Australia's Hedging Policy: Dualism in the Belt and Road Initiative in

2017

Abiansyah Bayu Ramadhan

Universitas Airlangga

Keywords: international system, economyc cooperation, Australia, Belt and Road Initiative, alliance

Abstract: The Belt and Road Initiative became one of the Chinese initiatives that had an influence on Asia, Africa, and

Europe. Cooperation formed to lead the development of trade routes and improvement of economic relations.

Australia became one of the countries that entered the maritime development in the South Pacific region.

However, Australia does not seem to give a clear position to this issue until 2017. The author seeks to analyze

the reasons of this unclear position from Australia through the analysis of the international system. This

analysis leads to a system in the international world that influences foreign policy. The author sees the

existence of economic and security systems that affect a country in establishing relationships with other

countries. This leads to the emergence of the main actor who gives influence in the system. The author argues

that China as a new international force has the same position with the United States as the previous influence

holder. This has led to dualism in Australian policy. On the one side Australia has economic interests through

relations with China. On the other hand, Australia can not abandon the United States which has become an

alliance.

1 INTRODUCTION

In September 2013, China’s President, Xi Jinping

introduced for the first time the concept for the Belt

and Road Initiative (BRI) in a speech at Nazarbayev

University, Kazakhstan (The State Council The

People’s Republic of China, 2015a). In said event,

President Xi Jinping took the opportunity to promote

the development of a trade rout which will connect

China and the Central Asian states. The statement

were reiterated when President Xi Jinping visited

Indonesia in October of the same year to form a closer

relationship between China and the Association of

South East Asian Nations (ASEAN) (The State

Council The People’s Republic of China, 2015b).

This statement had been a precursor to the formation

of a sea lane which connects China to the Southeast

Asian states. China also ventures to promote the

formation of the Asian Infrastructure Investment

Bank (AIIB) which fosters regional interconnectivity

and economic integration. In the development of the

BRI infrastructure, China’s ambition is evident in the

40 billion dollars budgeted for this initiative in

February of 2014 (The State Council The People’s

Republic of China, 2015b). The budget covers the

support for the development of infrastructure, data

sources, industrial cooperation, financial cooperation

and various other projects in the nations along the

route of the BRI.

The relationship that China is trying to form is not

only limited to the Asian region, but also spreads to

Europe, South Pacific, and Africa. The relationship

China is trying to form with the European region is

evident when President Xi Jinping and Russian

president, Vladimir Putin gave a joint address

regarding the construction of the BRI which connects

the Asian and European railways in February of 2014

(The State Council The People’s Republic of China,

2015b). Relations with the Pacific Asian nations can

bee seen in Xi Jinping’s address in the Asia Pacific

Economic Cooperation (APEC) meeting in Beijing in

November 2014.

The involvement of other countries such as New

Zealand, Maldives, Saudi Arabia, and Tajikistan adds

tot the list of countries involved in this project in

February 2014 (The State Council The People’s

Republic of China, 2015b). All in all, the road in

development in the program concerns the connection

of China, Central Asia, Russia, the Baltic States, the

Persian Gulf, and the Mediterranian states. While the

maritime counterpart includes the Northern Natuna

Region, Indian Ocean, Mediterranean Ocean, and the

186

Ramadhan, A.

Australia’s Hedging Policy: Dualism in the Belt and Road Initiative in 2017.

DOI: 10.5220/0010274900002309

In Proceedings of Airlangga Conference on International Relations (ACIR 2018) - Politics, Economy, and Security in Changing Indo-Paciﬁc Region, pages 186-192

ISBN: 978-989-758-493-0

South Pacific Region. Until 2017, there are at least 65

countries involved in the project (Hu et al, 2017, p.

410). Which makes the total population involved in

the cooperation nearing 4,6 billion people, making up

62 percent of people on Earth.

The goal this forum is trying to achieve is

multilateral relations, economic globalization,

cultural diversity, and better application of

information and technology (The State Council The

People’s Republic of China, 2015c). With the BRI,

the course of the economy is expected to run

smoothly with the integration of market and facilities

along the route. This is applied through the

coordination of economic policies, regional

cooperation, as well as development of economic

cooperation which benefits all parties involved. Thus,

the relationship formed not only includes a general

relationship between countries involved in the BRI,

but also in bilateral relations, product certification

and accreditation, availability of information, and

peace-preservation efforts.

Australia is among the nations included in China’s

attempt at developing a route through South Pacific

(Zhang, 2017). However, Australia’s position in this

cooperation as of now is still unclear, being in what

may be said as a “gray” area. This is evident from the

dualism of Australia’s behavior. New Zealand on the

other hand, as a neighboring country to Australia, has

been directly involved with this project. On one hand,

there is an opinion about Australia’s involvement in

this project being ultimately more detrimental than

beneficial for Australia. This sentiment had been

expressed by one of Australia’s senior member of

government, which is supported by some other

government members agreeing that this cooperation

will compromize Australia’s security (Greene, 2017).

However on the other hand, there is the opinion

that the BRI may yet benefit Australia, particularly in

supporting the government’s efforts in developing

Northern Australia. Australia is involved in the

development of AIIB. This may impact Australia’s

position later on in playing a more proactive role in

the cooperation. But the dominant position which

may be observed as of now is that of Australia’s

reluctance to join the cooperation. This is supported

by the absence of Australia’s statement regarding

their position in the article regarding the BRI in the

official site of the Australian Parliament (Parliament

of Australia, no date). The article does not even

criticize the BRI. There is an ambivalence in the

debates in the Australian Parliament in which

oppinions opposing and supporting the cooperation

may be found. (Senate of Australia, 2017a, p. 6014;

2017b, pp. 105-107). This dualism is still evident in

the government’s statement which sees the BRI as

advantageous for Australia. The Foreign Policy

White Paper of Australia 2017 (Australian

Government, 2017, p. 45) contains a statement

regarding BRI as a step Australia ought to take to

develop the region’s infrastructure. In this article, I

attempt to find the reason behind Australia’s vague

position in regards to BRI up until 2017. The author

seeks to analyze the reasons of this unclear position

from Australia through the analysis of the

international system. Further, I argue that Australia’s

positioning is an intentional hedging strategy.

2 INTERNATIONAL SYSTEM

ANALYSIS

The international system is among the tools which

may be used in analyzing the foreign policy of a nation.

George Modelski (1978, p. 214) depicts the

international system as what causes dependency in

international actors’ decisions. To simplify, George

Modelski (1978, p. 215) makes an analogy to domestic

politics, in which cities are dependent on what occurs

in the provincial or national level. In other words,

smaller entities will be dependent on larger entities in

deciding their actions. In this case, the actions of

international actors are depicted as being influenced

by larger systems, such as the international system.

Thus, by observing the international system, the

foreign policy of nations are adjusted accordingly

(Hudson 2014, p. 173). Furthermore, I will explain

how the international system can be perceived as a

cycle which occurs in the international stage through

the variables in the international system which

influences how policies are formed.

The cycle found in the international system may be

classified into several time periods, in which George

Modelski (cited in Hudson, 2014, p. 177) analyzes a

cycle that dates to 120 years in the past. In observing

this cycle, several main events may be identified.

George Modelski (cited in Hudson, 2014, p. 177)

found four main cycles in the international system, in

which those cycles perpetuate in sequence. First, a

global war leading to the emergence of a new world

power. Second, a great power emerging victorious

from war. Third, delegitimation of the world power.

Fourth, the shift of concentration from the previous

great power to a new one, or deconcentration.

Furthermore, George Modelski found that the cycle

repeats within at least thirty years accompanied with

changes in the military and economic aspects as seen

in Table 1

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Table 1. Modelski’s cycle of international system (1981, cited in Hudson, 2014, p. 178)

Year Phase Military

Development

World

Economy

Analysis of participating

actor

1763-1792 Deconcentration Increases Spreads France as main actor

1792-1815 Global War Spends Decreases France’s defeat,

emergence of Great Britain

1815-1848 World Power Increases Spreads Great Britain as World

Power

1848-1873 Delegitimation Spends Decreases Emergence of Germany

and the United States,

Great Britain remains

1874-1913 Deconcentration Increases Spreads Germany as a new player,

Great Britain begins to

decline

1913-1946 Global War Spends Decreases Germany defeated, fall of

Great Britain, United

States replaces Great

Britain

1946-1973 World Power Increases Spreads United States as world

power

1973-2001 Delegitimation Spends Decreases Decline of the United

States, emergence of

multiactor

2001-2030 Deconcentration Increases Spreads China as a new power?

2030-2060 Global War Spends Decreases China as a new world

power?

The second point that I am elaborating is how the

international system may be observed through several

variables. Valerie M. Hudson (2014, 174) explains

that there are at least six attributes to the international

system, including: the number of actors involved,

distribution of power among actors, number of major

power poles in the system, degree of adherence of

international actors, presence of supranational

organizations, and number of contested issues. The

number of actors involved refers to actors

participating in and making up the international

system. Distribution of power among actors refers to

how the relationship between two actors and how the

two actors themselves may influence other actors who

are not the main actors in the system. Number of

major power poles in the system refers to the actors

with a dominating power and influence over the

system. This aspects leads in to the point of adherence

to rules which becomes the basis on how other actors

respond to the influence of the main power in the

system. The presence of supranational organization is

another variable which may be used to analyze how

international actors are facilitated in a forum which

influences how policy are formed. While the last

variable, presence of contested issues, is a variable

which may be used to see the issues afflicting the

relations between actors.

As an explanan, the concept of international

system has two major flaws. First, this model leads

researchers to see how the existing system influences

international actors (Singer, 1961, p. 80). This tends

to reduce the actors’ role in the international system.

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Thus, international actors – which in this case mostly

refers to nations – are seen as static parties prone to

the whims of the system instead of active actors able

to act dynamically. In other words, seeing through the

international system, researchers sees international

actors as not having an autonomy to act according to

their free will and as being dependent to the

international system. Second, the international

system makes it as if there is a uniformity of action

among international actors (Singer, 1961, p. 81).

Every action a nation takes may be conducted on the

basis of interest. While a nation’s interest may be

influenced by the resources they possess. Therefore,

it is impossible that the actions of nations in an

international system be considered uniform to one

another.

From the flaws mentioned above, J. David Singer

(1961, p. 82) argues that the use of the international

system as a concept to analyze international

phenomena is no more than an effort to fulfill the

predictions made by researchers. In other words, the

actions conducted by international actors may be

predicted upon broader variables. Explanations

regarding international systems has brought me to the

conclusion that Australia’s position in regards of the

BRI tends to be vague or “gray”. More specifically,

Australia can be said to be hedging. Hedging refers to

the behavior of nations in regards to several policy

choices (Kuik, 2008, p. 163). This is done in order to

balance the risks within an uncertain situation. Risks

in the international stage refers to the field of security,

economy, and politics. These three aspects are

considered to be influential to other specific policies

that a nation forms. The hedging position is also

popular among nations with smaller powers in facing

other nations with greater power. As Valerie Hudson

(2013, p. 173) stated, that lesser powers in an

international system must defend themselves by

seeking protection from greater powers. Furthermore,

I will refer to this theoretical framework in analyzing

Australia’s policies.

3 THE RISE OF CHINA AND THE

UNITED STATES’ HEGEMONY

TO AUSTRALIA

Referring to the table created by George Modelski

(1981, cited in Hudson, 2014, p. 178) as can be found

above, it is evident that in the present era there is an

emergence of a new player in the international system

and the decline of preceding players. Marijke

Breuning (2007, p. 144) explains the concept of

emerging power in reference to China’s position

presently. Whereas the previous superpower,

referring to the United States as being at the apex of

the international system since the end of World War

II. Furthermore, China presents itself as a challenger

to the United States, consistently gaining more power.

Some researchers (cited in Ikenberry, 2008) are of the

opinion that the era of the United States’ dominance

is reaching its end. The world’s orientation to the

West is gradually being replaced by the increasing

influence from the East. The military can be said to

improve seeing as the debate regarding the

development of nuclear weapons on a global scale has

increased considerably. Whereas regarding the

increase of economic development, I consider how

nations in the world has begun to develop their

economies through cooperation with other nations.

Among the form of cooperation taking place between

states is China’s BRI.

The emergence of China as a new power in the

global constellation is observable by the sharp

increase in trade of goods and services from 200

valued at 1 trillion dollar, to 4 trillion dollars in 2009

(Hachigian et al, 2009, p. 7). Not only that, China also

has a high import and export value as well as a large

sum of investment in various countries. In short,

China has a great economic value compared to the

nations in the world. Gilford John Ikenberry (2008)

states that it is far from impossible that with the

current economic development and with China

actively pursuing diplomatic relations, their power

and influence may experience a considerable increase.

China has become Australia’s greatest investor,

rendering the mutual relationship between the two

nations an important point (Findlay, 2011, p. 181). On

the other hand, China has been a potential trade

partner for Australia for quite some time. Australia

has become the main supplier of raw materials for

China’s industries (EABER dan CCIEE, 2016, p.

271). This relationship is predicted to continually

increase with the increase of Australia’s export to

China, predicted to reach 120 percent, and China’s

export to Australia increasing by 44 percent (EABER

dan CCIEE, 2016, p. 15). Sino-Australian relations

are also supported by international forums such as

G20. Considering the intensity of the relation

between China and Australia in the economic sector,

BRI can be considered as among the most potential

forums for Australia. Also considering the increase of

China’s influence on neighboring countries in the

region who also has a trade relation with Australia.

On the other hand, the United States still cannot

be considered independently from their role as the

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189

founder of the current international system, from

2017 onwards (Hachigian et al, 2009, p. 9). This is

due to the United States’ vital role in shaping

international institutions as well as norms and rules in

place in the world, as evident in the United States’s

role as the largest donor to the United Nations (UN)

and the World Trade Organization (WTO). The

United States also has an important role in

maintaining the order and security of the world,

including military weaponry management and

terrorism management (Beeson, 2003, p. 113). The

United States is also in possession of a considerable

economic value. This can be observed in the

relationship the United States has which includes

regional and global forums. In other words, the

United States is still considered to be the main actor

or the hegemon in the economic, political, and

cultural aspects on the whole and in particular, in

military relations (Beeson, 2003, p. 127).

Australia and the United States has a relationship

which may be considered as a close alliance since the

end of World War II (Beeson, 2003, p. 113). This

relationship entails a cooperation in the security

aspect for Australia. There are those of the opinion

that the alliance formed between Australia and the

United States is a strategic choice on the part of

Australia to secure their safety with the United States

(Beeson, 2003, p. 115). This security alliance is

accomodated by the formation of ANZUS, a security

forum between Australia, New Zealand, and the

United States. The Australian territory in the Pacific

Ocean is also part of the basis of the United States’

influence in this country. This is in part due to the

United States’ perception of regions bordering the

Pacific Ocean as rightfully belonging to the United

States to spread their influence (Dosch, 2004, p. 16).

However, the relations between Australia and the

United States is also heavily criticized in regards of

the involvement of Asian nations which goes largely

unnoticed by Australia. Further, this dualism will be

depicted through the six variables by Valeri Hudson.

4 AUSTRALIA’S POSITIONING

IN THE INTERNATIONAL

SYSTEM

I represent the international system in place in 2017

in the variables as proposed by Valerie Hudson in

Table 2. I recognize two main actors in this

international system: the United States and China,

besides other actors who also exerts some influence

on the international system, albeit not at the level of

the United States and China. The involvement of

these other actors can be perceived in the United

States’ ambitious endeavour of forming cooperation

through multilateral relations (Hachigian, 2009, p. 6).

In addition, this is also indicated through the BRI

formulated by China. The distribution of power is

recognized between the United States and China,

each with their own focus, including the economy in

which presently China is leading, and in security

which remains under the domination of the United

States.

Table 2: International System 2017

Variable Attributes

Number of actors The United States, China, “the rest”

Distribution of power The United States and China on different issues

Number of major power poles Two (The United States and China)

Degree of adherence High to the United States and China

Supranational organizations The UN and WTO

Contested issues Economy and security

As has been expounded upon previously in

regards of distribution of power, there exists two

major power poles in the United States and China.

Both actors gives off the impression of opposition in

theor cooperation, particularly in their ideological

background and ambition for power. There are also

those of the opinion that the United States is headed

for a decline in the international system. The United

States’ decline can be seen in the views of North

Carolina senator, Jesse Helms (cited in Hachigian et

al, 2009, p. 9) who had stated that the United States’

position in the UN has declined along with the

transformation of the UN as an independent body no

longer warranting the United States’ suppport. This

goes on to explain how the BRI enters Australia’s

Foreign Policy White Paper 2017 (Australian

Government, 2017, p. 45). The adherence of the other

actors can also be identified as being quite high to

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both powers, as evident in the number of alliances the

United States has formed with nations who are part of

China’s BRI. I view supranational organizations as

another relevant variable with the presence of the UN

and WTO, despite their presence relying largely on

the states with greater power. The principles held by

the UN and WTO can also be found in the main

principle of BRI particularly in the point regarding

the preservation of peace and the economic treaty

(The State Council The People’s Republic of China,

2015b). Whereas the contested issue lies in the

consent between economy and security in regards of

nuclear security and terrorism.

To draw a conclusion on the international system

as it is in the deconcentration phase, with the rise of

China and the United States still playing an important

role in the system, Australia’s response in regards of

the BRI can be said to be that of hedging. In an

international system which places the United States

and China as two major power poles who influence

one another, Australia is predisposed to take a safe bet

and maintain a relationship with the United States and

seize the opportunity to join the BRI. It is evident that

the alliance between the United States and Australia

has prevented Australia from forming a cooperation

with countries in the Asian region, in this case China

(Beeson, 2003, p. 114). Moreover, with Australia’s

effort to maintain security in their region by

cooperating with the United States. On the other hand,

Australia also has an intense economic relationship

with China. Australia is trying to suppress economic

risk by maintaining a relationship with China. This is

the reason why Australia’s position tends to be more

vague or “gray”.

5 CONCLUSION

From the explanation above, I conclude that the

international system may be used to explain

Australia’s position in regards to the BRI and China.

The international system represents how the intensity

and influence of economic and security issues on a

global scale has increased. This leads to the formation

of relationships which tends to be in support of the

economic and security conditions. This relationship is

created by forming multilateral cooperations and

alliances. In this regard, the United States and China

are the two main actors to bring economic and

security issues in order to form relations with other

nations. The international system gives the United

States and China room as the two entities who holds

the main power in the international stage. The

international system also explains the current

international condition and accounts for the

emergence of new powers alongside established ones

which are experiencing a decline. This places China

as a new player and the United States as the old

hegemon on the decline. Thus, China and the United

States’ presence is a clear influence on the foreign

policy of other nations, including Australia.

The dualism which emerges with the rise of China

and persistence of the United States in the system

causes Australia to experience some sort of dilemma

in taking a stance regarding the BRI. China, with an

intensive economic relation with Australia, is an actor

with a considerable potential in forming a cooperation.

In this regard, the economic issue is the main aspect

to influence relations between Australia and China.

Whereas the security issue may be found in

Australia’s attempt of maintaining a relationship with

the United States. The dualism is also caused by the

persistence of the United States’ influence in the

international system. Australia is led to maintain their

relationship with the United States, forming an

alliance not only focusing on the security aspect, but

also economic. In addition, the relations between the

United States and Australia is also facilitated in their

multilateral relations. Thus, Australia’s position in

regards of the BRI tends to seem vague due to the

dualism of influence from the United States and

China in the international system.

I argue that in future, Australia’s position in

regards to the BRI may change yet, even becoming

more proactive. In addition to the assumption

regarding the international system which predicts the

decline of the United States, this is also supported by

the present condition in which there is a good working

relationship with China. Although if this does occur,

Australia’s footing with the United States is predicted

to be compromised. In this juncture I acknowledge a

flaw in the international system concept which

considers national foreign policy to be uniform. Or,

in other words, that a nation’s foreign policy is

directed by the international condition without regard

of whatever interest the nation happen to have. A

nation is made out to be rigid and intransigent to the

constructed dynamics of international relations, even

before change occurs. According to Australia’s

interests, it would make sense if they maintain a

cooperation with both parties. However, throughout

their history Australia’s policy orientation never

disregards the United States.

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