Ahead of the anniversary meeting of NATO foreign ministers in Washington in April 2019, U.S. Vice President Mike Pence stated that the adjustment to the rise of China would probably be the biggest challenge for the Alliance in the coming decades. After the U.S. named both Russia and China as strategic rivals in its 2017 National Security Strategy (NSC) and 2018 National Defense Strategy (NDS), the first major test for transatlantic unity soon followed. The U.S. urged its allies to block Chinese company Huawei from participation in their broadband 5G networks, which could offer new ways of intelligence collection or be used to exert additional political pressure against Western democracies. When, despite warnings, the UK decided to grant Huawei a limited role in the development of such infrastructure, U.S. senators proposed legislation to limit the preferential access of British companies to the American market.
NATO has been struggling to forge a consensus on how to respond to China’s growing power and associated risks for the rules-based order and international security. NATO Secretary-General Jens Stoltenberg warned that China is getting closer to NATO in the Arctic, Africa, and cyberspace, and through control of infrastructure in Europe. He also noted that there is no need for greater NATO involvement in Asia-Pacific (which was recently replaced by the U.S and ASEAN with the term “Indo-Pacific”). Such statements helped prepare the setting of the NATO leaders meeting in London in December 2019. For the first time in the Alliance’s post-Cold War history, China was put on the agenda of the discussions between NATO heads of state and government. In the London Declaration that followed, the allies stated that China poses both opportunities and challenges, a statement that could be interpreted as a lack of consensus on how to respond to the Asian nation. Confronted with threats and challenges from both Russia and China, as well as terrorism and instability in the Middle East and North Africa (MENA), the allies agreed to launch a reflection process to help strengthen NATO’s political dimension, including consultation.
The ongoing coronavirus pandemic and accompanying economic crisis, which has hit all members of the NATO alliance, will probably strengthen traditional tensions in transatlantic relations. The U.S. will be under increased pressure to look for savings and the pressure on its allies to do more for common security will inevitably increase. Hence, the challenge of China and defining NATO’s role in Indo-Pacific is likely to be high on the agenda of the next Alliance summit in 2021.
China’s Growing Power—Opportunities and Risks
China’s rising power presents not only opportunities but also serious risks for the U.S. and its allies in strategic, normative, political, economic, and military dimensions. In the normative dimension, China is an open rival of democracies. The development of state-controlled capitalism in that country opened the way for modernisation and economic development but its one-party, authoritarian political system remained unchanged. The ruling Chinese Communist Party (CCP) offers economic development and security at the price of individual freedoms and civil rights. To augment this model, it has quashed any independent groups and created an unprecedented, high-tech system of control over the society, largely sealed from outside influence by strict censorship of information.
The Belt and Road Initiative (BRI), a massive project of investments in infrastructure in more than 130 countries, offers China additional economic and political leverage. The project will help secure access to markets and strategic resources, making China a dominant player in Eurasia and Africa.
Referring to the principle of non-interference in internal affairs, China tries to use its influence on other states and societies to change the definition of human rights by shifting the significance of political and individual rights towards economic and social ones. Beijing’s enhanced ability to defend and promote its vision of the world order includes significant political influence in the United Nations. Unlike any other UN member, China has the advantage both of holding veto power in the Security Council and wielding influence over the G77, a group of 134 developing countries in the UN General Assembly, almost 70% of the organisation’s members. With such trends continuing, the West’s capacity to maintain the rules-based global order and to promote democracy as the most legitimate model is likely to diminish.
China’s political influence is a natural result of its growing economic power. According to some estimates, China overtook the U.S. as the world’s largest economy in 2014, with more conservative estimates indicating that it still needs two decades to reach this point. Even though it still lags numerous countries in GDP per capita (PPP), dethroning the U.S. as the largest economy after more than 140 years of domination can have a significant psychological and political effect. This, in turn, can be used to divide the West and weaken the support of democracies for the rules-based order. The Belt and Road Initiative (BRI), a massive project of investments in infrastructure in more than 130 countries, offers China additional economic and political leverage. The project will help secure access to markets and strategic resources, making China a dominant player in Eurasia, Africa, and potentially even in the Arctic. To promote its interests in the latter region, China declared itself a “near-Arctic state.”
Although new Chinese initiatives can provide some benefits to interested countries, they also create vulnerabilities and strategic risks. On the one hand, China helps develop needed infrastructure and stimulates growth in some countries. On the other hand, it is accused of predatory practices that increase corruption and create a “debt trap,” undermining the chances for sustainable development. Through control of infrastructure, China can offer preferences to its state-controlled companies to gain a competitive advantage over the West. It can also use economic and political leverage to influence or coerce both developing states and mature democracies. One of the most spectacular examples of such coercion is the sanctions on Norway after the decision to award a Nobel Prize to Chinese dissident Liu Xiaobo in 2010. A similar kind of coercion has recently been applied against the Czech Republic because of its political contacts with Taiwan, and against Sweden, which awarded a literary prize to a Chinese-born Swedish publisher and scholar detained in China.
China’s claim to the whole South China Sea and determination to regain political control over Taiwan is backed by the modernisation of its navy (PLNA) at an unprecedented scale. Since 2005, the Chinese fleet has increased by 119 ships to 335, overtaking the U.S. deployable naval force.
China’s expanding economic and political interests can also create military risks for the U.S. and its allies in Indo-Pacific. With a defence budget estimated at $170 billion—second after the U.S.—the Chinese People’s Liberation Army (PLA) is being modernised to win “informationised, local wars,” which are regional conflicts defined by advanced technologies. China’s claim to the whole South China Sea and determination to regain political control over Taiwan is backed by the modernisation of its navy (PLNA) at an unprecedented scale. Since 2005, the Chinese fleet has increased by 119 ships to 335, overtaking the U.S. deployable naval force, which decreased in the same period by five vessels to 286. The potential of the PLNA can further be boosted in its “near seas” with 248 Coast Guard ships and maritime militia fishing boats. Newly deployed capabilities include difficult-to-detect cruise missiles, land-based anti-ship ballistic missiles (ASBM) capable of hitting moving ships at sea, hypersonic systems, S-400 air and missile defence systems procured from Russia, and offensive cyber and space capabilities. China has also invested in infrastructure to cement de facto control over disputed territories in its neighbourhood. It has developed a chain of artificial islands in the South China Sea and turned them into military facilities. In the East China Sea, it imposed an Air Defence Identification Zone (ADIZ), extending to areas disputed by Japan. As a consequence, it created an anti-access/area denial (A2/AD) bubble in its “near seas” in which it can defeat any adversary or threaten him with unacceptably high losses. For the first time since World War II, the U.S. may lose its ability to control major sea lines of communication in Asia, a region which is on track to reach 50% of global GDP within the next three decades.
With control over the “near seas” and the BRI bypassing major maritime routes controlled by the U.S., China will be able to exert military pressure for political purposes in its neighbourhood. If it decided to employ military power, for example, against Taiwan, it could use A2/AD to deter or delay U.S. intervention in defence of the island. China’s offensive cyber and space capabilities could limit the U.S. ability not only to win a conflict but even to end it on acceptable terms. China could also use its presence in the Arctic as a pretext to deploy ballistic missile submarines to the region and by influencing the U.S. threat perception, potentially weaken its resolve to defend allies. The simple fact that China possesses a growing ability to use military power in Indo-Pacific while U.S. intervention could be questioned might undermine the sense of security and political stability of democracies in the region.
During a crisis between NATO and Russia in Europe, China could deploy combat ships to the Baltic Sea or the Mediterranean, complicating Alliance military planning. Through its control of crucial infrastructure in Europe, it could limit U.S. options to send reinforcements to NATO.
China’s growing global economic and political interests stimulate the development of power-projection capabilities beyond the Indo-Pacific. In 2019, China’s second aircraft carrier became operational and expected further development of carrier battlegroups could challenge the U.S. Navy’s dominance of the world’s oceans. In 2018, the Chinese military also opened its first overseas base, in Djibouti, strategically located between the Indian Ocean and the Red Sea. With this facility, the PLNA will be better prepared to protect maritime routes between Asia and Africa. Even though this might open potential areas of cooperation with western states on combating piracy or humanitarian missions, the benefits do not offset the strategic disadvantages. The growing Chinese military presence in Africa coupled with the sale of military equipment to oppressive regimes can prolong their hold on power, which can fuel instability in Europe’s neighbourhood and weaken the political influence of the West on the continent.
China’s ability to challenge the rules-based international order with political and military tools is augmented by the strategic partnership with Russia, which can have direct negative security implications for NATO. China and Russia share a common goal of weakening U.S. dominance, strengthening military cooperation, and using joint manoeuvres for strategic signalling. Russia demonstrates support for China’s territorial claims by participating in military exercises in the South and East China seas, whereas China has sent its warships for manoeuvres in the Baltic Sea and the Mediterranean. Common strategic interests and military cooperation may suggest that both powers can count on each other’s political or even military support during a confrontation with the U.S. It would be in their common interest to enforce a change in the regional status quo, weaken the United States’ credibility as a guarantor of security arrangements, either in Europe or in the Indo-Pacific, and undermine U.S.-led alliances across the world. During a crisis between NATO and Russia in Europe, China could deploy combat ships to the Baltic Sea or the Mediterranean, complicating Alliance military planning. Through its control of crucial infrastructure in Europe, including stakes in ports in Greece, France, Spain, Belgium, and Germany, it could limit U.S. options to send reinforcements to Europe.
In response to the U.S. NSC and NDS documents, which refer to China as a rival, Chinese leadership for the first time acknowledged the strategic competition with the United States. In a 2019 defence policy white paper, China openly stressed its determination to build a global security architecture based on Chinese values and cooperation models (illiberal political system and state capitalism), which are presented as more effective than Western liberal democracy and the free market. In the document, China visibly harshened its criticism of Taiwan and accused the Western countries of violating its “territorial” waters in the South China Sea. It also signals that it has common strategic interests with Russia, whose revanchist policy in Europe was presented as a self-defence reaction to NATO enlargement. The tone and substance of the defence white paper coupled with China’s military build-up indicate that Beijing might be more willing to accept the risk of confrontation with the U.S. Although it is in China’s interest to achieve its strategic goals by political means, the risk that it will resort to military force in the South China Sea to test U.S. determination to defend the status quo is higher than in the past.
Challenges to NATO Political Cohesion
The rise of China and increased risk of conflict in the South China Sea create a long-term challenge for the political cohesion of NATO. Although Alliance unity can be threatened along numerous lines, the most dangerous split would be in transatlantic relations, since the credibility of NATO depends on the U.S. power and military presence in Europe. The United States perceives both China and Russia as rivals, but the sheer size of China’s power and its ability to undermine the rules-based order will increasingly dominate the U.S. threat perception and strengthen bipartisan consensus on this strategic challenge. In response to the rise of China, the U.S. has been gradually strengthening political and military cooperation with partners and allies in the Indo-Pacific, increasing its military presence in the region, and intensifying freedom of navigation operations (FONOP) in the South China Sea.
Greater NATO involvement in Indo-Pacific in a physical sense may not be in NATO’s interest, but there is a strategic rationale behind creating a new political tool that would demonstrate NATO’s support for the rules-based order in the region. For this purpose the “NATO-Pacific Forum” could be established.
At the same time, NATO has been trying to overcome financial and political limitations to adjust its potential to new threats from Russia and instability in MENA. With its Euro-Atlantic regional focus, limited power-projection capabilities, and diverse political and economic relations with China, it seems neither feasible nor desirable for NATO to contest China militarily in the Indo-Pacific. In addition to the U.S., only a small group of NATO members (including France, the United Kingdom, and Canada) have both the resources and political will to conduct FONOPs in contested waters in Southeast Asia. Even though China is perceived in major NATO states as a threat, some political leaders prefer to downplay the scale of the challenge. When the EU branded China a “systemic rival,” NATO, by indicating that China poses both opportunities and challenges, tried to limit the risk that it will be under pressure to initiate new missions without necessary resources. Still, NATO managed to approve certain measures necessary for maintaining its military credibility vis-à-vis China. In 2019, the allies identified space as an operational domain and approved the first-ever space policy, which should help defend satellites crucial for collective missions against Russian and Chinese attacks. In 2019, they also updated the baseline requirements for civilian telecommunications, which can facilitate a coordinated approach to the development of 5G networks.
These steps, even though important, have little political visibility in the U.S. With China potentially dominating the U.S threat perception and NATO making only politically obscure, internal adjustments to meet a challenge of strategic proportions, transatlantic relations may be fundamentally threatened. The Alliance can easily be accused by the U.S. of insufficient support for the rules-based order, including in the South China Sea. If politicized in the U.S., such support for NATO in the U.S. Congress could diminish, which can negatively affect U.S. support for the deterrence of Russia or even result in initiatives to limit the American military presence in Europe.
The NATO-Pacific Forum
Although greater NATO involvement in Asia-Pacific (Indo-Pacific) in a physical sense may not be in NATO’s interest, there is a strategic rationale behind creating a new political tool that could be used to demonstrate NATO’s support for the rules-based order in the region. For this purpose, the Alliance can use existing formats of cooperation with partners. After the collapse of the USSR, the allies decided to adapt NATO to the post-Cold War security environment and strengthen cohesion by complementing the Alliance’s collective-defence mission with crisis response and cooperative security. To support new missions, NATO created an extensive network of partnerships with 40 states, reaching out beyond the Euro-Atlantic area. The so called partners across the globe include Afghanistan, Australia, Columbia, Iraq, Japan, South Korea, Mongolia, New Zealand, and Pakistan. Each of them has a separate plan, tailored to their needs of cooperation with the Alliance—Individual Partnership and Cooperation Programme (IPCP).
In Indo-Pacific, the ICPCs have already established a set of shared principles, including adherence to the rules-based international order, and identified areas of cooperation, such as maritime security, crisis-response missions, or cybersecurity. The allies could move the relationship to the next level and launch a new format of political consultation and cooperation with like-minded, maritime partners from the Indo-Pacific: Australia, Japan, New Zealand, and South Korea. This “NATO-Pacific Forum” (NPF) could be based on similar principles as the Istanbul Cooperation Initiative (ICI) and Mediterranean Dialogue (MD)—multilateral formats promoting closer relations between NATO and partners from the Middle East and North Africa.
The NPF would complement the existing bilateral NATO+1 formats (NATO-Australia, NATO-Japan, NATO-South Korea, NATO-New Zealand), which, due to the diverse scope of practical cooperation, are of significant importance to individual partners. Political consultations in the NATO+4 format could be held at the level of chiefs of staff, ministers of foreign affairs, ministers of defence, and the heads of state and government. The NPF would also offer additional public diplomacy tools, including opportunities for meetings of high-ranking officials with the representatives of the four participating states.
Such a format would offer several political and practical benefits. On the political level, NATO would demonstrate its commitment to the defence of the rules-based order in the Indo-Pacific, under increasing pressure from China. Such a strategic message directed to the U.S. audience would help augment the transatlantic bond and limit the risk of a renewed debate about NATO’s relevance. With an additional forum for political consultation, it would be easier for NATO and its partners to understand their common strategic interest in defending the rules-based order both in Europe and the Indo-Pacific against concerted Russian and Chinese pressure.
On the practical level, regular consultations would provide the allies and partners with better situational awareness about evolving threats, facilitating a coordinated response. This could be more effective than at present, especially in the coordination of their anti-hybrid warfare measures, including strategic communication and cyberdefence. The areas of possible cooperation could also include maritime security (all partners supported NATO’s anti-piracy mission in the Gulf of Aden), missile defence, defence of space systems, non-proliferation of weapons of mass destruction, arms control, which would enable coordinated approach to both Russia and China, and possibly intelligence sharing.
To exploit the added value of the multilateral format, NATO and its partners could approve an annual working plan to exert pressure on participating states to move forward with coordination of their policies and practical mechanisms of cooperation.
China would probably react negatively to the formation of such a forum, like it’s reacted in the past to the Quadrilateral Security Dialogue (the Quad) between India, the U.S., Japan, and Australia. However, to adjust NATO to new strategic challenges, the allies have to be prepared to share the political risks and costs of defending the rules-based order with the United States. Such readiness is part of fair burden-sharing and constitutes a pillar of the Alliance. NATO can also limit the room for a negative Chinese response by stressing that the NATO-Pacific Forum, similar to the ICI and MD, is based on the principle of inclusiveness. It means it remains open to all interested countries in the region, although they have to subscribe to such aims as the defence of the rules-based order.
Even though a new format can be easily organised technically, it would require some political effort to convince partners. Australia, which was granted the status of Enhanced Opportunity Partner and is sometimes presented as a natural candidate for NATO membership despite the organisation’s regional character, is proud of its most advanced bilateral cooperation with the Alliance. South Korea is usually sceptical of initiatives that can be perceived as anti-China. However, the deteriorating security environment and dependence of both states on the U.S. military presence should encourage decision-makers to exploit new opportunities to strengthen relations with NATO and the U.S.
The announcement of the strategic reflection period by NATO creates a political expectation that the allies will come up with some practical and politically feasible strategy to adjust the Alliance to meet the new challenges and threats from Russia, China, terrorism, and instability in MENA. In just the China dimension it will be a significant challenge. There is growing bipartisan consensus in the U.S. that China is a key security threat that requires a long-term strategy and mobilisation of resources, including through coordinated responses with allies and partners. However, building a similar consensus in NATO will be much more problematic due to the different threat perceptions, short-term political interests, and attempts by numerous NATO states to strengthen their position through cooperation with China. This, coupled with the Alliance’s declining engagement in Afghanistan (the main platform of cooperation with partners from the Indo-Pacific) and the risk of failure to increase defence spending to 2% of GDP by some allies (a problem further exacerbated by the coronavirus pandemic), can lead to a fundamental threat to transatlantic relations. Although the concept of the NATO-Pacific Forum would not solve all the problems, it could help limit the risk of detrimental transatlantic tensions. As the ICI and MD indicate, adding a multilateral format to bilateral cooperation would not increase the risk that NATO would be drawn into a military conflict beyond Europe against the will of its members. On the contrary, an additional political tool would rather facilitate preventive diplomacy, limiting the risk that the U.S. will expect military support from NATO in the South China Sea. In the longer term, however, it could also help fine-tune threat perceptions among NATO states and partners, strengthen transatlantic cohesion, and facilitate coordinated policy towards China, Russia, and threats from other directions. Hence, by deepening political relations and practical cooperation with partners from the Indo-Pacific, NATO also would be better prepared to maintain its primary function as a collective-defence organisation in the Euro-Atlantic area.
 “Remarks by Vice President Pence at NATO Engages: The Alliance at 70, 3 April 2019,” www.whitehouse.gov.
 “The Chinese Threat to American Speech, The New York Times, 19 October 2019, www.nytimes.com.
 D. Shepardson, “U.S. Lawmakers Seek to Step Up Pressure on UK to Reverse Huawei 5G Decision,” Reuters, 5 March 2020, www.reuters.com.
 NATO and EU strategic documents indicate that both organisations and their members are guided in their actions by a set of principles that include democracy, the rule of law, the universality and indivisibility of human rights, and respect for the principles of the United Nations Charter and international law. There is a general consensus among members of both organisations that the rules-based order they are ready to defend comprises respect for international law, human rights, and free access to global commons (freedom of navigation and overflight).
 “NATO: The Transatlantic Alliance at 70 Conversation with NATO Secretary General Jens Stoltenberg at the Aspen Security Forum,” 17 July 2019, www.nato.int.
 “London Declaration issued by the Heads of State and Government participating in the meeting of the North Atlantic Council in London 3-4 December 2019,” 4 December 2019, www.nato.int.
 M. Okano-Heijmans, F.P. van der Puten, “A United Nations with Chinese Characteristics?,” Clingendael Report, December 2018.
 “China’s Economic Rise: History, Trends, Challenges, and Implications for the United States,” CRS Report, 25 June 2019, www.fas.org.
 “China’s Strategy in Africa,” Enerdata, 21 January 2020, www.enerdata.net.
 H. Havnes, J.M. Seland, “The Increasing Security Focus in China’s Arctic Policy,” The Arctic Institute, Center for Circumpolar Security Studies, www.thearcticinstitute.org.
 Y. Chen, “Silk Road to the Sahel: African Ambitions in China’s Belt and Road Initiative,” China-Africa Research Initiative, Policy Brief, No. 23, 2018.
 C. Paris, “Djibouti Rejects Court Ruling to Hand Back Container Terminal,” The Wall Street Journal, 17 January 2020, www.wsj.com.
 M. Przychodniak, “Tensions in China-Sweden Relations: Conclusions for the EU,” PISM Bulletin, 20 January 2020.
 M. Taylor Fravel, “China’s New Military Strategy: ‘Winning Informationised Local Wars’,” China Brief, vol. 15, 2 July 2015, www.jamestwon.org; “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2019,” Office of the Secretary of Defence, 2019.
 “China Naval Modernization: Implications for U.S. Navy Capabilities—Background and Issues for Congress,” Congressional Research Service, 20 December 2019, www.fas.org.
 “Asia’s Future is Now,” McKinsey Global Institute Discussion Paper, July 2019.
 M. Paul, “Partnership on the High Seas. China and Russia’s Joint Naval Manoeuvres,” SWP Comment 2019/C26, June 2019, www.swp-berlin.org.
 J. Szczudlik, “‘New Era’ in China’s Defence Policy,” PISM Bulletin, 122 (1871), 27 August 2019; for the full text of the 2019 defence white paper, see: “China’s National Defense in the New Era,” Andrew S. Erickson, www.andrewerickson.com.
 G. Zieziulewicz, S. Snow, “Navy Conducts Year’s First FONOP in South China Sea,” Navy Times, 29 January 2020, www.navytimes.com.
 L. Silver, K. Devlin, Ch. Huang, “Attitudes towards China,” Pew Research Center, 5 December 2019, www.pewresearch.org.
 The name should include the word “Pacific” to maintain high visibility and serve its political purpose. Other names of the format could be “NATO-Pacific Initiative” or “NATO-Pacific Council,” with the latter referring to the North Atlantic Council and indicating the strategic significance of the initiative. The name “NATO-Pacific Dialogue” should be avoided as it could be confused with the “NATO-Asia-Pacific Dialogue”—an expert forum organised by the Konrad Adenauer Foundation in cooperation with NATO.
 L. Bourke, “Let Australia Join NATO: Summit Begins with Plea for Change,” The Sydney Morning Herald, 4 December 2019, www.smh.com.au.