The Quad’s Geo-Economic and Geostrategic Implications

Chinese Foreign Minister Wang Yi famously mocked the Quad as a “headline-grabbing idea” that will dissipate “like the sea foam in the Pacific or Indian Ocean.” But far from dissipating, the Quad is strengthening, largely in response to China’s muscular revisionism.

Brahma CHELLANEY
published by RIETI (Research Institute of Economy, Trade and Industry)

At a time when there is a life-and-death conflict between two systems of governance — repressive and democratic — a loose strategic coalition of the Indo-Pacific region’s four leading democracies, the Quad, is rapidly solidifying. Comprised of Australia, India, Japan and the United States, the Quad has received a lot of international attention, largely because of the promise it holds toward underpinning the power equilibrium in the Indo-Pacific. In fact, the increasing use of the term “Indo-Pacific” — which refers to all countries bordering the Indian and Pacific oceans — rather than the traditional term “Asia-Pacific,” underscores the maritime dimension of today’s challenges. Asia’s oceans have increasingly become an arena of competition for resources and influence (Note 1). It now seems likely that future regional crises will be triggered and settled at sea.

As is apparent from the websites of the White House and the foreign ministries of its four member-states, the Quad’s official name is the Quad, not “Quadrilateral Security Dialogue,” as some publications keep calling it on first reference. The Quad’s origins date back to the 2004 Boxing Day tsunami that devastated large parts of Asia, killing hundreds of thousands across Indonesia, Thailand, India, Sri Lanka and South Africa. The four countries joined hands to coordinate disaster relief and humanitarian assistance. The idea of formalizing a Quad emerged from that humanitarian initiative.

After lying dormant for nine years, the Quad was resurrected in November 2017 and began regular working-level meetings. It started gaining momentum after its consultations were elevated to the foreign-minister level in October 2020. Under U.S. President Joe Biden’s initiative, the Quad leaders convened for the first in-person summit at the White House in September 2021. In fact, just weeks after assuming office, Biden organized a virtual Quad summit that yielded the Quad leaders’ first joint statement, which articulated a clear-eyed vision (Note 2).

China has long viewed the Quad with suspicion, with its misgivings reinforced by the more recent formation of the Australia-UK-U.S. (AUKUS) alliance, which President Biden called “a historic step.” The plain fact is that China’s aggressive actions have driven India closer to America, compelled Japan to strengthen its security alliance with the U.S., and forced Australia to abandon hedging and openly align itself with Washington.

China sees the Quad as a threat to its expansionist ambitions (Note 3). But, publicly, China has been dismissive of the Quad. Chinese Foreign Minister Wang Yi famously mocked the Quad as a “headline-grabbing idea” that will dissipate “like the sea foam in the Pacific or Indian Ocean.” Far from dissipating like “sea foam,” the Quad is strengthening, with its four democracies forging closer bonds in response to China’s increasingly muscular actions, which extend from the East and South China Seas to the Himalayas. In fact, opposing China’s coercive expansionism is the Quad’s unifying theme.

The next logical step would be for these democracies to play a more concerted, coordinated role in advancing broader Indo-Pacific security. The idea, however, is not to create an Asian version of NATO, but rather to develop a close partnership founded on shared values and interests, including the rule of law, freedom of navigation, respect for territorial integrity and sovereignty, peaceful dispute resolution, free markets and free trade.

China represents a growing challenge to these principles. At a time when the world is still battling a deadly pandemic that originated in China, that country’s muscular revisionism has lent new momentum to the Quad’s evolution toward a concrete, institutionalized grouping. In fact, with India’s closer integration, the Quad is beginning to blossom. And the Quad seems poised to deepen its strategic collaboration.

The Australia-India-Japan-U.S. quartet has affirmed a shared commitment to underpin an Indo-Pacific region based on clear and transparent rules, with respect for international law. The Quad’s agenda is centered on building a stable balance of power and a “free and open Indo-Pacific,” a concept authored in 2016 by then-Japanese Prime Minister Shinzo Abe. That concept was later embraced by U.S. policy, becoming the linchpin of America’s Indo-Pacific strategy under two successive administrations. The Quad’s focus, however, extends beyond China and the security realm.

In fact, the media focus on the Quad’s geostrategic aspects has obscured the important role that the group is playing to bring about geo-economic change. The grouping’s geo-economic priorities are apparent from several of its initiatives, including the following (Note 4):

  • Build resilient supply chains. The Quad’s supply-chain initiative extends from the technology and public-health sectors to clean energy. With Beijing seeking to leverage its domination of international supply chains, many economies, since the start of the COVID-19 pandemic, have learned hard lessons about China-dependent supply chains. There is a growing recognition of the imperative to diversify supply chains and make them more resilient to interference or manipulation by any state. Toward that end, the Quad, among other things, has sought to secure supply chains for vaccine production and clean energy, as well as identify vulnerabilities and strengthen supply-chain security for semiconductors and their vital components.
  • Rally expertise, capacity and finance to expand regional infrastructure. The Quad is working to finance and build infrastructure projects in the Indo-Pacific that are properly planned and financially sustainable as a counter to China’s debt-trap diplomacy, which is driving its “Belt and Road Initiative” even as it increasingly ensnares vulnerable nations in sovereignty-eroding debt traps (Note 5). Since 2015, the Quad partners have provided over $48 billion to more than 30 regional states in official finance for infrastructure related to public health, rural development, water supply and sanitation, renewable power generation, telecommunications and road transportation. Meanwhile, the Quad Infrastructure Coordination Group has been established to help deliver transparent, high-standards infrastructure by coordinating technical assistance and capacity-building efforts, including with regional states.
  • Help vaccinate the world against COVID-19. The Quad Vaccine Partnership, launched in March 2021, is aimed at fostering equitable access to COVID-19 vaccines in the Indo-Pacific and the wider world by expanding vaccine manufacturing capacity in the quartet and donating vaccines to developing nations. This initiative is piloted by the Quad Vaccine Experts Group, which coordinates the Quad’s collective response to the pandemic. As part of their plan to donate more than 1.2 billion COVID-19 vaccine doses, in addition to the doses they have already financed through COVAX, the Quad countries seek to leverage the vaccine-manufacturing heft of India, which supplies more than 60% of the world’s vaccines against various diseases. Japan, for example, will invest some $100 million in India’s healthcare sector to help boost the output of COVID-19 vaccines and treatment drugs.
  • Foster an open, accessible and secure technology ecosystem. This goal extends from 5G diversification and deployment to bolstering critical-infrastructure resilience against cyber threats. The Quad partners have now extended their cooperation even to outer space, including building a partnership for exchanging satellite data to promote sustainable use of oceans and marine resources and thereby protect the Earth. Critical and Emerging Technologies Working Group has been established.
  • Keep climate goals within reach through clean-energy innovation and deployment as well as adaptation, resilience and preparedness. A Quad shipping task force, for example, will seek to establish low-emission or zero-emission shipping corridors between the Quad member-countries, including by inviting Yokohama, Los Angeles, Sydney and Mumbai to form a green-shipping network. The Quad is also aiming at a clean-hydrogen partnership to strengthen and reduce costs across all elements of the clean-hydrogen value chain and to boost trade in clean hydrogen across the Indo-Pacific. Another objective of the Quad is improving critical climate information-sharing and disaster-resilient infrastructure.

These initiatives show that the Quad, although catalyzed into action by China’s aggressive actions and irascible behavior, has a broader agenda heavily focused on geo-economic issues. After the administration of U.S. President Donald Trump took the lead in reviving the dormant Quad and giving it strategic meaning, the Biden administration, in partnership with Japan, India and Australia, has sought to orient the Quad toward addressing the geo-economic challenges. Following the G-7 summit in Britain in June 2021, President Biden revealed at a news conference that, after he won the presidential election, a Chinese leader (whom he didn’t name) sought to dissuade him from embracing the Quad (Note 6).

Today, its four members perceive the Quad as providing important new architecture in the Indo-Pacific for advancing cooperation economically and strategically. The Quad, through its geo-economic initiatives, including generous vaccine donations, is also seeking to project soft power.

The fact is that the Quad is fostering greater cooperation between and among its member-states, as well as with outside nations. By seeking to leverage both public and private resources to achieve maximum impact, the Quad offers an alternative model to China’s state-directed lending for infrastructure projects, which has saddled a number of countries with onerous debts and increased their dependence on Beijing. Australia has unveiled a $1.4 billion infrastructure fund for the South Pacific, while Japan and India have agreed to develop a series of joint projects along what they have called the “Asia-Africa Growth Corridor,” which links the two continents via sea routes.

More fundamentally, the Quad member-states have come a long way toward cementing a partnership of democracies that had once appeared more concept than reality. The new AUKUS alliance is likely to complement the Quad. For the U.S., the Quad is becoming the central dynamic of its Indo-Pacific policy, with National Security Adviser Jake Sullivan calling the Quad “a foundation upon which to build substantial American policy in the Indo-Pacific (Note 7).”

While recognizing the Quad’s utility, it is also important to understand its limitations. Unlike the U.S. and Australia, which are geographically distant from China, Japan and India face a direct China threat, which the Quad cannot mitigate. While India in response has embarked on a major defense buildup, Japan — already shaken out of its complacency by an expansionist China vying for regional hegemony — is likely in the coming years to rearm and become militarily more independent of the U.S., without jettisoning its security treaty with Washington (Note 8).

Still, it is imperative that the Quad gain greater economic and strategic heft so as to ensure power equilibrium in the Indo-Pacific. By cooperating in economic, technological and security realms and coordinating their responses, the Quad member-states can help put discreet checks on the unbridled exercise of Chinese power. If China’s growing threats against Taiwan lead to military action, then a grand international coalition, with the Quad at its core, could emerge.

Footnotes:

  1. ^ The White House, United States Strategic Framework for the Indo-Pacific (Washington, DC: The White House, declassified on January 5, 2021); and U.S. Department of State, The Elements of the China Challenge (Washington, DC: Policy Planning Staff, Office of the Secretary of State, November 2020).
  2. ^ The White House, “Quad Leaders’ Joint Statement: ‘The Spirit of the Quad,’” March 12, 2021, available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/12/quad-leaders-joint-statement-the-spirit-of-the-quad/.
  3. ^ Kevin Rudd, “Why the Quad Alarms China,” Foreign Affairs, August 6, 2021.
  4. ^ The White House, “Fact Sheet: Quad Leaders’ Summit,” September 24, 2021; and the White House, “Joint Statement from Quad Leaders,” September 24, 2021.
  5. ^ Anna Gelpern, Sebastian Horn, et al, How China Lends: A Rare Look into China’s Debt Contracts with Foreign Governments (Williamsburg, VA: AidData at William & Mary, the Center for Global Development, the Kiel Institute for the World Economy, and the Peterson Institute for International Economics, March 2021).
  6. ^ The White House, “Remarks by President Biden in Press Conference,” June 13, 2021, at Cornwall, United Kingdom, available at https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/06/13/remarks-by-president-biden-in-press-conference-2/.
  7. ^ Kyodo, AFP-Jiji Press, “U.S. national security adviser says ‘Quad’ key in Indo-Pacific,” The Japan Times, January 30, 2021.
  8. ^ Ministry of Foreign Affairs of Japan, Full text of the Treaty of Mutual Cooperation and Security Between Japan and the United States of America, signed on January 19, 1960, available at https://www.mofa.go.jp/region/n-america/us/q&a/ref/1.html.