The global economy may be in hibernation, but geopolitics is thriving and sprinting towards a potential crisis at the end of this year or early in 2021. The immediate and understandable focus is on fighting the virus, but our government needs to be thinking about defence and national security risks as well.

The core of the security problem is the Chinese Communist Party’s drive to emerge from the Covid-19 pandemic strategically stronger in the Asia–Pacific than the US and its allies.

This is not just about diplomacy. The Chinese military is aggressively positioning around Taiwan, using ships and combat aircraft to push into Japanese and South Korean territory and doing high-end combat training in the South China Sea.

At the same time, Chinese state media outlets are fomenting aggressive nationalism. The Global Times, the party’s English-language paper, editorialised on 4 April: ‘If the Taiwan question leads to a China–US showdown, no matter what the results, Taiwan will pay an unbearable price … The world has entered an eventful period, during which Taiwan is ineligible to play an active role.’

Beijing’s sabre-rattling over Taiwan is hardly new, but in the first months of 2020 we’ve seen a significant stepping up of Chinese military activity and an intense propaganda effort to isolate Taiwan and assert political primacy in the region.

Forget the conspiracy theory that Covid-19 came from a People’s Liberation Army biological warfare laboratory. That’s fantasy. What is fact is that Beijing is using the virus to position itself as the saviour of much of the world, sending medical equipment and doctors, building political indebtedness and loudly claiming that authoritarianism is doing a better job of beating the virus than Western democracy.

This is why there’s such an intense CCP push to win the narrative battle. And it’s why there’s such hostility to self-evident judgements that the virus originated in China and that the party hid the seriousness of the crisis in January while Chinese companies stripped other countries of protective medical equipment.

Here’s an example: Greenland Australia, a Sydney-based, Chinese-owned property development company, has admitted that ‘in late January and early February’ it was directed by its Shanghai-based parent to buy and ship massive quantities of medical supplies from Australia to China.

While this was happening, on 30 January, Chinese Foreign Minister Wang Yi spoke with Australian Foreign Minister Marise Payne. Wang told Payne, ‘The epidemic is generally preventable, controllable and curable.’ On 13 February, the Chinese embassy in Canberra was expressing ‘deep regret and dissatisfaction’ over Australian restrictions on travel from China, saying these were ‘extreme measures, which are overreaction indeed’.

The CCP’s strategy during the crisis has been to extract maximum advantage for itself at the expense of every other country.

The Global Times reported that PLA combat aircraft for the first time conducted night-time combat drills southwest of Taiwan on 16 March. The paper said, ‘Similar drills are expected to become more frequent in order to let Taiwan secessionists get a clear idea of the power gap between the mainland and the island’.

On 20 March, a Chinese fishing boat collided with the Japanese Maritime Self-Defense Force destroyer Shimakaze in the East China Sea. Japan claimed the incident occurred in international waters, while Beijing said it was in Chinese coastal waters.

On 26 March, South Korean jets were scrambled to intercept Chinese surveillance aircraft that flew into Korean-claimed airspace.

In the South China Sea in the middle of last month, the PLA Navy’s first aircraft carrier, the Liaoning, conducted flight training. The PLA Daily said, ‘Training for war preparedness will not be stopped even in the middle of the COVID-19 epidemic, and the training of carrier-based fighter pilots must continue.’

The Liaoning is still operating in the South China Sea. For its part, the US Navy last week sent a guided missile destroyer, USS Barry, through the Taiwan Strait—a transit intensely disliked by Beijing—and the amphibious assault ship USS America exercised with the Japanese warship Akebono.

This heightened level of military exercising has gone largely unnoticed because of Covid-19. While it’s not unprecedented, at this time of international crisis there’s a risk that the PLA’s posturing could spark a conflict.

Beijing’s increased military activities are meant to be seen as a show of strength and to contrast with the challenges the US Navy is facing with maintaining a viable presence in the western Pacific. The aircraft carrier USS Theodore Roosevelt has been tied up in Guam since Covid-19 infected many of its crew. China claims that three other American aircraft carriers have Covid-19 outbreaks and that there’s currently no viable US carrier presence in the Pacific.

It’s unlikely the PLA has been able to avoid some Covid-19 infections, particularly among those soldiers used as first responders in Wuhan, but by not revealing the early stages of the crisis China had more time to quarantine elite units.

Beijing is clearly showing it can operate forces around the so-called first island chain that includes Japan, Taiwan and maritime Southeast Asia.

How might this play out across the rest of this year and into next year? I anticipate a dangerous situation arising over Taiwan as President Xi Jinping seeks to seize a strategic advantage while the US remains dangerously incapacitated.

A scenario could look like this: Xi has shaped his premiership around preparing for two critical centenaries. The 100th anniversary of the founding of the CCP is on 21 July next year, at which time Xi’s aspiration is for China to be ‘moderately well off’. By October 2049, the centenary of the party’s takeover of power, China is to be a ‘strong democratic, civilised, harmonious and modern socialist country’.

Xi likely won’t be around in 2049, but he will steer the party through next year’s anniversary. Covid-19’s effect will be to damage the aspiration of being moderately well off. Xi may calculate that now is the moment to harness Chinese nationalism by focusing the population on a campaign to retake Taiwan.

Militarily, the calculation may be that the US is distracted by Covid-19, President Donald Trump’s failure to manage it and an election campaign. With the virus reducing Western military effectiveness, there may not be a better time for the PLA to blockade the Taiwan Strait and economically squeeze Taipei.

Taiwan is now a successful liberal democracy. It has shown how to manage a Covid-19 lockdown without resorting to the repressive measures seen in Wuhan. The Taiwanese have never seemed less inclined to support so-called unification with the mainland. Being a different and successful model of political organisation, Taiwan profoundly threatens Xi’s personal leadership and the CCP’s credibility.

A crisis over the Taiwan Strait would instantly push the region into a dangerous cold-war situation, one that would be the ultimate test of US credibility as a Pacific power, and would existentially threaten Taiwan and Japan. There would be no guarantees that a blockade wouldn’t slide into major and sustained conflict, drawing in the US and its allies.

A pre-emptive effort to coerce Taiwan would be immensely risky for Xi, but leaders under pressure do risky things, and Beijing has a long history of pushing the limits of regional tolerance—as with island-building in the South China Sea—to see what it can get away with. The challenge for Washington, Canberra and other allies and partners is to ensure that Xi calculates that this is a risk not worth taking.

What should Australia do? First, Prime Minister Scott Morrison needs to talk with Trump, his Japanese counterpart Shinzo Abe, Indonesian President Joko Widodo, a recovered UK Prime Minister Boris Johnson and any other national leader who is willing to join a coordinated push-back against Chinese military opportunism.

This is a tough call. Canberra’s deepest instinct is to say nothing and hope all will return to just­in-time normality. That won’t happen. Covid-19 exposes the real nature of the CCP, which cannot be accommodated by an Australia that needs to build up practical sovereign capabilities to ensure national security.

Second, far from thinking that this is a time to cut defence spending, the government needs to double down on strengthening the Australian Defence Force, including by urgently building up ammunition and fuel stocks to have the force as operationally ready as it can be.

Australia is going to be deeply in debt, but we don’t have to be in debt and insecure. Now is the time to invest in nation-building, sovereignty-enhancing defence capabilities. A defence budget closer to the US’s 3.2% of GDP rather than just under 2% would be a more realistic base from which to deal with the strategic risks we face.

Third, it’s time for new thinking about our national security challenges. For unworthy bureaucratic reasons, we did away with a national security adviser years ago and haven’t seen a national security strategy since 2013, when Prime Minister Julia Gillard produced a flabbergasting document that said Australia faced a ‘positive’ and ‘benign’ security outlook.

Fourth, a new defence white paper must be commissioned soon. At Minister Linda Reynolds’s direction, the Defence Department has been working on a strategic update and review of procurement plans. But that was before Covid-19. We’ll need something that’s dramatically bigger and produced much faster than the 2016 white paper, which took two years to develop—the time it took China to build three air bases in the South China Sea.

Finally, Morrison has wisely realised that Covid-19 will force Australia to redesign its approach to supply chain security. A stronger national security perspective must be brought to how we manage the supply of fuel, food, medical equipment, information technology and critical infrastructure. This will unseat many comfortable Canberra assumptions, but there is no return to the pre-Covid-19 world.

Covid-19 is changing everything and turbocharging the strategic trends that were already making the Indo-Pacific region a riskier place. The reality of China’s threat to regional security is undeniable. Now we must prepare for the crisis after the crisis.