U.S. to Remain Most Powerful Nation, Australia’s Bishop Says

The U.S. will remain the single most powerful nation in the coming decades and Australia is committed to its alliance at a time of heightened territorial tensions in the Asia-Pacific, Foreign Minister Julie Bishop said.

“I am dismayed by the amount of commentary that equates Asia’s rise with America’s decline,” Bishop told delegates at a conference in Canberra today. “Such thinking fails to take into account the depth of U.S. engagement in the rise of Asia.”

Australia is seeking to balance its longstanding loyalty to the U.S. against the need to maintain a workable relationship with biggest trading partner China, which is asserting itself as an economic and military power in the region. President Barack Obama, who met with Australian Prime Minister Tony Abbott in Washington last week for talks, is pivoting military resources to Asia as tensions rise.

“The last thing Australia wants is increased conflict between China and the U.S.,” said Jingdong Yuan, a University of Sydney associate professor specializing in Asia-Pacific security. “China will be listening to Australia’s comments but it will be more attentive to what Australia is actually doing, including its defense collaboration with the U.S. and how the Americans use its military facilities.”

Islands Dispute

Japan and China are embroiled in a dispute over islands in the East China Sea, and China is pressing its claims to a large part of the South China Sea, an area estimated to have major oil and gas reserves and which carries some of the world’s busiest shipping lanes. Bishop criticized China last year for proclaiming an air defense identification zone over the East China Sea.

It’s important for “the U.S. to be present and accounted for at a period when tensions in the South China Sea and the East China Sea are rising,” U.S. Assistant Secretary of State for East Asian and Pacific Affairs Daniel Russel told the conference via a live video-link. The area is seeing “a considerable amount of tension and friction.”

Abbott in May increased defense spending, committing A$122.7 billion ($114.6 billion) in the four years through June 2018, A$9.6 billion more than the amount earmarked by the previous Labor government. The stepped-up spending comes as Asia-Pacific nations focus on upgrading their military, with China making a more combat-ready army and a navy with broader reach a priority.

Defense Spending

China’s defense budget will rise 12.2 percent this year to 808.2 billion yuan ($129.7 billion).

“For the U.S. and Australia, as well as Japan, South Korea and the Philippines, the choices are clear but the stakes are very high,” Major General Richard L. Simcock, the U.S. Marine Corps Deputy Commander in the Pacific, told the conference today. “These stakes aren’t solely about the sovereignty of rocky shoals and island reefs or even the natural resources nearby. They’re about sustaining our global economy’s rules-based order.”

While China’s appetite for iron ore and coal assets has boosted the world’s 12th-largest economy, Australia relies on shipping lanes in the South China Sea to get exports to market. About 1,110 U.S. Marines are now based in the northern Australian city of Darwin, Simcock said today.

Roy Krzywosinski, the managing director of Chevron Corp. (CVX)’s Australia’s unit, told the conference his company was in “very significant and close engagement” with government and border-security authorities to protect its projects and trade routes. The U.S. company is developing its flagship $54 billion Gorgon liquefied natural gas development off Australia’s remote north-west coast.

‘Strategic Targets’

“We are very much aware that they could be considered strategic targets, not only the plants themselves but the product that they produce and the routes and paths they take to the customers,” Krzywosinski said.

Bishop, who last week held talks in Japan with Foreign Minister Fumio Kishida and Defense Minister Itsunori Onodera, said Australia’s alliance with the U.S. was at the “heart” of the nation’s foreign and security policy. “It is the very cornerstone of our strategic architecture.”

“When I meet with leaders and foreign ministers from around the Indo-Pacific, they tell me they want more U.S. leadership in the region, not less,” Bishop said. “It’s in all our interests that the U.S. continue its diverse and multi-dimensional engagement in our neighborhood.”

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Andrew Davis

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