China can already control most of our region

NATO’s new strategic roadmap is a game changer. Once a strategic partner, Russia is now considered the main threat to the expanding alliance. Equally important is the belated recognition of China as a strategic challenge to the alliance’s “interests, security and values”. The commitment to boost military spending and bolster its high-readiness forces from 40,000 to “well over 300,000” will tilt the European balance of power in favour of democracies. But the opposite is occurring in our strategic neighbourhood, where maritime power will be decisive.

Slowly, but surely, the balance of naval forces in the Pacific is shifting against the democracies, presaging an end to a long period of Western dominance of an ocean which is the maritime gateway to northern Australia and carries most of our trade.

Last month, China launched its third aircraft carrier. The Fujian is an 80,000-tonne behemoth three times the size of our navy’s largest ship and the Asian power’s most advanced so far. Three more are on the way along with a suite of ­locally built, highly capable aircraft designed to fly from its decks. The next carrier is expected to be nuclear-powered. Soon, China’s rapidly expanding navy will be able to emulate the carrier groups Washington sends around the world to project power and buttress America’s influence.

At the turn of the century, China possessed an ageing and under-resourced green-water navy barely able to patrol the country’s coastal waters. It was dwarfed in size and strike power by the multi-ocean blue-water fleets of the US navy. All that has changed. Beijing has ramped up defence spending to produce an armada of modern ships in the ­biggest ever military build-up in peacetime. In the four years from 2014 to 2018, the country built and deployed more warships than the combined navies of India, Germany, the UK and Spain.

Today, China has 355 battle force ships and is projected to have 460 by 2030, surpassing the combined number of warships in the US and Indian navies. Retired US navy intelligence officer Captain James Fanell says that China could match the 11 aircraft carriers in the US inventory by 2049. Conversely, America’s once dominant navy is older and smaller than at any time since World War II, numbering 297 battle force ships. While still powerful, attempts to grow and rejuvenate the force have stalled for budgetary, capacity and political reasons.

The gap is even more marked when China’s coast guard and fishing fleet are added to the mix. The coast guard is essentially a blue-water, paramilitary force which co-ordinates closely with the navy. Many of its 140 ocean-going ships are former naval vessels. Sixty of them are 2500 tonnes or greater, which makes them comparable in size to our Anzac-class frigates. They are also armed. China’s fishing fleet is the world’s largest and has been used by Beijing as an auxiliary force to support China’s military objectives, notably by paving the way for the occupation and militarisation of disputed islands in the South China Sea. In the increasingly contested South Pacific, the number of Chinese-flagged vessels grew tenfold between 2009 and 2020 – from 54 active vessels to 557, according to the South Pacific Regional Fisheries Management Organisation. More are on the way.

Why has China invested so heavily in its navy? The answer, says Beijing, is to defend the country from unspecified enemies and protect the ocean highways that carry the trade and energy critical to its economy. Western defence analysts have a different answer. Beijing wants to use its newly acquired naval power to dominate the western Pacific and control the vital sea-lanes running from Asia to Europe.

Its goals may be even more ambitious. Leading American strategist Aaron Friedberg writes in the US Naval Institute Proceedings that if China can “undermine US alliances in East Asia, push US forces back to the second island chain, and assert control over the waters of the western Pacific it will be well-positioned to construct a new Eurasian order”. This would be a Sino-centric system in which China’s “continental and maritime neighbours” are economically dependent on and politically subordinate to China “and from which the US is largely excluded”.

Until recently, the major constraint on China’s expanding maritime clout has been the lack of access to ports and supporting infrastructure that can serve as strategic access points. Without them, China’s formidable new navy would be largely confined to its home waters.

England ruled the waves in the 19th century because it had a world class navy and an empire to support it. China doesn’t yet have an empire. But it has begun to create the next best thing – a string of port facilities and military bases that could eventually rival the extensive network of overseas bases and places that enable America to project and sustain power globally.

Of the 95 commercial port facilities overseas which China owns, leases or otherwise controls 21 are in the Pacific, 25 in the Indian Ocean, 31 in the Atlantic and 16 in the Mediterranean. The leases include two Australian ports. Darwin is operated by the Chinese-owned Landbridge Group on a 99-year lease. China Merchants Port Holdings company is a 50 per cent partner in a consortium that owns and operates the port of Newcastle on a 98-year lease.

Many of these ports are located near strategically important waterways and potential chokepoints such as the Malacca Strait, the Persian Gulf, the Strait of Hormuz, the Suez Canal and the Strait of ­Gibraltar. Chinese state-linked companies even help to operate and maintain the Panama Canal raising concerns that in the event of a conflict with the US, the Peoples Liberation Army could deny the US navy access to the canal.

An analysis of China’s port strategy for The Washington Times by veteran national security correspondent Bill Gertz makes clear that Beijing’s geo-economic objectives are to gain control over international shipping hubs, guarantee markets for Chinese goods, expand China’s influence, consolidate its control of supply chains, increase the number of pressure points that can be brought to bear on recalcitrant states, and create economic dependencies.

It’s equally clear that China’s commercial and military objectives are completely intertwined – explicitly so under its “military-civilian fusion” program. This aims to eliminate barriers between China’s civilian research and commercial sectors, and its military and defence industrial sectors. Where possible, commercial ports and airfields constructed by Chinese companies are built to military specifications so they can support the country’s navy and air force.

Retired US navy captain Stu Cvrk says that China’s port network is part of a wider strategy that includes “ringing and neutralising rival India, shifting the military balance in the Middle East from the US to China, and eventually providing strategic port encirclement” of the US itself.

But China can’t achieve these ambitious aims through control of commercial port facilities alone. That’s why it has embarked on a critical second phase of the strategy – the establishment of stand-alone military bases or dual-purpose facilities that have military utility.

In 2017, China opened its first overseas military base in Djibouti which is strategically located near the Bab el-Mandeb Strait at the confluence of the Red Sea and Indian Ocean and within easy sailing distance of vital oil shipping routes running through the Strait of Hormuz. A second, more controversial Chinese military facility is being built in Cambodia’s Ream naval base in the Gulf of Thailand.

In 2019, The Wall Street Journal reported that China had signed a secret agreement to allow its military to use the base. Commercial satellite imagery shows the site being extensively redeveloped and expanded.

Beijing and Phnom Penh have gone to extraordinary lengths to deny its purpose despite evidence to the contrary. According to The Washington Post, when foreign officials visit Ream, Chinese military personnel wear uniforms similar to their Cambodian counterparts or no uniform at all to avoid suspicion.

Knowledgeable Western officials say that China’s military will have exclusive use of the northern portion of the base which will be able to accommodate large naval ships. When linked with its bases in the Spratly Islands, this will consolidate China’s ability to control the whole of the South China Sea.

In an interview last month with The Washington Post, Richard Fontaine, the chief executive of US think tank the Centre For a New American Security, said that a base in Cambodia was intrinsic to Beijing’s aspiration of having a more “dominant military presence throughout the Asian rimland and in the South China Sea, allowing Beijing to hold at risk – and have political influence over – countries quite far from the Chinese shore.”

A 2021 Pentagon report on Chinese military developments assessed that China wants facilities in several other regional countries to support “naval, air ground, cyber and space power”. They include Thailand – which is at risk of falling into China’s orbit – Singapore, Indonesia, Myanmar and Pakistan. Heavily indebted Sri Lanka already hosts a Chinese-controlled port at Hambantota. China also operates a base in Tajikistan’s Pamir mountains and is reported to be building a second base in Tajikistan near the border with Afghanistan.

Overseas military bases are likely to come with a full set of capabilities to support the PLA’s regional and global operations. They include intelligence collection, missile targeting and covert operations. Ream is likely to host a ground station for the Beidou navigation satellite system that can be used for missile guidance. Military radars, eavesdropping and tracking systems have been extensively installed across disputed islands occupied by the PLA in the South China Sea despite President Xi Jinping’s promise not to militarise them.

Another danger from China’s base-port network, writes Gertz, “stems from the PLA’s development of long-range missiles capable of being fired from launchers disguised as shipping containers”. When fully developed, the system could turn Chinese-controlled container ports “into cruise missile bases”.

The next most likely candidate for a Chinese military base is Solomon Islands, which is closer to the Australian coast than Melbourne is to Townsville. The leaked secret agreement between Honiara and Beijing is a classic case study of China’s methodology for establishing military beachheads in targeted host countries.

First, strengthen aid, investment and trade. Leverage them for political influence and elite capture. Bring in construction crews which then require “protection”. Deny any intention to build a military base. When confronted with incontrovertible evidence there is one, argue that China’s military presence is part of a joint facility or a minor part of a civil infrastructure project.

From Beijing’s perspective, Solomon Islands is ripe for plucking. In 2020, China accounted for nearly two thirds of the island country’s exports. Its strategic approach to trade and aid is beginning to wean small, Pacific Island states away from their longstanding ties with Australia, the US and New Zealand. Despite the debt trap risk, they are particularly susceptible to the notionally “no strings” infrastructure investment that China purports to offer.

Don’t think that the rejection of China’s proposal for a regional economic and security pact will dissuade the aspiring superpower from continuing its push into the South Pacific. This ignores Xi’s uncompromising nature, the enormous resources at his disposal and the success of his strategy to harness China’s control of ports and strategic infrastructure around the world for commercial and military gain. But we need to be careful about criticising China-funded port development in our region when we’ve granted Chinese companies long-term leases to run Dar­win and Newcastle ports. This is a bit like the pot calling the kettle black.

The controversial Landbridge lease is a particular problem given what we know about China’s port-base strategy which is completely at odds with the objectives of our defence, aid and foreign policies. With pressure on the Albanese government to step up northern Australia’s defences, the Landbridge lease is a serious obstacle to developing Darwin Harbour into a major naval base and alliance hub. Taking back this lease on national interest grounds would send a clear message to our Pacific neighbours that our actions are consistent with our rhetoric.

The Prime Minister has an opportunity to take a leadership position in a democratic push-back against China’s port-base strategy. He should start by adding Australia’s major ports to the list of critical infrastructure, and barring foreign companies from owning, leasing or operating them.

Albanese should also advocate for an international port’s initiative off the back of the G7’s recently announced $US600bn Partnership for Global Infrastructure and Investment which is designed to give developing countries a democratic alternative to China’s Belt and Road Initiative.

The port initiative would require investor countries and companies to submit transparent, high-standard development proposals. These should demonstrably benefit the people of host countries and preclude foreign control, especially the establishment of exclusive, de facto sovereign enclaves. Loans should not exceed the capacity of developing countries to pay and debt for equity swaps would be proscribed.

Albanese should move quickly to build on the previous government’s Pacific Step-up because the G7 infrastructure and investment partnership won’t come on stream until 2027 and there are no guarantees that the funds will be forthcoming.

Trade is another area that needs attention. We have performed poorly here by allowing China a free hand. Solomon Islands is illustrative. While China increased its share of the country’s exports more than five-fold to 64.4 per cent between 2000 and 2020, Australia’s share declined from 2.8 per cent to a paltry 1.1 per cent. Small wonder that Prime Minister Manasseh Sogavare is beholden to Xi.

Albanese also needs to reverse the decline in Australia’s regional hard power. This means expanding the reach and reconfiguring the posture of the defence force, particularly in northern Australia. We should never have allowed ourselves to be in a position where the navy cannot adequately respond to the presence of Chinese warships in our Exclusive Economic Zone because our Perth and Sydney based frigates are five to six-days steaming time away from our northern waters.