted to to continue this this affiliation Before I introduce the speakers I think as it is customary we should acknowledge and celebrate the first Australians on whose traditional lands we're meeting today And to pay our respects to the elders of the Nunnamal people passing present now folks I Should begin by introducing the head of the NSC Professor Rory Metcalf Who has as many of you know had a long and varied career at the forefront of Australia's national interest forefront of the study of Australian foreign and security policy and also as a practitioner He's been involved in diplomacy intelligence analysis think tanks and of course journalism as well and prior to coming to the NSC He was the director of the international security program at the Lowy Institute from 2007 through to 2015 and before that of course he was a senior strategist with the Office of National Assessments Ashley Townsend the co-author to the paper is a research fellow at the US studies Center University of Sydney He is amongst many of the things that he has done being a research associate in the international security program again at the Lowy Institute From 2010 to 2012 and a visiting fellow also at SDSC here at ANU His research focuses mainly on international security and strategic affairs focusing specifically on China Northeast Asia in the Indo-Pacific Dr. Yuren Graham who I suppose it could be said Took Rory's seat or warmed it further at the Lowy Institute Is currently the the director of international security at Lowy And he came there from the very prestigious Rajaratnam School of International Studies at Nanyang Technical University in Singapore and he was a senior fellow there specializing in maritime issues Before that he was a research analyst in the UK FCO and has been charge a defer at the British Embassy in Pyongyang, which is a fantastic posting I would like to grill him on his his experience at some stage he is a noted researcher on maritime issues particularly in the eastern South China Sea and Remains also an associate fellow at Russey. So also extremely well credentialed panel for you today copies of this paper are available and While you and will be serving as a discussant for the paper I don't want to steal any of this thunder I think it is worth saying at the outset that this is a highly sophisticated piece of analysis And I'm not just being paid to say that In fact, I have read it and enjoyed it very much. I think this papers best contribution is that when you look at the majority of scholarly and policy assessments about Chinese behavior In the Asian maritime region, particularly the South China Sea There is an inherent assumption that China is simply being assertive This paper challenges that notion. I think it's it's main contribution is that it establishes that there was an initial phase In Chinese strategic behavior in which that was certainly the case But now more recently it's become apparent that the PRC has drawn back and is participating to some extent probably for Instrumental reasons in some of the lower level behind the scenes Architecture that is there to try and moderate conflict The implication of that of course is that it shifts the burden of escalation onto the United States and US allies And that creates a dilemma for Washington and Washington's friends apartment friends and partners Something that they will have to learn to address And I think the other strength of this report is that it identifies going beyond What is normally the case in the literature on this topic Some quite interesting avenues to attempt to moderate Chinese behavior in future So with that I will introduce Rory Medcalf who will talk for about five minutes or so And then we'll turn to Ashley then to you and to give some thoughts and we'll take some Q&A Look as as the tensions rise in regional waters We've tended to assume that there's a risk of war just around the corner that China's assertive behavior could accidentally spark war My colleague Ashley will talk about this in more detail But the key message in this paper is that the reality is much more complicated certainly China should not be exonerated from the Really the the affronting nature of the island building that's taken place which is The manifestation of a great strategic challenge in the region But at the same time there's been a fascinating Co-option if I would call it that of a lot of the rules the rules for maritime behavior that only a few years ago We were all encouraging China to engage with and which at that time China was recklessly Ignoring in some ways the the key message from this report is that Really China is is abiding by some of the rules in order to challenge or confront or break others And that makes the the job of other nations that want to uphold the rules based order all that more difficult It puts that burden on us I'll say a few things about the origin of this report why we undertook it why this research has taken place The context of this for policymakers and then I'll ask my co-author Ashley Townsend to talk in a bit more detail about the analysis and especially the recommendations which is the hardest part Now this report in some ways is the sequel to another report that I worked on at the Lowy Institute some years ago So we have the new report here shifting waters that I encourage you all to read But the sequel it's the sequel to another report crisis and confidence with this much more alarming cover That Lowy have published five or six years ago, and that I remember very well the then foreign minister Bob Carr Praised very highly at the time though completely ignored all of its recommendations Subsequently, which I suspect was was a habit of Mr. Kars when in when an office But that report focused on the really alarming Abuse or recklessness that we saw Chinese forces the Chinese Navy Coast Guard other paramilitaries and really in cahoots with Chinese fishing fleets in pushing out the boundaries of acceptable behavior and of Chinese authority into the South China Sea into the East China Sea and at the time This did risk war. It did risk escalation. It risked accidental clashes. There was very poor Communication with the Navy's or Coast Guards of other countries. There were all sorts of alarming incidents of Chinese ships harassing The naval the naval ships and the air forces of other countries in incidents that could easily have spun out of control And so the lesson of that report was frankly that it was in China's interests to get with the program and start engaging with Confidence building measures the basic Chinese mantra until very recently was this Frankly absurd paradox you have to trust us and we have to trust you before we can talk about confidence building measures to eliminate the risk of war precisely the opposite of the The traditional notion of CVMs that that helped keep the Cold War cold Well times have moved on and when we embarked on this project with funding support from the MacArthur Foundation in the United States I guess my assumption was we'll find more of the same We will find that China is continuing to break these rules Avoid codes of conduct of behavior at sea and I know there's a code of conduct with ASEAN that China is still stalling on but avoid even basic codes of maritime behavior for avoiding influence incidents at sea with the United States and with the Japanese That China was continuing to use risk as its tactic as its way of alarming the rest of the region about the possibility of escalation to war and Therefore in a way creating a cover for the rest of the region to allow China to get on with extending its authority over disputed waters, but what's interesting and as my colleague Ashley undertook a lot of the Really the face-to-face research interviews behind this report over the past two years What's interesting is that this picture has actually changed in very subtle ways. In fact It's almost One almost has to say be careful what you wish for because in many ways China has signed on now to all of these agreements for Unaltered encounters at sea or confidence-building measures channels of communication and behavior with the United States and it's done that Because in a sense I suspect at one level the leadership in China has begun to recognize Belatedly that the risk of conflict is something China itself can't control that war is not in China's interests But also China has already made the gains. It's changed facts on the ground or facts in the water through the island building through The backing down of other countries the back the back down of the United States when China essentially sees Scarborough Sholl of the Philippines a few years ago And so now we're faced with this paradoxical situation as this report outlines a great detail Where China is in fact using some of the rules to its advantage to consolidate the gains it made through its reckless Ignoring of those rules just a few years ago Now what this means for us, of course is a really difficult set of dilemmas as the Australian Air Force encountered In some of its patrols through the South China Sea Last year it's continuing patrols that it's undertaken for decades in international airspace China is now essentially inventing What's called military alert zones? We don't know exactly what a military alert zone is it has no definition Under international law or international agreements that China is creating quasi legalistic mechanisms To accuse other countries of being the ones that are disrupting the peace or disrupting good order And it's doing this to basically protect the gains. It's made through Illeginodactivity such as the island building So a really difficult set of dilemmas for our policy makers and for the United States to deal with We'll talk a little bit more about the recommendations shortly. Ashley will introduce them to you I'm happy to join the conversation about them This is is not a paper that offers all of the solutions. None of the recommendations is without its own It's own problems. This is I guess a classic wicked problem But certainly if we simply persist with the view that China is breaking all of the rules at sea And we don't acknowledge that it's in fact quite quite cleverly and quite cautiously Taking advantage of some of the rules in order to prosecute its claims in the South China Sea We're only going to have half the story and we'll be further away from a viable solution. So I'll leave it there. Thank you Ashley Thanks, Rory for that introduction and and everyone for coming to hear about the paper today As tensions rise over Asia's disputed waters as Rory says it has become pretty common to assume that China's assertive behavior Will accidentally spark an accidental maritime crisis But we argue that this view is increasingly out of date Far from escalating the risks for its own for its own reasons of a confrontation at sea Chinese military and Coast Guard forces have actually displayed greater professionalism and restraint in recent years and they have come on board With a range of risk reduction measures and confidence building measures Designed to further reduce the risk of a dangerous encounter at sea Now it's important to underscore that all of this does bode well for managing maritime tensions without conflict And that is a good thing But China's passive assertive behavior as we call it comes with a paradoxical twist By reducing the risk of dangerous air and sea incidents It's actually become easier for China to embark on Strategically provocative activities like island building the creation of military alert zones the ADIZ in the East China Sea and more generally It's it's sort of continued expansion of maritime aerial and Coast Guard patrols across all aspects of maritime Asia And as these moves aren't aggressive or risky by their own nature They shift the burden of escalation onto the United States and its partners Making it harder for these countries to push back against China's strategic encroachment simply put China's shift towards passive assertive Strategy makes its ongoing challenge to Asia's maritime status quo less risky and more sustainable and therefore harder to combat It wasn't always like this a few years ago as Roy's outlined Beijing did seem genuinely willing to heighten the risk of a military clash in order to intimidate others into accepting its expansive Claims and its new position in the region Chinese vessels harassed Cut-off American warships on several occasions aerial incidents or near misses really became quite frequent There were at least five of these with the US and China in 2014 two between China and Japan China and China also locked its fire control radar on a couple of occasions on to Japanese military assets in the East China Sea And as Roy outlined as well, there were a number of cases of China essentially using gumbo diplomacy To wrestle different features disputed features from the Philippines to set up a blockade around second Thomas Shawl To muscle in with its HS9-8-1 oil rig including sinking some Vietnamese vessels in the process in an overall coordinated strategy To use tactical recklessness to push out the boundaries of where it existed But in the last two years China's tactical aggression has has genuinely declined and it's not just us saying that a growing chorus of US Naval officials have gone on the record including this week and including our Admiral Harry Harris who as you know has been otherwise Very outspoken on China's behavior They've gone on the record to say that China is being professional and restrained at least with its naval interactions Coast Guard interactions Is a more of a mixed bag but certainly in the East China Sea China's Coast Guard is behaving in a more professional way vis-a-vis Japan and has actually reduced the frequency of its patrols in the area Beijing importantly has also changed its tune on maritime confidence building measures And confidence building measures are essentially rules-based agreements to reduce misperceptions Open up channels of communication during a crisis and regulate the conduct of opposing ships and aircraft safely It is these sorts of rules-based CBMs that we focus on in the paper Despite its previous opposition to such measures Beijing had did start to negotiate in good faith around 2013 and from 2014 we started to see the fruits of this The code for unplanned encounters at sea was signed Which regulates the interactions of about 21 Asia Pacific navies including all the principal players in in the maritime in Asia's maritime disputes To US China codes of conduct as you know were signed in the last two years again to regulate our US China interactions air and at sea The important thing is that China has not signed them It's practiced these measures with regional navies including Australia the United States Indonesia and other Aseans It's also even more importantly actually adhered to these guidelines and rules Most notably in May last year a YouTube video emerged US Navy filmed of the Fort Worth in the South China Sea being Shadowed in a responsible way by a Chinese guided missile destroyer And this was one of the first examples of this new Code of conduct, sorry this new CBM being used by the Chinese forces And as I said before American naval officials have since confirmed this including in the Asia Pacific maritime strategy last year So the good news in all of this and there is some good news is that is the confidence-building measures and China's more restrained tactical Conduct is contributing to greater tactical stability on the water in maritime Asia But the more worrying purpose behind China's newer version to dangerous risk-taking Is what concerns us as well? Now that the likelihood of an accidental military crisis is lower China seems to be emboldened to push ahead with a with strategically provocative actions that are geared to To redrawing Asia's maritime boundaries Island building in the South China Sea is the centerpiece of this strategy The establishment of these far-flung outposts right throughout the Spratley Paracel and perhaps soon the Scarborough Shoal in the South China Sea Will give China an outsized capacity to tilt the military balance in its favor at least in certain conditions Once once these outposts are all if they are equipped with military-grade airstrips, but also forward deployed fighters Ballistic missiles air defense missiles and perhaps an air defense identification zone to regulate all of this China will have altered the status quo in the region and perhaps as Rory and another low e colleague argued in a previous paper Perhaps also be able to use the South China Sea as a bastion for its nuclear submarines in time Instead of using reckless naval maneuvers to intimidate Nearby vessels or chase away the US and other Southeast Asian navies China has turned to these radio warnings To warn other countries warn the Australian Air Force as well to avoid Moving into China's military alert zones or face unspecified consequences Presumably of a military nature, but but a covert threat that has not yet led to tactical crises Likewise China's air defense zone in the East China Sea is another non-confrontational way to alter the the to deter countries from exercising freedom of navigation in what is what are international waters To chip away at that norm and to challenge the administrative status quo Principally over the Senkaku Diaio Islands Many Chinese analysts themselves talk about an ADIZ as a way of ensuring up Chinese spheres of influence I Think also another thing to point out is that China has stepped up Navy and Air Force controls right throughout the South China Sea but more importantly undertaking quite sophisticated military exercises in recent years including one last year Which was the largest to date in the South China Sea over a hundred warships dozens of planes Including the Chinese nuclear forces the second artillery now renamed the rocket force So all of these activities are designed to gradually change China's maritime status quo without triggering an accidental military crisis Because they don't require dangerous tactics to be successful China feels more confident about using them to shore up its advantage and more confident than other nations will find it difficult to stop them So there are four main implications of this passive assertiveness that I'm going to run through before we look at some recommendations China's maritime tensions are now being better managed, but they aren't being solved So all of these agreements that we've seen today from China's behavior is geared around preventing escalation preventing Encounters to go out of control, but no country Not least China has been willing to actually genuinely negotiate or compromise more on any of the underlying causes For maritime disagreements for instance the sovereignty claims the difference in opinion over what an exclusive economic zone actually means the US Japan China In a sense still disagreed on these points And so the reason the driver for ships and aircraft to operate in close proximity intense environments Is still there, but these things are being managed. So it's a mixed bag there Second implication is that China is using tactical stability quite deliberately. It seems to strengthen its strategic position It appears that Beijing has calculated the best way to expand and consolidate The strategic presence that it has been building over the past five or so years has been to take the risk of conflict out of the equation This is why China has felt emboldened to pursue the sorts of passive assertive activities that we discuss Moreover, I think Chinese analysts and officials Have have privately said that they think CBMs will limit and restrain other countries in their responses They see CBMs as a as a two-way street a way for actually Way for actually making it more difficult for other countries to seize the initiative in responding tactically to China's provocations So thirdly then the burden of escalation is shifting to the US and its Asian allies and partners Now the US faces a dilemma It must either watch on as Asia's maritime order starts to erode and change or it must itself assume some of the cost of risks For escalation China's island building the expansion of ADIZ etc. Won't by themselves cause a crisis It's only our response that will cause a potential crisis if there is one and China is banking on that to actually Expand and consolidate these features on the water and then fourthly a public relations war is unfolding over maritime risk-taking This is something that you may not seem as important as the strategic reality there But it is a corollary of China's strategy China has stepped up its public relations efforts to portray the United States as the principal antagonist maritime risk-taker in the region and also has brought in its accusations of Of the country stirring up trouble and and leveled them at Australia Japan and others It's about changing the narrative and while many countries won't be fooled by this China is already lining up It's it's its side of the international debate on these issues by bringing Russia Some Southeast Asian countries to align with its view on the upcoming case in the Philippines versus China tribunal Well, it's also important that if this international narrative is muddied It may make it difficult for global bodies to speak out by naming China directly And it certainly makes it difficult for smaller and more concerned Southeast Asian countries to themselves Saddle up with a United States or an Australian and Japanese response that maybe then cause them to be labeled as as provocateurs So finally a couple of recommendations. We look at four clusters of recommendations I'm just going to touch on three here and there's a number of different details at each of them Regional maritime players should strengthen and expand rules based CBMS I think a key takeaway from this report is that despite everything CBMS do appear to be working Despite the fact that China is co-opting them to its advantage as well But CBMS have not yet run their full course We are missing dedicated China Japan and China ASEAN measures and indeed China is deliberately stalling on the code of conduct in the South China Sea It seems to most observers But Coast Guards also need to be brought into the equation although there's a tacit agreement between China and Japan The United States now is pushing hard for China to bring its Coast Guard Into the Q's agreement to all US China MOUs as other Southeast Asians like Singapore have argued This is important because Coast Guards now account for the majority of encounters including whiskey encounters in the South China Sea particular Secondly countries do need to push back against China's creeping strategic expansion But in a pragmatic and cautious way and the ways that they do that won't all be the same Countries do need to exercise their right to freedom of navigation in newly contested waters in their own ways For some like Australia This will be to maintain a quiet approach of exercising our right to freedom of navigation rather than undertaking dedicated phonops But for smaller Southeast Asian countries with political reasons for not wanting to do this or even for the lack of capacity In order to do this They may want to take the Philippines lead and offer open open or offer Their territories their bases and ports and airstrips for the United States or other countries to launch Patrols or even phonops from there. That is certainly something China is not wanting to see I think though in the pushback one key point in this paper is that it's important to shift to Shift our mentality not to think about responding to China's passive assertiveness But actually to think about deterring China's future militarization I think too much attention is focused on responsiveness and in truth. There is no direct response to the creation of islands There's certainly no military solution So in in thinking about a deterrence framework, I think it's important To talk about privately communicating red lines to China around the question of militarization of the Spratlys in particular And also of the establishment of an ADIZ Rather than shifting to more frequent or more provocative phonops Perhaps not under innocent passage now it makes sense to use these as leverage to try and seize back the initiative from China and Determine them from doing something that we we don't want to see change the region and Finally countries do need to expand diplomatic and legal efforts to pressure China I think it's often underestimated people often argue that reputational costs don't matter to Beijing I think that they do China is becoming increasingly allergic. I think to international reputation Reputational damage public criticisms by countries like the United States and Australia, but also global bodies like the G7 and EU And that's partially why it's trying to again line up its side of the equation with countries that support its view on all of these issues Quite interestingly in the course of this this research It's become clear to me that a growing number of Chinese analysts argue that the Beijing's on the Beijing's policy is kind of productive And actually they point to the fact that Australia's criticism international advocacy on this issue and the more generally Ratcheting up of diplomatic criticism that Australian government has done over the past year is actually something they observe It's almost a barometer for how they're losing the region a barometer for how the China threat theory is starting to come back and go So with that I think we'll leave it there There are more recommendations in the paper and we can discuss these in the Q&A Ladies and gentlemen, I'll keep my comments very brief because I know that I stand between you the audience who've come here today and Your opportunity to put some questions directly to the authors So I just like to say first of all that I very much welcome this as a joint Lowy Institute National Security College launch This was a project which had its genesis when my distinguished predecessor was still in the Lowy Institute that batten now has been carried and Hopefully it's the beginning of a fruitful partnership ahead because We do when we have an overlap in what we do But we also have also our distinct differences the fact that we are in Sydney, too I welcome fact that we Probably need to be doing more in Canberra in future as well There are policy recommendations as Ashley has already made clear to this and I think having a policy I know several people in uniform in the audience There is of course implications for Australia in this as well as for a general Indo-Pacific wide readership Let me also congratulate both of the authors on an extremely Well researched very detailed very timely Analysis couldn't be more timely in many ways although the South China Sea has continued to be on the boil I think we are in a new and intense phase particularly this year bookmarked by US freedom of navigation operations on one hand a Legal case with the Philippines in which we're expecting a decision soon and of course the US election politically at the end of the year which obviously is part of China's calculus, I would also echo the broad conclusion which both the the Authors have already flagged and which Matt Sussex in his introduction also echoed which is this Although we're looking in very granular terms and throughout the paper at sort of operational and tactical details To me it speaks to this paradox of our region the wider Indo-Pacific where we have On the one hand the good news story of an unparalleled peace Between states which other regions in the world look at with envy but on the other hand the ongoing simmering and Apparently irreconcilable rivalries between larger states which seems to be pushing in in a much towards a much sort of Darker and potentially foreboding future. So there is a strategic question. I think that that subtlety that distinction Which although we're looking in very detailed granular terms as I say, I think it It brings that nuance Into clear light as was mentioned in the introduction. I was in Singapore previously and we had there I think a real focus on this question of conflict avoidance, which of course is important CBMS Are worth the candle But they're not a panacea now. It's not the only thing and simply avoiding conflict doesn't Magic away the the strategic questions Particularly if there is intent behind them to challenge the status quo. So I think in that wider sense. This is an extremely Sharp piece of well-argued analysis with over 200 footnotes There is no shortage of information there and I Commend it to you highly for those with an interest as I have in the maritime security domain that It's Part of a debate that will no doubt run and we at the Low Institute will continue to keep our focus on this and similar issues So I'll conclude my comments there and be very happy to take your questions with the other panelists Broaden Robertson Department of Foreign Affairs and trade Thank you very much for this useful contribution to the debate the discussion just a couple of very quick questions one You did make an oblique reference to it But but China it's passive assertiveness have certainly been demonstrated recently with Coast Guard vessels escorting Convoys of fishing boats in Malaysian and Indonesian waters Wonder if you've got any comments about what the purpose of that is is it testing their resolve etc And secondly on CBMs if you've got anything to add on how International law it could be used for the perhaps obviously there's the the Philippine arbitration In China's position on that is very well known China refuses to clarify what the nine dash line means although there are sometimes references to To for ocean archipelagos, but any any further ideas on how international law could be used to to to to deal with this issue Thanks. Bye. Yeah, thanks brought and that's There are all very pertinent questions I think on the first question about the Coast Guard convoys The one distinction that we make in the paper is between the behavior of Navies and the behavior of Coast Guards and the other Auxiliary law enforcement and frankly paramilitary forces that China has been increasingly using now China I think one of the opportunities for other countries on this issue We're seeing China as I say abide by some rules in order to break others We now need to call out China on the inconsistencies Between the fact that it is being more rule abiding in its naval behavior And in some ways less rule abiding in the behavior of Coast Guards and Auxiliaries the the the essentially forceful intervention into Indonesia's lawful apprehension of illegal Chinese fishing in Indonesian waters recently by a China a very powerful Chinese Coast Guard Bessel is a perfect example of where China is is clearly Abusing the rules or not following the rules. So we I think there needs to be international pressure on China to pursue Quickly move towards confidence building measures and rules relating to the Coast Guard and the other Auxiliaries So that this massive loophole in the naval Rule abiding nature of Chinese behavior can be can be dealt with and I think in a way The fact that China is now adhering to some rules gives us an opportunity to call China out on the blatant inconsistency inconsistency there on the the related matter of How do we use international law to try and limit the affronting nature of China's behavior more generally the paper also makes the case encourages strong support for a essentially a rules-based approach to the Philippines China Territorial differences and indeed strong international consensus in support of whatever the The outcome the verdict is of the arbitration case that lies ahead that of course is perhaps a forlorn hope But it points to this this I guess opening the China's now given us to call it out on Inconsistencies in its application of the rules at least China's now no longer saying we don't accept all of the rules Just two quick points to add on that on on international law one thing We do talk a little bit about is Reducing the ability of China to argue that there is a genuine debate around Unclos and what it means for exclusive economic zones Obviously, we echo the call of many that the United States and Congress should sign unclos, but other than that More efforts Sorry to ratify unclos, but but more efforts By the United States and other countries like Australia to get US allies and partners in the region to also come on board With the dominant understanding of unclos would be important countries like Vietnam Malaysia even the Philippines and India have somewhat different views to the United States and Australia on what's permissible under unclos Bringing those countries into line and others if possible would would make it harder for China to argue that there is a legitimate argument here On Coast Guards, I agree with Rory's comments. I would just add one thing, which is that Coast Guards in the South China Sea their behavior has changed a little bit in a way that suggests They are becoming less aggressive tactically vis-a-vis other government ships We have seen and continue to see the use of water cannons arrests flares etc against fishing boats But China hasn't undertaken coordinated strategies of its Coast Guard and fishing boats to harass sink or ram Other Coast Guards since the HS9 at one oil re-incident or if it has these have been under reported and very few by comparison And in the East China Sea Coast Guards have become very restrained Which brings us to a larger point? We haven't touched on yet today, which is all of the passive assertiveness tendencies that we see More fully developed vis-a-vis the US and Japan China worries a lot more about escalation with these major powers and with smaller Southeast Asian countries that it feels it can Intimidate without risk I'll just add my part on the fishing vessels, which I think is a very Permanent question because of the incidents that have happened recently Both in around Indonesian waters near a tuner island, but also within Malaysia's EZ off East Malaysia and Sarawak There is a question an open question about what the level of government direction is behind China's fishing fleets It may be too simple to leap to the conclusion that it is simply a proxy To my mind. There is an unhealthy Spiral also involved in which the denuding of fishing stocks in South China Sea is Inherently pushing fishing vessels from China to go further out And whether directed or not to do the work of the creeping jurisdiction that lies behind I think a lot of the The government directive but a bit of the other The other aspect of this is as Ashley had said, I mean incidents may not all be reported We have to rely on on public database But there is I think an open question to be asked if we're looking particularly at Southeast Asian countries that are Seeking to maintain a healthy bilateral relationship with China. They may have an active disincentive to public reporting Incidents that are ongoing involving fishing vessels and maritime law enforcement Okay, next to it from the camera times. Thanks very much for that. Hope it the there's been satellite imagery that suggests that there might be another Island building Activity about to take place Firstly, do you think that perhaps diplomatic pressure that's been exerted in Beijing at the moment has prevented that? So far and secondly, what would that mean if it does actually take place would would that be a re assertion of the aggressive side or is it just another play another step in building the the Great Wall? Thanks, some Greg Raymond at SDSC. Thanks, so Rory you and and Ashley for it. So what sounds like a fantastic paper that I'm really looking forward to reading Just two quick questions First of all, I'm interested in your point that the burden of escalation has been shifted to other powers or I guess to allied powers the US Australia so forth given that Now it would seem that phonops would be safer If there is going to be less challenge from the Chinese maritime forces and also Isn't it up to China now to enforce any ADs or maritime? Military enforcement zone won't the burden beyond them to actually and try to enforce those zones. The other question is Does your paper cover any of the economic? Dimensions of this issue we tend to look at the strategic issues somewhat in a stove pipe But I think it's probably true to say that for policymakers here at least in Australia and other countries our voice on China our preparedness to criticize our preparedness to call out the nine-dash line has been somewhat muted by our economic Stakes in the relationship and I'm just wondering if the paper covers those Thank you, I'm do go Robinson from DFAT look It's been known for a long time that Pacific Command has wanted Australia to do more There are some in Washington like Australia's Andrew Shearer calling for sort of federated defense between the US Japan and Australia and that view seems to be gaining traction in Washington at the same time It looks like any credible future US administration would probably tend more towards Competition rather than collaboration in the relationship with China So on that basis, how do you see that playing out for Australia? And how does this paper and yourselves projecting forward think that that's going to resolve itself from Canberra's point of view? Come January 2017 when we have a new US president. I might work backwards starting with Google I like your term credible US administration Yeah, I think we can interpret that in various ways Look, I think the The paper doesn't go specifically to what color what are the specific coalitions that should take action? And again, I think when this paper was a joint effort. We may each have our own slightly different views on this my own view is that is That Australia should I mean Australia has its own very good reasons for upholding freedom of navigation In the South China Sea either unilaterally or in partnership with others Including but not exclusively with the United States. So I do think the diplomatic challenge for us is still How do we get our message across? Without giving any false impression or being open to the accusation that we're just doing it because the Americans want us to And that's only going to be a more acute problem If there's a certain administration next year as opposed to another one But I think that doesn't mean we shouldn't do partnership with the Americans We should do both we should do our own unilateral activities and from time to time work in concert with the Americans or the Japanese or Others in the South China Sea I think it goes to the more general question. I think it was Greg's questions about About risk and freedom of freedom of navigation operations And I think you make a very good point when you say that in fact if China is Less in is actually more worried about escalation than it used to be That it actually means that although they may challenge our freedom of navigation operations There is actually a built-in Disincentive for them to follow through on threats. Of course, we don't want to get into a game of Who's going to lose face first and how do we Humiliate the China Chinese leadership as much as possible in front of the Chinese population because we don't know how that will end I think on balance though. It's fair to say that the Chinese leadership is trying to manage risk rather than Manufacture risk as much as possible. It's exploited our fear of escalation over the past few years very very effectively But it's reached a point now where it's where it is playing a more sophisticated case sophisticated game And I think particularly phonops or other activities that are not advertised Dramatically in advance and where the I guess the humiliation factor isn't the name of the game It's the it's the precedent or it's the maintenance of the existing status quo where we have exerted Exercise freedom of navigation for many years. That's the priority. So I think what I would encourage is More activity more Australian activity But do it with a reasonably low profile and perhaps only announce it after the after the event The paper doesn't look at great length on the economic dimensions of this. I would echo I think you and point about fishing. I think a colleague here at the National Security College Marina service has written a very interesting recent article online about how Internationalizing the fishing issue and the overfishing and the depletion of fisheries in the South China Sea is perhaps now one of the best and most sensible avenues for us to pursue in Limiting China's behavior and trying to basically encourage China to be a bit more genuinely self-interested because it's going to be a great tragedy if China essentially finally manages to exert the maximum of authority over The economic uses of the South China Sea are needed to find to find that fishing stocks there have basically been Eliminated and the island building of course is Accelerating that that sorry outcome and going finally to your point I think Nick on on Scarborough Shoal and on the the new phases of the island building I don't think the island building has been Stop start in response to diplomatic pressure. It's just continued pretty relentlessly And I I mean it is a difficult distinction that we make in this paper The island building is occurring precisely because in a way China has Co-opted or changed the rules around risk so it feels in a way that the island building is a very You know some American colleagues will disagree with this but a very passive way of Extending authority because each stage of island building isn't Causing an immediate risk of conflict whereas in the past Ramming ships sending the Navy out into confrontations was doing that So I'm afraid to say we're likely to see more of the same and we're likely therefore to see These very difficult decisions of how do we make we collectively take decisions to confront China? We see that or I see that as the the dynamic that will continue to be at work The only other thing we haven't mentioned about this paper is it talks about looking for a bleak or other ways to put pressure on China and Perhaps in the end the only way for countries like Australia and others in the region to put pressure on China will be to be willing to bear Economic costs ourselves in the degree to which we're willing to confront. That's going to be tough Sorry, I've taken a lot of your time there No problem. I'll quickly run through the three questions On on Nick on your question. I agree with with Rory's point there It's difficult to it's difficult to actually draw out a specific tit-for-tat Relationship on China's actions in the South China Sea vis-a-vis US counter reactions I think although it seems clear that over a period of years as a general cycle of Escalation from the pivot to island building etc looking for specific responses to specific provocations I've tried to find that and I haven't found it China's island building is continuing Despite everything on on Scarborough's shoulder specifically I think two points One is I don't think that it's been prevented by diplomatic pressure I think that it's obviously them probably the more the more Difficult one for China to build on precisely because it has taken on enhanced significance by the way China actually Got control of the maritime space around it back in 2012 It was one of the it was the only feature that was directly wrestled in fact from Philippine Jurisdiction and Philippine control through the overt or covert at least you threat of the use of force So how the US wants to back Philippines on this issue is what is what's important to watch Were the US to come forward as they did over the Senkaku Jail islands to say this is covered by the treaty I think that would be a muscular Way for Washington to try and deter building there and secondly if building did occur after the tribunal I think it will be interpreted as an active defiance against the UN tribunal if Beijing were trying to If Beijing wanted to build on the Scarborough Shoal It would be best to build before the tribunal rather than afterwards because there will be a lot more flak on that There's a sense of moral hazard in the tribunal much like a ceasefire agreement where rebel sides try to get as much as they can Before the agreement comes into force China might try and build as much as it can before it becomes more diplomatically harder to do so Greg on the question of burden of escalation shifting I wrestled with this idea of our phonops getting safer because China is less likely to want to Challenge them provocatively and I think the answer is yes, but Von Ops the US phonops today have been the least provocative way they could be undertaken under innocent passage China's response has also been tactically restrained and interestingly It's been the United States not China that has leaked every incidence of Challenges to its maritime jurisdictions the US or British journalists at the BBC on Australia's overflight China hasn't got an incentive to publicize other countries challenging it there So it is trying to keep phonops in check and that goes to Rory's point of not actually using phonops to publicly humiliate China But telling them that we might do so in the future if they do things that we really don't want like militarization or aid is construction But the but the bus of that response is that we don't know how a more forceful phonop Policy by any country including Australia could actually change the calculus in China We don't want to rely too much on these measures even though we see that they are working and that's again part of China's Strategy for using them, but more importantly perhaps is we don't know what might tilt the debate within the PLA and within the Chinese Administration to quickening the pace of militarization and putting things putting ships and another forward-deployed Air Force missiles, etc. They're sooner rather than later How much right but they could do things more permanently and they probably could could deploy forces by the end of the year According to US intelligence estimates They haven't done that yet and there is a debate within China about is this all going too far and are we losing control of what? We want to achieve here Moderation therefore gives time for those internal debates to maybe stick And finally on the point of paycom wanting Australia to do more I would make one point there which is that paycom might want Australia to do more But it's not necessarily the case at the White House wants Australia to do more yet So that debate within the United States is also Interesting to the extent that I think Australia should consider getting involved in phonops I think that it's important We don't just because as I said before use them as a response But think about them carefully in a tailored deterrence framework where they might actually have more traction Australia could take Australia could say that it will take part Publicly in US phonops as a potential response to future militarization That would be more important than just doing it because America wants us to so letting states respond to Chinese challenges in their own ways is also useful for For showing China that this is an organic regional aversion to what it's doing not a US directed policy to contain China As the non-author on the panel I I don't think I should do the author's jobs and represent the Analysis for them, so I'll just restrict my comments to Scarborough Scholl because When I said that this is very timely. This is obviously one area where I think for attentions focus of the US in particular is is going increasingly towards as the next potential focal point or flash point in the South China Sea Speaking to a lot of the issues that have been raised in the analysis But to emphasize that Scarborough Scholl is different as Ashley said because it was it was a a Change of the status quo. I mean sovereignty can be disputed, but the Philippines was the de facto administrator there Scarborough Scholl is geographically in a very different location to it's not part of the Spratlys It's a freestanding feature far to the north. It's in a particularly strategic location in terms of Extending air cover if that's what China's military Strategy is is about further into the north of the South China Sea and it lies fully within Philippines exclusive economic zone, which is not challenged by any other feature that even by a maximalist interpretation could could legally Do so so from that point of view I think it would be a very significant escalation if China were to do that and if If Ashley's right and and it makes more sense to do it ahead of the ruling We may see something happen very soon because that ruling may happen as early as as the end of May It may go a little bit longer, but it'll probably be around the middle of the year So that's one to watch and just to connect with the freedom of now with freedom of navigation operations It certainly gets to the limitation of freedom of navigation operations. They are not about changing the status Quo physically Ashley's point is well taken that where they leave off and deterrent starts I think is something the u.s. Is thinking very hard about but the purpose of any activity about around Scarborough shore would be to deter further Land-building activity so it might in by definition. It has to serve a Deterrent function simply sailing past is not going to change anything. It would be something rather rather different I think if it were to happen I'm a question that is about the summer rain deal what Was the implication of of this deal to to China and to the south China's sea situation How long have you got can I go first? Yeah, I don't know You and I bet you want to say something on this. Yeah, and look I'll give my own view I mean, I think there is an absolute nonsense being peddled in some media That the Australian decision on the submarine deal was due to Chinese pressure And I think that's you know, that's a really It's quite insulting Nonsense, it's been peddled in some of the some of the media coverage So I think I think the first that the key point to making this is Is it a low I mean personally I think that Australia should continue to deepen its strategic partnership with Japan and obviously a Japanese win in the submarine competitive evaluation process and selection would have been you know a major step in that direction there is still lots of Australia and Japan can do together and there'll be some hard work ahead to Reassure Japan on that front by my Australian colleagues But the fundamental point is that Australia is very serious about building up its naval deterrents its maritime deterrents submarines will be at the center of that and so basically No matter where the submarines come from as long as they're in the view of Australian capability Planners the best submarines for us. That's a pretty significant message To China and other countries in the region that Australia is going to be a serious partner in coalitions to manage the regional the regional order I think that's all I'll say on that I'd agree with everything that Rory has said but just add that I think as well as the Unhelpful external myth that this is deference to China that has driven the decision to award to France instead of Japan There is also an internal myth which is fast growing up that this is not about strategy at all It's about South Australia and and seats an election to come forward and I find that's interesting that you you have these two myths in some ways Reflecting the wider discourses About Australia's positioning between the United States and China and its in its diplomacy But within Australia to the defense debate can be very parochial at times and this this latter myth I think is Something there's also it's a reflection back of that that that people are looking inwards at defense and perhaps it's unavoidable in an election year But it shouldn't mask the fact that the decision to double the submarine fleet is a very significant one It's strategically driven at its core and if it's fully funded and carried out I say if because we've been some way down this road before things can happen technically, but nonetheless the decision and The white paper has put numbers behind this for the first time to double the submarine fleet will end up with You know a very much more capable submarine force And that's something I think a strategic signal that is loud and clear Regardless of whether they have a made in France label or a made in Japan label One last one. I think the best submarine decision for Australia from the Chinese perspective would have been to buy none at all And so I think I think that's been categorically squashed