Winning Strategic Competition in the Indo-Pacific

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Executive Summary

The strategic competition in the Indo-Pacific involving the United States (U.S.), Australia and the Chinese Communist Party (CCP) is arguably the most significant contemporary international relations issue. It spans all aspects of state power: hard, sharp and soft; diplomatic, information, military and economic; and all domains: air, sea, land, space, cyber, technology and innovation. But in their rush to recover ground perceived to be already lost to the CCP, neither the U.S. nor Australia have paused to devote sufficient attention to understanding the nature of strategic competition, to comprehend what winning it actually means, and therefore to grasp how best to approach it. As a result, they both continue to cede the initiative to the CCP, while it continues to compete on the terms most favorable to it.

Most current interpretations of strategic competition view it as a constant state, one that therefore defies clear articulation of end-states and the metrics that demonstrate progress towards their attainment. Such interpretations are not only imprecise but unhelpful, as they prevent development of concrete strategies, leaving only abstract visions against which executable planning and commitment of resources is unachievable. A more exact approach views strategic competition structurally—poised atop a hierarchy made up of a range of smaller competitions, which are themselves comprised of discrete, single-issue contests. In this context, the objective of strategic competition can be best understood and expressed as the effort to gain and maintain a relative advantage over an adversary regarding contested goods such as power, security, wealth, influence, and status. This is achieved by winning the component competitions and contests that contribute to that strategic end-state without escalation to conflict. To win strategic competition necessarily requires a clear grasp of its key terrain. Approaches that focus on a single domain are too narrow and tactical to achieve a strategic end-state. Instead, reference to conflict, decision-making and power theories reveal that, from a Western perspective, the human-cognitive process is the critical element of strategic competition, a view also reflected in the CCP’s adoption of the Three Warfares. In concrete terms, this key terrain is best understood as the observe, orient, decide and act (OODA) loops of strategic competition’s actors.

The CCP’s use of the Three Warfares demonstrates its implementation of this concept. Its actions indicate a deliberate effort to increase its own influence among foreign actors by: 1) promoting a positive narrative of Chinese culture, society and ideology, 2) incrementally establishing ‘facts on the ground’ regarding the CCP’s territorial claims and political and economic relationships, 3) building critical bilateral partnerships to limit multilateral challenges to CCP interests, while 4) not provoking the U.S. or its partners to respond effectively. While the CCP has suffered a number of setbacks as a result of its aggressive use of sharp power, it has also gained a relative advantage overall compared to both the U.S. and Australia. More importantly, it will continue to do so unless those latter two choose to compete more effectively in future.

The CCP is largely immune to efforts by external actors to control its OODA loop directly. Its use of sharp power against the leaders and citizens of the U.S., Australia and other Indo-Pacific and global actors exploits their open societies. However the CCP is insulated against similar approaches by the People’s Republic of China’s (PRC) craving for stability and unique interpretation of democracy, the Han nationalism the CCP nurtures and carefully manages, and its dominance of the PRC’s information environment. Consequently, the U.S. and Australia need to employ an indirect approach to Indo-Pacific strategic competition, one in which they identify and engage those actors, both regional and global, who play significant roles in either enabling or obstructing the pursuit of objectives by the U.S., Australia or the CCP. While current U.S. and Australian approaches are mostly indirect in nature, analysts identified shortcomings within them that include their focus on military presence and deterrence, U.S. unreliability as a partner and ally, conditionality associated with investment and development aid, treatment of regional middle and minor powers as pawns in a strategic ‘Great Game’, and the absence of robust and repeatable processes to integrate and synchronize multinational, multiagency competitive efforts.

The procedural shortcomings could be swiftly addressed by adaptation and adoption of extant military processes for multinational, multiagency use. This represents the area in which the U.S. and Australian militaries could make their most significant, immediate contribution to strategic competition, providing support to the political instruments Clausewitz viewed as decisive in cases where conflict was absent, rather than increasing their posture and presence in potentially counterproductive attempts to deter or coerce. These processes could help ensure executable policies were articulated rather than immeasurable abstractions, enabling generation of the detailed intelligence on target audiences necessary to determine critical actors’ customer needs, as well as the development and deployment of resonant narratives among them to build enduring brand loyalty. Such processes could also help ensure that U.S. and Australian efforts to compete with the CCP were integrated and synchronized with each other, including efforts to cooperate with the CCP or to concede to it on certain issues. This would allow mutually supportive, measurable strategic outcomes to be achieved instead of engaging in piecemeal and potentially conflicting activities.

Such a shift to ‘Model II’ (process-oriented) decision-making by ‘Model III’ (agenda-driven) organizations faces multiple challenges. These include the inherent inertia and friction of bureaucracies, an aversion to treating potential partners as ‘targets’, and the resourcing the intelligence community requires to enable effective planning and targeting efforts. This resource demand is particularly problematic, as it will likely come at the opportunity cost of the hard power capabilities, those traditionally viewed as the military’s crown jewels, that will be necessary to win should competition escalate to conflict.

However, the most critical concerns relate to values. The CCP’s use of sharp power provides it a greater range of options to seize and control other actors’ OODA loops than the U.S. or Australia. But for either of these liberal democracies to employ sharp power themselves presents difficulties. The first is the risk to their integrity and reputation (including the inevitable CCP accusations of hypocrisy) if their use of sharp power is discovered. A second relates to the legality of sharp power’s use. While there is no Law of Strategic Competition that defines its norms, sharp power blurs the threshold of peacetime International Law; it removes volunteerism from its targets’ decisions, and its use can have collateral effects whose legality is questionable and ethics unsound. The lack of equivalent professional frameworks for those who engage in strategic competition to that of the military in conflict is a further concern given the complexity of these legal and ethical issues. Given the fiduciary obligations owed by the state to those professionals, significant development in this area would be required to adequately prepare them to use sharp power, and to provide them the necessary protection from the potential consequences of doing so.

If those within the U.S. and Australia who assert the CCP seeks regional, and potentially global hegemony are correct, each nation needs to determine with some urgency exactly what they are willing to do to prevent that outcome. Fundamentally, the U.S. and Australia will remain unable to win in strategic competition, and therefore rely on the CCP to lose it, until they are willing to face that crucial, and potentially existential, question.