Research

Australia-India need unprecedented collaboration to fight Chinese influence: ORF President Samir Saran

Interview originally published here.

The President of Observer Research Foundation (ORF), one of India’s premier think tanks, Samir Saran, was recently in Australia.

In an exclusive interview with The Australia Today, Mr Saran outlined the importance of the Australia-India bilateral relationship and how crucial this relationship is going to be from a strategic and economic point of view.

Q1) How important is the India-Australia relationship going to be globally and for the Indo-Pacific region from a security point of view?

Mr Saran: India views Australia as one of its most important partners in the world. The relationship has transformed in less than a decade. Today, the two countries are exploring opportunities to work shoulder-to-shoulder on new opportunities to tackle challenges that confront Asia and the world. The partnership has been catalysed by shared concerns about China and a shared responsibility to ensure a peaceful and inclusive Indo-Pacific by partnering closely with like-minded countries in the region.

Q2) How do you see bilateral trade between the two countries going forward, is it likely to substantially increase after the trade agreement?

Mr Saran: The signing of the interim agreement has come at a time when the trade momentum between both the countries is on a high. The latest data by the Ministry of Commerce and Industry of India, released in April 2022, show 104.8% year-on-year growth in Indian exports to Australia and 99.5% year-on-year growth in Australian imports to India. The completion of the FTA would definitely boost volumes of trade between the two countries—both expect trade in goods to double in five years to the US $50 billion. Australia’s aim is to make India the third-largest destination in Asia for Australian investment and also one of its top three export markets by 2035.

Q3) How important is it for Australia to diversify its international trade and reduce its exposure to China? 

Mr Saran: It is extremely important. As one of the developed world’s most China-dependent economies, Australia will always be vulnerable in case of deterioration in bilateral ties. By pushing for answers on the origin of the pandemic, Australia has already angered Beijing. After being at the receiving end of Beijing’s trade weaponisation, it is extremely significant for Australia to reduce its perverse dependence on China by diversifying its export markets. Australia and others also need to invest more in trade diversification, and supply chain resilience and are conscious of the geopolitical risks.

Q4) How important is it for Australia to increase its economic engagement with India specifically given the implications not just for geoeconomics but also geopolitics?

Mr Saran: The broader trade and technology agenda is closely linked to and implicated by politics. This geopolitical convergence in the Indo-Pacific is also driving the current upward trajectory in the economic relations between India and Australia. Australia realises that even as it seeks to respond to the increase in Chinese influence within Pacific Island countries, India is staving off the overbearing presence of the dragon in South Asia. Instead of relying solely on the United States, it is time for India and Australia to increase their economic engagement and build their own capabilities to push back against Chinese expansiveness. They have obvious overlapping interests in the region and a clear motivation to make this happen.

Q5) How important is Australia going to be for India from a trade and security point of view?

Mr Saran: As the first bilateral trade agreement of India with a developed country in the last decade, this FTA with Australia is extremely important. as India is not part of any significant regional or free-trade bloc. Apart from eliminating or lowering tariffs on both sides, this FTA positively influences other ongoing bilateral trade negotiations that India has with Canada, the EU and the UK.

As mentioned earlier, due to an overlap in the Indo-Pacific regional visions of the two countries and the escalating competition between US-China, India sees it important for Australia to bolster its security capacities through enhanced defence acquisitions and spending, as well as by strengthening existing defence cooperation. India and Australia, by investing in their own security and economy, are offering the other greater ability to manage and negotiate the changing political and economic landscape in Asia.

Q6) Are there any specific areas where you see the potential for increased engagement that require more attention?

Mr Saran: There are four areas where there’s potential for increased engagement. First is political – both India’s and Australia’s neighbouring island countries are facing excessive inducements by the CCP to follow the Chinese way of life. We need to realise that dialogue with these island countries is not enough, we need to put money where our mouth is. India and Australia can create an islands initiative, wherein we invest in their technology futures and climate resilience, and offer them better, safer money than what is on offer from the Chinese.

The second is climate – as India transitions to a green economy, Australia can vigorously partner with us. As a country with sophisticated financial institutions, Australia can offer significant inputs in the technology, R&D and innovation space. Australia’s financial institutions can also service the significant Indian appetite for green finance and infrastructure projects.

Third is technology – instead of becoming the B-teams of Silicon Valley, the India-Australia technology partnership could create tech for development, fit for our neighbourhood. This would not only help the ASEAN and island countries, but also the emerging world. India and Australia have the potential to be the A-team of the tech for a development paradigm that serves the next 6 billion that silicon valley does not innovate for.

And finally, diaspora – we need to scale up Australia’s educational and knowledge partnership with India. We need to take Australian institutions to India and offshore the education industry, wherein the former is able to increase its presence and build to-scale education and skilling institutions in India.

7) Do you see Quad as having substance or is it more a symbolic grouping at this stage?

Mr Saran: Quad, as of today, is a limited-purpose partnership that was born out of common concern about Chinese activities. At this stage, the Quad is beginning to become more ambitious and is seeking to shape the development and technology pathways the region treads on.

A quad must consider building more substance through institutionalisation and by delivering on specific projects in the Indo-Pacific region.

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China, Cyber Security, Politics / Globalisation, Writing

Made in China: A Digital Agenda for the Quad

In the Indo-Pacific and beyond, China’s growth in capabilities and political authoritarianism are now threatening to alter how we engage with technology and digital domains. China believes it has the right to access other nations’ information and networks without offering up access to its own. This is not a simple techno-mercantilism. There is a single purpose to China’s deepening investments in existing and future technologies: furthering the agenda of the Chinese Communist Party (CCP).

For Beijing, technology is about both national security and ideology. Under Xi Jinping, it will use the information age to rewrite every assumption of the postwar period. Countries outside China must join together to seek open, safe and inclusive technology and digital platforms and products.

There are five main ways in which we can shape national, regional and global engagement with our digital world. These must also drive the purpose and direction of the Quad countries (the United States, Australia, Japan and India) as they strive to create a technology and digital partnership in the Indo-Pacific.

‘China tech’ was for the CCP initially about managing the social contract within China. Now, the CCP is weaponising and gaming other nations’ democracies, public spheres and open systems. It is creating a digital insurgency that allows it to delegitimise its opponents on their own political turf. This goes beyond episodic interference in elections. The CCP uses American forums such as Twitter and Facebook to critique the domestic and foreign policy of nations such as India. Wolf warriors seek to shape the information space internationally while China and the CCP remain protected behind the Great Firewall. The unimpeded global access China is allowed under some perverse notion of free speech must be questioned; internet propaganda endorsed by authoritarian regimes cannot and should not go unchecked. As a first step, the world will have to embrace a political approach to repel the digital encroachments we are witnessing. The European Union offers a model – just as its General Data Protection Regulation sought to rein in the US technology giants, we need laws that limit China’s access to the public spheres of open societies, thereby curtailing its global influence.

Today, all digital (silk) roads lead to Beijing. Many developing countries rely on China for their technology sectors. From control over rare earths and key minerals to monopoly over manufacturing, China commands the digital spigot. The Quad countries and others in the Indo-Pacific must seek and encourage diversification. Affordable, accessible products and innovations must emerge in the digital space. From resilient supply chains to diversity of ownership, a whole new approach is needed to prevent the perverse influence of any single actor. This is the second way to shape global patterns of digital engagement.

The Chinese under Xi have embraced the dangerous essence of the Chinese phrase ‘borrowing a boat to go out to the sea’. The CPC has essentially borrowed all our boats to further their agenda.

Universities in the developed world, their mediatheir public institutions and even their technology companies are serving and responding to missives from the Middle Kingdom. Many journalists have exposed the Western media’s promiscuous entanglements with a Beijing that artfully co-opts them into its propaganda effort. In the digital age, this cannot be ignored. Countries will soon be faced with a digital fait accompli – signing on to Pax Sinica. As a third way to enhance engagement, it is time to protect liberal institutions from their own excesses.

China has attempted to internationalise its currency with the launch of its own digital currency. After banning financial institutions and payment companies from providing crypto-related services in May, China launched a crackdown on computer-powered crypto mining in June, and a blanket ban on all crypto transactions and mining in September, clearing the way for its digital renminbi (digital RMB). With the development of its own central bank digital currency, the Chinese government will now have the power to track spending in real time. It will have access to the entire digital footprint of a citizen or a company. This will provide Beijing with an unprecedented vault of data, which it can use to exercise control over technology companies and individuals.

The rise of China’s digital RMB has the potential to challenge the status of the American greenback. For decades, the US dollar has been the world’s dominant reserve currency. Yet countries such as Iran, Russia and Venezuela have already begun using the Chinese yuan for trade-related activities or replacing the dollar with the yuan as reference currency. China can shape all three attributes of the ‘ideal’ currency, also referred to as the ‘Impossible Trinity’: free capital flow, a fixed exchange rate and independent monetary policy. It is a matter of time before it uses currency as part of its wider geopolitical plans. And with its past experiments with many countries on ‘trade in local currency’, it will have the capacity to create disruptions in the global monetary system. This can only be countered with two measures: one, depoliticising the existing dollar-led currency arrangements (the tendency to weaponise the SWIFT system – a giant messaging network used by banks and other financial institutions to transmit secure information – and to employ ad-hoc economic sanctions) and two, investing in the economic future of the emerging economies that currently depend on China.

Lastly, China is seeking technological domination not only terrestrially but also in outer space. China has invested considerably in space technology and engages in counterspace activities. These include suspected interference in satellite operations, both through cyberattacks and ground-based lasers. There are growing fears that Chinese technologies developed for ostensibly peaceful uses, such as remote satellite repair and cleaning up debris, could be employed for nefarious ends. The inadequate space governance mechanisms is an opportunity for the Quad to develop situational awareness in the space realm to track and counter such activities, and to develop a new set of norms for space governance.

The Quad’s agenda is prescribed by China’s actions. It will have to be a political actor and have the capacity to challenge China in the information sphere and the technology domain. It will need to be a normative power and develop ideas and ideals that are attractive to all.

From codes and norms for financial technologies to the code of conduct for nations and corporations in cyberspace and outer space, the Quad has the responsibility and opportunity to write the rules for our common digital future.

The Quad will also have to be an economic actor and build strategic capacities and assets in the region and beyond. It will have to secure minerals, diversify supply chains and create alternatives that ensure the digital lifelines are not disrupted.

Most importantly, the Quad will need to be an attractive partner for others to work with. This is its best means to counter China’s dangerous influence.


This commentary originally appeared in The Sydney Dialogue.

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