AUKUS project has worsened Australia’s ties with China
July 1, 2025
I have argued elsewhere (Asia Sentinel, 24/5/2025) that five factors could throw the US$245 billion AUKUS deal off balance following the recent decision by Washington to review the deal.
First, the US has a limited shipyard capacity to deliver nuclear-propelled submarines to Australia in accordance with the agreed timeline.
Second, concerns are being expressed in Washington that, given shipyard limitations, selling new subs to Australia may erode the US’s own fleet strength.
Third, the fast development of underwater offensive technologies like autonomous underwater vehicles and remotely operated vehicles may undermine or negate the operational value of the proposed nuclear-powered submarines that Australia, the UK, and the US have agreed, since to non-submariners, these platforms are more cost-effective than submarines.
Fourth, there are thus fears that the advent of new technologies will make oceans, including the sea surrounding the Australian continent, more open or transparent by 2050, making it difficult to hide submarines deep in the ocean. Without the element of surprise, submarines will lose their stealth capability, rendering them useless, if not obsolete.
Finally, questions have been raised within Australia on whether the strategy of aligning with the US is the correct strategy considering the state of the US economy, emerging defence technology, and the unpredictability and volatility of the current administration in Washington.
Other domestic concerns like cost overruns, long delivery times, technical knowledge, and environmental factors have found a strong constituency in Australia.
Critics like Paul Keating, Gareth Evans and John Menadue, among others, are questioning why Australia continues to hang its strategic fate on the US umbrella in a changed geopolitical landscape. These critics have argued that AUKUS has not only entrenched Australia in a US-China rivalry, making it a potential target, but it has also increased dependence on Pax Americana.
Among the earliest to raise this concern was the late prime minister Malcolm Fraser in his book Dangerous Allies, originally published in 2014. His calls for a review of Australia’s foreign and defence policy towards the US have unfortunately fallen on deaf ears.
While Canberra may feel compelled to align with US foreign policy positions on issues like Taiwan, Ukraine, or Middle East conflicts —whether it serves Australia’s national interest or not — the AUKUS project has worsened ties with China, Australia’s largest trading partner. While some relations have thawed, Beijing remains suspicious of Canberra’s anti-China policy.
What China wants from Australia are its cheese, wines, lobsters, barley, beef, iron ore, gold and petroleum among others. These products command a premium price because of its proximity to Chinese markets. Nobody else in the region has bought these products at a premium price; not Japan, not South Korea.
One other product that was popular with China was education. Due to recent restrictive policies imposed by the Australian Government, the Chinese opted to study at home. Times Higher Education has ranked Tsinghua University and Peking University among the top 15 in the world! The loss of Chinese students in Australian Universities affects not only the revenue to the states but also a potential decline of Australia’s soft power.
Australia is geographically distant from China. It is not Taiwan or Japan. It is not a frontline state in the US-China rivalry over the South China Sea and the western Pacific. Geography favours diplomacy, not confrontation.
What Australia needs in an uncertain geopolitical environment today are reliable friends. While friendship lowers risks, submarines raise tensions. Nuclear submarines may provoke rather than deter China, making Australia look like a pawn in America’s Indo-Pacific chessboard.
Canberra’s quest for nuclear submarines is premised on a mischievous assumption that China poses a threat to its security. There is no evidence that China plans to invade Australia, whose regional interests may be at odds with the US maintaining its primacy. Its interests are not territorial in nature.
Beijing may want to exert regional dominance, not the occupation of distant islands.
While Canberra may feel obligated to defend US interests as it has done since WWI, cutting the umbilical cord may be difficult for some who have built fortunes from association with America and the West. Realpolitik demands that Canberra takes a hard look of its security future in the Indo Pacific region that is getting accustomed to a multipolar world where Wahington is no longer the proverbial North Star of the world.
The treaty with UK and US ties Australia more deeply into the US strategic planning and command architecture, implying interoperability in weapons systems, logistics, and intelligence will increase at the cost of strategic autonomy.
While a US withdrawal from AUKUS would be a major setback, Australia is not without options. In fact, it might even reclaim greater strategic flexibility, allowing it to pursue more balanced regional diplomacy, avoid excessive dependence on Washington and tailor its defence priorities to its geography, economy and regional relationships.
In the event the entire treaty, which is to be implemented over three decades, fails to materialise, Canberra can turn back to France, with which it voided a deal to buy €50 billion worth of diesel subs in 2021, or to Japan, which offered Sōryū-class diesel-electric attack submarines in 2016, if it still wants to pursue the course. It would be a better and safer bet for Canberra to tie up with its surrounding ASEAN neighbours. Australia has a ready-made defence consultative mechanism in the form of the Five Power Defence Arrangement with Malaysia, New Zealand, and Singapore.
It also makes more sense for Australia to work with its immediate neighbours in the South Pacific with whom it has a long-established rapport. Australia is not without a US tie-up as it is also a member of the Quadrilateral Security Dialogue alongside India, Japan and the US.
The purpose of diplomacy is to make friends. Thus, building trust and good relations with neighbours, including China, serves Australia better than preparing for a war that may never come. The uncertainty that the AUKUS deliveries are threatened should be a lesson learned. In the meantime, the AUKUS pact has worsened ties with China.
International diplomacy is about preserving state interests, not about maintaining ethical values. Lord Palmerston’s 1848 advice to England remains valid in this context that “it is a narrow policy to suppose that this country or that is to be marked out as the eternal ally or the perpetual enemy of England. We have no eternal allies, and we have no perpetual enemies".
However, the final decision on AUKUS rests squarely with the Australian electorate who need no reminding. While useful for defence purposes, their own submarines can’t stop rising seas, cyberattacks, or a breakdown in civil order.
The views expressed in this article may or may not reflect those of Pearls and Irritations..