Facing China, Dealing with Trump, and Shaping Effective Australian Defence: Ross Babbage Goes to the Heart of the Matter

My friend and colleague, Ross Babbage, has spent a lifetime understanding the strategic threats to Western civilization.

While many in Australia would include President Trump in this calculus, Babbage focuses on the systemic challenge to Australia, namely China.

Next year I am publishing a book with my friend and colleague, the noted expert on Brazil and Portugal, Kenneth Maxwell, which looks at both Australia and Brazil and their evolving relationships with China and what it means for the democratic world.

For I think that how the democratic middle powers play their game will determine the fate and outcome of the democratic world.

In the context of interdependence and constrained major power autonomy, middle powers have gained unprecedented agency. Middle powers are states that commit their relative affluence, managerial skills, and international prestige to the preservation of the international order and peace, helping to maintain the international order through coalition-building, by serving as mediators and “go-betweens.”

Unlike the colonial era, when territories were either colonizers or colonized, today’s middle powers, Australia, South Korea, Japan, India, and Brazil, operate as autonomous actors with significant influence.

One of the leading trends in world politics which in the long run, are just as important as intensifying great-power rivalries is the growing desire of these countries for more control over the shape of the global order and greater influence over specific outcomes.

Many middle powers are diversifying their partnerships and clearly not wanting to align fully with either side and know that their ability to overhaul the any bifurcating global order is limited.

But Babbage warns Australia of the need to enhance its own defence capabilities rather than just tilting towards partnerships in its region skillfully being played by President Xi and ignoring the tumultuous President Trump. Perhaps this to be understood emotionally, but it certainly does not make sense strategically if one is concerned with the fate and security of Australia itself.

In a recent piece published on July 4th by the ASPI strategist, Babbage argues the case for Australia focusing on its need to enhance real defence capability, rather than simply arguing against Washington with record to spending levels.

According to Babbage, Australia’s security challenges have undergone a paradigm shift that the government seems reluctant to acknowledge publicly. Unlike the Cold War era when potential conflicts centered on Europe, Australia now sits precariously on the edge of what may become the world’s primary theater of major power conflict.

This isn’t merely about geography. The convergence of several strategic trends has created what Babbage describes as a “perfect storm” of vulnerability for Australia.

The most striking change is the erosion of American military dominance that has underpinned regional stability for decades. U.S .defense spending has dropped to approximately 3.3% of GDP — its lowest share in 70 years. Meanwhile, China has built the largest military forces in the Western Pacific and is rapidly expanding its nuclear arsenal to potentially match U.S. and Russian levels within a decade.

This shift has profound implications. If current trends continue, Washington could face a coalition of authoritarian powers possessing roughly 3,000 strategic nuclear warheads.—.double the U.S. arsenal.

The result?

America becomes increasingly constrained in its ability to confront Chinese and Russian aggression, as evidenced by Beijing’s growing boldness in the South China Sea and Moscow’s actions in Ukraine.

Perhaps most sobering is the industrial dimension. China’s manufacturing output now doubles that of the United States, with shipbuilding capacity over 100 times larger. In a prolonged conflict, this industrial imbalance could prove decisive. The U.S. would struggle to supply its own forces, leaving allies like Australia to fend for themselves or find alternative suppliers.

This industrial shift reflects deeper changes in China’s strategic preparation.

Under Xi Jinping’s direction, Chinese infrastructure programs now prioritize defence needs over economic growth, potentially reducing annual GDP growth by 1-2%.

The country is building bomb shelters, adapting industry for military support, and rapidly expanding strategic reserves of fuel, raw materials, and food.

Equally concerning is what Babbage identifies as declining U.S. strategic credibility. From Obama’s inaction after Syria crossed his chemical weapons “red line” to inconsistent support for Ukraine and Israel, recent American presidents have demonstrated less predictable commitment to allied defense.

This pattern suggests that “prompt, powerful and sustained U.S. support for Australia in a crisis is now much less predictable and less likely than it has been.”

Given that many of these changes predate recent political developments and reflect deeper social shifts in America, they’re likely to endure.

In practical terms, Australia must prepare for scenarios previously considered unlikely: fighting wars of necessity against major powers with little warning and uncertain allied support. This requires capabilities that can deter aggression independently while supplementing allied forces when possible.

The recommended approach involves both military and civilian preparations.

Military priorities include advanced uncrewed submarines, road-mobile intermediate-range missiles, long-range strike aircraft, and hardened military bases.

Civilian preparations encompass industrial competitiveness, economic resilience against weaponization, enhanced emergency services, and public awareness campaigns.

The financial reality is stark. Babbage argues that Australia’s planned defense spending of 2-2.3% of GDP is insufficient for the new strategic environment. He advocates for NATO’s emerging standard of 3.5% of GDP for defense, plus 1.5% for supporting infrastructure.

This represents a significant increase from current levels, but the alternative — inadequate preparation for increasingly likely conflicts — could prove far more costly.

The debate over defense spending shouldn’t be reduced to meeting American expectations or hitting arbitrary targets.

The compelling case for increased investment stems from Australia’s deteriorating strategic position and the need to maintain sovereignty in an increasingly dangerous neighborhood.

As Babbage concludes, “The government is gambling that its minimalist defence spending will be enough. If it is wrong, Australia will pay a terrible price.”

The question isn’t whether Australia can afford to spend more on defence.

It’s whether the nation can afford not to. In an era where the strategic balance is shifting rapidly, half-measures may prove to be no measures at all.

The time for comfortable assumptions about distance, allies, and deterrence has passed.

Babbage argues Australia’s leaders must now grapple with harder truths about the nation’s security in an increasingly contested world.