This morning we released the 2023 edition of the Lowy Institute Asia Power Index. This data-driven assessment measures national resources and international influence to determine the relative power of countries in the Indo-Pacific. Now in its fifth iteration, taking stock of this project across half a decade has revealed a fair few surprises.
The biggest is not that the age of uncontested US primacy is over – it most certainly is – but rather China’s halting progress to become America’s equal.
China draws power from its central place in Asia’s economic system. The United States draws its power from its military capability and unrivalled regional defence networks. Whether this uneasy cohabitation between unequal superpowers results in a settling point or outright conflict is an open question.
But what is clear is that a “Chinese century” is no longer the most likely scenario. China is now less likely to pull ahead of its rival by the end of the decade. If it does so in future decades, China will not enjoy an advantage anything like the United States did in the past.
This may give credence to those who champion an alternative scenario: the notion of a multipolar Indo-Pacific led by a handful of major powers. However, this too seems misguided.
The Index offers little evidence of a more multipolar distribution of power in the region.
In fact, a widening gulf separates China from the region’s next most important players. Japan and India have each suffered setbacks causing them to entirely drop out of a special category of major powers in the Index.
The “grand concert of powers” view of the Indo-Pacific – inspired by the 19th century European tradition – in which the region coalesces around a single military and strategic counterweight to deter China’s ability to dominate the Indo-Pacific is looking decidedly shaky. In all likelihood, Australia and others will need to learn to deal with a messier reality.
The Indo-Pacific may remain stubbornly bipolar, but this is not adding up to consolidated blocs.
The Chinese are wrong in this regard. There is nothing like NATO expansionism happening in Asia.
There are of course clear geopolitical antagonisms. But based off the promiscuous patterns of diplomatic, economic and defence engagement between Index countries, what we are seeing is not the formation of two blocs, but rather adversarial poles around which third countries – large and small – must navigate.
In lieu of major powers, the Asia Power Index reveals the Indo-Pacific’s surprisingly “long tail” of middle powers. Most of what Australia will need to do in shaping the regional context will necessarily involve this key but highly heterogenous grouping of countries.
What makes this particularly challenging is that there is no consensus view that holds the region’s middle grouping of countries together in terms of how they align geopolitically with either the United States or China.
India’s Minister of External Affairs S. Jaishankar calls it the art of functioning in a “Bazaar” world order – one defined by more players, more fluid alignment between them, and greater volatility.
Hence Australia’s focus on finding a common denominator of interests: this is not about picking sides between rival superpowers but upholding international rules that underwrite our stability, prosperity and sovereignty.
Even in a bipolar system, smaller players can still wield a powerful asymmetric advantage.
When neither the United States nor China can establish undisputed primacy in the region, the actions, choices and interests of every third player become more consequential not only to the calculations of the superpowers but in shaping the character of regional order.
A tunnel vision fixation on the China challenge can help bring about clarity of purpose in Australia’s foreign and defence policies, but it should not result in a loss of peripheral vision on the wider region – particularly when it comes to engaging the interests of countries in Southeast Asia and the Pacific.
Finally, and despite not taking ourselves too seriously, Australia is undeniably a powerful country.
Having overtaken South Korea in 2020, Australia is now within a whisker of equalling Russia’s power – much weakened by the calamitous invasion of Ukraine – as the fifth-most powerful state in the Index.
Thanks to immigration, Australia inhabits a rare demographic goldilocks zone as one of the few wealthy economies globally with a growing working-age population. This at a time when China is growing old before it becomes rich.
Just as important, Australia remains enormously privileged by its geography. Australia, unlike many Asian counterparts, is surrounded by friends and fish. This good fortune gives the country breathing space to think expansively and act strategically about its contribution to regional order.
And despite its remoteness, Australia is among the most highly networked powers in the Index. The country carries less great power baggage and can be far nimbler in its regional engagement than either the United States or China.
This creates many opportunities for shaping a region that is likely to be made up of a messy patchwork of coalitions, rather than a grand concert of powers. But it requires a finer appraisal of a changing strategic landscape and of the versatility of Australian power in meeting the challenge.
Ultimately, the Asia Power Index reminds us that superpower rivalry matters but so too does the diverse ecosystem in which it takes place.