Australia and Japan’s new defense pact sends a strong message to China — that the two countries will work closely to ensure a stable Indo-Pacific region, a senior analyst from an Australian think-tank said Friday.

Fumio Kishida the Japanese Prime Minster met Scott Morrison, his Australian counterpart virtually, on Thursday. The two countries signed a reciprocal access agreement(RAA), which will be subject to domestic approvals before it goes into effect as soon as is possible.

This agreement will facilitate closer defense relations between both countries. According to Malcolm Davis of the Australian Strategic Policy Institute (ASPI), Japanese and Australian forces are able to deploy from their bases each other and set up common protocols.

“What is even more important is the strategic message this RAA sends to the region — that Japan and Australia are working together much more closely to ensure a free and open Indo-Pacific,” Davis said on CNBC’s “Squawk Box Asia.”

He said, “That’s happening against the backdrop of a rising China, which is much more assertive and even aggressive in areas like the South China Sea and East China Sea where Japan and China are in a territorial dispute and, of course, in relation with Taiwan.”

Davis spoke out about China’s potential response to Australia-Japan’s defense deal, saying, “I fully anticipate some terse sentences from the Chinese Ministry of Foreign Affairs in Beijing.”

He said, “They won’t like it, but honestly, we make our defence policy decisions based on Australia’s needs and not what China is happy to do with.”

Taiwan leads discussions in strengthening their relationship with Australia, Japan, USA, Curtis Chin of the Milken Institute said that Taiwan was at the forefront.Street Signs Asia“Friday.

He said, “If China was to freely speak, obviously I believe they would be concerned.”

Beijing is increasingly aggressive in the East China Sea and South China Sea in recent years.

Last year, President Xi Jinping vowed “peaceful reunification” with Taiwan, which prompted an angry response from the latter.

China views Taiwan as a breakaway province, while Taiwan sees itself as separate from China, having been a self-ruled island since splitting from the mainland in 1949 following a protracted civil war.

ASPI’s Davis told CNBC that a big concern is the potential for China to make some kind of move against Taiwan — existing security pacts and arrangements in the Indo-Pacific could “strengthen the credibility of deterrence.”

Political analysts predict that rising tensions between China and America over Taiwan could lead to increased U.S.-China tensions. top risk for Asia this year.

China, on the economic front is an ally of world’s largest trade agreement, the Regional Comprehensive Economic Partnership, which It includes several countries from the Indo-Pacific region. Beijing is also lobbying to join another mega trade dealThat part of the planet.

None of these trade pacts involve the U.S.

China has an ambitious program known as the Belt and Road Initiative. It aims to create digital and physical infrastructure to connect hundreds of countries across Asia, Africa, and Europe, and expand China’s reach in these regions.

Chin of Milken Institute stated that, while most discussions revolve around other nations’ reactions to China’s rising power, it is also important to consider what China is going through domestically.

That includes its efforts to contain the Covid outbreak as well as trying to get its economy back on track — economists are worriedChina’s outlook for growth could be affected by the slowing economy and problems in the real estate market.

Chin expressed hope that all involved parties will take a look back in 2022 and acknowledge it. [to]If what is called an emerging cold conflict becomes a hotwar in the Asia Pacific region, it will not be to anyone’s advantage.”