The Shorenstein Asia-Pacific Research Center (APARC) is delighted to share that Center Fellow Oriana Skylar Mastro is the recipient of the John H. McArthur Research Fellowship for 2022-23 in recognition of her outstanding scholarship.

Awarded by the Asia Pacific Foundation of Canada (APF Canada), the fellowship provides opportunities for exceptional mid-career scholars working on programs and research areas directly relevant to Canada and Canada’s interests in Asia. It honors the memory of John H. McArthur, a world-renowned Canadian business educator who, among other roles, was dean at Harvard Business School and chair of the APF Canada Board of Directors.

Mastro’s current research projects focus on the U.S.-China great power competition, deterrence in the Taiwan Strait, China’s maritime ambitions, and the China-Russia military relationship.

Prior to her appointment at Stanford in August 2020, Mastro was an assistant professor of security studies at the Edmund A. Walsh School of Foreign Service at Georgetown University. She holds a B.A. in East Asian Studies from Stanford University and an M.A. and Ph.D. in Politics from Princeton University.

Over the past decade, as China’s might and assertiveness have grown, countries around the Indo-Pacific have increasingly embraced informal partnerships, or minilateral groupings, to deepen international policy action and defense coordination. Two prominent examples of the minilateral model are the Quad, which comprises Australia, India, Japan, and the United States, and AUKUS, which includes Australia, the United Kingdom, and the United States. However, deterring China with minilateral groupings is more complex than traditional deterrence theory might suggest. Can minilateral groupings deter coercion and aggression in the Indo-Pacific, and if so, under what conditions? 

A collection of essays in a new Asia Policy roundtable tackles this question. Shorenstein APARC South Asia Research Scholar Arzan Tarapore is a co-editor of the roundtable. Center Fellow Oriana Skylar Mastro is the author of the first essay in the collection.

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The roundtable brings together six leading security experts to explore the nexus between deterrence and minilateralism in Indo-Pacific security politics. The motivation for this endeavor, Tarpore and co-editor Brendan Taylor of the Australian National University explain in the roundtable introductory essay, is to fill the gap in the existing literature, which has largely not addressed the possible convergence between these two increasingly dominant trends in the region.

The roundtable opens with Mastro's essay, in which she identifies the unique characteristics of the China challenge and considers how minilateral groupings can best enhance deterrence in these circumstances. First, she explains why minilaterals, such as the Quad, could address some of the challenges of “deterrence by punishment.” This traditional form of deterrence employs the threat of severe penalties — ranging from economic sanctions to nuclear retaliation — to prevent attacks by an adversary. Here, Mastro says, “economic or political costs may have greater deterrent value against Beijing than military costs, thus creating an opportunity for the Quad.”

Next is the category of “deterrence by denial,” which includes strategies that prevent or limit aggressive actions of an adversary by creating the perception that they will not succeed. Such denial-based strategies are more effective than punishment-based ones in circumstances where China could blunt U.S. attempts at punishment or choose to incur the costs. But the United States, Mastro says, “does not have the regional force posture to deny China its objectives.” 

Mastro then considers a third, less analyzed category, “deterrence by resilience,” where the goal is to encourage the perception that disruptive events such as military operations will not be effective in attaining the adversary’s objectives. Here, “resiliency is about signaling to China that the benefits of a particular action are less than China believes them to be.” By building resiliency, smaller countries can push back against Chinese coercion to abide by China's interests. Countries in minilateral groupings should therefore prioritize this form of deterrence as they consider ways to cooperate, Mastro concludes.

This commentary was first published by Nikkei Asia.

The White House has styled the Partnership for Global Infrastructure and Investment announced by U.S. President Joe Biden in June as a $40 billion pathway to work with allies, partners and the private sector to offer sustainable, green infrastructure alternatives.

This marks the latest American effort to offer an infrastructure alternative to China's Belt and Road Initiative. But given the disappointing results seen with previous such programs, it is imperative that Washington look for lessons in the successes of other more creative efforts in recent years.

Experience shows that the U.S. and its allies can win important infrastructure victories by being strategic, proactive and persistent, and by building close partnerships between government and private business.

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Consider the deal under which U.S. private equity group Cerberus Capital acquired a bankrupt shipyard in the Philippines last April, keeping it out of Chinese hands.

The U.S. embassy in Manila had alerted Washington to the business' failure in 2019, noting that its Subic Bay location provided the closest deep-water port access and ship supply and repair facilities to the disputed South China Sea and that Philippine officials were concerned about the prospect of Chinese companies moving in. Some in Washington showed interest, but the bureaucracy initially struggled to translate this into action. Fortunately, key players in the government persisted.

Working closely with Cerberus executives to overcome delays and a decision by the U.S. International Development Finance Corp. (DFC) not to participate in the project, these officials developed a creative solution: obtaining commitments from the U.S. Army and the Philippine Navy to lease parts of the project area, thereby guaranteeing Cerberus the steady revenue stream it required to proceed. The deal was a big win but happened only through the ad hoc efforts of a few people.

The Australian government took a more proactive approach toward the sale of the Pacific arm of Digicel Group, which controlled much of the communications and internet infrastructure in six island nations, including Papua New Guinea. Two Chinese state-owned companies had immediately expressed interest in the assets when Irish billionaire Denis O'Brien put them up for sale in 2020.

The U.S. took a different but equally strategic approach toward a third infrastructure development of strategic importance: China's building of a deep-water port at Kyaukphyu on the Bay of Bengal in Myanmar.

CITIC Group, the Chinese state-owned lead investor, had initially proposed a $7.3 billion port complex which would have made Kyaukphyu as big as Southern California's massive Long Beach freight hub.

Some U.S. and Myanmar officials were concerned that Naypyidaw could be saddled with sizable debt for a project of questionable commercial viability as the Chinese proposal included loans worth hundreds of millions of dollars for Myanmar to finance its 15% stake. CITIC was to take 85%.

In response to a request from the National League for Democracy-led government, Washington's embassy in Yangon used funds from an existing U.S. Agency for International Development program to hire independent experts to conduct due diligence on the project.

They succeeded in downsizing the project to $1.3 billion and doubling Myanmar's equity participation to 30%, thus avoiding the need for borrowing from China. Going ahead on a smaller scale then greatly reduced concerns about potential repercussions.

These three efforts demonstrate that the U.S. and its allies can, when they focus imaginatively, offer countries in the region viable infrastructure options that reduce their dependence on Chinese investments.

They also highlight, however, that this process remains ad hoc and needs substantial improvement. For the Partnership for Global Infrastructure and Investment to be successful, the U.S. and its partners must adopt a more systematic strategic approach.

This approach should include three components. First, the U.S. should build on its recent appointment of a global infrastructure coordinator at the State Department by moving that position to the White House. It should give the coordinator authority to bring together personnel from different agencies and ample staff of his or her own and provide a clear mandate to identify and pursue priority infrastructure projects aggressively.

Second, the U.S. must make better use of existing tools by bolstering the DFC's flexibility, requiring each embassy to assign an officer to identify potential projects and ensuring senior officials match Beijing's aggressive lobbying efforts.

Third, the U.S. infrastructure team should forge partnerships with private companies on specific infrastructure projects and redouble efforts to overcome the obstacles that have hindered cooperation with allies, including Japan, which on its own has achieved success on the infrastructure front, to co-finance and coordinate so as to avoid needless competition.

These recommendations will take commitment, political will and resourcing. But if Washington wants PGII to succeed, it will require the White House's strong commitment and a willingness to be nimble and creative in responding to opportunities.

The U.S. has made many promises in a variety of programs on global infrastructure development and consistently under-delivered. PGII must prove it can get things done.

James Carouso leads the advisory board to the Australia chair of the Center for Strategic and International Studies in Washington. Scot Marciel is the Oksenberg-Rohlen Fellow at the Shorenstein Asia-Pacific Research Center of Stanford University and a former U.S. ambassador to ASEAN, Indonesia and Myanmar. Both are senior advisers at strategic advisory firm BowerGroupAsia.