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Wednesday 23 Aug 2017 | 09:04 | SYDNEY
Wednesday 23 Aug 2017 | 09:04 | SYDNEY

Australia's role in China's naval expansion

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COMMENTS

31 January 2008 21:38

On 4 December an obscure American naval technology trade journal called Signal published an article on a new generation of missile-armed catamarans (the Type 022; pictured) being built for China’s navy, the People’s Liberation Army-Navy (PLAN). The article was all about the tactical employment of these new ships in a Taiwan war scenario, and thrown in almost as an aside was the following:

The Australian company AMD exports various sizes of catamarans for commercial customers from all parts of the world. From 1993 until 2000, China procured seven AMD catamarans from 16 meters long to 30 meters (100 feet) long for river, seaport or local ferry duties. AMD has a joint venture company, Sea Bus International, located in Guangzhou that refined this catamaran design. After a review of competing designs, the PLAN selected a military patrol boat design based on the AMD 350, which is markedly like the 022 in specifications. AMD is cooperating in the design with China, and French diesels may be the power plant.

A call to AMD confirmed the Signal story: AMD did set up a joint venture called Sea Bus International with a Chinese company, GUMECO, and this joint venture company is working directly with the Chinese Navy. To be clear, AMD is not breaking any laws, as the Defence Export Control Office explained in an email:

...an offence would have been committed if there have been any exports from Australia of any item listed in the Defence and Strategic Goods List (DSGL) without a Defence issued licence or permission. This would include items specifically designed or modified for military use, ie. civilian vessels fitted with hardpoints for mounting weapons/missiles or vessels specifically designed for special forces.  It would also include any vessel design that is specifically for, or has been modified for, a military use. Australia's export laws only apply to exports from Australia and not for work done by an Australian company subsidiary in another country.

Nor has AMD supplied actual weapons or designs for weapons through this joint venture company. AMD designs catamaran hulls, and it set up the joint venture to sell fast ferries to the Chinese market. But China's admirals, recognising that these hulls allow for speeds of up to 36 knots and a more stable platform for firing weapons, came calling. They were not turned away, and Type 022s are now being turned out regularly, with possibly 30 of them built so far. 

Do deals like this serve Australia's strategic and foreign policy interests? We have close economic relations with China and they are not our military enemy. But as a US ally we are engaged in some level of strategic competition with Beijing. And then there’s Taiwan. If China went to war over Taiwan and the US intervened, there’s a good chance we’d come in on the US side, possibly by sending in RAN ships. With Taiwan only 180km off the Chinese mainland, clearly these catamarans would be a threat to the RAN.

The ABC's National Security Correspondent, Leigh Sales, is working on a story about the AMD deal with the Chinese Navy. I asked if she had made contact with the company. Sales said she had and that in an email from AMD Technical Director Allan Soars, he said that if AMD had not entered into a joint venture, a UK or French company would have done so, and the ships would still have been built. Soars told Sales the only way to prevent the crossover of Australian commercial material into the Chinese military is to stop trading with China completely. Sales said she planned to air her story on the AMD China deal on tomorrow morning's AM and that it would include more detailed comment from Soars.

I have some sympathy with Soars' view. Although the arms business lends itself to moral grandstanding, in truth there is no clear moral line. Australia sells civilian technology and raw materials to China that could have dozens of military applications, but it would be suspicious in the extreme to put a stop to all such trade on those grounds. In fact, trade may actually reduce the chances of conflict. 

Still, although the line between what we should and should not sell is blurry, that doesn't mean there is no line. We don't, for instance, sell uranium to North Korea. And although the AMD case is a less extreme example (to repeat, AMD has not broken the law), it does raise questions about our national interest.

The problem is, even if the Government thought AMD was acting contrary to the national interest, it cannot (as Defence admits in its email) act in cases where Australian subsidiaries operate in another country. That is something that merits the Government's attention.

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