As tensions worsen in the Taiwan Strait, the Quad is also needed to deter potential forced reunification between the PRC and Taiwan.
Peace and prosperity are the cornerstone principles of a free and open Indo-Pacific. The region includes half of the world’s population and 60% of the global gross domestic product (GDP), making regional diplomacy, consensus building, and security necessary for helping maintain an uninterrupted flow of goods and services. With the People’s Republic of China (PRC) rapidly realising its aspiration as a regional hegemon and the US-led unipolar world transitioning to a multipolar order, counterbalances are needed to ensure that Chinese Communist Party (CCP) policies do not threaten Indo-Pacific stability.
India, set to become the world’s third-largest economy by 2027 and forecast to double its GDP in the next 10 years, will increasingly influence decision making on regional security, along with New Delhi’s Quadrilateral Security Dialogue (Quad) partners, the United States, Australia, and Japan. The Quad and its like-minded partners (United Kingdom) have the capabilities to implement a two-pronged defence and economic denial strategy in the Indo-Pacific to counter Beijing’s objective of establishing predominance throughout the region.
The potential for geo-economic disorder arising from PRC hegemony in the Indo-Pacific is a threat to India’s future economic growth trajectory and imperils overall global prosperity. CCP economic policies aiming to further cement predominance, risk supply chain disruptions, inflationary shocks, and regional conflict. To deter these disruptive CCP policies, the Quad must counter the PRC’s economic pressure on trading partners and its mercantilist-communist market distortions. The Indo-Pacific market needs an alternative to the PRC’s “Dual Circulation” economic strategy, which curtails mutually beneficial foreign trade and develops “controllable” supply chains in China’s favour.
As tensions worsen in the Taiwan Strait, the Quad is also needed to deter potential forced reunification between the PRC and Taiwan. With Washington focused on arming Ukraine and America’s military modernization lagging behind the PRC’s, a region-wide denial coalition is needed. China should realise it will face resistance from the Quad over any PRC invasion of Taiwan, attempts to forcibly “seize” the majority of the global semiconductor sector on the island, or disruptions to sea and air trade routes near the Taiwan Strait. The Quad and partners can cooperate on forward positioning key military assets (both weapons and supplies), joint training, and freedom of navigation exercises to deter PRC aggression.
Securitization of the Indo-Pacific would benefit from permanently expanding the security dialogue to a Quad+ format with the United Kingdom. This will improve interoperability with all AUKUS trilateral security pact members, which includes the United Kingdom, as well as Australia and the United States.
Expansion of the Quad to include the United Kingdom is essential for coordinated export control and investment restriction policies as well, as Europe has not demonstrated a commitment to mitigating its economic interdependence with the PRC. Germany has recently approved PRC investment in a German port and initially approved the sale of a German semiconductor manufacturer to a Chinese entity. While the Quad has focused on developing export controls for emerging technologies, the Quad and United Kingdom should secure supply chains for defence-related rare earths, including extracting, processing, and refining the critical minerals. From 2008-2018, China exported 42.3% of all global rare earths.
Indo-Pacific security requires more than an “all guns, no butter” strategy. The Quad’s focus on security in the region, therefore, need not focus exclusively on defence policy. The Quad should expand its scope to ensure a “Free and Open Indo-Pacific” includes economic and energy security.
Economic security policies should aim to deepen commercial ties throughout the Indo-Pacific, particularly those Commonwealth members amongst the top 50 of the world’s nominal gross domestic product, including India, Australia, Singapore, Malaysia, and New Zealand. Diversifying supply chains and minimizing regional economic dependence on the PRC will require increased market access, reduced trade and investment barriers, fewer tariffs, and agreements on subsidies. Private sector investment from other Quad countries to help accelerate India’s industrialization drive will be mutually beneficial. New Delhi has initiated tax reforms and is rapidly shifting its economic model from services to manufactured exports, making India a key partner for redirecting targeted supply chains away from China.
Countering the CCP’s economic, military, and political regional predominance also will require private sector infrastructure finance development options to compete with Beijing’s Belt and Road Initiative (BRI). India had been invited to join the Blue Dot Network, a platform launched by the United States, Australia, and Japan, to certify international infrastructure development and attract public-sector funding for these initiatives. The United States and Japan should work with other Group of Seven (G7) members to coordinate with the Quad on developing pragmatic, private-sector funded infrastructure solutions throughout the Indo-Pacific as a counter to Beijing’s BRI. Investment in energy infrastructure through the G7’s Partnership for Global Infrastructure and Investment (PGII) will help lessen dependency on Russia and China for the export of oil and gas.
Since joining the World Trade Organization (WTO) in 2001, the PRC has not become the “responsible stakeholder” that Washington once envisioned. China’s partners in the Indo-Pacific should not expect any meaningful PRC policies aimed at regional stability in the near future, as Xi Jinping used the word “reform” in his 20th National Congress speech less than any of his predecessors had during their remarks at previous CCP leadership conferences. Most reform-minded CCP officials retired at the recent quinquennial party congress, including Premier Li Keqiang and Vice Premier Liu He.
As former Australian Prime Minister recently noted, Xi Jinping has ended the era of PRC pragmatism and non-ideological governance. This includes the CCP’s continued insistence on Zero Covid policy, which is threatening China’s reliability as an engine of economic growth. Marxist nationalism is now the basis of China’s political, economic, and foreign policies. The CCP’s competing vision for the Indo-Pacific constitutes a direct threat to regional commercial markets, the rule of law, and freedom of navigation. Until Xi and his inner circle demonstrate a propensity for change and reverse course on using economic policies or regional aggression to further the CCP’s geopolitical objectives, a Quad denial strategy is necessary to help markets remain “free from force or coercion” and to ensure that peace and prosperity is for the entirety of the Indo-Pacific, not just for China.
Darren Spinck is an Associate Fellow at the Henry Jackson Society, managing partner of Washington Consulting Solutions, and co-author of “A New Era for UK Policymaking: An Economic Denial Strategy in the Indo-Pacific”.