Economic interdependence with China and the resulting connectivity of Chinese companies to the wider digital economy are increasingly viewed as a threat. How US allies in Asia respond to economic opportunities with China in strategic sectors is a key concern.

The United States’ policy toward China has undergone a pronounced shift in recent years to push back the expansion of Chinese global influence in technology and supply chains. In May 2019, the United States effectively banned Huawei with President Donald Trump’s Executive Order on Securing the Information and Communications Technology and Services Supply Chain. In August 2020, the US government prohibited non-US companies from exporting chips using US technologies to Huawei without a special license. Beyond the idiosyncrasies of the Trump administration’s foreign policy, the Biden administration has said that it was “concerned about the dangers of installing networks from equipment that can be manipulated, disrupted, or even controlled by the People’s Republic of China.”

As the US-China strategic rivalry has intensified, Washington has looked to its close allies and partners to counter Chinese clout, bringing their choices and strategies to the fore of shifting power balances in the Indo-Pacific. Australia, Japan, and South Korea each have a major stake in the United States’ continued security commitment to their own defense and to the US-led liberal international order. At the same time, China is the largest trading partner for all three countries, with their trade surpluses constituting significant percentages of their respective GDPs. From the perspective of the US allies in Asia, it has long been acknowledged that their foreign policy goals are best met when they can simultaneously maintain a strong military alliance with Washington while keeping good relations with Beijing for their economic prosperity. For this reason, Canberra, Seoul, and Tokyo all pursued a form of bifurcated foreign policy toward these two powers, as a way to hedge against future uncertainties.

One of the most pressing policy debates in Washington, Canberra, Seoul, Tokyo, and elsewhere is how to manage existing alliances in the face of the challenges arising from a rising and assertive China. Against the backdrop of the expectations established by the alliance halo, a norm among allied states that they are expected to support each other’s interests even on issues not officially commanded in the alliance agreement, when they diverged on the interests with regard to what risks Huawei posed and how to address them, they perceived the other ally as unreliable and took actions to mitigate the negative effects of the ally’s unreliability.

Scholars, policymakers and pundits debate the value of the US alliance network in Asia when it comes to jointly addressing these challenges that are short of invoking the alliance treaty. Some argue that the US alliance network should address economic coercion, disinformation campaigns, hacking, and marimetime law enforcement tactics that China and Russia use. Others argue that such coalitions will unnecessarily exacerbate the security dilemma vis-à-vis China, while causing a fear of political entrapment on the part of those countries that do not wish to choose sides between the United States and China. When it comes to the decoupling of global supply chains from China, expectations established by the alliance halo are likely to result in a fear of political entrapment, multi-faceted hedging, and threats of abrogation in their relations as allies, with long-term consequences for the future of the US alliance network in Asia.

The decisions on Huawei can be seen as a proxy for understanding alliance behaviour and preferences vis-à-vis China when economic opportunities and security risks coexist. Empirical evidence yields at least two insights. First, in the face of the United States’ expectations established by the alliance halo to join the ban on Huawei, its three closest Asian allies have responded differently. Australia’s reactions have been the most direct, banning Huawei and other Chinese companies before the United States, while showing a contrast with South Korea’s relatively muted responses. Japan’s decision to ban Huawei was as decisive as Australia’s but Tokyo sought to keep a low profile.

Second, these allies’ varied responses and choices originated mostly from their own assessments of the security risks associated with Huawei and China in the context of their own broader strategies of hedging toward Beijing, rather than the US diplomatic campaigns of urging them to ban Huawei. The United States has sought to influence its Asian allies to meet the challenges from a rising, assertive China through a networked allied architecture in techonology, infrastructure, and communications, as well as defense. From the alliance management point of view, this created a significant sense of political entrapment on the part of South Korea. Australia and Japan, whose interests converged on restricting China’s role in regional security and future technologies, not just formed a coalition with the United States, but in Australia’s case in particular, influenced Washington’s view on the nature of risks associated with Huawei.

In the face of perceived American unreliability and a fear of abandonment during the Trump presidency, they all pursued a variety of hedging strategies that strethened diplomacy with ASEAN and India, as well as with one another, in the cases of Canberra and Tokyo. Acknowledging that cybersecurity threats were central to the Huawei debate and that cyber attribution can be very difficult, all three countries have responded by creating and strengthening domestic institutions and legal authority over cybersecurity issues. Further, they all showed a tendency toward seeking the diversification of supply chains in order to reduce and manage their reliance on the Chinese economy at large.

The responses of its closest allies to the United States’ call for banning Huawei shows that diverging interests among the US and its Asian allies with regard to China’s rising global influence can cause anxieties and a fear of political entrapment in the US alliance network. When it comes to dealing with China’s multifaceted challenges that come with economic opportunities, it is necessary to manage allies’ expectations on mutual support.

In this era of US-China competition, efforts to address economic and technological issues further highlight interdependence and communication among allies in the US alliance network. As Yasuhiro Izumikawa’s study on the formation of the hub-and-spoke system has revealed, the preferences and behaviour of the US allies in Asia are as consequential as those of the United States in the shaping of a new international order.

The divergence on the Huawei issue is a good reminder that the US alliance network in Asia was originally built for more traditional security threats, such as an external attack on an alliance partner. The task of whether and how Washington and its allies will jointly meet the nonmilitary risks associated with China will require dialogue among alliance managers based on their appreciation of the differences in their goals and approaches to China.

In March 2021, US National Security Advisor Jake Sullivan announced that leaders of the Quad—the United States, Japan, India, and Australia—had agreed to establish a working group toward standard-setting for emerging technologies such as 5G and artificial intelligence. During President Joe Biden’s summit meetings with Prime Minister Suga Yoshide and President Moon Jae-in in April and May 2021, reorganising global supply chains was one of the most important agreements. These developments suggest the US and its allies’ efforts toward mutual support on the issues that are below their alliance contract.

Ji-Young Lee is an Associate Professor of International Relations and the C. W. Lim and KF Professor of Korean Studies at American University’s School of International Service.

Eugeniu Han is a Ph.D. candidate at the Pardee RAND Graduate School and an assistant policy researcher at RAND. His research addresses topics in international economics, technological innovation, and national security.

Keren Zhu is an assistant policy researcher at RAND and a Ph.D. student at the Pardee RAND Graduate School. She is also an adjunct lecturer at policy school of the University of Southern California. Her research interests include infrastructure development in emerging markets, program evaluation, the Belt and Road Initiative, China’s engagement with the world, international development, China-African relations and U.S.-China relations.

This is an edited extract of Lee, Han, and Zhu’s article in the Australian Journal of International Affairs, titled “Decoupling from China: how U.S. Asian allies responded to the Huawei ban” It is republished with permission.