Australia-China ties are not ready for AUKUS

Australia-China ties are not ready for AUKUS

Originally published on the Australian Financial Review

After being feted in Canberra on Monday, Chinese Premier Li Qiang will head straight to Perth, which as the capital of Western Australia counts as Australia’s most pro-Chinese city.

It is no surprise why – Australia’s mining capital has flourished for more than two decades by shipping millions of tonnes of the state’s bountiful iron ore resources to China’s all-devouring steel mills.

Great economists and men of affairs have predicted the demise of the iron ore industry for years, but the rivers of red keep flowing. Even after recent price falls, iron ore is still trading over $US100 a tonne, well above the Treasury’s budget forecasts.

WA Premier Roger Cook isn’t the only politician celebrating the industry’s enduring success. For Treasurer Jim Chalmers, healthy iron ore prices translate into a fat federal budget.

If Li needed reminding of why he is flying hours across the continent to Perth, he could stroll down St George’s Terrace, which is to the global mining industry what Rodeo Drive is to fashion.

You can be sure, however, that Li will not be visiting another growing part of the WA economy, the Stirling naval base south of Perth, which is being readied for the arrival of US nuclear-powered submarines.

Even though the government says little about it, the arrival of the US submarines will be every bit as momentous as China’s embrace of Western Australia as Beijing’s favoured iron ore province in the mid-1980s.

It’s not far away now. The US submarines will be rotating permanently through HMAS Stirling Fleet Base West by 2027, and visiting even earlier.

The Chinese hate AUKUS

In the words of Defence Minister Richard Marles, the submarines are the core of what he calls the “forever partnership” of the US, the UK and Australia in the AUKUS alliance.

Australia will host US submarines, then it will buy several from the Americans and operate them. Finally, in theory, Australia will build several with the UK.

The Chinese hate AUKUS because they judge correctly that it is aimed at giving Australia more military firepower when Beijing wants to drive the US and its allies far from Taiwan and contain them in the South China Sea.

In the place of full-frontal attacks on the tripartite alliance, the Chinese use a set of familiar code words to describe the likes of AUKUS, attacking a “Cold War mentality” and “bloc confrontation”.

This is deceptive in the extreme. Not only does Xi Jinping, China’s paramount leader, constantly talk about the possibility of China fighting a war in the surrounding region, he is also preparing accordingly.

Xi is hardening the country on numerous fronts to close off any weaknesses in readiness for potential future conflict over Taiwan, or elsewhere, and to forestall US leverage of any kind.

Inside China, this is not a secret.

Hundreds of billions are being invested in technologies where China lags. Local food production has been stepped up to reduce reliance on imports.

Information channels once used by outsiders to try to penetrate an already opaque system are being closed off, even those once used by academic researchers.

The areas where Beijing does have the lead, in critical minerals used to manufacture the batteries in electric vehicles and high-tech inputs into weapons systems, are being strengthened.

Li will have an eye on this sector in WA, as he is planning to visit a Chinese-owned lithium processor, Tianqi Lithium Energy Australia, south of Perth.

China can’t make itself independent from the supply chains that sustain the global economy. But it can do its best to minimise the ability of the US to constrain them in any fashion.

Someone in the government must be asking themselves whether the public, and not just in Perth, are remotely ready for [nuclear subs].

Of course, Beijing doesn’t want to go to war. The use of direct military means is just one of the strategies Beijing is using to bring Taiwan to the negotiating table.

Nor is it Xi’s preferred option. The reason war is talked about so much is that China’s other coercive stratagems haven’t worked, so far.

Which brings us back to the Stirling naval base and the imminent arrival of the US submarines. Someone, somewhere in the government must be asking themselves whether the public, and not just in Perth, are remotely ready for this.

The Albanese government’s policy of “do more, say less” has worked about as well as it could thus far, in stabilising the bilateral ties. China’s trade measures are now almost entirely gone.

It is also a smarter policy, because it has given Australia the space to operate more effectively in the Pacific and South-East Asia, both cockpits of competition in different ways with China, while pursuing a generational change in national security settings.

But the policy is reaching its limits.

It is not just a question of the government warning Australians about the possibility of conflict. It is more basic than that, particularly for a Labor government.

The sheer cost and transformative nature of AUKUS on Australian defence, national security and industrial policies means it can be sustained only with broad public support.

In the current political climate, AUKUS is a sitting duck on Labor’s left flank, most notably for the Greens.

Anthony Albanese promotes AUKUS largely in terms of high-quality jobs and the revival of Australian industry. But AUKUS is about much more than that.

It will be time, soon, to “do more, and say more” if the government is to bring the public along with it on defence policy.

Areas of expertise: China’s political system and the workings and structure of the communist party; China’s foreign relations, with an emphasis on ties with Japan, the two Koreas, and Southeast Asia; Australia’s relations with Asia.