Bloomberg Business Week – by Jason Scott and Isabel Reynolds
Australia is considering buying top-secret technology from Japan to build a fleet of new generation submarines, a move that would risk reigniting diplomatic tensions with China only recently smoothed over.
China and Japan are competing to build their domestic arms industries, and for China the export of Japanese military technology is particularly sensitive given their wartime history and territorial disputes. Choosing Japan to play a role in the multi-billion dollar submarine project could prompt a stern response from Australia’s biggest trading partner.
Australian Defense Minister David Johnston has confirmed “unsolicited proposals” to build the submarines had been received from Japan, Germany, Sweden and France, with a decision on the replacement of the country’s aging diesel-powered submarines expected by March. Alongside Australia, countries such as Vietnam and India are expanding their submarine fleets as China seeks greater military clout in the Pacific.
“The government’s preference seems to be the Japanese, but there are still lots of hurdles,” said Mark Thomson, a defense economics analyst at the Australian Strategic Policy Institute. “Japan hasn’t exported sensitive military technology before and while a deal would mean ties between two close U.S. allies would strengthen, it would be seen in China as a dark cloud.”
Australia needs to replace its six Collins-class diesel electric submarines by 2026, according to Johnston, who is looking for a cheaper option after scrapping the previous Labor government’s plan to build 12 submarines locally, which Thomson estimated would cost around A$36 billion ($29.6 billion). He hasn’t ruled out any options on where the craft, designed to better help Australia patrol the Pacific Ocean and Indian Ocean, will be built.
‘Black Hand’
Choosing Japan would be a bet that its technology will be workable and risks angering Australian voters who want the project kept onshore. Japan itself is struggling with how much to shed its pacifist mantra, though Prime Minister Shinzo Abe has increased the defense budget.
Prime Minister Tony Abbott is seeking to balance Australia’s economic ties with China with its military partnerships with the U.S. and Japan. Australia in 2011 agreed to host as many as 2,500 Marines in the northern city of Darwin as part of U.S. efforts to preserve its military influence in the Pacific at a time when China is calling for a new model of great power relations.
Strike Fighters
Australian airforce bases have been selected by the U.S. Department of Defense to host maintenance work for F-35 Joint Strike Fighters operating in the Asia-Pacific, Johnston announced today. His government this year ordered 58 of the Lockheed Martin Corp.-made jets for $12.4 billion on top of the 14 it pledged to buy in 2009.
“Beijing is almost certain to see the ‘black hand’ of Washington at work” in a Japan-Australia submarine deal, Dean Cheng, a senior research fellow at Washington policy group the Heritage Foundation, said by phone from Virginia. “Japan is clearly stepping beyond its traditional interpretation of its pacifist policy, which China may see as opening the door to a more forceful role in Asia.”
U.S. Interests
President Xi Jinping in a November visit to Australia said he hoped for closer security ties, and the two countries reached a free-trade agreement. Things have not always been so cordial, with Australia publicly rebuking China for introducing an air-defense identification zone over parts of the East China Sea and calling its actions in the South China Sea unhelpful. Abbott has referred to Japan as Australia’s “closest friend in Asia.”
It’s not necessary for Australia to have “so many” new submarines, said Shi Yongming, a research fellow at the China Institute of International Studies in Beijing.
Using Japan’s technology would be at the “nudge and encouragement of the U.S.,” Shi said of Australia. “It’s in the U.S. interest to have the security ties between its two major allies in the region strengthened.”
Japan has been deploying Soryu submarines since 2009, with the latest models costing about 60 billion yen ($514 million), Yasushi Kojima, a lieutenant commander at the government’s Maritime Staff Office, said by phone. Compared to the previous Oyashio submarines they can stay under water for longer, have stronger motion performance and are better able to avoid detection, he said.