The 7th Japan–Australia
Track 1.5 Dialogue
Tokyo
February 29 - March 1, 2012

Co-Hosted by:
The Japan Institute of International Affairs (JIIA)The Australian Strategic Policy Institute (ASPI)
Supported by:
Ministry of Foreign Affairs, Japan

Contents

Preface ................................................................................... 3
Agenda ................................................................................... 5
List of Participants ................................................................ 7
Biographies
Japanese Participants .................................................... 9
Australian Participants ................................................. 16
Summary .............................................................................. 21
Talking Points ...................................................................... 51
Session 1 ....................................................................... 52
Session 2 ....................................................................... 56
Session 3 ....................................................................... 60

PrefaceThis report is the product of the Seventh Japan-Australia Track 1.5 Dialogue held inTokyo in February-March 2012, consigned to the Japan Institute of International
Affairs (JIIA) by the Ministry of Foreign Affairs of Japan. This dialogue wasorganized with the aim of producing policy recommendations for the enhancement ofJapan-Australia security cooperation.
In recent years, we have witnessed remarkable developments in the bilateral security
relationship between Japan and Australia, represented by the issuing of theJapan-Australia Joint Declaration on Security Cooperation in March 2007 and of theMemorandum on Defense Cooperation in December 2008. More recently, Japan andAustralia signed their Acquisition and Cross-servicing Agreement (ACSA) in May
2010. Reflecting these developments, a group of security and regional experts fromJapan and Australia discussed in this meeting possible measures to enhance security
cooperation between Japan and Australia based on three topics: 1) recent developments
in China’s foreign and security policy and the implications for Australia and Japan, 2)
the South China Sea and maritime security, and 3) Australia-Japan security
cooperation and the US.
We hope that this report will make a contribution to policy-making regarding
Japan-Australia security cooperation. Lastly, we would like to express our deepest
appreciation to the Oceania Division, Asian and Oceanian Affairs Bureau, Ministry ofForeign Affairs of Japan, and the Australian Strategic Policy Institute (ASPI) for theircooperation in holding this dialogue.
(As this dialogue is based upon the Chatham House Rules, this report does not identify
the speaker for any records of statements made throughout the course of the dialogue.)

Yoshiji Nogami
President
The Japan Institute of International Affairs

3The 7th JAPAN-AUSTRALIA TRACK 1.5 DIALOGUE
February 29 - March 1, 2012
Tokyo, JapanAGENDA
Co-Hosted by: Japan Institute of International Affairs
Australian Strategic Policy InstituteWednesday, February 29, 2012
10:30 - 10:40

Opening Remarks
Japan: Amb. Yoshiji NOGAMI, President, Japan Institute of International Affairs(JIIA)
Australia: Maj. Gen. Peter ABIGAIL, Executive Director, Australian Strategic
Policy Institute (ASPI)

10:40 - 11:30

Session 1: Recent Developments in China’s Foreign and Security Policy
and the Implications for Australia and Japan
Moderator: Amb. Yoshiji NOGAMI, JIIA
- Presentation
Japan: Dr. Yoshifumi NAKAI, Professor, Gakushuin University
Australia: Maj. Gen. Peter ABIGAIL, Executive Director, ASPI
- Discussion

11:30 - 11:40

Coffee Break

11:40 - 13:00

Session 1 Continuation

13:00 - 14:00

Lunch

14:00 - 14:50

Session 2: The South China Sea and Maritime Security
Moderator: Maj. Gen. Peter ABIGAIL, ASPI
- Presentation
Australia: Dr. Andrew DAVIES, Program Director (Operations and Capability),
ASPI
Japan: Dr. Koichi SATO, Professor, J.F. Oberlin University- Discussion

14:50 - 15:00

Coffee Break

15:00 - 16:20

Session 2 Continuation

5

Thursday, March 1, 2012
10:30 - 11:20

Session 3: Australia - Japan Security Cooperation and the US
Moderator: Mr. Hideki ASARI, Deputy Director General, JIIA
- Presentation
Japan: Dr. Eiichi KATAHARA, Professor / Director, Regional Studies
Department, National Institute for Defense Studies (NIDS)
Australia: Dr. Rod LYON, Program Director (Strategy and International), ASPI
- Discussion

11:20 - 11:30

Coffee Break

11:30 - 12:50

Session 3 Continuation

12:50 - 13:00

Closing Remarks
Australia: Maj. Gen. Peter ABIGAIL, ASPI
Japan: Amb. Yoshiji NOGAMI, JIIA

13:10 - 14:40

Farewell Lunch
Venue: “Suwa,” The Tokai University Club
(Kasumigaseki Bldg. 35F, 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo)

6

The 7th Japan - Australia Track 1.5 Dialogue
February 29 - March 1, 2012
Tokyo, Japan

List of Participants*Alphabetical order based on last name.

Japan
Name

Title

Organization

Mr. Hideki ASARI

Deputy Director General

Japan Institute of International Affairs

Dr. Tamotsu FUKUDA

Research Fellow

Japan Institute of International Affairs

Dr. Teruhiko FUKUSHIMA

Professor

National Defense Academy of JapanMr. Shinichi IIDA

Director, Oceania Division

Ministry of Foreign Affairs

Mr. Yasuyuki ISHIDA

Official, National Security Policy
Division, Foreign Policy Bureau

Ministry of Foreign Affairs

Mr. Yasuhisa ISHIZUKADefense Councilor,
Minister's Secretariat /Deputy Director General,
Defense Intelligence Headquarters

Ministry of Defense

Mr. Osamu IZAWA

Director, National Security Policy
Division, Foreign Policy Bureau

Ministry of Foreign Affairs

Vice Admiral
Hideaki KANEDA

Director

Okazaki InstituteAdjunct Fellow

Japan Institute of International Affairs

Ms. Etsuko KANNODefense Official

Ministry of Defense

Dr. Eiichi KATAHARA

Professor / Director,
Regional Studies Department

National Institute for Defense Studies

Professor

Aoyama Gakuin University

Adjunct Fellow

Japan Institute of International Affairs

Mr. Koichiro MIYAGIResearcher, Oceania Division,
Asian and Oceanian Affairs Bureau

Ministry of Foreign Affairs

Dr. Yoshifumi NAKAI

Professor

Gakushuin University

Amb. Yoshiji NOGAMI

President

Japan Institute of International Affairs

Prof. Naoko SAJIMA

Professor

Senshu University

Dr. Koichi SATO

Professor

J. F. Oberlin University

Dr. Tsutomu KIKUCHI

7

Australia
Name

Title

Organization

Maj. Gen. Peter ABIGAIL

Executive Director

Australian Strategic Policy Institute

Mr. Richard ANDREWS

Minister‐Counsellor (Political)

Australian Embassy, Tokyo

Dr. Andrew DAVIES

Director for Operations andCapability Program

Australian Strategic Policy Institute

Dr. Brendon HAMMER

Deputy Head of Mission

Australian Embassy, Tokyo

Dr. Rod LYON

Director for Strategy andInternational Program

Australian Strategic Policy Institute

Ms. Davina McCONNELL

Second Secretary(Political / Strategic)

Australian Embassy, Tokyo

Mr. Greg RAYMOND

Director, Strategic Policy Guidance

Department of Defence

Mr. Peter ROBERTS

Counsellor (Political)

Australian Embassy, Tokyo

Group Captain
Malcolm SELKIRKDefence Attaché

Australian Embassy, Tokyo

8

The 7th Japan – Australia Track 1.5 Dialogue

Biographies*Alphabetical order by last name.

Japanese Participants
Hideki ASARI
Hideki Asari is Deputy Director General of The Japan Institute of International Affairs. He
was Minister at the Embassy of Japan in the US before assuming his current position. After
graduating from Waseda University he joined the Ministry of Foreign Affairs (MOFA) in1986. He earned M.A. in the University of Oxford. At MOFA he served as Counsel for
Trade Negotiations in the International Legal Affairs Bureau (2004) and as Director of the
Oceania Division of the Asian and Oceanian Affairs Bureau (2005-2007). His overseas
posts include Political Counselor at the Japanese Embassy in the Republic of Korea (2003)
and Economic Counselor, and later Minister at the Japanese Embassy in the US(2008-2011). He was also Cabinet Counselor in the Office of the Assistant Cabinet
Secretary (2007-2009).

Tamotsu FUKUDA
Tamotsu Fukuda is a research fellow at the Japan Institute of International Affairs (JIIA). He
also teaches part-time at Aoyama Gakuin University, Gakushuin University, and Hosei
University. He obtained his Ph.D. (Political Science and International Relations) from theAustralian National University in 2008. His research interests include regional security in
the Asia-Pacific and ASEAN. His recent publications include: “Japan and ASEAN” in
Toshihiro Minohara,ed., Japan’s Critical Issues in the 2000s: Foreign Policy and Security(Tokyo: Kashiwa Shobo, 2011) (Japanese publication).

Teruhiko FUKUSHIMAFUKUSHIMA Teruhiko joined the National Defense Academy of Japan as professor of
Oceanian studies at the Department of International Relations. His academic interests
covers various issues of Australian studies. He has recently written on Rudd-Gillard
government’s foreign and security policies; the Asia-Pacific community idea; Australia’s
defence organizational reforms; the evolution of postwar Australia-Japan relations; theAustralian and New Zealand labour governments’ economic reform, and is now writing anarticle on the issue of water security in the Murray-Darling Basin. He obtained the Ph. D
degree from the Australian National University.

9

Shinichi IIDA
Education
Amherst College
Bachelor of Arts, 1991-1993
The Training Institute of Ministry of Foreign Affairs of Japan
Diplomatic Trainee, 1990-1991
The University of Tokyo
Law Faculty, 1987-1990

Massachusetts, USA
Tokyo, JapanTokyo, Japan

Professional Experience
Ministry of Foreign Affairs
Tokyo, Japan
Director, Oceania Division
2010-present
Senior Coordinator, Economic Policy Division
2008-2010
Principal Deputy Director of Financial Affairs Division, Minister’s Secretariat
2006-2008
First Secretary, Permanent Mission of Japan to the United Nations
2003-2006
Principal Deputy Director of China and Mongolia Division, Asian and Oceanian Affairs
Bureau2001-2003
Deputy Director of Treaties Division, Treaties Bureau
1998-2001
Deputy Director of Management and Coordination Division, Minister’s
Secretariat
1997-1998

Yasuhisa ISHIZUKA
Date of Birth:Present Assignment:
Education:
Service Career:Apr 1986
Jun 1988
Oct 1990
Dec1990
Nov1991
Sep1992
Apr 1995
Jul 1996
Apr1997
Sep1998
Jul 1999
Jun 2000
Apr 2002
Jul 2004

26 October 1958
Defense Councilor, Minister’s Secretariat and Deputy Director
General, Defense Intelligence Headquarters
Mar 1981
Hitotsubashi University (Economics, BA)

First Intelligence Division, Defense Policy Bureau
Operations Division, Defense Policy Bureau
Administration Division, Minister’s Secretariat
Communication Division, Equipment Bureau
Administration Division, Minister’s Secretariat
Second Personnel Division, Personnel Bureau
Accounts Division, Finance Bureau
Special Assistant to Minister of State for Defense
Visiting Research Fellow, Institute for National Strategic Studies,
National Defense University, USA
Equipment Division, Equipment Bureau
Director, Fourth Contract Division, Equipment Procurement
OfficeDirector, Education Division, Personnel and Education Bureau
Director, Accounts Division, Administration
Directorate, Defense Facilities Administration Agency
Director, Administration Division, Administration

10Aug 2005
Sep 2007
Jan 2008
Aug 2008
Aug 2009

Aug 2011

Directorate, Defense Facilities Administration Agency
Director for Administration, Secretariat, National Defense
Medical College
Director for Administration, Tohoku Regional Defense Bureau
Director for Technical Planning, Technical Research andDevelopment Institute
Deputy Director General, Technical Research andDevelopment Institute
Director for Management, Cabinet SatelliteIntelligence Center, Cabinet Intelligence and Research Office,Cabinet Secretariat
Present Assignment

Osamu IZAWA
Director of National Security Policy Division, Foreign Policy Bureau,
Ministry of Foreign Affairs
Date of Birth: August 16, 1963
Mar. 1987
Apr.
Nov. 1999
Dec. 2002
Aug. 2004
Mar. 2006
Aug.
Aug. 2008
Sept.
Sept.
Sept. 2009
Jun. 2010
Jan. 2011

Graduated from Keio University, Faculty of Economics
Entered Ministry of Foreign Affairs
First Secretary, Embassy of Japan in France
Principal Deputy Director, Policy Coordination Division,
Foreign Policy Bureau
Senior Foreign Policy Coordinator, Policy Coordination Division,
Foreign Policy Bureau
Principal Senior Foreign Policy Coordinator,
Policy Coordination Division, Foreign Policy Bureau
Deputy Director, Japan-US SOFA Division, North American Bureau
Minister’s Secretariat
Secretary to MACHIMURA Chief Cabinet Secretary
Secretary to KAWAMURA Chief Cabinet Secretary
Secretary to HIRANO Chief Cabinet Secretary
Secretary to SENGOKU Chief Cabinet Secretary
Present Position

Hideaki KANEDA
Vice Admiral Hideaki Kaneda, JMSDF (ret.) is a Director for The Okazaki Institute, an
adjunct fellow of JIIA (Japan Institute of International Affaires) and a trusty of RIPS
(Research Institute of Peace and Security). He was a Senior Fellow of Asia Center and J.
F. Kennedy School of Government of the Harvard and a Guest Professor of Faculty of
Policy Management of Keio University.
He is the author of published books and articles about security, including “Proposal for

11Maritime Coalition in East Asia”, IMDEX, Germany, Nov. 2000, “Changing situation ofChina’s and Japan’s security”, World and Japan, Tokyo, Sep. 2001, “US/China Power
Game in Maritime Hegemony”, JIIA, Tokyo, Mar. 2003, “BMD for Japan”, Kaya-Books,
Tokyo, Mar. 2003, “Multilateral Multi-Agencies Cooperation for Maritime Order
Maintenance”, CSCAP, Apr. 2005, “US and Japan’s Policy toward North Korea”,
World and Japan, Tokyo, Sep. 2005, “Japan’s Missile Defense”, JIIA, Tokyo, Dec. 2006,“Collective Defense Right and Japan’s Security, Naigai News, Tokyo, Aug. 2007,“Aspects of the War (Sea Battle)”, Naigai Publishing Company, Tokyo, July. 2008,“Understanding BMD”, Ikaros-Books, Tokyo, Oct. 2008, “Japan’s Diplomacy andTotal Security”, Wedge, Tokyo, Sep. 2011.
He is a graduate of the National Defense Academy in 1968, the Maritime War College in
1983, and the U.S. Naval War College in 1988. He served in the JMSDF from 1968 to
1999, primarily in Naval Surface Warfare at sea, while in Naval & Joint Plans and Policy
Making on shore.

Eiichi KATAHARA
Eiichi KATAHARA is Professor and Director, Regional Studies Department at the National
Institute for Defense Studies (NIDS) of the Japanese Ministry of Defense. Prior to joining
NIDS, he was Professor of International Relations at Kobe Gakuin University; a visiting
fellow at Stanford University’s Asia-Pacific Research Center; a postdoctoral fellow at the
University of California’s Institute on Global Conflict and Cooperation (IGCC); lecturer inthe Department of Political Science and research fellow at the Australia-Japan ResearchCenter both at the Australian National University. He is Editor-in-Chief of the forthcoming
East Asian Strategic Review 2012 (Tokyo: National Institute for Defense Studies, 2012).
His publications include “Japan: From Containment to Normalization,” in Muthiah Alagappa(ed.) Coercion and Governance (Stanford University Press, 2001); Chapter on the USA,
East Asian Strategic Review 2010 (Tokyo: National Institute for Defense Studies, 2010);“Japan’s Concept of Comprehensive Security in the Post-Cold War World,” in Susan Shirk& Christopher P. Twomey (eds.) Power and Prosperity: Economics and Security Linkages
in Asia-Pacific (Transaction Publishers, 1996) and other articles and book chapters. He
earned a Ph.D. in Asian and International Studies from Griffith University, an MA in
International Relations from The Australian National University, and a BA in Economics
from Keio University.

Tsutomu KIKUCHI
Kikuchi Tsutomu is professor of international political economy of the Asia-Pacific at the
Department of International Politics, Aoyama-Gakuin University, Tokyo. He has been an
adjunct fellow at the Japan Institute of International Affairs (JIIA) since 1987. He was avisiting fellow at the Australian National University (ANU) and the Institute of Southeast
Asian Studies (ISEAS) and a visiting professor at the University of British Columbia (UBC).
He has been engaged in various track 2 activities such as the Pacific Economic
Cooperation Council (PECC) and the Council for Security Cooperation in the Asia Pacific(CSCAP). He has published many books and articles on international political economy

12

(especially regional institution-building) of the Asia-Pacific. He obtained his doctoral degree(LL.D) from Hitotsubashi University, Tokyo.

Yoshifumi NAKAI
Yoshi Nakai has been teaching Chinese Politics and International Relations at the
Department of Political Studies, Gakushuin University, Tokyo, Japan since 2003. From1997 to 2003, he had been Senior Researcher at the Institute of Developing Economies.
He was Researcher at the Consulate General of Japan in Hong Kong from 1991 to 1994,
and Senior Researcher, Center for Asia-Pacific Affairs at the Japan Institute of International
Affairs from 1994 to 1997.
His recent publications include “Japan’s Views on the Rise of China and Its Implications:Bureaucratic Interests and Political Choices,” in Hsin-Huang Michael Hsiao and Cheng-Yi
Lin eds., Rise of China: Beijing’s Strategies and Implications for the Asia-Pacific.
Routledge: New York, 2009; “Japan’s Perspective on U.S.-China-Taiwan Relations.” inCheng-yi Lin and Denny Roy eds., The Future of United States, China, and Taiwan
Relations. Palgrave: New York, 2011.

Yoshiji NOGAMI
Yoshiji Nogami is President of The Japan Institute of International Affairs and Executive
Advisor of the Mizuho Corporate Bank, Limited. His current responsibilities include Advisor
to the Cabinet, Advisor to the Minister for Foreign Affairs. He is former Japanese
Ambassador to the U.K. and a Vice-Minister for Foreign Affairs of Japan. After graduatingfrom the University of Tokyo he entered the Ministry of Foreign Affairs in 1966. He was
Deputy Director-General of the Middle Eastern and African Affairs Bureau and the Foreign
Policy Bureau, Director-General of the Economic Affairs Bureau, Deputy Minister for
Foreign Affairs. His overseas posts include Economic Counsellor at the embassy in the
U.S. and Consul-General in Hong Kong. Mr. Nogami was also Ambassador to the OECD in
Paris in 1997-99. He was Senior Visiting Fellow at the Royal Institute of International
Affairs.

Naoko SAJIMA
Professor at Senshu University (International Security). Sajima graduated from Sophia
University, Department of Law, and completed her M.A. (International Politics) at Aoyama
Gakuin University. During a career of 19 years at the Japan Defense Agency, she worked
in the Foreign Relations Office and as a senior researcher in the National Institute for
Defense Studies, among other posts. In April 2001 she assumed her current post. She wasa visiting fellow of the Strategic Defence Studies Centre (SDSC), ANU in 1994-1995 and a
distinguish fellow of Centre for Strategic Studies (CSS), NZ in 1998-1999. She was the
Secretary General of Japan Society for New Zealand Studies (JSNZS) from 2008-2010.
Amongst various publications both in English and Japanese, her leading monographs in
English include; Japanese Sea Power: A maritime nation’s struggle for identity (Canberra:
Sea Power Centre, Australia, 2009); ‘JANZUS: towards complementary security

13

arrangements’, Senshu University Institute of Humanities Monthly Bulletin No.241, October
2009, [originally presented at the 2008 International Study Association (ISA) Annual
Convention in San Francisco]; Japan, Australia and Asia-Pacific Security (London:
Routledge, 2006) (Coauthor); Strategic Cultures in the Asia-Pacific Region (London:
MacMillan Press Ltd., 1999) (Coauthor). In 2005 she got the 15th Cum-Sophia Award[Sophia Alumni Association Prize] with the winning work of Gendai anzen hosho yogo jiten[Concise Encyclopaedia of Security Affairs] (Shinzansha, 2004) as an editor in chief.

Koichi SATO
Nationality: Japanese
Date and Place of Birth: 17 January 1960, Tokyo
Position: Professor of Asian Studies
Office: College of Liberal Arts, J. F. Oberlin University, Tokyo, Japan3758 Tokiwa, Machida City, Tokyo, 194-0294, Japan
Tel: 042-797-2661
Fax: 042-797-2743
E-mail: koichis@obirin.ac.jp
Education:

Bachelor of Law (politics), Tokyo Metropolitan University
Master of Arts (politics), Tokyo Metropolitan University
Ph. D in International Studies, Waseda University

Employment: Sales Engineer, Hitachi Chemical Co. Ltd. 1983 - 1987
Research Fellow, Japan Institute of International Affairs, 1988 - 1992
(Resident Officer in Singapore, 1988 - 1990)
Lecturer, Open University of Japan, 1993 - 1995
Lecturer, Tokyo University of Foreign Studies, 1996 - 2007
Associate Professor, J. F. Oberlin University, 1997 - 2002
Lecturer, Japan Maritime Self-Defense Force: JMSDF Staff College,
1999 - Present
Policy Adviser, Japan Coast Guard, 2003 - Present
Professor, J. F. Oberlin University, 2003 - Present
Lecturer, National Institute for Defense Studies (NIDS), 2006 - Present
Major Publication:

1. Coauthor, Southeast Asia in the Post-Cambodian Era, Japan
Institute of International Affairs, 1992.
2. Coauthor, Asia Pacific Region in the Post-Cold War Era, Japan
Institute of International Affairs, 1995.
3. Coauthor, Asian Security in the Post-Cold War Era, Government
Printer, 1997.
4. Author, ASEAN Regime: ASEAN’s Conference Diplomacy ,its
Development and Agenda, Keiso Shobo Publisher, 2003.
5. Coauthor, East Asian Regionalism and Japan’s Foreign Policy,
Japan Institute of International Affairs, 2003.
6. Author, The Lion City and the Wind of Malacca Strait, Mekong
Publishing, 2004.

14

7. Author, The Japanese Royal Diplomacy in Asia, Heibonsha
Publisher, 2007.

15

Australian ParticipantsPeter ABIGAILPeter Abigail joined ASPI as Director in April 2005. Prior to that he spent 37 years in the
Army before retiring in 2003. Following promotion to Major General in December 1996, heserved in a range of senior leadership appointments in the Defence Organisation. As
Assistant Chief of the Defence Force (Policy and Strategic Guidance) and then Head
Strategic Policy and Plans (Australian Defence Headquarters) (1996-1998) he was
responsible for key aspects of Defence policy, military strategy and capability development.
As Deputy Chief of Army (1998-2000) he was responsible for managing the Army and its
interaction with other Defence stakeholders. In his final appointment, as Land Commander
Australia (2000-2002), he commanded all of the Army’s operational forces, full time andreserves, including those that were committed to operations in East Timor, Bougainvilleand Afghanistan.
During his appointment with ASPI he has been a member of the Defence and National
Security Advisory Council to the Minister for Defence, The Hon. Dr Brendan Nelson MP,
and a member of the Defence White Paper Ministerial Advisory Panel for the Minister for
Defence, The Hon. Joel Fitzgibbon MP. He was appointed to the ASPI Council in March
2007.

Richard ANDREWS
Richard Andrews was appointed Minister-Counsellor (Political) to the Australian Embassy,
Tokyo in December 2008.
He previously served in a number of positions in the Department of Foreign Affairs andTrade, both overseas and in Australia. These include postings as Head of the Politicaland Trade Policy Branch in the Australian High Commission in London (2002-2005) and asCounsellor in the Australian Embassy in Tokyo (1996-1999). He has also served as
Second Secretary in the Australian High Commission in Kuala Lumpur. In Canberra, prior
to taking up his current position he was Executive Director of the Economic Analytical Unit
(2006-2008) and Director of the Trade Policy Section in the Office of Trade Negotiations(2005-2006). He was the Director of the Budget Management Section from 2000-2002, andheaded the Chemical and Biological Disarmament Section in 1999-2000.
He is a fluent
Japanese speaker with a first class honours degree from the University of Sydney majoringin Japanese History, and has also spent time undertaking research at Kansei Gakuin
University and as a student at Kobe Prefectural High School in Hyogo Prefecture. Before
joining the Department he worked as an assistant to the Sydney correspondent of the
Nihon Keizai Shimbun. His hobbies include golf, listening to classical music, and reading.

16Andrew DAVIESAndrew has been with ASPI since 2006. He has written extensively on ADF capability andforce structuring issues, including hardware options, industry issues, decision-making in
the Department of Defence and ways of more effectively employing Reserve forces. Before
joining ASPI, Andrew spent twelve years in the Department of Defence. With a backgroundin Physics, he joined the Department as a research scientist working on force-development
issues, before moving on to managerial roles in capability analysis, signals intelligence andproject management.

Brendon HAMMERDr Hammer has been serving as Deputy Head of Mission at the Australian Embassy inTokyo since February 2010. Dr Hammer returned to the Department of Foreign Affairs
and Trade (DFAT) in June 2009 to head its South-East Asia Division. From May 2004 he
was Deputy Director-General at the Office of National Assessments (ONA) where heoversaw development of assessments across the full range of international developments
impinging on Australia’s international interests.
From April 2002, he served in DFAT as Assistant Secretary for the Americas –encompassing the countries of the North and South American continents – Assistant
Secretary Iraq Task Force, and as Assistant Secretary Parliamentary and Media, which
entailed liaising with members of the Australian Parliament and Australian journalists on
foreign policy matters.
From March 1999 to April 2002 Dr Hammer was Assistant Secretary for Defence,Intelligence and Security in the Department of the Prime Minister and Cabinet (PM&C),
where he was responsible for advising the Prime Minister, the Secretary of PM&C and theSecretary to Cabinet on defence, intelligence and security matters, law enforcement
matters and on crisis response to natural disasters.
From March 1998 to 1999 Dr Hammer was Director of the Nuclear Trade and Security
Section in DFAT, and before that, from March 1995 was First Secretary and thenCounsellor (Political) at the Australian Embassy in Washington, where he liaised with the
US Government on a range of arms control and national security matters including, WMD
proliferation and nuclear and conventional weapons policies; US relations with Persian
Gulf countries; US relations with South Asian countries; US relations with other Americancountries; and narcotics control matters.
From March 1993 to 1995 Dr Hammer worked as a Deputy Director in DFAT and was
involved primarily in chemical and biological weapons arms control negotiations. Before
that, from September 1989, he was a member of the Strategic Analysis Branch at ONA
drafting assessments on WMD proliferation and civil science.
Dr Hammer has a PhD in Chemistry from the Australian National University. He is married
to Inge Sugani and has two daughters, Rosemary and Julia.

17Rod LYONDr Rod Lyon is the Program Director (Strategy and International) at ASPI. He joined theinstitute in October 2006. Previously he was a Senior Lecturer at the University of
Queensland, where he taught courses on international security, conflict, and civil military
relations. He worked in the Strategic Analysis Branch of the Office of National Assessmentsfrom 1985 to 1996. He was a Professional Fulbright Scholar at Georgetown University
during the latter part of 2004, researching a topic of alliances and coalitions in the post-9/11
strategic environment. He has authored a range of publications in both academic journals
and at ASPI. His major ASPI works include ‘Forks in the river: Australia’s strategic options
in a transformational Asia’, and ‘A delicate issue: Asia’s nuclear future’.

Greg RAYMOND
Greg is currently Director of the Strategic Policy Guidance section in Strategic Policy
Branch in the Australian Department of Defence where he is responsible for thedevelopment and promulgation of Australian strategic policy, including through preparationof Defence White Papers and the classified Defence Planning Guidance. Before
commencing in this role, Greg was posted in Thailand as Australia's Defence Technology
and Management Adviser to the Thai Ministry of Defence 2005-2008. Greg's broader
experience in the Australian Defence organisation (ADO) since joining in 1996, includes
significant experience in the domains of international policy, intelligence and capability
development. Greg graduated from Monash University in Melbourne with a Master's
degree in Asian Studies (Politics) and is currently undertaking part-time PhD study
focussing on Thailand's strategic culture. He is a graduate of the 2004 Australian
Defence Force School of Languages Thai language course.

Malcolm SELKIRKGroup Captain Selkirk joined the Royal Australian Air Force as a Cadet at the RAAF
Academy in 1974. He completed a Bachelor of Science degree in 1976 and a Graduate
Diploma in Military Aviation in 1977. He was awarded the Sword of Honour on graduation.
He transferred to the Education Specialisation in 1979.
After a number of instructional and management postings, Group Captain Selkirk waspromoted to Squadron Leader and was posted to Air Force Headquarters , responsible forTraining Policy, Plans and Research. He completed Command and Staff Course in 1992,
gaining a Graduate Diploma in Management Studies. Following a posting to RAAF
Williamtown, during which time he was mainly responsible for operational support, he waspromoted to Wing Commander and posted to Headquarters Air Command as the senior
training officer. Subsequently, he was responsible for operational evaluation across all of
Operational Command. He also served as Base Commander RAAF Glenbrook for two
years.
On promotion to Group Captain, he was appointed as Director, Training Systems
Development at Air Force Training Group. In 2008, Group Captain Selkirk was posted to
the Office of Secretary and Chief of Defence Force as Director Policy Development. He

18

was selected for Defence Attaché Tokyo and undertook Japanese Language training
before undertaking the National Institute for Defense Studies course in Tokyo. He
graduated with honours from that course and assumed the role of Defence Attaché, Tokyoin August 2011. In that role, he is also the Australian National Liaison Officer to the
Headquarters United Nations Command (Rear) in Japan.
Group Captain Selkirk is married to Maxine and they have three children, Allirra, Ellin and
Iain. Group Captain Selkirk enjoys Rugby Union, Cricket and Golf. His hobbies are bird
watching, fishing and music.

19

Summary
Opening Remarks
Session 1
Session 2
Session 3
Closing Remarks

S UMMARY

Opening Remarks
Japan: Amb. Yoshiji NOGAMI, President, Japan Institute of International Affairs(JIIA)
Ambassador Yoshiji Nogami opened the 7th Japan-Australia Track 1.5 Dialogue andwarmly welcomed the Australian delegation to Japan. In light of the recent
developments in the regional security landscape since the previous dialogue,
Ambassador Nogami expressed his expectations for fruitful and stimulating
discussions over the two days which would address timely issues related to regional
security such as South China Sea issues and others.
Australia: Maj. Gen. Peter ABIGAIL, Executive Director, Australian Strategic
Policy Institute (ASPI)
From the Australian side, Major General Peter Abigail remarked on the changes in thestrategic environment and prospects for the future. Furthermore, he felt that there wasadditional traction in the Japan-Australia bilateral security relationship. A brief
introduction of the Australian and Japanese participants followed the opening remarks.

Session 1
Recent Developments in China’s Foreign and Security Policy
and the Implications for Australia and Japan
Presentation
Japan: Dr. Yoshifumi NAKAI, Professor, Gakushuin University
China is facing potential threats on multiple fronts. This elevated threat perception may
help to explain China’s increasing military budget in recent years – and corresponding
rise in US defense expenditures – although as shown in US dollars the figures areslightly misleading given the appreciation of the Japanese yen. Against thisbackground, is it fair to conclude that China has reversed its traditional foreign policy
22stance in favor of a more assertive posture? Japan asserts yes, and cites serious
repercussions of such changes such as the Senkaku Islands incident. It is possible that
China may modify its posture, reverting back slightly to its traditional stance. The
present status of the debate appears to indicate a tentative cease-fire within Chinese
leadership.
Dr. Nakai spoke about the recent shift of US attention to Asia, both in terms of
economic and security issues, which has raised concern in China. China seeks tomaintain its strong position in Asia and therefore would benefit from a slower US
withdrawal from operations in the Middle East. Dr. Nakai predicted a resurgence inChinese nationalism in light of the imminent power transition and likelihood of a
Chinese economic slowdown. While debate continues regarding the precise time of theslowdown, it is important to assess the implications for the regional and global
economy. In addition, social unrest is occurring in both major and small cities across
China.
There are four short-term issues for the region, namely the North Korea factor, theTaiwan factor, the Asia factor and the domestic factor. First, concerning North Korea,
Dr. Nakai spoke about the recent power transition in the wake of Kim Jong Il’s deathand the uncertain future of the Six-Party Talks. Second, concerns were raised regarding
the implications of the new Taiwanese president, Ma Ying-jeou, vis-à-vis relations withJapan and Australia. In particular, Dr. Nakai felt that the Senkaku Islands issue would
be a top priority of the new administration, noting President Ma’s campaign pledge notto work with China against Japan.
The third factor was the Asia factor – who would work with the growing economies in
Asia? In 2010, Asia represented the lion’s share of China’s trade by region with Hong
Kong and India ranking high amongst China’s trade partners. Japan also represented afairly large share of trade, followed by Malaysia, South Korea, Thailand and Australia.
While Chinese exports still exceed its imports, its overall trade has shown a declining
trend. In terms of foreign direct investment (FDI) into China, Hong Kong represents
60% according to 2010 figures. Remarkably Latin America also represented a large
share of FDI, with 80% of Latin American FDI into China coming from the Cayman
Islands, and the remaining 20% from the Virgin Islands. As China endeavors to
become more than just the factory of the world, it is important to consider the
implications. And fourth, the domestic factor, pertains to China’s evasive control of its
23

armed forces. Furthermore, political instability in Japan could have negative
implications for Japan’s regional security strategy, while the management of the
US-Japan alliance is being tested.
Against such a backdrop, Japan must seek to strengthen its regional partnerships inorder to address such timely issues as energy security and the rare earth issue. However,Dr. Nakai expressed his reservations concerning efforts at regional integration such as
the East Asia Summit (EAS) and the Trans-Pacific Partnership (TPP). He felt that thetiming of the EAS may be too late and noted that regarding the TPP, there was still alot of debate ongoing. Dr. Nakai was equally doubtful that security coordination
through the ANZUS Treaty (Australia-New Zealand-US Security Treaty) would be
realized. However, he advocated sharing lessons learned and experiences and felt that
low-profile issues such as the environment or maritime safety coordination could be
addressed.
Australia: Maj. Gen. Peter ABIGAIL, Executive Director, ASPIIn matters of China, proximity matters. As such, Australia’s views may differ fromthose of Japan. Nevertheless, considerable resonances vis-à-vis China remained.
Undoubtedly the rise of China has had a significant impact on the dynamics ofinternational economic, political and security affairs. While it remains to be seen if
China will become a revisionist power once its development peaks, the current signs
do not indicate that will occur as China and its growth have benefitted greatly from aWestern-led global multilateral order. China’s current status stems from its economic
rather than military power. Its leadership is committed to peaceful development, but
this commitment does not preclude assertive behavior when Chinese interests arechallenged.
The most notable strategic development in regards to China is its increasingly assertive
position in territorial disputes. Chinese confidence in weathering the global financial
crisis, coupled with the slow economic recovery of Western economies and thestrategic distraction of the US beyond East Asia seem to have provided a wealth ofopportunities for China. Meanwhile, China’s rapid military modernization has attracted
significant attention. While on one hand its modernization strategy appears transparent
and within reason, in some respects Chinese intentions remain opaque and concerning,particularly with regards to its strategic intentions. Admittedly China’s military24

modernization has challenged US military dominance in the region, but has yet togenerate the global reach as compared with US Forces. In addition to increased
military power, China has also demonstrated its ability to exercise diplomatic,
economic and political instruments in order to achieve its security policy objectives.
One such example is the use of paramilitary forces to exert influence over interests in
the South China Sea, allowing China to both remain below the threshold of naval
intervention and stall resolution of the issue.
As China enters a new and challenging phase of its development, it will be faced with
important domestic concerns such as management of external resources andimbalances between political, economic and social reforms. While it remains to be
seen how China will exert its increasing global influence, it is worth noting that China
is tightly integrated into the international system and at present does not exhibit
intentions of becoming a revisionist powers. Furthermore, China must contend withother strong powers in the region in an environment in which it finds itself strategicallyalone.
China and the US appear to be in the initial stages of strategic competition in the
Asia-Pacific region. Coinciding with increased Chinese assertiveness, the US pledged
continued engagement in the Western Pacific which was welcomed by most nations in
the region. The Chinese and US militaries are regarded as putative adversaries and areeach developing concepts to defeat the other, for example, China’s focus on an
anti-access concept and its increasing reliance on conventional ballistic and cruise
missile capabilities. Meanwhile, the US is developing an AirSea Battle doctrine tocounter the anti-access concept with long-range conventional strike and distant
blockade operations. The doctrine will have significant implications for the US Global
Posture Review and its allies.
Australia pursues a dual-track strategy with China as its primary economic partner andthe US its primary strategic partner. While there is speculation that Australia will beforced to choose at some point, for the moment Australia stands committed to support
US engagement in the region and is prepared and preparing to do more with thealliance and beyond to maintain strategic stability in the Asia-Pacific.
Regional nations seek community development, and recognize the stabilizing role of
the US. Many are also watching India which it is hoped will be a balancer to rising25

Chinese influence. The EAS provides the most likely mechanism to promote
community development at the moment, particularly now with US and Russian
involvement. A layered web approach of bilateral and mini-lateral arrangements istaking shape, and increasing involvement on the part of Australia, Indonesia and South
Korea can be expected. Undoubtedly the rise of China has had significant implications
for Australia’s security environment, but China’s growth has also offered increased
prosperity for many. All players in the region have a shared interested in continued
growth which is underpinned by regional stability. As such, a sensible approach would
be to accept China’s great power status, accommodate its expanding legitimate needs
and interests, but also hold it accountable to the rules-based international order.

Discussion
A Participant held the view that at present Chinese foreign policy direction remained
ambivalent. China is attempting to strike a precarious balance between maintaining thecurrent regional order which has underpinned its remarkable economic development,
while at the same time struggling to exert its appropriate place of increasing stature ina new order that is emerging. Presumably China is concerned about US reengagementin the region. However, recent developments such as the deployment of US Marines toa facility near Darwin make it difficult to gauge the level of Chinese concern.
Historically, Chinese concern has increased commensurate with the proximity to
Chinese borders. However, there appears to be a certain acceptance of the US refocus
in the region.
The nationalism debate is less about policy and more about how to maintain domestic
stability and continuing economic growth. It is likely that we will continue to see arising China. It is also important to consider the strategic implications of the rise ofsome of the other industrializing latecomers as these new economies play a larger role.
There are many ideas of how to accommodate China into this new environment. First
is to ensure that Asia remains integrated in the global economy so that globalization
continues and to avoid a Sino-centric Asia from emerging. Second, to have an inclusive
strategy with China. And third, there should be a backstop strategy for Asia in which
globalization does not continue and China is not a reassuring power. While the exact
architecture of such a strategy remains unclear, it may include an upstream positive
relationship building and downstream hedging.
26

A Participant informed that in 2011, the US and EU accounted for approximately
46% of China’s trade. Moreover, the US and EU accounted for 42% of China’s total
trade surplus. This raised concern regarding China’s economic structure. Following theLehman collapse in 2008, China’s domestic economic structure skewed toward fixed
capital formation. Prior to 2008, it was fairly balanced with trade, private consumption,and fixed capital occupying equal proportions. However, following the global financial
crisis in 2008, fixed capital formation accounted for nearly half, while trade andprivate consumption dropped to 20% and 30% respectively. It remains to be seen if thissituation is sustainable. China also has significantly large foreign exchanges reserves,which means fairly large capital inflow. The balance between gross foreign exchange
reserves and net external assets rests on capital inflow, and capital inflow can disappear
at any time. Thus China’s huge capital inflow represents vulnerabilities in the domestic
economy. Furthermore, there appears to be a dichotomy between the public perceptionof China’s future growth potential and the concern among leadership vis-à-vis China’s
economic vulnerabilities.
A Participant inquired about the position of China in Australian diplomacy andstrategy. From an outsider’s viewpoint, it appears that Australia possesses strong
strategic and security ties with the US, while at the same time values its economic
relationships with China. It is therefore in the best interest of Australia to prevent directconfrontation of the two superpowers. In this regard, middle power countries likeSouth Korea play an important role in maintaining the balance between China and theUS.
A Participant stated that the public sentiment in Australia vis-à-vis China varied andthat many Australians lacked a deep understanding about China. The fact that China
represents the largest market for Australian natural resources has led to a prevailingview that China has leverage over Australia and that Australia is therefore vulnerable.
But in fact China needs Australia more than Australia needs China. Australia provides
the natural resources that are vital to continued Chinese economic growth.
Nevertheless, politicians must strike a balance between public perception and thestrategic realities and while Australia politically treads on middle ground, if forced
with a decision, it would ultimately side with the US and Japan.
A Participant added that China is a significant factor in the new strategic environment.
Two things emerged from the global financial crisis: China’s continued economic
27

growth and the successful implementation of defense capabilities which have shifted
the military balance in China’s favor. Coinciding with such developments, a series ofincidents in 2009-2010 could be regarded as signs of increasing Chinese assertiveness.
Incidents like the imprisonment of an Australian businessman in reaction to theentrance of an activist to Australia, the US-China incident involving the USNS
Impeccable and USNS Victorious, and the Senkaku Islands incident. However,regional developments such as the commitment of the US to join the EAS, andregional pressure on China through fora such as the ASEAN Regional Forum (ARF)
could prompt China to step back and recalibrate its foreign policy direction.
It remains to be seen if China possesses a grand scheme. At the moment China affords
top priority to party preservation, which is followed by territorial integrity, andresource security. Against such a backdrop, where does Australia stand? From adefense strategy point of view, Australia is promoting “competitive multi-polarity,”
which is more complex than the traditional US hub-and-spoke alliance. This new order
will require better and stronger relationships with a new set of emerging Asian powers,
as well as strengthened relationships with existing Asian powers. Nevertheless, the
US-China relationship remains a critical one which provides both risks andopportunities. The economic relationship between the two has inherent opportunities
and the US appears genuine in its desire to advance economic cooperation. But
incidents at sea, the domains of cyberspace and outer space, and North Korea alsopresent risks.
The next Participant spoke from a foreign policy viewpoint. The regional
environment is changing, and while no one can predict how the Chinese growth story
will end, it is almost certain that the power balance will be significantly different in 20
or 30 years, which should not be regarded as a negative. Ideally in the new world order,
China is an engaged and constructive player in the regional and international
community. To this end, Australia and its partners should aim to create regional andglobal norms and institutions that allow China to assume that role, while at the sametime creating incentives for newcomers to be constructive and engaged players. At thesame time, it must also hedge against an alternative outcome. Acknowledging that
direct confrontation between the US and China would be bad for Australia, and bad forthe region, it would be essential to encourage transparency in China’s intentions andcapabilities as it is in China’s best interests to preserve regional stability.

28

On the issue of trade, it is interesting to note that in the same year China became
Australia’s largest trading partner, overtaking Japan, China also became Japan’s largest
trading partner, overtaking the US. Japan was asked to describe how China fits in to its
foreign, economic and defense policies.
A Participant spoke about the TPP and asked how Australia regards an Asia-Pacifictrading mechanism that excludes key players such as China and Indonesia. For
Australia, a Participant responded, the TPP is first and foremost a trade negotiation.
As such, it is in Australia’s best interest that its trade partners are involved in tradenegotiations and agreements to which Australia is party. Provided it is prepared tofulfill the requirements to join the TPP, there is no reason why China would be
excluded from the TPP. Another Participant felt that the level of ambition among
ASEAN for TPP was very low at the moment and questioned the ability of China andIndonesia to join the TPP in the near future.
A Participant added that the conclusion of a high-level US-China trade agreement
would intrinsically remove one of the major impediments to the WTO Doha round. In
addition, we are beginning to witness a lack of coordination and coherence in thedecision making process where the activities of the People’s Liberation Army (PLA)
are not necessarily compatible. If China cannot be expected to act as a single entity, it
may require more effort to encourage it to become a responsible international player.
A Participant reminded that there are many aspects of trade, including tradeliberalization. It remains to be seen if the Chinese government has the capability to
implement a large-scale global trade agreement. In particular, there is concern over
China’s ability to implement some of the requirements of the TPP, for example,
domestic regulatory assistance.
This prompted further discussion concerning China’s place in the TPP. A Participant
stated that if China can fulfill the requirements to join the TPP, prima facie, there
should be no reason to prevent its entrance. The challenge would be to position the
TPP as a catalyst for further economic growth, similar to the way that China’s entrance
to the WTO fueled its economic emergence and required it to implement extensive
domestic reforms in order to do so.

29

In response, a Participant added that one of the key ambitions of the parties to the
TPP was zero tariff levels among the economies over time. Under this scenario, China
may feel disadvantaged by that goal if it were outside such a group that contained twoor three of its major trading parties, regardless of the domestic regulatory implications.
Having overseen China’s entrance to the WTO, a Participant reported that China wasstill working to implement some of the agreements made prior to their entrance. Can
China be part of a larger institutional framework? China’s repeated claim that it is stilla developing country sends the message that while they are not a revisionist power,
they are also not willing to live up to the obligations inferred by their growing
economic status, and it is uncertain when China will cease to add this caveat.
In order to clarify his/her remarks, a Participant added that accommodation, notappeasement, would be required in relations with China, coupled with a calibrated
preparedness to accommodate legitimate claims by China.
When making speculations about the incoming leadership in China, it is important toconsider that Xi Jinping is a son of the era of reform and prosperity and what
implications that may have on China’s foreign policy direction. Chinese policy
vis-à-vis Taiwan changed significantly from the Jiang Zemin era to the Hu Jintao era.
Going back to the issue of trade, the figures showing Asia trade which were derived
from China’s 2010 Statistical Yearbook include trade with Taiwan and Hong Kong, as
well as internal trade among Chinese enterprises and as such the actual figures may besignificantly smaller.
A Participant spoke about China’s self-image as a global power and that Chinese
aspirations as such are focused on the international stage. In addition, a recovery of the“great nation of China” is a possible national target.
Session One was closed with a remark that on the issue of China as a single entity,
there appears to be a uniform objective of maximizing effort.

30

S UMMARY

Session 2
The South China Sea and Maritime Security
Presentation
Australia: Dr. Andrew DAVIES, Program Director (Operations and Capability),
ASPI
Issues of maritime security can be broadly classified into first order and second ordersecurity issues. First order issues are security issues involving states and can include
major power rivalries, territorial disputes, issues related to resource exploitation andresource security, and interpretation of laws of the seas. Naval engagement is expected
in first order issues. The latter set consists of constabulary issues involving non-state
actors such as piracy, human trafficking and illegal fishing. In these cases, involvementof coast guards and paramilitary is expected. The confluence of the above factors
makes the South China Sea a particularly difficult area to manage.
In general, consensus is easily reached on second order issues as direct interests ofstates are not involved, and as such provide opportunities for cooperation among
countries. One such example is the recent maritime surveillance cooperation among
Indonesia, Singapore and Malaysia. However, the line between first and second orderissues can become blurred, for example, if a state uses its fishing fleets as an arm ofnational power. Similarly, the recent incident involving China in the South China Sea
could be regarded as a deliberate attempt to disguise first order issues as second orderissues, although they may also be the result of a lack of coherence in central control.
Undoubtedly confidence-building measures (CBMs) in second order issues offer
benefits, but do not automatically lead to an increased willingness to resolve first orderissues. What is required is a meeting of like-minded states in order to tackle first orderissues, even if the resolution is to not reach a resolution. One such example is theAustralia-East Timor Treaty on Certain Maritime Arrangements which stipulates thatthe boundary will remain undefined for the next 50 years, and outlines how revenues
will be split from the resources in the disputed territory. It is more difficult to reach an
agreement on first order issues when states come to the table with conflicting interests,
31

for example, territorial disputes. These are often disguised as resource issues but in fact
are really issues of sovereignty.
The South China Sea is comprised of coastal states as well as countries with blue-waternavies and there are times when their respective views conflict. Increased internalstability is also driving rising investment in military platforms designed for external
power projection and as a result, sophisticated platforms, like submarines, are being
acquired by countries that may lack experience in properly operating those platforms.
In addition the growing number of submarines in the region – Vietnam is in the processof acquiring six; Singapore, four; Malaysia, two; Indonesia, six – will lead to anincreasingly congested and contested space which in turn increases the potential for
accidents or miscalculations.
An additional source of vulnerability for the region is the fact that nearly half of theworld energy trade passes through the Straits of Malacca which sits at the junction
between the Indian Ocean and the South China Sea. Any threat to the safe navigationof this trade would likely trigger a response from the countries dependent on thoseresources. Given the necessity and vulnerability of the South China Sea, the creation ofa multilateral mechanism to manage incidents at sea is desirable. Such a mechanism
should also include a framework to discuss issues and lessons learned following an
incident.
The rise of China has essentially destabilized the previous regional order in which the
US served as the de facto guarantor of maritime security. Under this order, Australia
and Japan, through their respective alliances with the US spent 1-1.5% of GDP on
defense, but this era is coming to an end. While it seems that many regional nations arecontent with the status quo, it is clear that China cannot accept an order in which the
US is responsible for China’s energy security. This sentiment is only exacerbated by
the development of a US maritime strategy which includes potentially imposing distant
blockades on countries like China and development of long-range strike capabilities tocounter China’s advanced power projection capabilities.
There has been reluctance in China regarding agreements on freedom of navigation or
incidents at sea because the US strategy remains to keep the seas open. China now
finds itself in a situation where it is benefitting from the current world order, but isunwilling to maintain the current balance of power. The final architecture of the new32

world order has yet to be finalized, but may require some concessions in order toaccommodate China’s concerns.
Japan: Dr. Koichi SATO, Professor, J.F. Oberlin University
The South China Sea is a vital highway for one-third of the world’s trade, and overhalf of world oil and gas trade. It is also rich in marine resources as well as oil and gas
deposits. By Chinese estimates, the South China Sea may hold 168-220 billion barrelsof oil reserves, although the US Geological Survey estimates 28 billion barrels. The
economic value of the South China Sea has led to territorial disputes in the region with
China, Malaysia, the Philippines, Brunei and Vietnam all laying claim to some or all of
the Spratly Islands.
Recent developments in the area include several notable incidents at sea in 2011 suchas the harassment of a Philippine seismic survey vessel by the PLA navy; the cutting ofa seismic survey cable of a Vietnamese oil exploration vessel by the Chinese State
Oceanic Administration in Vietnam’s EEZ; and the ramming of a survey cable of apatrol vessel by the Chinese fishing boat in Vietnam’s EEZ.
The assertion of growing Chinese assertiveness stems from the increase of naval
exercises held by the PLA Navy in the South China Sea and Pacific Ocean. This movehas been met by an increase in naval exercises by other regional navies in partnershipwith Western navies. In July 2011, Japan, the US and Australia conducted a joint
trilateral exercise in the South China Sea which was regarded as an effective
demonstration of world deployment capability. In fact, following this exercise the PLA
Navy ceased naval exercises in the South China Sea. In addition, the maritime
skirmishes with the Philippines and Vietnamese were reconciled.
In 2005, China, together with the nations of ASEAN, began negotiations for the
implementation of the Declaration on the Conduct of Parties in the South China Sea(DOC). According to Prof. Carlyle Thayer, the final guideline was formulated at theASEAN-China ministerial meeting in July 2011 after nearly 21 amendments to thedraft.
Although China’s military build-up has sparked concerns among its neighbors in theregion, many still question the true capabilities of the PLA Navy. A look at its warship33

capabilities reveals that only 9% of Chinese warships have adapted gas turbine engines.
The lion’s share of its warships still rely on diesel engines which require a stoking timeof four hours. In terms of tankers, China possesses five, which is equivalent to that of
the Japanese Maritime Self-Defense Force (JMSDF). By comparison, the US Navy has
14 tankers. The PLA Navy dispatched an escort fleet for merchant ships to the Gulf ofAden 10 times between December 2008-2012 and it appears to be testing newly
developed gunboat tankers and crew in the Gulf of Aden.
The PLA Navy is in the beginning stages of blue-water navy status. The PLA Navy
conducted exercises in the near sea area of Japan from 2010-2012. Each time, a
JMSDF destroyer was dispatched to observe the exercise. In response, China deployed
its naval and paramilitary helicopters which harassed the JMSDF destroyer, coming
within 90 meters of the vessel on five occasions.
At present, the PLA has 57 submarines, but its submarine-launched ballistic missile(SLBM) capability remains quite limited. In addition, its aircraft carrier is not equippedwith steam catapult which limits the payload of its aircrafts. It is worth noting howeverthat the PLA’s Julang 1 (JL-1) SLBM 2,150-kilometer shooting range is sufficient tocover most of the Japanese islands.
Given these potentially worrisome developments, cooperation is essential in the South
China Sea. At the third international workshop, “The South China Sea: Cooperation for
Regional Security and Development” in November 2011, some proposals were put
forth to promote such cooperation, though time has not yet come to realize them.

Discussion
A Participant felt it may be necessary to reexamine the current norms of the laws of
the sea in order to accommodate Chinese concerns, particularly with regard to freedomof navigation. It is possible that China’s views vis-à-vis freedom of navigation willchange if and when it increases its maritime power. The emergence of new norms
would depend on the relative balance between the US and its allies on one hand, andChina on the other as it is doubtful that China will emerge as a challenge to US
dominance in the foreseeable future.

34

Territorial claims are one of the most significant first order security issues, stated a
Participant, as they can be powerful drivers of war. As outsiders, Japan and Australia
may exert limited influence in the resolution of territorial disputes in the South China
Sea. External parties are faced with four options. They can compete, resolve, ignore or
give preference for certain modes of resolution, with the latter two options most likely.
The role of outsiders has yet to be defined as well as the limits of a possible dispute in
the South China Sea. The participant wondered how long the fuse would last in thisarea. For example, would a dispute between Vietnam and China prompt involvementof external parties? It is important to consider the prospects of escalation given theimportance of the region.
A Participant observed that in session one, there was the conclusion that one approachfor dealing with China would be to accept its great power status while holding it
accountable to the rules-based international order. By contrast, in session two, there
was the conclusion that the Western view of freedom of navigation may not prevail in
the region. The participant questioned why the international order was so easily
abandoned.
Addressing the point regarding a possible shift in China’s view of freedom ofnavigation, a Participant reminded that China’s current views come from a position ofmaritime weakness. The presenter was not suggesting that the notion of freedom ofnavigation be abandoned, but rather that elements, such as overt intelligence collection
operations, could be eliminated.
Another Participant felt that the issue at stake was not freedom of navigation, butrather the width of the territorial sea. The very basis of the law of the sea provides forfree navigation once beyond the territorial sea, excluding functional jurisdiction in theEEZ (exclusive economic zone).
Going back to the comment about the role of outsiders, a Participant felt thatoutsiders should play the role of honest broker. As such, China and ASEAN should
cooperate for the settlement of disputes, while outsiders like Japan, Australia and the
US would carefully intervene if China were to misuse its maritime power. Adding to
the previous speaker’s remark, a Participant stated that territorial disputes by theirvery nature were local affairs. As such, external parties were not effective arbitrators.
In order to be successful, a mediator must be free of any conflict of interest and be35

trusted by all the relevant parties, requirements which Japan, Australia, nor the US
could fulfill.
Addressing the previous point about the honest broker, a Participant reiterated thatexternal parties do not make effective mediators. It was also noted that the Japan-US
alliance provides deterrence, but there is no intention to draw the US into the Senkaku
Islands issue.
A Participant informed that the United Nations Convention on the Law of the Sea(UNCLOS) does not include specific provisions for military intelligence operations
conducted in an EEZ. Therefore, in the absence of such provisions, the US-establishednorms should prevail. However, there are four countries with differing interpretationsof rights of coastal states in the EEZ, namely China, India, Iran and Guyana. China
asserts that it is not opposed to the free navigation of merchant ships in the EEZ, only
those intended for military intelligence gathering.
A Participant asked if the South China Sea issues had become easier to solve given
developments such as China’s rapid economic growth.
In response, a Participant agreed that much had changed over the past 17 years, andthat most of the developments had been to China’s advantage. There is speculation that
China may be deliberately delaying a resolution to the issue so that it can assert its
position as the dominant power in the South China Sea.
A Participant underscored Australia’s position on the South China Sea issue byreiterating that Australia does not have any claims to the region, nor does it take aposition on any of the claims. It supports a peaceful resolution to the disputes. The
Antarctic Treaty is an additional example of an effective agreement to ignore a dispute.
The participant added that territorial disputes carry different weights in the psyches of
the claimants. The South China Sea dispute is very symbolic for the PLA and Chinese
Communist Party and appears to be a part of efforts to restore Chinese unity andterritorial integrity.
In relation to the interpretation of UNCLOS, China may not be in the best position toargue its interpretation as it does not strictly adhere to the UNCLOS process, given, forexample, China’s avoidance of clarifying the basis of its territorial claims. As such,36

any discussion on the UNCLOS interpretation would be difficult in the absence of asense of good faith and trust amongst the negotiators.
A Participant noted that there appears to be an intellectual offensive on South China
Sea issues taking shape in China, and he/she cited the expansion of the National
Institute for South China Sea Studies and the provision of money to study history andinternational law. Taking these developments into account, it will be important toenhance the intellectual capacity of Southeast Asian claimants who may lackinternational law expertise given that many of the issues are being discussed behindclosed doors between China and its Southeast Asian counterparts.
Revisiting the issue of freedom of navigation, a Participant commented that during
the Cold War, the former Soviet Union took a similar position to China vis-à-vis
freedom of navigation. However, as its naval forces expanded, its views became morealigned with the US. One of the presenters was asked to share his views on incident atsea (INCSEA) agreements as well as Code of Conduct (COC) in the South China Sea.
A Participant responded that there was little difference between INCSEA and COC.
Agreements negotiated between like-minded parties are obviously easier to negotiate.
However, agreements between parties who are in strategic competition are also
necessary in order to manage escalation.
A Participant thanked the presenter for his provocative and informative presentationand then posed a question regarding the coordination of Chinese law enforcement
agencies. At times, China has used either a coast guard or fisheries patrol vessel during
its naval exercises and the Participant wondered if this was a coincidence.
A Participant explained that many of the Chinese maritime enforcement agencies lacklarge vessels. Therefore, vessels of the Bureau of Fisheries and the State Oceanic
Administration are used. Recently, State Oceanic Administration vessels have been
involved in incidents with Vietnam which have resulted in a negative perception on thepart of Vietnam. The Vietnamese expect that the State Oceanic Administration will
unify all vessels and assume control. While the incidents between China and Vietnam
appear to be an accident, they indicate a lack of coordination.

37

According to a Participant, Japan is of the view that territorial disputes in the South
China Sea should be handled by the parties concerned. As such, Japan and Australia
should remain uninvolved. However, the Japanese government is interested in COC
because as a dispute management mechanism, the COC will likely contain CBMs. In
the event that CBMs such as prior notification of military exercises in the South China
Sea were set forth in the COC, Japan would oppose it as it infringes on freedom of
exercise in the EEZ. Regarding INCSEA, the US is not convinced that INCSEA should
be introduced in the South China Sea and US support is vital to promote CBMs in theregion. Codes of Unexpected Encounters at Sea (COUES) may serve as an alternativeto INCSEA. On another matter, Japan wishes to provide technical assistance to thePhilippine coast guard and navy. The US is providing Hamilton-class vessels andAustralia has provided eight coast guard vessels to the Philippines. As such,
coordination is necessary in order to prevent duplication of assistance.
A Participant added that there are many similarities between COUES and INCSEA.
COUES used for piracy operations in the Gulf of Aden have been very effective.
However, there are some countries that do not adhere to COUES.
Next, a Participant clarified that the Acquisition and Cross-Servicing Agreement(ACSA) between Japan and Australia applied only during peace time.
A Participant stated that there is consensus that the US should not be directly
involved. But at the same time, there is the feeling that the US backing of Southeast
Asian nations is an important influence in the region. The speakers were asked if theyfelt that the US was at a disadvantage since they were not a signatory to UNCLOS. In
response, a Participant acknowledged that while it would be beneficial if the US were
to join UNCLOS, in principle, the US feels that it already adheres to UNCLOS in spirit
and in letter. Another Participant remarked that the issues of concern for the US,
namely freedom of navigation through the South China Sea and the ability to conduct
military exercises at sea, had been resolved and as such, the US is expected to sign theagreement in the near future.
Next, a Participant asked if Australia were truly an outsider, given its obligations
under the Five-Power Defence Arrangements (FPDA). A Participant responded that
the FPDA has limited application which was underscored in the remarks of former

38

Prime Minister John Gorton that FPDA parties would not be involved in any or every
territorial dispute of FPDA members.
A Participant spoke about a shootout in 1994 prior to the inaugural ARF meeting
between a Vietnamese fishing vessel and a Chinese patrol boat. The incident could
have escalated, but the two sides aimed to resolve the issue bilaterally and held viceministerial-level negotiations behind closed doors to resolve the issue. It is likely thatbilateral negotiations may be used to solve similar incidents in the future.
Going back to the question of how long the fuse continues, a Participant felt that astime passes, the US and its allies lose leverage. Therefore, it would be better to find acommon ground sooner rather than later, but Beijing does not appear to desire an
expeditious resolution.
Regarding the Senkaku Islands, a Participant reaffirmed that Japan has no territorial
dispute. Furthermore, China and Japan agreed in principle to establish acommunication mechanism for the management of accidents or incidents in the East
China Sea. Such a mechanism could be utilized in the event of incidents in the
territorial waters of the Senkaku Islands.
Views were solicited by a Participant on China’s definition of its first island chain
and second island chain. In response, a Participant informed that China is rapidly
developing its anti-access capabilities. The A2/AD (anti-access/area denial) strategy
dates back to the 1995-1996 Taiwan Strait Crisis. The limits of China’s ambitions
remain unclear. Another Participant felt that the first island chain/second island chain
concept was too vague. Because the islands are situated at such varying distances fromthe Chinese coastline, it is difficult to interpret China’s requirements for A2/AD in
those areas. It is likely that China aspires to become a great maritime power. If andwhen China can project power beyond its coastline, there will be significant changes in
the Asia-Pacific strategic environment.
A Participant reminded that it was important to consider the element of capability.
The PLA’s capability in the first island chain is focused on land-based power, and inparticular, land-based air power. Its capabilities in the second island chain areconcentrated on force projection capabilities and ballistic missile capabilities. A

39

Participant recommended Red Star over the Pacific by Toshi Yoshihara for additional
insight into the first island chain/second island chain concept.
The final comments of the discussion period concerned Mahanism. A Participant feltthat the A2/AD strategy between China and Japan could be regarded as a part ofMahanism. Building on those remarks, another Participant noted that Mahan’s
thinking about the US as a secondary power in the Western Pacific may be worth
rethinking.

40

S UMMARY

Session 3
Australia - Japan Security Cooperation and the US
Presentation
Japan: Dr. Eiichi KATAHARA, Professor / Director, Regional Studies
Department, National Institute for Defense Studies (NIDS)
The unprecedented disaster which struck Japan on March 11 revealed both theremarkable resilience of the Japanese people as exemplified in the prompt andeffective response, and the weak leadership of the central government. As Japan
continues to rebuild in the wake of the disaster, the need for strong political leadership,transparent governance, comprehensive national crisis management strategies, andmore robust capabilities has become apparent. Despite the setbacks caused by the
March 11 disaster, and severe fiscal constraints, significant developments have beenachieved in Japan’s national security policy such as the strengthening of the US-Japan
alliance, the deployment of the Self-Defense Forces (SDF) in the southwestern islands,
the promotion of trilateral (US-Japan-ROK, US-Japan-Australia, etc.) and multilateral
security cooperation, and the establishment of new standards regarding the Three
Principles on Arms Exports.
For the past 50 years, regional peace and stability has been underwritten by US
strategic primacy. Recent shifts in the balance of power, however, have had
far-reaching implications for the regional security order. Securing the global commons– air, sea, space and cyberspace – have emerged as strategic objectives of the US. In
this context, China’s growing anti-access and area denial (A2/AD) capabilities havegenerated concern among the US and its allies especially at a time when it is expectedthat both Japan and the US will face further defense budget cuts. The ongoing reviewof the US Defense Posture Review will have important implications for the US-Japan
alliance and it is expected that the US will aim to implement “a more geographically
distributed, operationally resilient and politically sustainable force structure in theregion.”41

Against such a background, there are at least 10 areas for strategic policy cooperationand coordination between Australia, Japan and the US so that Japan’s relationships
with Australia and the US can become more dynamic. First, Japan and Australia (andthe US) should expand cooperation in the area of non-traditional security challenges
such as peace-building activities, and climate change, to name a few. At the same time,
it is important to continue dialogue on traditional security challenges, including
contingencies on the Korean Peninsula. Maritime security issues are becoming
increasingly important, particularly in the East China Sea and South China Sea.
Intelligence sharing should be strengthened and expanded, and in particular, Japan andthe US have much room for improvement. Japan-Australia cooperation in missile
defense can be strengthened.
Space and cyber security offer new opportunities for cooperation among Australia,
Japan and the US while existing cooperation between Australia and Japan in the areaof nuclear disarmament and nuclear security could be further expanded. In the field ofregional security architecture building, dialogue regarding the long-term security
architecture should include ASEAN and China. Concerning Japan’s enhanced security
role in the region, it would be important to consider the role of the SDF in the South
Pacific and in the Indian Ocean. And finally, the area of strategic communications alsopresents opportunities. Japan should promote foreign language and strategic areastudies education, and also consider the long-term impact of future demographic
changes on its security policy.
In closing, Dr. Katahara asked the participants to consider three points: the long-term
implications of the US fiscal situation and defense cuts to the US military posture in
the region; China’s role in the regional security architecture building; andstrengthening of Japan-Australia strategic policy cooperation.
Australia: Dr. Rod LYON, Program Director (Strategy and International), ASPIThe Japan-Australia bilateral relationship remains strong and Australia supports andpromotes future strengthening. Japan and Australia benefit from a solid economic
relationship built on shared economic complementarities. Additionally, security
cooperation is growing and it is envisaged that ACSA will play an important enablingrole to that end. The growth of the 2+2 Meetings can also be regarded as a positive
development as well as Australia’s participation in Operation Tomodachi in the wake42

of the Great East Japan Earthquake. Five years have passed since the 2007 Joint
Declaration on Security Cooperation, and Australia aims to further strengthen theJapan-Australia relationship that has been historically defined by economic anddiplomatic factors. Strategic distrust and blind spots with other potential partners makesuch a shift easiest with Japan, although Australia aims to strengthen relations with the
US, China and India as well.
The bilateral relationship is not without potential problems, however, which include
issues of context and traction. Regional power shifts, coupled with Australia’s
concerns vis-à-vis the US and more recently Europe, have resulted in a policy agendathat is increasingly cluttered. As such, the Japan-Australia relationship has been forced
to compete for more attention in Canberra. At the same time, there is a concern thatJapan’s focus on its domestic reconstruction will distract its attention away fromstrategic changes unfolding in the region and Australia is worried that Japan may
become sidetracked in the near term. Concerning issues of traction, although thegeneral view of the Japan-Australia relationship is positive and supportive, therelationship lacks traction at a public level as evidenced by Japan’s failure to attract
media attention in the way that China or the US do. Traction can be defined in many
ways, and the relationship is moving forward incrementally. However, the bilateralrelationship lacks traction in the sense that there is no big end game that captures the
public’s attention.
The trilateral relationship among Japan, Australia and the US is supported by threelegs: the US-Japan alliance, the ANZUS alliance and the Australia-Japan relationship.
The third leg is destined to be the weakest leg, although the other two remain robust.
As such it is essential to find additional points of congruence in order to strengthen theAustralia-Japan relationship. Two Lowy analysts referred to the Trilateral Security
Dialogue (TSD) as a meeting of “reluctant realists,” and their analysis raises twoquestions: Where does realism lead and is there an agenda beyond the emergency
response and soft non-traditional one? The potential sale of Japanese arms to Australia
has been cited as an example of future cooperation. But there is also a need to consider
strategic cooperation opportunities in addition to defense cooperation. This will lead toan assessment of the prospects for a prosperous and stable Asia which is notunderpinned by US primacy. In Australia, such assessment is centered around
upstream strategic issues and downstream defense issues.

43

Upstream issues include strategies to increase the prospects of a brighter Asia. There isa shared interest in a new US footprint in Asia and the formation of a new regional
order in which Asian countries assume a larger role with continued US engagement. It
will also be important to find ways for Asian countries to contribute to and broaden theinterlinked systems of reassurance and deterrence upon which regional security in Asia
depends. There is also joint interest in the future of Southeast Asia, particularly aprosperous and engaged Indonesia, and shared interest in maritime security.
Downstream, there is a shared interest to remain key regional players in an age ofausterity as well as shared concern vis-à-vis the future credibility of US extended
nuclear deterrence. The fields of space and cyber offer new opportunities forcooperation, and finally, there is joint interest in power diffusion in a darker Asia.

Discussion
The first comment by a Participant questioned why the Japan-Australia leg of thetrilateral relationship was weakest. Secondly, the participant asked about the Australianperception of China. One area of opportunity between Japan and Australia could be tosolicit the involvement of Southeast Asian nations in security cooperation. Lastly, theparticipant drew attention to the recent ranking of think tanks by the University ofPennsylvania, noting that security-related think tanks in Asia-Pacific were nearlynon-existent in the rankings.
Next, a Participant spoke about the possibility of the US adopting an offshorebalancing role in the future. Australia predicted in its 2009 Defence White Paper that
the US would remain the most significant strategic actor toward 2030 which it
maintains is still a fairly accurate assertion. Undoubtedly the proposed US$489 billion
cuts over 10 years in US defense spending and the reevaluation of its forward posture
will have implications, but a strategic refocus on the Asia-Pacific region can be
expected as the conflicts in the Middle East draw to a close. The US will continue tomaintain a two-war doctrine and an emphasis on AirSea Battle technologies and assuch a US shift to offshore balancer appears unlikely in the foreseeable future. Rather,
the US may seek to retain its global power status but with increasing reliance on othercenters of power.

44

There appears to be increasing understanding regarding the importance of maintaining
US presence. The US also recognizes the importance of capacity building and views
this as an opportunity for trilateral cooperation, such as the joint-use facilities in
Darwin for US Marines. Ultimately, although the term offshore balancer is appearing
more frequently, it should still be regarded as a future concept.
Next, a Participant asked how trilateral strategic cooperation could be strengthened,and solicited views on how to co-opt China. The participant also stated that
non-traditional security issues should be utilized more effectively, such as forcooperation on counter-piracy, counter-terrorism, prevention of illegal immigrationand disaster relief operations, to name a few. The suggestions put forth by the US
regarding cooperative strategy could be diversified and expanded and should be
inclusive of China. Australia was asked if there was an intent to coordinate bilateral
exercises with Japan in the area of security cooperation.
A Participant questioned what a replacement to the San Francisco system might look
like and inquired if the public view vis-à-vis Japan was based on Labor Party politics
in Australia.
In response to an earlier point raised about the weakness of the Japan-Australia
relationship, a Participant felt that the primary cause of the weakness was the lack of
a formal alliance between the two countries. Japan’s force structure is limited by its
constitution. Meanwhile, what Australia could bring to Japan’s defense cannot
compare with what is guaranteed under the US-Japan alliance. Regarding the point
about China, the Australian public perception vis-à-vis China varies from day to day.
However, the general view of China is that of a dynamic, yet uncertain actor, not an
inherent strategic adversary. Speaking to the point of offshore balancing, theparticipant reminded that the last time the US engaged in offshore balancing was
between 1900-1945 and it essentially took world wars to solicit US involvement. It is
unlikely that the US will revert to a position of offshore balancer as it would
undermine its alliances along the Eurasian rimlands.
While non-traditional security areas provide a strong basis for co-opting China, itcannot end there. A liberal and prosperous regional security order that is not reliant on
US primacy depends on Asian contributors to that system. However, Asian great
powers have been absent for decades. In the past, Japan has provided assurance45through its disengagement from the system. China and India have been essentiallyabsent. The new security order must encourage both first-tier and second-tier powers to
become more committed suppliers of reassurance. Concerning the public view of Japan,
Australia stated that there was little difference between the Howard government and
Gillard government vis-à-vis Japan.
Going back to the issue of the US offshore balancing, a Participant referenced recent
argument by Christopher Layne in which Dr. Layne states that fiscal and economic
constraints require that the US set strategic priorities which may prompt the US towithdraw or downsize its forces in Europe and the Middle East and concentrate its
military power in East Asia. Offshore balancing is a strategy of burden shifting, notburden sharing. By reducing its geopolitical and military footprint in the Middle East,
the US aims to reduce the incidence of Islamic fundamentalist terrorist acts directedagainst the US. In addition, the US must avoid future large-scale nation-building
exercises like those in Iraq and Afghanistan for the purpose of regime change.
Therefore, a more realistic strategy would be the forward partnering strategy in which
US allies and partners would assume a greater responsibility in tackling security issues
which would allow the US to decrease its role.
The next Participant noted that despite the positive bilateral relationship, there weresignificant impediments to advancing the relationship. The two parties agreed ingeneral, but were opposed on the specifics. Although non-security issues provide
opportunities for enhanced cooperation, it is necessary to consider if an agenda beyond
those issues exists and if so, its content. Hard security issues also offer cooperation
opportunities, such as in contingency situations. One example is the Korean Peninsula
contingency which Australia operates under the UN banner. It was noted that undersuch circumstances, ACSA would not apply due to a specific exemption clausepertaining to UN operations.
A Participant quoted President Obama’s remarks that “There is no stronger ally for
the US than Australia.” As such, attempts to strengthen the Japan-Australia
relationship would not be regarded as an attempt to dilute US-Australia security
relations, making Australia an ideal partner. With this in mind, the participant asked
how trilateral security cooperation could be advanced with a view to co-opt China.

46

A Participant informed that the AirSea Battle concept could involve a distant
blockade of China which for Australia could involve a blockade of the Malacca Strait,
for example. Japan was asked for their understanding of the AirSea Battle concept andwhat their increased role may be under such a concept.
In the aftermath of the March 11 disaster, a Participant felt there was increased public
willingness on the part of the Japanese public to engage in activities that would lead
toward a nuclear-free Asia. The participant asked if the idea of a nuclear-free Asia was
attractive or feasible.
Going back to earlier remarks regarding impediments to the Japan-Australia
relationship, a Participant observed that the systems of the two countries operate
differently in many ways and the issue of traction is inextricably linked to this fact. It
is often the case that incrementalism is most conducive to cooperating in anenvironment where there are differing views and systems. In terms of desire, theconstraint appears to be more on the Japanese side. Australia welcomes increased
engagement and coordination with Japan, but there may be limitations as a result of thelegal constraints within which Japan operates.
A Participant responded that the AirSea Battle concept is an operational battle
concept that is not a national security strategy and is part of a larger Joint Operational
Access Concept. The AirSea Battle concept is still in the developmental stage andthere are likely to be refinements, so it is important not to place too much emphasis on
the concept. Trilateral security cooperation is in Japan’s strategic best interest. If Japan
is to remain relevant, it must be part of the partnerships among major powers, so that it
does not become a middle power in the US-China relationship. US-China-India-Japan
cooperation also offers interesting opportunities.
The next Participant stated that operationalizing cooperation opportunities would
require finding a common ground between the two sides. The participant cautioned
against limiting future cooperation opportunities based on ACSA as the agreement wasdeveloped by Japan and Australia and intended to be a transformative agreement.
While the increase in exercises between Japan and Australia was a positive
development, the two must aim higher in terms of practical security cooperation anddefine clear objectives for additional cooperation.

47

On the issue of US-Japan-China cooperation, a Participant referenced a recent article
by Zbigniew Brzezinski in which he states “The US-Japanese relationship isparticularly vital and should be the springboard for a concerted effort to develop a
US-Japanese-Chinese cooperative triangle. Such a triangle would provide a structurethat could deal with strategic concerns resulting from China’s increased regionalpresence.”
The next Participant spoke about the unstable political situation in Australia andasked the Australian delegation for its views on the security policy of the opposition
coalition. Furthermore, would a change of stance be likely in the event of a change ofgovernment? Lastly, in Australia’s view, what were the most suitable areas for security
cooperation in the context of the TSD?
The next Participant asked if Australia regards Japan as an uncertain power.
Furthermore, does the lack of traction in the bilateral relationship stem from concern
about Japan’s future? In terms of US-China-Japan trilateral cooperation, Australia
envisions an active role for Japan, but the participant questioned if Australia regards
Japan as an impediment to stronger US-China relations.
Previous comments addressed the issue of a Status of Forces Agreement (SOFA)
which does not cover peace-keeping operations (PKO) or humanitarianassistance/disaster relief (HA/DR) operations. The Participant stated that there had
been attempts within the Japanese Ministry of Foreign Affairs to expand theinterpretation of the UNC-Japan SOFA (United Nations Command-Japan Status ofForces Agreement) to include such operations, but without success. Additionally,
attempts at the formation of a SOFA-like arrangement that would enable Australian
troops to provide HA/DR failed due to the lack of an alliance arrangement. One of thepresenters was asked how such a situation could be resolved.
Speaking to the alliance issue raised by the previous participant, a Participant statedJapan’s inability and unwillingness to engage in cooperative defense hindered theformation of an alliance arrangement. In its absence, while there were certainly
limitations, ACSA provided a framework for meaningful bilateral cooperation.
Nevertheless, there was a need to do more. Future participation in military exercises
was envisaged. Recently Australia came to Japan to observe the Japan-US bilateral
exercise Yama Sakura with a view to growing that exercise to a trilateral in the future.
48

At the same time, discussion was ongoing on defense cooperation agreements. AnotherParticipant proposed the idea of a semi-alliance arrangement in order to addresscontingencies such as on the Korean Peninsula or Taiwan Strait.
In response to questions posed previously, a Participant responded that domestic
policies are the current driver of Australian politics and the coalition is reluctant toplace significant emphasis on foreign or strategic policy. Regarding the TSD, both theJapan-US alliance and Australia-US alliance will be changing footprints and may offer
additional opportunities for trilateral cooperation. Secondly, the areas of space andcyberspace represent additional cooperation opportunities. On the issue of how
Australia views Japan’s future, Japan is currently standing at a crossroads. Until now,for good reason, it has been an under-contributor to regional security. It must now
consider how and if it will move from a position of relative disengagement toengagement beyond HA/DR operations. If it fails to make such a transition, Asia will
be a less stable and secure region in the future.
Adding to the previous remarks concerning a SOFA, a Participant felt that in theabsence of a SOFA, there should be alternative legislation to cover HA/DR. Five areasfor enhanced cooperation were identified: HA/DR; maritime security, such as joint
exercises in the East China Sea or South China Sea; capacity building for peace
keeping and peace building; intelligence cooperation; and space and cyberspacecooperation. Another Participant added that SOFA pertains to sovereignty-related
issues such as criminal jurisdiction and treatment of claims and a SOFA requires Dietapproval and public support.

Closing Remarks
Australia: Maj. Gen. Peter ABIGAIL, Executive Director, ASPI
Reflecting back over the two days of discussion, Major General Abigail concluded thatthe dialogue had successfully fulfilled its original intent and remarked that looking to
the future, Japan and Australia must continue to work toward defining sharedperspectives and objectives, particularly regarding the shape of future Asia. He
thanked the organizers for their hospitality and commended the participants for the
productive and stimulating discussion.
49

Japan: Amb. Yoshiji NOGAMI, President, JIIA
From the Japan side, Ambassador Nogami underscored the importance of trilateral
cooperation in order to ensure secure and liberal institutions and economic conditions
for continued prosperity in the region. In closing, he extended his heartfelt appreciation
to the Australian delegation for their active participation and contribution and Session
Three was adjourned.

50

Talking Points
Session 1
Session 2
Session 3

T ALKING P OINTS

Session 1
Recent Developments in China’s Foreign and Security Policy andthe Implications for Australian and Japan
Yoshifumi Nakai
Gakushuin University

Living dangerously in Asia
1.

Recent Developments in China’s Foreign and Security Policy
A. Has China revised Deng’s directives and decided to take aggressive/assertive foreign
policy?: The present status of the debate indicates a tentative cease fire until the coming
Party Congress.
B. Is China concerned about the recent shift of the US priority toward Asia?: Definitely, yes.
China wants to keep its neighbors as friendly as possible. China does not want the US to
get out of trouble in Middle East and elsewhere.
C. Is China going to drum up nationalism again?: Quite likely. Facing the power transfer, theslowdown of the national economy, and the social unrests.

2.

Short term issues
A. Can North Korea survive?:

The prospect of the Six‐Party Talks; can Japan work with

South Korea and the US as well as China?
B. The Taiwan factor: The victory of President Ma Yinjiu, good news or bad?; how far should
the economic integration go?: The possibility of China‐Taiwan coordination over Senkaku
and the South China Sea?
C. The Asia factor: Who is going to work with the growing economies in Asia (India, Thailand,
Indonesia, Myanmar, Vietnam, Cambodia)?
D. The domestic factor: China‐the evasive civilian control of the armed forces; Japan‐thepolitical instability and the management of the Japan‐US security pact
3.

Desperately looking for friends
A. Energy security
B. Rare earth
C. East Asia Summit (EAS)
D. Trans‐Pacific Partnership (TPP)52

E. ANZUS security treaty

53

Recent Developments in China’s Foreign and Security Policy andthe Implications for Australian and Japan
Peter Abigail
Australian Strategic Policy Institute

About China•

China is an authoritarian state with historical grievances based on what it sees as 150 yearsof humiliation, but harbouring memories of former greatness, and determined to realise its
regional and global power potential. China can also be thought of as an imperial state in thesense that the imperial project that has created China’s current borders is not yet complete,with Taiwan and claims in the East China and South China Seas still outstanding.

•

China’s rise is changing the dynamics of international economic and security affairs.
Nonetheless, it shows no sign of becoming a belligerent revisionist power: China, and its
growth, has benefited greatly from the Western‐led global multilateral order. China will seek toinfluence and shape that order in the future, but not to defy it.

•

The Chinese leadership is committed to ‘peaceful development’ but this does not preclude
assertive behaviour when China’s interests are challenged. They are also acutely conscious of
the strategic opportunities available in the first two decades of the 21st century.

•

The most notable strategic development in the past few years has been China’s increasingly
assertive position in territorial disputes which has unnerved many of its Asian neighbours. The‘charm offensive’, which has been the hand‐maiden of the doctrine of ‘peaceful development’,
stumbled.

•

China’s military modernisation is challenging US military dominance in the region but it is, ina strategic sense, alone. The US ‘strategic pivot’ into Asia foreshadows strengthened
re‐engagement with Asian allies and partners continuing its 2009 re‐calibration of strategy.

•

Conflict between China and the US is not inevitable, but a serious strategic competition isunderway. The militaries of the two nations view each other as putative adversaries and areeach developing warfighting concepts to defeat the other.

On regional stability•

Australia, like many countries in the region, pursues a ‘dual track’ strategy with China as its
primary economic partner and the US as primary security partner. Some suggest that afundamental choice between the two will be needed at some stage.

•

The Australian government signalled its ‘choice’ in the 2009 Defence White Paper. Then, andsince, the message has been clear: Australia is very much on the front foot in encouraging and54

supporting US engagement in the region, and is prepared and preparing to do more within thealliance and beyond to maintain strategic stability in the Asia‐Pacific.
•

Australia’s defence strategy has three implicit objectives: (1) ensuring Australia’s strategic
weight and role in the region; (2) managing shifts in US strategic primacy in the region; and (3)sustaining adequate defence funding. The capability proposals in the Defence White Paper,
more recent announcements relating to the ANZUS alliance and US military use of Australianfacilities, and the strategic reform program are all directed to these objectives.

•

Most countries in the region recognise the stabilising role of the US and the desirability ofmaintaining US engagement. They also resist the notion of Chinese leadership or hegemony,and most are hedging against China, watching India whilst seeking it to be a ‘balancer’ to China.
India’s role will be focussed more on the Indian Ocean than the wider Asia‐Pacific.

•

Nations are looking for regional ‘community’ development and appropriate institutionalarrangements, particularly in the security dimension. The East Asia Summit provides the most
likely candidate, particularly now that the US and Russia are included, but a layered‐web
approach of bilateral and ‘mini‐lateral’ arrangements is also underway. We can expect to see
increasing activism by Asian middle powers (e.g. Australia, Indonesia, South Korea) to ensure a
multi‐polar Asia and the protection of interests: perhaps, in concert with Japan and/or India.

•

China might have over‐reached in 2009‐2010. Having stumbled, the question is: can the
Chinese regain the initiative?

•

We all have shared interests in stability and prosperity. We’ll ‘balance’, we’ll ‘hedge’, andwe’ll ‘manage’.

•The sensible approach towards China is to accept its great power status, accommodate its
expanding legitimate needs and interests, build a constructive relationship focusing on sharedinterests, and to hold it to account in the rules‐based international order.

55

T ALKING P OINTS

Session 2
Maritime security and the South China Sea
Andrew Davies
Australian Strategic Policy Institute•Maritime security is a multi‐faceted concept. Before discussing the South China Sea
specifically, a classification is useful:First order security issues (state versus state)
 major power rivalries
 territorial disputes
 resource exploitation and security
 interpretation of laws of the sea
Second order security issues (involves non‐state players) piracy people smuggling illegal fishing

The South China Sea has all of these issues to varying degrees.
It is relatively easy to reach consensus on second‐order issues—everyone can agree that piracy isa bad thing, for example. (Although the line between what I call first and second order can beblurred if a state chooses to use, for example, fishing fleets as an arm of national power.)
Second order issues can be a useful organising principle for the cooperation between states—anexample being the work that Indonesia, Singapore and Malaysia are doing in maritime
surveillance. These are useful confidence building measures.
Similarly, like‐minded states can usually reach agreement on the first‐order issues—even if theresolution is to not find a resolution, but simply to agree to work around it. An example is theAustralia‐East Timor Treaty on Certain Maritime Arrangements.
The real difficulty comes when states bring different minds to first order issues—in which case it
can be very difficult to reach common ground. In the South China Sea, this is often the case. In
particular, territorial disputes are often multi‐lateral, and they are related to not only resources
issues, but sovereignty issues.
It is also an area where coastal states and maritime states bump up against one another, andinterpretations of laws of the sea differ.

56

At the same time, military modernisation is bringing new capabilities in the form of warships,
submarines and air combat capabilities into the area, sometimes in the hands of states that havelittle experience in operating them.
Maritime security in the region could be improved by:•

A multi‐lateral ‘incidents at sea’ sort of arrangement•

A concerted effort to broker agreements on resources, even if sovereignty has to be put
into the ‘to be determined’ basket

The rise of China has destabilised what was previously a workable, if imperfect, regional order.
The United States has served as the defacto security guarantor of the region until now, but that is
not an acceptable solution for China in the future—energy security being a paramount concern.
Beijing may judge that time is on its side, and may therefore resist attempts to settle disputes
now.
The United States has resisted negotiating an agreement on freedom of navigation or incidents at
sea agreement with China, but changes in the power balance in the region may make thisinevitable.
The western view of freedom of navigation may not prevail in this region.

57

[Not for Citation]

The South China Sea and Maritime Security
Koichi SatoJ. F. Oberlin University

1. Recent Developments in the South China Sea①Incidents at Sea: There were many maritime skirmishes between the Chinese maritime security
agencies and ASEAN nations oil exploration vessels in 2011. A Vietnamese China watcher told that
China utilized the maritime security agencies for maritime assertion in stead of the People’s
Liberation Army (PLA) navy, because they don’t want the naval intervention of the external
powers.
②Naval exercises: China mobilized the PLA navy fleets for naval exercises in the South China Sea
and the Pacific Ocean in 2010. The PLA navy also conducted naval exercises in the Pacific Ocean in
2011. The Vietnamese navy and the Western navies conducted the naval exercises, too.
③Bilateral Talks: China prefers the bilateral talks to the multilateral talks. The Chinese leaders
were reconciled with the Philippine and Vietnamese leaders after the maritime skirmishes.
④Multilateral Talks: China and the ASEAN nations began the negotiation to formulate the
Guideline for the Implementation of the Declaration on the Conduct of Parties in the South China
Sea (DOC) in 2005, though the Chinese delegation objected.
Finally, the Guideline was formulated in ASEAN‐China Ministerial Meeting in 2011. The ChinesePremier Wen Jiabao also objected the discussion on the South China Sea in East Asia Summit inNovember 2011, though he could not avoid it.
2. China’s Rise and the Naval Build‐up in the Asia pacific Region
Much has been said about the Chinese naval build‐up. It was said that the PLA navy had a plan ofstrategic nuclear capability against the U.S.A in the long run. They also made public the plan of
construction of two aircraft carriers on 23 December 2008. What is the real capability of the PLA
navy?

58

Table‐1: Comparison of the Main Warships
Crew

Submarine

Aircraft Carrier

Cruiser

Destroyer

Frigate(10000)

% of

Total

Gas‐turbine

U.S.A

32.8

71

Japan

4.6

16

China

24

57

Taiwan

4.7

4

ROK

3.5

23

India

5.1

17

AUS

1.4

Indonesia

11

22

59

28

100%

191

45

6

76.4%

67

27

51

9.0%

135

22

54.5%

26

11

9

55.0%

43

8

13

54.5％

39

6

12

100%

18

3.7

2

6

‐

8

Malaysia

2.0

2

2

‐

4

Philippines

2.2

1

‐

1

Singapore

0.45

6

0%

10

Thailand

6.3

9

10%

10

Vietnam

1.3

5

0%

5

(1)

1

4
1
(2)

Source: Sekai No Kaigun 2011‐2012 [World Navies 2011‐2012], Ships of the World, Kaijinsha
Publishing, 2011, Tokyo.
3. The Ways and Means to Promote Cooperation in the South China Sea
Some ideas to promote cooperation in the South China Sea were suggested at the thirdinternational workshop, “The South China Sea: Cooperation for Regional Security andDevelopment” in November 2011, though time has not yet come to realize them.
＊＊＊＊＊＊＊

59

T ALKING P OINTS

Session 3[personal views only]

Japan‐Australia Security Cooperation in an Age of Change and Austerity
Eiichi Katahara
National Institute for Defense Studies

1. The Contexts (Strategic and Domestic)(1) Anti‐Access/Area Denial Environment & Problems of Global Commons(2) Domestic Politics in Japan and the US‐Financial Constraints; Public Opinion; US Presidential Election(3) US Defense Posture Review and its Implications for the US‐Japan Alliance‐“a more geographically distributed, operationally resilient and politically sustainable force
structure in the region”‐President Obama’s speech in Canberra, November 17, 2011
‐US Department of Defense “New strategic guidance” January 5, 2012
‐US‐Japan Joint Statement on Defense Posture, February 8, 2012
2. Towards a ‘Dynamic’ Japan‐Australia (plus US Trilateral) Security Cooperation(1) Non‐Traditional

Security

Challenges(peace‐keeping,peace‐building

activities&

HA/DR→ACSA(2010), SOFA? , non‐proliferation (PSI), climate change, failed states, terrorism,etc.): ‐bilateral, trilateral & multilateral exercises, capacity‐building(2) Strategic Dialogue on Traditional Security Challenges (Korean Peninsula, territorial issues)(3) Maritime Security Issues (SLOCs in East China Sea & South China Sea, the Western Pacific
Ocean and the Indian Ocean), Crisis‐management Mechanism(4) Intelligence‐sharing(5) Missile Defense(6) Space and Cyber Security(7) Nuclear Disarmament and Nuclear Security(8) Regional Security Architecture Building: maintaining US presence and managing power shift
and China’s rising‐ASEAN‐centered institutions: EAS, ADMM Plus, etc.
Multi‐layered institutions; US‐Japan‐China trilateral cooperation?; APEC, TPP(9) Dialogue on Japan’s Enhanced Security Role in the Region60‐diplomacy and security policy →the South Pacific and the Indian Ocean?
(10) Dialogue on Strategic Communications, Foreign Language Education & Area and Strategic
Studies; Demographic Issues: study on immigration policy and its implications?

61Australia‐Japan bilateral relations; opportunities for the trilateralrelationship with US
Rod Lyon
Australian Strategic Policy Institute

Bilateral relations in good shape•

At the political level, high level engagement (at Prime Ministerial level)•

Economic relationship solid—built on long years of economic complementarity•

Security cooperation growing

•

o

ACSA

o

2 + 2 meetingsoAustralian contribution to Operation Tomodachi

5 years down the path from the 2007 Joint Declaration on Security Cooperation between
Australia and Japan, gradually adding a richer strategic dimension to an historical
relationship that has been primarily shaped by economic and diplomatic relationships•

Easiest for Australia to make that shift with Japan than with any other regional greatpoweroA legacy of strategic distrust with Chinao‘strategic blindspots’ in our relationship with India•

Problems tend to be ones of a) context and b) traction•

Context: competing priorities in both Tokyo and CanberraoMany priorities in Asia now, and worries about US and Europeo

In Australia, a Minister of Defence from WA, with a natural tendency to engage
Indian Ocean issues and South AsiaoEffect: the Australia‐Japan relationship has to compete more for attention in
Canberra (and probably in Tokyo too)

We argued in a recent ASPI paper than Japan was starting to replace
India as the ‘overlooked’ great power of Asia—overlooked in Canberra at
least



Obviously, Japan remains focused on domestic rebuilding after theearthquake

But Australians worried by the prospect that Japanese ‘engagement’ inAsia might be sidetracked for five years or more62

•Traction:othe view of Japan in Australia is a positive and supportive oneoit is characterised by top‐level engagement, practical developments, and growing
defence‐defence relations (which our defence officials say have never been
better)obut I think the relationship lacks ‘traction’—a sense that the relationship is ‘goingsomewhere’lack of traction suggests we’re both aiming too low in where we want
the relationship to go—the relationship is predictablelack of traction adds to Australian uncertainties about the broader
regional security environment

Trilateral relationship•

The trilateral relationship turns on the two basic alliance relationships, US‐Japan and
ANZUS

•

So the Australia‐Japan leg destined to be the weakest leg while the other two legs remainrobust•Two Lowy analysts (Shearer and Cook) referred to the TSD last year as a meeting of‘reluctant realists’?
o(a title Michael Green once used for his book on Japan)

Their argument was that all three leaders (Obama, Noda and Gillard) had beenpulled towards greater ‘realism’ in their thinking about Asia‐Pacific securityoIs there an agenda beyond the emergency response and soft non‐traditional
one?

o
•

If so, what is it?

Where does realism lead? Is it even right to think characterise the Australia‐Japan leg as‘realist’ in its approach to regional security?
o‘Hard’ security cooperation is rare in Asia: and there aren’t many bilateral
security relationships in prospect that could be of direct, practical defence
benefit to both countries in the same way that Australia‐Japan one might be•

But possibility there for something considerably deeper than we’ve seen in the past?
Something that our publics would see as both ‘positive’ and strategically important?
oSome in Australia think about possible Japanese arms sales to Australia in thatlight, and that might be one example of future cooperationo

But we should think more broadly of ‘strategic cooperation’ rather than merely‘defence cooperation’What can we do together (if anything) that increases the prospects for asecure, liberal, prosperous Asian security order in the 21st century?

63This is an ‘upstream’ question, and not a ‘downstream’ one—it’s about
increasing the prospects for a brighter Asia, and not just hedging against
the possibility of a darker Asia

64