The nature of strategic competition in the Indo-Pacific demands a renewed approach to deterrence by the United States, Australia, and their allies and partners. Rather than posing a purely military challenge, the Chinese Communist Party’s use of grey zone coercion, geoeconomic leverage, emerging technologies, and nuclear modernisation presents a multi-domain threat to regional order. While deterrence must be calibrated for different domains, it provides an important lens for developing strategies to resist, deny, or punish coercion in an integrated way.

There is no common framework for Americans and Australians to engage in focused thinking about deterrence in the Indo-Pacific. While both allies have core interests in dissuading Beijing from employing force and coercion, they do not possess the kind of formal understandings about collective commitments, capabilities, risk thresholds, and resolve that are central to operationalising deterrence in other alliances. It may be necessary to strengthen alliance coordination and planning mechanisms over time.

The United States and Australia have distinct perspectives on the scope of deterrence. Whereas Washington views deterrence in a global context involving multiple powers, for Canberra, it is regional and primarily about China. Australia cannot independently deter Chinese coercion; but it can complicate Beijing’s risk calculus by supporting US deterrence efforts, building domestic and regional resilience, and fostering collective action in the Pacific and Southeast Asia.

There is a growing consensus that the United States and Australia need a more proactive strategy for deterring grey zone coercion. Given the asymmetry of interests at stake in many flashpoints, this may require threats of legitimate escalation to build credibility. Other elements of a new strategy should include clear red-lines, the resolve to accept risks, an integrated policy toolkit, a collective approach, and explicit threat narratives.

As the US-China regional balance of power evolves in favour of Beijing, Washington will need to work more closely with its allies to sustain conventional deterrence. The most urgent priority is to bolster the war-fighting capacity of forward-deployed forces to deny China a fait accompli victory in its near abroad — a task that is complicated by Beijing’s higher tolerance for risk in pursuing a regional sphere of influence. In time, the United States, Australia, and other close allies may need to consider aggregating military capabilities to preserve a favourable balance.

The Indo-Pacific nuclear order is entering a period of geopolitical and technological flux that will likely lead to more intense nuclear competition among regional states. If counter-force targeting becomes a central part of this competition — which is expected as new technologies like hypersonics come online — joint facilities such as Pine Gap will become more important within the alliance.

Retaining a competitive edge in new technologies is central to deterrence in a multi-domain competition. This is best achieved collectively. The United States, Australia and other close partners should continue to integrate and breakdown barriers between their technological and innovation industrial bases. Expanding the Defense Innovation Unit to likeminded partners such as Australia can help stretch limited resources and focus investments on technologies that directly address shared operational challenges.

Although networking among US allies and partners in the Indo-Pacific is an important development, optimising the network for deterrence remains a key challenge. Capable allies like Australia should focus on developing the military interoperability, shared resolve, and internal coordination required for credible deterrence. In working to build the capacity and resilience of smaller partners, it is vital to present a positive narrative and a wholistic vision for the region’s economic, environmental, and security future.

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