A senior Asian diplomat quips that China’s leadership fears the numbers two, three, four, five and seven.

The superstition is the way the numbers are stacking up.

China agonises over the bilateral alliances represented by the number two (US–Japan, US – South Korea, US–Australia), three represents the members of AUKUS, four is the Quad, five is the Five Eyes intelligence community and seven is the G7.

I’d add to the list the number one, which is too serious for any jest. Beijing wants to be number one. And it wants to enforce the one-China policy on Taiwan. Beijing’s great fear is Taiwan’s growing singularity. China and Taiwan peer intently at Ukraine: the wolf warrior and the porcupine ^[1] seek invasion lessons ^[2].

The way the numbers stack up was the theme last week of an ASPI masterclass, offering an accounting of China’s emerging military and strategic capabilities.

The conference star was former prime minister Kevin Rudd, who noted that China is constantly counting, measuring its ‘comprehensive national power’, judging the power balance with the US. It was a notable ‘twins’ moment having the two ASPIs together for a session—Peter Jennings for the Australian Strategic Policy Institute and Rudd as head of the Asia Society Policy Institute.

Characteristically, Rudd is doing two things simultaneously as he zips around the wide brown land. He’s campaigning for Labor in the federal election and promoting his new book, The avoidable war ^[3]. The book is Rudd at his best: deeply detailed at 400 pages, but vivid and driven in its discussion of the ‘unfolding crisis’ between the US and China and the danger of ‘global carnage on an industrial scale’. The Strategist’s Jack Norton reported on ^[4] Rudd’s presentation, including his comments on the controversial deal between China and Solomon Islands.

From Washington, ASPI’s Mark Watson ^[5] offered the masterclass a US perspective, describing the American shift from engagement to competition to deterrence. The engagement decade (2000–2010) was defined by economics as China joined the World Trade Organization. The competition decade (2010–2020) saw economic cooperation bumping against China’s rising military capability and the arrival of Xi Jinping.

Now in the deterrence decade, Watson said, the US ‘no longer sees China as a constructive player but as an outlaw’. China is one of the few things Democrats and Republicans in Washington agree on. Despite Russia’s invasion of Ukraine, Watson said, the US remains focused on the Indo-Pacific: ‘Long term, China is still the main game.’

John Lee ^[6], former senior national security adviser to foreign minister Julie Bishop, described a reversal of the mindset of the past three decades where cooperation with China was an ‘absolute good’ and Asia was ‘sleepwalking into becoming a Sino-centric region’.

Lee stressed the limited but important ability of other powers to shape China’s understanding of the costs of its actions. ‘One of the tricks China plays on the world is to suggest it can’t be deterred,’ Lee said. ‘We do have the weight to significantly change the cost calculations of the Chinese Communist Party.’

The University of Sydney’s Gorana Grgic ^[7] offered a range of conceptual frames for the future that’s coming into view:

• Charters—a resuscitated United Nations and rebuilt multilateralism.
• Clubs and coalitions—the democracies join together; the autocracies line up; like-minded coalitions form around issues.
• Concerts—a 21st-century version of the 19th-century recipe, built around spheres of influence.

Grgic’s bet discounts both the charter and concert outcomes. The charter future asks too much of a deeply troubled multilateral system. And attempts at concert will suffer because of domestic politics and the difficulty getting agreement between different regime types.

The Biden administration is using both club and coalition approaches, Grgic judged, with a high-minded appeal to democratic renewal as the principled lodestar, linked to a pragmatic effort to gather teammates.

Amid the domestic hand-to-hand of an election, Australia is giving some attention to the way the international system is shifting (or cracking). ASPI’s agenda paper for the federal election ^[8] comes at this future from several directions.

ASPI’s Michael Shoebridge judges that globalisation is ‘dead, not resting’, a victim of a divided and dangerous world. He sees a great decoupling of economies and supply chains, notably in the digital world and in key inputs (critical minerals, semiconductors, rare earths, software and, increasingly, the big tech actors and their platforms):

This fracturing of globalisation isn’t just about grievance and increased state-based competition. It’s a response to its inherent flaws, exposed by Covid’s shattering of brittle supply chains and by the ruthless intervention of state power into markets and longstanding business relationships (whether the more egregious, aggressive type we’ve seen from Beijing using trade as a weapon, or the ‘America first’ and ‘EU first’ behaviours seen with vaccine supply early in the pandemic).

Jennings sees politicians increasingly frustrated with a defence organisation that must move beyond the language of crisis and turbulence, to act with urgency and purpose:

Whoever is in government after the next election will face immense policy challenges. How best to strengthen Australia’s position against an angry, nationalist China? How best to shape and support American engagement? How to strengthen our regional friends and how to rapidly boost the capabilities of the ADF, and plan for nuclear submarines.

Time for an independent review of Australia’s defence capabilities, Jennings says, ‘the like of which we haven’t seen since Paul Dibb’s review in 1986’.

Fergus Hanson, of ASPI’s International Cyber Policy Centre, says Australia must look outward to a regional battle that will be about democratic values as well as interests. The Department of Foreign Affairs and Trade must be given the cash and mandate for a contest that’s not a clash of arms, Hanson writes, but a regional contest that ‘will require diplomatic expertise and scale to win’.

DFAT ^[9], I’ve argued, is a great department ^[10] with an anaemia problem ^[11], its budget squeezed for decades ^[12]. Nobody wants to pay for good foreign policy, but everybody pays for poor foreign policy ^[13]. See James Wise’s ASPI report ^[14] on how Australia underappreciates and underinvests in diplomacy.

As with Defence, Hanson says DFAT’s role needs a big rethink:

A lingering problem has been an inability to identify clear objectives that DFAT can pursue and achieve, thereby justifying its funding to government. The failure to do this has seen national security agencies increasingly ascendant in the Canberra policy ecosystem. As dismal as DFAT has been in justifying its own existence, the dynamics of competition in the region demand a well-resourced and high-functioning Australian foreign service. If DFAT can’t demonstrate the ability to evolve, a high-level review should look at a complete overhaul of the organisation to make it fit for purpose.

On 21 May, voters will pencil the numbers on their ballot papers, giving their score on our politics, but also on how the numbers are adding up beyond our shores.