Positive Visions, Powerful Partnerships the Keys to Competing with China in a Post-Pandemic Indo-Pacific

MARCH 2021 Positive Visions, Powerful Partnerships The Keys to Competing with China in a Post-Pandemic Indo-Pacific Stephen Tankel, Lisa Curtis, Joshua Fitt, and Coby Goldberg About the Authors About the Indo-Pacific Security Dr. Stephen Tankel is an Associate Program Professor at American University and an The CNAS Indo-Pacific Security Program addresses oppor- Adjunct Senior Fellow with the Center for tunities and challenges for the United States in the region, a New American Security (CNAS) Indo- with a growing focus on issues that originate in the In- Pacific Security Program. He has served do-Pacific but have global implications. It draws on a team on the House Foreign Affairs Committee with deep government and nongovernment expertise in and in the Office of the Under Secretary regional studies, U.S. foreign policy, international security, of Defense for Policy. Tankel is the author and economic statecraft. The Indo-Pacific Security Program of numerous works, including With Us and Against Us: How analyzes trends and generates practical and creative policy America’s Partners Help and Hinder the War on Terror. solutions around four main research priorities: U.S.-China strategic competition, India’s growing role in the Indo-Pa- Lisa Curtis is the Senior Fellow and cific, the North Korea threat, and American alliances and Director of the Indo-Pacific Security partnerships. Program at CNAS. Curtis has over two decades of experience working for the Acknowledgments U.S. government, including as Deputy Assistant to the President and National This report was made possible by generous funding from Security Council Senior Director for the Government of Japan. The authors are grateful to South and Central Asia from 2017–2021. Curtis also worked the many officials and experts—both in the United States at the CIA, State Department, Senate Foreign Relations and elsewhere—who shared their perspectives during the Committee, and as Senior Fellow for South Asia at the course of the project. This report would not have been Heritage Foundation from 2006–2017. possible without assistance from a variety of current and former CNAS colleagues, including Melody Cook, Isha Dalal, Joshua Fitt is a Research Associate Christopher Estep, Allison Francis, Kristine Lee, Maura with the Indo-Pacific Security Program McCarthy, Ely Ratner, and Emma Swislow. In addition, the at CNAS. He focuses on U.S. East Asian authors would like to thank Zack Cooper, Elina Ribakova, security strategy and specializes in and Rachel Ziemba for reviewing full drafts of this report. Japanese and Korean Peninsular affairs. The views presented here are the authors’ alone and do not Before joining CNAS, Fitt was a campaign represent those of CNAS or any other organization. The field organizer during the 2018 midterm authors are solely responsible for any errors in fact, analysis, elections in the Upper Midwest, an earthquake and tsunami or omission. disaster relief volunteer with IsraAID in Japan, and an intern with the Council on Foreign Relations’ Japan Program. He earned his BA in East Asian studies from Yale University Coby Goldberg is an analyst with the Counterproliferation Program at the Center for Advanced Defense Studies. He was previously the Joseph S. Nye Intern with the Indo-Pacific Security Program at CNAS. He recently graduated summa cum laude and Phi Beta Kappa from Princeton University, with a BA in East Asian studies. TABLE OF CONTENTS 01 Executive Summary 02 Introduction 05 Chapter One: The United States, China, and COVID-19 in the Indo-Pacific 13 Chapter Two: The View from America’s Quad Partners 21 Chapter Three: Spotlight on COVID-19 in Southeast Asia 24 Chapter Four: Challenges, Opportunties, and Recommendations 32 Conclusion INDO-PACIFIC SECURITY | MARCH 2021 Positive Visions, Powerful Partnerships: The Keys to Competing with China in a Post-Pandemic Indo-Pacific Executive Summary » Option 1: Lay the groundwork for an eventual smooth transition from distributing vaccines in he United States was losing ground to China in the United States to distributing them abroad. the Indo-Pacific when the COVID-19 crisis began. » Option 2: Provide financial support to fund the T China’s growing economic might, military mod- purchase and distribution of vaccines in the Indo- ernization, and aggressive diplomatic efforts were already Pacific, especially among Southeast Asian countries. eroding America’s competitive advantage and shifting the regional balance of power. A year after the virus first spread, » Option 3: Consider additional steps to boost vaccine it is possible to identify where the pandemic is affecting production by supporting distributed manufacturing diplomatic, economic, and defense trends in ways that could capacity in the Indo-Pacific. accelerate declines for the United States, but also might » Option 4: Create an Indo-Pacific COVID-19 response create opportunities to reverse or mitigate some of them. mechanism that includes Quad and Association of Restoring U.S. alliances and partnerships in the Indo- Southeast Asian Nations (ASEAN) countries, South Pacific is critical to competing effectively against China, Korea, Taiwan, New Zealand, and the Pacific Islands. and President Joe Biden has made this a top foreign ¡ policy priority. In particular, his administration is making Build shared mechanisms for tackling Chinese disinforma- the Quadrilateral Security Dialogue—a strategic forum tion about the origins of COVID-19 and the efficacy commonly known as the Quad, which is comprised of of Western vaccines. the United States, Japan, Australia, and India—a core ¡ Prioritize public health and emergency preparedness in component of its approach to the Indo-Pacific. Chinese Quad and ASEAN engagements, and increase public health post-outbreak behavior has driven increased cooperation assistance to Southeast Asian countries. among these four countries in the diplomatic, economic, and defense domains to address shared challenges from Economic Lines of Effort China. Seizing the opportunities this cooperation creates is ¡ Prioritize helping Indo-Pacific countries, especially those critical for the United States. in Southeast Asia, deal with debt problems resulting from While expanding U.S. cooperation with Quad countries, or exacerbated by the COVID-19 crisis. the United States cannot neglect Southeast Asia, where competition with China for influence is fiercest. Southeast ¡ Accelerate implementation of existing assistance programs Asia is at the heart of U.S. and Japanese efforts to promote a for infrastructure and human capital development in the free and open Indo-Pacific, and is a region where Australia region and enhance coordination with other Quad countries has played a traditional leadership role. Competing on the delivery of assistance. effectively with China requires offering Southeast Asian ¡ Pursue small-scale trade initiatives, while simultane- countries a positive alternative vision to the one Beijing ously exploring the costs and benefits of entering the promotes. Whether the United States and its fellow Quad Comprehensive and Progressive Agreement for Trans- democracies can help Southeast Asian countries recover Pacific Partnership. from the COVID-19 crisis will be a key litmus test of their ¡ Balance reshoring with diversification of supply chains ability to deliver on such an agenda. and emphasize efforts to help allies and partners deepen This report offers recommendations for the United States their own supply chains. to take unilaterally and in close cooperation—bilaterally, trilaterally, and through the Quad—with Japan, Australia, ¡ Expand opportunities for Quad engagement on economic and India to address challenges and seize opportunities issues in the Indo-Pacific. created by the COVID-19 crisis along three lines of effort: diplomatic, economic, and defense. Defense Lines of Effort ¡ Increase defense integration with Japan and Australia. Diplomatic Lines of Effort ¡ Adapt exercises to account for potential reductions in ¡ Swiftly follow through with plans to work with Japan presence and possible future disruptions to training cycles. and Australia to fund the Indian production of at least one billion vaccine doses and their distribution in the ¡ Seize opportunities to expand the U.S.-India Indo-Pacific. Consider additional vaccine diplomacy defense relationship. options to pursue unilaterally or in concert with the ¡ Seek opportunities to reinforce and expand defense ties Quad and other countries. between all four Quad countries. 1 @CNASDC Introduction America’s allies and partners are already key players in the Indo-Pacific, and will only become more important he United States is losing its strategic advantage as Chinese economic and military power grows. Since to China in the Indo-Pacific. Although the United the pandemic began, Chinese behavior in the diplo- T States remains the security partner of choice in matic, economic, and defense domains has strengthened the region, China’s increasing economic clout, asser- cooperation among the United States, Japan, Australia, tive diplomacy, and growing military capabilities are and India bilaterally, trilaterally, and through the shifting the regional balance of power. Many Indo-Pacific Quadrilateral Security Dialogue (commonly known as countries are wary of China, which uses its economic the Quad). While the pandemic aggravates challenges for and military power to coerce its neighbors, but they are the United States, it also creates opportunities to coop- also increasingly viewing China

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