A new report from the United States Studies Centre (USSC) highlights how the Indo-Pacific region remains the primary geopolitical theatre for strategic competition, even as Washington and its allies and partners meet the challenges brought on by the Russia-Ukraine war. The report follows the third Annual Track 1.5 US-Australia Indo-Pacific Deterrence Dialogue run by the USSC and the Pacific Forum, bringing together over 30 US and Australian experts from a range of government and research organisations. This year’s theme was “A new age for deterrence and the Australia-US alliance.”

The dialogue and report found a tectonic shift in the balance of power driven by China’s sustained military modernisation continues to pose a “major challenge to the United States, Australia, and their Indo-Pacific allies and partners.”. In this context, the report emphasises it has never been more essential for the United States and Australia to adapt and strengthen their approaches to regional deterrence and defence – individually, together, and with like-minded partners

China continues to wield its growing power in unprecedented ways, undermining the foundations of the regional order through a multi-dimensional, whole-of-government strategy. “Beijing is leveraging an increasingly sophisticated toolset in the grey zone between peace and war, including non-military means, economic coercion, and political interference, to pursue incremental changes to the status quo,” the report notes.

At the same time, China’s formidable military capabilities, its ongoing nuclear build-up, and its emerging advantages in new domains like cyber and space raise hard questions about the United States’ ability to deter or prevail in a regional conflict.

For a strategy of collective deterrence to succeed, Canberra and Washington need to pursue deeper alliance integration in new ways across different domains and government agencies, while finding greater consensus with the interests and objectives of other regional players. These efforts enjoy widespread support in Washington and Canberra, reflected in the ambitious agenda of recent Australia-United States Ministerial Consultations (AUSMIN) and in the creation of the Australia-United Kingdom-United States (AUKUS) trilateral defence industrial pact.

Yet reconciling differences in capabilities, interests, policy priorities, and threat perceptions will be crucial if the United States, Australia, and their allies and partners are to regain the initiative in the face of China’s efforts to reshape the Indo-Pacific order.

The report's authors are USSC Non-resident Senior Fellow Ashley Townshend, USSC Research Fellow Tom Corben, and President of the Pacific Forum, David Santoro.

Key points

  1. Australia and the United States are more firmly aligned than ever before on the need to advance a collective approach to deterrence and defence in the Indo-Pacific.
  2. Canberra and Washington have different views on the extent to which armed forces should prioritise shaping the regional strategic environment and preparing for high-end military contingencies.
  3. The role of expanded US-Australia force posture initiatives looms large in alliance debates about shaping the strategic environment.
  4. The United States’ concept of “integrated deterrence” is widely regarded as a useful framework for addressing the multi-dimensional strategic challenges China presents the region. 
  5. There is broad agreement that efforts to resource a strategy of conventional deterrence by denial need to proceed with far greater urgency. 
  6. There is widespread support for deepening cooperative strategic planning initiatives between Australia and the United States on Indo-Pacific security flashpoints.
  7. Risk perceptions in Canberra and Washington will rarely align perfectly in crisis scenarios, not least because Australia, as a middle power, is more vulnerable to Chinese coercion.
  8. There is uncertainty over the degree to which Southeast Asian nations share US and Australian assessments about the regional order.
  9. Washington and its Indo-Pacific allies can no longer think of nuclear weapons as separate from other instruments of war.
  10. Australia and the United States see expanded defence industrial cooperation as essential to enhancing the credibility of collective deterrence in the region.

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