Remarks by the Director-General of National Intelligence, Andrew Shearer, at the 62nd Annual Australia-Japan Joint Business Conference.
Thank you Deborah [Hazelton], and good morning everyone – it is great to be here and a real privilege to address such a distinguished gathering of Australian and Japanese business and political leaders.
It is my job to call it as I see it, which sometimes unfortunately has the effect of lowering the mood, but I promise I will try to end with an optimistic note.
I would like to acknowledge Minister [Madeleine] King and Vice-Minister [Akiyoshi] Kato, other ministers, Ambassador [Kazuhiro] Suzuki, Ambassador [Justin] Hayhurst, Chairman [Tadashi] Maeda – my good friend – and also Australia Japan Business Co-operation Committee President, Peter Grey, and Japan Australia Business Co-operation Committee Chairman, [Michiaki] Hirose. It is good to be here with you.
As the conference theme suggests, we meet today at a moment of profound complexity, fluidity and disruption in global affairs.
The certainties of the post-war era that delivered remarkable stability and prosperity to our region are eroding. Few countries benefited more from that dispensation than Australia and Japan.
Regrettably, what we see emerging though is a world that is more fragmented, more contested and far less predictable. It is a world governments and businesses alike are still struggling to comprehend, to navigate, and in which they are being forced to adapt to a bewildering range of new risks on a daily basis.
As Australia’s most senior intelligence analyst it’s my job to help navigate them.
Let me begin with geopolitics.
Australia’s National Intelligence Community has been warning for some time now that Australia’s strategic environment is not only deteriorating, it is doing so at an accelerating pace.
Conflicts are proliferating and intensifying, crises are more frequent, and both malign state and non-state actors are more willing to test boundaries.
To understand the challenges we face, we must be candid about the nature of the changes that we are experiencing.
If we paint a word picture of the world today, some words come up time and time again: disruption; contestation; fragmentation; deterioration; and acceleration.
These are not abstract descriptors. They are lived realities felt every day in Cabinet discussions, at boardroom tables, throughout supply chains and across markets.
They affect our citizens too, weighing on their quality of life, wellbeing and confidence about the future – and fraying our social cohesion.
The deterioration of the international system is increasingly obvious.
The rules and norms that once gave us stability and supported unprecedented global prosperity are fading. Confidence in multilateral institutions is weakening.
The military balance is shifting against the west and deterrence is eroding.
Armed conflicts are occurring more frequently and guardrails, such as the arms control regime, are weakening or – in the case of cyber warfare – virtually non-existent.
Russia’s attack on Ukraine, war in the Middle East and rising ‘grey zone’ tensions in the Indo-Pacific all demonstrate the fragility of the order we once took for granted – which Australia and Japan have worked so hard together to shape and sustain over the past seven decades.
Fragmentation is also manifest. The era of seamless globalisation is behind us.
We are entering a world of competing technological ecosystems, splintered supply chains and rival economic spheres.
This is already manifest in semiconductors, artificial intelligence, critical minerals, 5G networks and digital standards. What was once an integrated global marketplace is increasingly dividing along strategic and political lines.
This reflects that contestation is intensifying. Power is being flexed and tested at every level and across every domain.
Some states are increasingly open in their challenge to the rules-based order.
Our adversaries are exploiting our preference for restraint and de-escalation – and leveraging coercion, cyber attacks, sabotage and disinformation to test us without triggering outright conflict.
Often they act through proxies – whether organised crime syndicates, front companies, armed groups or maritime militias.
These tactics exploit the openness of our economies, societies and polities, and are very hard for liberal democracies to counter.
They have become the day-to-day reality for governments – but also increasingly for businesses.
So, we are becoming used to disruption as a constant.
The number of disruptive forces we track is growing and they are interacting in ways that are complex and unpredictable, and magnify their impact.
Climate change, the energy transition, pandemics, cyber attacks and more conventional threats such as espionage, terrorism and organised crime are converging and compounding.
Artificial intelligence, automation and the ‘internet of things’ are rapidly transforming industries and our lives but also exposing new vulnerabilities.
Finally, acceleration is making all these other trends more immediate and dangerous.
Changes that once unfolded over decades now happen within years – or, in the case of AI, even in months or weeks.
Take just the last few weeks, which highlight the quickening pace of events.
Russian drones and aircraft have tested boundaries and disrupted aviation across Europe, while Putin steps up his strikes on Ukraine.
Here at home, great work by my colleagues in ASIO and the AFP exposed the involvement of Iran’s Revolutionary Guard Corps in anti-Semitic arson attacks designed to foment unrest and violence in our community.
In the Middle East, there now seems to be a fragile prospect of peace in Gaza amidst conflict between Israel, Iran and its proxies.
Closer to home, Chinese military and paramilitary forces have continued to intimidate allies and partners in the international seas and skies around the South and East China Seas and Taiwan, challenging freedom of navigation and heightening the risk of confrontation.
A broad international coalition of security agencies, including from Australia and Japan, has publicly attributed SALT TYPHOON and related intrusions into telecommunications, transportation and energy infrastructure networks to China’s Ministry of State Security and the People’s Liberation Army.
And in Beijing, we saw authoritarian leaders convening in an intimidatory demonstration of military power and solidarity against the international order we have relied on.
These events are all – to some degree – linked. No crisis today is truly isolated from wider developments.
For our adversaries, each crisis creates opportunities to distract and divide us, to complicate our coordination, to erode our collective bandwidth and to chip away at our resolve.
Authoritarian regimes revel in multi-theatre turbulence, knowing democracies struggle to manage more than one crisis at once.
Advanced democracies are also uniquely exposed when it comes to economic security risks. Hyper-digitisation and interconnected infrastructure, from grids and ports to undersea cables, satellites, data centres and consumer devices, create almost infinite opportunities for attack.
In the Indo-Pacific, and across the democratic world, critical civil infrastructure assets are no longer neutral assets. They are targets – of coercion, of strategic dependency, and of sabotage in a crisis or conflict.
Adversaries are looking to weaponise interdependence – to disrupt not only security, but economic sovereignty and public trust in our institutions.
Australia has experienced this first-hand. We have seen attempts to exert pressure through coercive trade measures, cyber operations and penetrative investments.
But we are not alone. Japan is no stranger to these threats either, and most OECD countries have been through something similar.
Democracies everywhere are now grappling with a central paradox. Economic openness remains essential to our productivity, efficiency, long-term living standards and our way of life.
But that same openness now gives adversaries the means to turn access into leverage – and interdependence into malign influence.
Footholds in our systems – granted to promote economic growth – are now exploited by hostile actors to shape decisions, project power and constrain sovereignty.
Today there are no dividing lines between prosperity and security. Economic security – including trade agreements, supply-chain configurations, cutting-edge technologies and foreign investment flows – is now central to strategic competition.
As a result, states are ring-fencing sectors once considered purely commercial – from data centres to food supply chains – recognising that economic dependence can be leveraged as coercion.
And technology now sits at the very heart of strategic rivalry.
Tech and government leaders in China and the US speak openly of AI as the new arms race.
Key technologies – artificial intelligence, semiconductors, quantum and biotech – are not adjuncts to national power but its wellspring and currency.
How these are used – and weaponised – will define economies, military balances, and the future of warfare.
In this environment – as earlier speakers have referenced – trust is at a premium.
And that’s why today, Australia’s Special Strategic Partnership with Japan is not just an asset, it is foundational – consistently delivering shared trust, capacity and influence to both our nations.
After the devastation of the Second World War, reconciliation was not inevitable. But far-sighted government and business leaders on both sides took bold steps – the sorts of steps I have heard delegates calling for at this conference.
The historic 1957 Commerce Agreement – itself an act of courage and leadership, given the context – opened the way for Japan to become one of Australia’s largest trading partners and laid the foundation for the Asian economic miracle.
Over time Japanese investment spread across multiple sectors from energy to manufacturing to infrastructure.
And since then, Japan and Australia have been at the heart of almost every significant effort to shape a prosperous and stable region.
Today we are both parties to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – thanks in large measure to the vision and leadership of the late Prime Minister Abe.
And Australia’s selection of the Mogami-class frigate is much more than a defence procurement choice.
It highlights the close alignment of our strategic interests but also the deep trust between our countries and peoples that successive generations have built and nurtured.
Japan’s world-class defence industrial capabilities will help transform Australia’s naval shipbuilding enterprise.
As both countries necessarily scale up their military capabilities, I am confident this will be just the start of a much closer defence industrial partnership between us.
This level of integration does not happen overnight. It is built on decades of patient diplomacy and shared experience in trade, investment and regional security.
Whether in the intelligence, cyber defence, counterterrorism, maritime surveillance or tracking malign influence, closer links are helping us each to act faster and with more precision – while also contributing to regional resilience, deterrence and stability.
The arc I have described from belligerents to economic, diplomatic and now strategic partners, speaks to a rare level of trust between nations.
One of the reasons I am so confident about the future of our strategic partnership – often called a quasi-alliance by my Japanese colleagues – is that it is grounded in deep people-to-people ties and affinity.
Lowy Institute polling shows that Australians’ confidence in Japan is not only strong but steadily rising.
In the 2025 survey, a record 90% of Australians said they trusted Japan to act responsibly in the world, the highest figure recorded for any country and an increase from 87% in 2024. On the ‘feelings thermometer’ Japan registers a warmth score of 76 degrees, second only to New Zealand and far ahead of other major powers. Japan has now held the top position in trust for five consecutive years.
The question, then, is what comes next? How do we build on this solid foundation?
First, it is clear we must keep working with our closest friends on joint efforts to bulwark regional and global security and stability.
There will continue to be significant value in working trilaterally with the United States – and also with India through the Quad.
Our cooperation now spans joint exercises, intelligence sharing, cyber resilience, infrastructure delivery, disaster relief and maritime domain awareness. And it is recognised – and appreciated – by our partners across Southeast Asia and the South Pacific.
I also believe India’s importance as a partner for both our countries will continue to grow.
It is a significant power with a strong sense of its own strategic autonomy but also a country that shares core interests in keeping the Indo-Pacific peaceful, stable and prosperous. In Southeast Asia and the Pacific, India’s presence offers crucial additional heft and a wider set of options for regional states.
We then have opportunities to work together on some of the most significant priorities for our region. For example, energy security remains central to regional stability – just as Australian LNG remains a vital pillar of Japan’s energy security.
The transition to renewables and next-generation grids must be managed not only for efficiency but also for security and resilience.
To this equation Japan brings technology and innovation. Australia brings resources and geography. Together we can build an energy system that helps ensure future stability in the Indo-Pacific – as we did over the past seven decades.
Infrastructure is equally vital. Undersea cables, digital networks and secure logistics are now strategic assets. By providing trusted and sustainable alternatives, Australia and Japan can help Pacific and Southeast Asian countries build infrastructure that supports sovereignty as well as development.
Today, our bilateral relationship has never been stronger or more important.
None of this happens spontaneously. It builds on work by visionary leaders and diplomats – and I again acknowledge ambassadors, former ambassadors and other officials from both Japan and Australia in the room today.
One of their outstanding predecessors was the late Dr Ashton Calvert AC. As Secretary of the Department of Foreign Affairs and Trade he helped shape modern Australian diplomacy.
He was a key architect of Australia’s engagement with Asia and – with four postings to Tokyo under his belt, including as ambassador – he had a deep understanding of and affinity for Japan.
I’m personally indebted to Ashton for taking a chance on a young DFAT officer and entrusting me with responsibility for his beloved Japan desk 25 years ago.
Dr Calvert understood that Japan was not only an economic partner but a strategic one, and he urged successive governments to treat the relationship as central to Australia’s prosperity and security.
His legacy is a reminder that effective diplomacy is often built patiently, through intellect, foresight and sheer hard work.
We also build on the legacy of former political leaders, including Prime Minister Abe’s powerful and enduring vision of a Free and Open Indo-Pacific; John Howard’s decision to send troops to protect Japanese engineers in Iraq in 2005 and the ground-breaking Joint Declaration on Security Cooperation he signed with Prime Minister Abe in 2007; and Julia Gillard’s recognition of Japan’s importance, reflected in her being the first foreign leader to officially visit Japan after the devastating 2011earthquake and tsunami.
And, when our current Prime Minister, Anthony Albanese, chose Japan for his first overseas visit, on his first day in office in fact – a visit I was privileged to join – it underscored a simple fact. This partnership is central to our strategic future.
But our partnership is not just grounded in political alignment.
Business continues to have a vital role in deepening and sustaining the connections between our countries.
Indeed, businesses now find themselves – no doubt reluctantly – on the front lines of strategic competition. Every major investment decision carries geopolitical weight – influencing the balance of trust, resilience, capacity and security across our region.
For Australian and Japanese businesses, the task is not merely to avoid or mitigate risk. It is to seize the initiative: to shape a regional economy that is more resilient, more trusted, and more capable of withstanding the pressures of uncertainty.
This requires situational awareness, dare one say it good intelligence, foresight, partnership, and the confidence to lead where others hesitate.
Notwithstanding the troubled state of the world and shared security challenges in our region, I remain fundamentally optimistic about our ability not only to prevail but to prosper.
Our countries have been at the heart of building regional peace and prosperity for decades. And we have never been more closely aligned than we are today in confronting common threats, nor more united in the resolve to turn those challenges into opportunities – as we did in the past.
That shared purpose, combined with the energy and ingenuity of our business communities, gives us every reason to look to the future with confidence.
Thank you.
6 October 2025