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America Is on the Road to Win in the Competition with China. What Should the Quad Do?
Members of the Communist Party of China (CPC) review the oath of joining the party in front of the party flag on April 13, 2021 in Luoyang, Henan Province of China. (Photo by Jia Fangwen/VCG via Getty Images)
(Photo by Jia Fangwen/VCG via Getty Images)

America Is on the Road to Win in the Competition with China. What Should the Quad Do?

Satoru Nagao

Recently, China’s attitude toward its neighbors has been escalating. In the East China Sea, China has increased its activities around the Senkaku Islands of Japan. In the Taiwan Strait, China has also increased its deployment, causing US Indo-Pacific commander Adm. Philip Davidson to warn that China could invade Taiwan within six years. In the South China Sea, China has ignored the 2016 verdict of an international court and deployed both military and paramilitary forces and constructed seven artificial islands with three runways. While claiming that these artificial islands have no military purpose, China has started to deploy missiles and military planes on them. Chinese warship and unmanned vehicle activities have increased in the Indian Ocean too. And in 2020 on the India-China border, 5,000 Chinese troops entered Indian territory and clashed with Indian troops, causing 20 Indian soldiers and at least four Chinese soldiers to lose their lives.

To counter China’s escalating activities, the US has stepped up its deterrence efforts. In December 2017, the US published its latest National Security Strategy, and in 2018, Vice President Mike Pence detailed the administration’s China policy at a speech at the Hudson Institute, both of which indicated a strong US stance toward China. In addition to imposing tariffs in an ongoing trade war, the US has excluded Chinese products and 5G technologies from government procurement in a so-called “high tech war.” To deal with China’s challenging attitude during the COVID-19 crisis, the US has already deployed two or three aircraft carrier battle groups, as well as B-1 and B-2 strategic bombers, in the Indo-Pacific region. On March 25 of this year, US President Joe Biden remarked in his first press conference, “China has an overall goal, and I don’t criticize them for the goal, but they have an overall goal to become the leading country in the world, the wealthiest country in the world, and the most powerful country in the world. That’s not going to happen on my watch because the United States are going to continue to grow and expand.”

Against this backdrop of escalating US-China competition, it is important to examine the role of Japan, India, and Australia, all members of the Quadrilateral Security Dialogue, or QUAD. To understand their role, this article first analyzes features of China’s territorial expansion and US policy toward China.

Three features of China’s territorial expansion

China’s recent territorial expansion has three features. The first feature of note is China’s repeated disregard for international law when laying claim to new territory. In the East China Sea, China did not claim the Senkaku Islands before 1971. China’s attitude has since changed due to the potential existence of oil reserves in the East China Sea. And at the same time, the Senkaku Islands are in a strategic location to pressure Taiwan. In the South China Sea, China has expanded its territorial claim, ignored the verdict of an international court, and built artificial islands. Despite insisting these islands have no military purpose, China has started to deploy missiles and military planes. In the case of the India-China border, the Tibetan exile government stated that these areas belong to India. China has ignored current international law and expanded its territorial claim in all three areas.

The second feature of China’s territorial expansion is timing. It has exploited the situation whenever it finds a power vacuum. For example, China occupied half of the Paracel Islands just after France withdrew in the 1950s, and occupied another half of the Paracel Islands one year after the US withdrew from South Vietnam in the 1974. China occupied six features of the Spratly Islands after the Soviet Union decreased its military presence in Vietnam in the 1980s. And in 1995, China occupied Mischief Reef three years after US troops withdrew from the Philippines. According to the SIPRI Military Expenditure Database, from 2010-19 China increased its military expenditure by 85 percent. During the same period, India increased its military expenditure by 37 percent and Japan by only 2 percent. China has tried to expand its territorial claims not only in the South China Sea, but also in the East China Sea and the India-China border because it sees a power vacuum in these areas.

A third feature of China’s territorial expansion is economic control. China has used foreign infrastructure projects—known as the Belt and Road Initiative (BRI)—to expand its sphere of influence. In one of these projects, Sri Lanka leased its Hambantota port to China for 99 years. Because the port project was financed at a high interest rate and created huge debt, Sri Lanka was essentially forced to accept China’s terms. In addition, countries with significant Chinese investment and debt are hesitant to criticize China, even when it flouts international rules. As this shows, China’s territorial ambitions are closely related to its economic power.

Analysis of the US stance toward China

To counter China’s provocations, the US has chosen a tough stance that has three aspects. Militarily, the US has tried to maintain a balance, but economically, the US has tried to decouple from China and reduce China’s budgetary advantages, and has demanded that China respect “Western values.” In June 2020, Secretary of State Mike Pompeo explained why the number of US troops in Germany has been reduced and why US troops had also withdrawn from Syria and Afghanistan: “This is going to dictate that in certain places there will be fewer American resources. There’ll be other places—I just talked about the threat from the Chinese Communist Party, so now threats to India, threats to Vietnam, threats to Malaysia, Indonesia, South China Sea challenges, the Philippines. We’re going to make sure we’re postured appropriately to counter the PLA [the Chinese People’s Liberation Army]. We think that’s the challenge of our time, and we’re going to make sure we have resources in place to do that.” Because China tends to expand its territorial claim when it finds a power vacuum, maintaining a military counterbalance is the proper way for the US to respond. Although the current Biden administration is reviewing the feasibility of the time schedule to withdraw, it is expected that the long-term course will remain similar to that of the Trump administration.

In its economic policy, the US could afford to take a more aggressive posture, because China’s rapid military modernization and the Belt and Road Initiative are dependent on an ample budget. Reducing China’s budgetary advantages could thereby ease China-related problems. During the Trump administration, both the trade war and the high-tech war excluded China’s participation in the US economy. As a result, US experts have started to use the word “decoupling” when referring to relations with China, and Trump himself indicated the possibility. So far, the Biden administration has continued this policy.

Indeed, there is a strong possibility that such tough policies toward China will remain long-term policy for three reasons. First, during its 244-year history, the US has taken only 169 years to transform from a single colony of the British Empire into the world’s only superpower, and it has kept this status for 75 years. During this time, all rivals of the US, including Germany, Japan, and the Soviet Union, disappeared. It is possible that the US has developed a long-term strategy to prepare for a serious challenge from China. For example, during WWII, the US had an “Orange Plan” to defeat Japan and implemented it. The US had a “Black Plan” against Germany and a “Green Plan” against Mexico. But when these plans were declassified in 1974, the world was surprised to learn that there was also a “Red Plan” to defeat Britain and Canada. (Canada was very upset.) Because the US designated China as a “competitor” in the National Security Strategy in 2017, one can assume that it has a contingency plan to defeat China as part of its long-term strategy.

Second, the tough stance toward China is not the product of the Trump administration alone. For example, the high-tech war, which banned products from Huawei and ZTE, started when the Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE was published in 2012, during Barack Obama’s presidency. The Biden administration has not changed the essence of the China policy that the Trump administration developed. Republicans and Democrats share many similar goals toward China.

Third, now is the proper time for the US to act if it wants to remain ahead of China. The National Security Strategy was published in December 2017. At that time, according to the Military Balance 2018, published by the International Institute for Strategic Studies in London, the US defense budget was $603 billion compared with China’s $150 billion—a large gap. However, from an overall economic perspective, US GDP was $19.39 trillion, compared with China’s $12.24 trillion, according to the International Monetary Fund’s World Economic Outlook Database for 2018. Compared with the defense budget, the economic gap between the two countries is narrow. And technologically, according to UNESCO Institute for Statistics figures published in 2018, the US invested $476 billion for research and development and China invested $370 billion. That gap is very small. If the US acts now, it will gain an advantage over China. But without such efforts, US advantages will gradually narrow. The Centre for Economics and Business Research predicts that China will overtake the US to become the largest economy by 2028.

How should the QUAD react?

China’s lack of respect for international law, expansion of territorial claims where there are power vacuums, and attempts at economic dominance abroad are all common themes of China’s exploits in the East China Sea, the South China Sea, and now the India-China border. To deal with China’s bad behavior, the US has been seriously stepping up its efforts. Thus, the question remains—what role does the QUAD have in the situation and how should other QUAD members (Japan, India, and Australia) respond? Knowing the pattern of China’s behavior points toward the answer: they should do the opposite of what China wants. For example, the QUAD must continue to respect and insist upon a rule-based order grounded in current international law. The QUAD needs to fill military power vacuums by increasing their defense budgets. And the QUAD needs to integrate economic efforts into their overall strategy. 

First and most importantly, Japan, India, and Australia should show their support toward the US effort to maintain a rule-based order. In March 2021, in the US-Japan 2+2 foreign and defense minister-level meeting, the US-Japan joint statement for the first time mentioned China by name multiple times and expressed concern over China’s activities in the East China Sea and South China Sea, Taiwan Strait, Hong Kong, and Xinjiang. Such a clear stance shows Japan’s support of the current rule-based order and democratic norms.

Second, to enhance their defense capability, QUAD countries need to focus on an offensive-defensive balance. Along with the US, Japan, India, and Australia are all planning to possess 1000-2000km long-range strike capabilities such as cruise missiles, F-35 jets with glide bombs, etc. Indeed, Taiwan, Vietnam, the Philippines, and South Korea are also increasing their strike arsenal with surface-to-surface missiles. These moves could be key. For example, if both Japan and India possess long-range strike capabilities, their combined capability forces China to defend multiple fronts. Even if China decides to expand its territories along the India-China border, it still needs to expend a certain amount of its budget and military force to defend itself against Japan. In addition, to deal with the route China is using to expand its territories, long-range strike capability is useful. If the straits or other choke points are under the range of the QUAD’s strike capability, China loses confidence in using these routes. In the case of the mountainous India-China border area, India can attack strategic bridges, tunnels, or airports anytime by using missiles. This reduces China’s confidence in using these strategic infrastructures.

Third, QUAD countries need to integrate their economic efforts and reduce their reliance on China. Although China is the first or second-rated trading partner for Japan, India, and Australia, if these countries depend too heavily on trade with it, their economies will be like passengers of a sinking ship. Therefore, decoupling or risk-diversifying of supply chains and markets are necessary. Indeed, Japan has already begun to do so. Because Japan has relocated its factories from China to Southeast Asia and South Asia, the number of Japanese citizens living in China has decreased from 150,399 in 2012 to 120,076 in 2018. At the same time, the number of Japanese living in the US has increased from 410,973 in 2012 to 446,925 in 2018. In addition, Japan earmarked $2.2 billion of its 2020 economic stimulus package to help local manufacturers shift production out of China.

When the first QUAD summit was held in March 2021, the four countries agreed to set up three working groups, including a group for providing COVID-19 vaccines to many countries in the Indo-Pacific, a critical and emerging technology working group, and a working group on climate change. These working groups will be a very important aspect of the QUAD’s collective security. Currently, China is the main provider of vaccines in the region and is expanding its influences in many developing countries. The QUAD needs to neutralize these influences. China is also the main supplier worldwide of rare-earth elements that are needed for new technologies, so the role of the technology working group is very important for technological development and supply chain diversification. QUAD countries should continue these efforts to create new markets and supply chains that do not depend on China.

China’s aggressive territorial expansion spurred the US to take a tough stance toward it. And now QUAD countries must show how strong they are. Japan, India, and Australia must cooperate more deeply with the US and strengthen their partnership. Now is the right time to do so.

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