Australia Knows It Needs Asia Capability. Why Isn’t It Building It?
Australia’s parliamentary inquiry into Asia capability has diagnosed a problem the country has been diagnosing for years. Its June 2026 report, Security and Prosperity in Asia: Building Australia's Asia Capability, recommends a 10-year National Asia Capability Strategy, annual reporting to Parliament and a comprehensive workforce needs assessment by Jobs and Skills Australia. These are sensible steps. But if Australia treats another assessment as the next step in solving its Asia-capability crisis, it risks mistaking measurement for remedy.
The larger problem is not simply that Australia does not know what skills it lacks. It is that the system does not consistently reward people for acquiring, retaining or using those skills. Australia has a two-sided capability problem: it is producing too little expertise, while failing to create sufficient demand for, and pathways to use, the expertise it does produce.
That distinction matters because Asia capability is more than generic “Asia literacy”. It encompasses language skills, cultural understanding, professional networks and specialist knowledge that allow Australians to make better decisions about the region. Asia is not a monolith: what works in Jakarta may be inappropriate in Seoul or not suitable in Astana, and understanding why requires more than broad regional familiarity.
It requires significant knowledge of particular countries, societies and institutions, alongside the ability to situate that expertise within wider regional dynamics. Language is not the only component of that expertise, but it is a critical enabler: it provides access to local sources, institutions and professional networks, and can increase the cultural and political understanding needed to interpret them.
A workforce assessment can estimate how many Mandarin-speaking analysts or Indonesia-literate managers Australia may need by 2030. It cannot create the teachers, university departments, researchers, immersive opportunities or professional positions required to produce them. Nor can another assessment persuade students to acquire difficult skills if employers continue to treat them as optional.
Australia’s dependence on Asia is already structural. Roughly 63 percent of Australia’s exports and 58 percent of its imports involve Asian economies, while 10 of its 15 largest trading partners are in Asia. Asia’s share of global GDP is projected to reach 45 percent by 2026, up from 21 percent in 1981, and the region will account for more than half of the world’s population by the end of the decade. Yet Australia’s institutional capacity to understand and operate effectively in that region is eroding.
The strategic consequences are increasingly difficult to ignore. Intensifying United States-China strategic competition is reshaping trade, technology access and regional alignments, while developments in the South China Sea and Pacific increasingly affect Australia’s own security environment. Reading these developments requires more than intelligence or defence capability. It requires language skills, historical knowledge, political judgment and sustained relationships across the region. Asia capability is not a cultural extra. It is economic and strategic infrastructure.
Australia starts with advantages that many Western countries lack. Nearly one in five Australians report Asian ancestry, and Mandarin is spoken at home by 685,274 Australians, or 2.7 percent of the population. Yet in the five years to 2021, just 17 students completed honours in Chinese studies with language across Australian universities. Geographic proximity, trade and migration have generated extensive connections; institutional capability has not kept pace.
The Asia-capability pipeline is weakening at its foundation. Australia is among the worst-performing Organisation for Economic Co-operation and Development (OECD) countries for teacher shortages: the share of lower-secondary teachers in schools reporting a shortage of qualified staff nearly tripled between 2018 and 2024, from 14 to 42 percent. For Asia capability, this matters because without enough qualified teachers, schools cannot sustain the language programs that produce the next generation of regional specialists.
The consequences are particularly visible in Asian-language education. A 2012 white paper aimed for every Australian student to be able to study an Asian language continuously through 2025. Instead, only 3.3 percent of Year 12 students studied Japanese, Chinese or Indonesian in 2023, down from 4.7 percent in 2012. University enrolments in Bahasa Indonesia have fallen 76 percent between 2004 and 2022, while fewer than 500 students are currently studying Indonesian at Australian universities.
The research pipeline is weakening too. The Australian Research Council’s 2026 Future Fellowships round distributed more than AUD$344 million across more than 290 projects. Yet none of the announced projects appears to focus specifically on contemporary Chinese society, economy or politics — despite China accounting for 25 percent of Australia’s two-way trade and 29 percent of its exports. The point is not that every research funding round must contain a China project. It is that the absence of such projects from a major national fellowship round illustrates how difficult it has become to sustain specialist capacity in areas of clear strategic importance.
This is not a new warning. The 2017 Match Fit report found that 90 percent of ASX 200 companies were not adequately equipped to do business in Asia. The diagnosis generated concern; the underlying pipeline nevertheless continued to weaken. Australia does not merely have an information deficit. It has an institutional capacity problem.
But supply is only half the equation. Australia is also sending weak signals about the value of becoming an Asia specialist. A national evaluation of the New Colombo Plan found that while 89 percent of alumni considered their international experience useful for their resume, only 44 percent believed it was valued by their current employer.
That gap matters. Students can spend years learning an Asian language, studying in the region and building professional networks, only to return to Australia and discover that these skills are treated as useful extras rather than qualifications in their own right. Australia is therefore not merely failing to produce enough specialists; it is failing to make becoming one a rational career choice.
Students respond to that signal rationally. So do researchers. There are too few positions in which significant regional expertise is the job rather than an optional attribute. The Department of Foreign Affairs and Trade graduate program recruits across broad corporate and policy streams, covering areas from international relations and trade to development, security, communications and corporate functions. Genuine Asia specialists are therefore only a subset of the intake. Beyond DFAT, opportunities narrow further across government, universities, think tanks and the private sector.
The result is a self-reinforcing cycle: expertise becomes scarce because it is not sufficiently rewarded, while it becomes less valued because Australia has allowed the pool of expertise to shrink. Only 13 Australian universities now offer some Indonesian teaching, and as few as 10 sustain a full program. When language programs remain dependent on small and inconsistent student cohorts, universities face growing financial pressure to close them.
The consequences extend beyond economic competitiveness to national security. Frances Adamson, former Secretary of the Department of Foreign Affairs and Trade and former Australian Ambassador to China, warned in Australia’s China Knowledge Capability report of a “massive devaluation of China expertise”.
Yet capability and security should not be treated as opposites. The answer to concerns about foreign interference cannot be less knowledge about the country concerned. It should be better knowledge combined with better screening. A research system with limited independent knowledge of contemporary China is less able to distinguish legitimate scholarship from genuinely sensitive collaboration. Less expertise makes risk harder to assess; harder-to-assess risk encourages broader caution; and broader caution makes expertise harder to sustain.
The parliamentary inquiry itself recognises this demand problem, noting that Asia-capable graduates lack clear career entry points and that few employers value Asia capability in recruitment or career progression. Its recommendation that government act as a model employer, including through Asia-capability recruitment targets and structured internships, points towards the broader solution: the workforce problem cannot be solved by education policy alone.
Australia should therefore pursue four reforms in parallel: durable mobility, specialist capacity-building, stronger career incentives and integrated research-security mechanisms.
First, make regional mobility infrastructure durable, and build on partnerships that already exist. The New Colombo Plan should be treated as long-term national capability infrastructure rather than a program whose value must repeatedly be defended in individual budget cycles. Since 2014, more than 55,000 Australian students have participated in New Colombo Plan study programs, language training, internships and research across the Indo-Pacific, while reforms from 2026 place greater emphasis on Asian-language learning and longer-term immersion.
Australia already has a precedent for linking government-funded mobility to private-sector development. The Westpac Scholars Trust has partnered with the New Colombo Plan alumni network on programs such as the Asian Exchange Leadership Residential, pairing regional experience with leadership development. This model should be scaled and formalised, with greater emphasis on connecting international study to subsequent professional pathways rather than leaving graduates to navigate that transition alone.
Second, build multi-year, sector-specific fellowships. Australia should target areas where the pipeline is demonstrably weak, including China-focused social science, Indonesian studies and other strategically important regional expertise, with fellowships that support researchers for years rather than weeks. General Asia-literacy funding cannot substitute for specialist capability. Nor should government dictate every research priority: competitive, peer-reviewed programs can identify strategic gaps while preserving academic independence.
Third, make Asia expertise professionally legible. The United States’ Boren Awards offer a useful model. They combine funding for critical-language study and overseas immersion with a defined public-service pathway, making the value of specialist expertise tangible to recipients. Australia does not need to replicate the program wholesale. The broader lesson is that funding capability is more effective when it is connected to credible opportunities to use it. Australia currently does the former far more reliably than the latter.
Government recruitment, professional accreditation, university promotion and relevant hiring frameworks should explicitly recognise demonstrated language proficiency, extended in-country experience and regional expertise. The Australian Public Service should also consider a structured pathway that links a portion of New Colombo Plan or fellowship funding to defined placement opportunities.
Fourth, build research security and capability together rather than treating them as competing objectives. One option would be a standing joint panel drawing on security agencies and academic China and Asia specialists to assess research-security cases individually rather than through blanket rules. Stronger screening of genuinely sensitive research should continue, but vetting decisions should have access to the country-specific expertise required to distinguish legitimate scholarship from problematic collaboration. Security cannot become a reason to eliminate the very knowledge required to understand the security environment.
These reforms require sustained commitment. Funding competes against other national priorities, and governments have reasonable grounds to ask why another round of investment should succeed when previous efforts did not.
The answer is that recognition and capacity must reinforce each other. Students are more likely to acquire difficult skills when they can see a professional future in using them; employers are more likely to create specialist positions when a greater pool of expertise exists; and researchers are more likely to stay when their expertise is both valued and usable. Government, in turn, is more likely to sustain investment when it can demonstrate measurable results.
That requires accountability. The proposed 10-year National Asia Capability Strategy should include a public Asia Capability Scorecard, reported every two or three years, tracking Asian-language enrolments, university specialist programs, research funding, regional immersion, specialist recruitment and whether graduates actually move into roles that use their expertise.
Australia has spent years measuring the problem. It should now measure whether its solutions work.
The reforms will not deliver results on the same timetable. Recognition and recruitment reform can begin immediately and cost comparatively little; rebuilding teaching, research and specialist-training capacity will take years and sustained investment. But delaying the demand-side reforms would make the supply problem harder to solve. Students need to see a career in Asia expertise before they will invest in acquiring it, while employers need a larger talent pool before they create more specialist roles.
The underlying problem is therefore not a series of disconnected failures. It is one system.
Australia does not lack diagnoses. It commissioned the Asian Century white paper in 2012, the Match Fit report in 2017, A Second Chance in 2021, Australia's China Knowledge Capability in 2023, Mapping Australia's Indonesia Research Capacity in 2024, and now Security and Prosperity in Asia in 2026. What it has lacked, across six reports and fourteen years, is a system capable of turning diagnosis into durable capability.
Without addressing both sides of the supply problem, Australia could arrive at 2030 with a precise map of the expertise it does not have — having spent the intervening years watching the people who might have filled that gap decide it was not worth staying.
The problem is no longer knowing that Australia needs Asia capability. It is making sure there is someone left to provide it.
This article is written by Genevieve Donnellon-May, External Affairs Director at Foreign Policy Talks. She is also a non-resident Vasey Fellow at the Pacific Forum, Research Fellow at the Yokosuka Council on Asia-Pacific Studies, Fellow at the Indo-Pacific Studies Center, and non-resident Fellow at the Institute for Security and Development Policy. She holds an MSc from the University of Oxford and a BA (Hons.) from the University of Melbourne.
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