Benjamin Picton at RaboResearch describes a growing Indo-Pacific arms race and geopolitical hedging as countries adjust security and trade ties in response to a more assertive China. Recent agreements between Indonesia and Australia, and Australia’s wider network of defence and trade arrangements, illustrate a shift toward bloc-based cooperation and denser geopolitical ‘hedgerows’ in security and economic relations.

Regional defence ties deepen and diversify

"To underline this point, Indonesia and Australia have just signed a common security pact."

"Though it falls short of a mutualdefence pact, the agreement will see a significant step-up in military cooperation that highlights the strategic re-evaluation that is underway across the Indo-Pacific."

"For its part, Australia has been busily upgrading its diplomatic and security ties in the region for several years now."

"Major agreements have recently been signed with Papua New Guinea, Fiji, the Solomon Islands, Vanuatu and Timor-Leste, while the AUKUS pact with the United States and the UK will soon see the Henderson shipyard in Western Australia used for maintenance and sustainment of nuclear submarines."

"The pattern of freer trade for friends and restricted trade elsewhere is a template that is now being repeated globally as the world coalesces into interest blocs with geopolitical hedgerows erected in between."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)