In sunny San Diego last Monday, Anthony Albanese, Rishi Sunak and Joe Biden shook hands on the Australia-UK-US (Aukus) deal.
Often reported as if it were simply a big industrial deal to equip Australia with nuclear submarines, it is in fact far more strategic.
Aukus represents a major step towards limiting China’s ambitions in the Asia-Pacific region, as Beijing increasingly turns its attention beyond its borders.
Why is China looking out to sea?
At heart, it is a matter of both strategic importance and national pride. Beijing sees control of the waters around it as crucial to maintaining its sovereignty and economic strength.
The West, however, fears that growing naval strength is part of a long term plan for China to invade Taiwan, an ambition that would hand Beijing potentially devastating economic leverage.
China’s path to global domination
To understand China’s growing focus on the seas that border it to the east, look first at its demographics and economy.
China is a gigantic nation with 1.4 billion people, more than any other on Earth, and a likewise gigantic $18 trillion industrial economy which is only outmatched by one other: the USA.
However, China does not have anything like sufficient energy supplies to run that economy, nor enough home grown food to feed its people. Vital imports of both come by sea.
The Middle Kingdom is powered overwhelmingly by coal (55pc of primary consumption), oil (19pc) and gas (9pc). China has to import half of its gas and more than half of its oil. Even though it is a gigantic coal producer, China also has the largest coal imports in the world.
The great bulk of the coal comes from Indonesia and Australia; the oil from many places, but primarily the Middle East. A third of the gas comes by pipeline from elsewhere in Asia, but the rest is in LNG tankers that cross the sea.
Even China’s own production is often offshore: the Bohai oil field, China’s biggest, is in the Yellow Sea.
Some people suggest that oil and gas fields might be a key issue in the South China Sea, where China has been increasingly aggressive, but in truth there aren’t enough resources there to seriously interest Beijing.
That doesn’t mean China is uninterested in the stretch; far from it. Control of the South China Sea is of great strategic importance.
Supertankers carrying millions of barrels of crude oil move into the Sea through the Singapore Strait every day, carrying vital supplies not only to China but onwards to the similarly energy-hungry industries of Japan, South Korea and Taiwan.
It’s a similar picture with LNG gas tankers and Australian and Indonesian coal shipments.
Australia is one of China’s most important trading partners, not just for fuel but for food too.
Despite China’s vast size and tracts of fertile land, it has one of the lowest amounts of arable land per head of population in the world.
Australia, by contrast, has the world’s highest area of arable land per head of population. It produces more than three times as much wheat as it consumes, much of which is exported to China.
Demand for meat has also soared in China in recent decades. Australia produces a lot of beef, a fact that has not gone unnoticed.
In 2015 and 2016, Chinese firms attempted to buy Australia’s largest cattle business, Kidman and Co, which owns 2.5 percent of the total Australian land area: about the same area as South Korea. The Australian government nixed those plans, but even so China remains the second-biggest foreign landowner in Australia (the first and third are the UK and US.)
China is also heavily dependent on Australian iron ore to supply all its mighty heavy industry and construction.
Indeed, iron ore may be an issue on which Australia holds the whip hand. Not only does Australia supply 60pc of China’s massive iron ore requirement, Australia has the largest global supply of the metal at present.
This picture may change – for instance a massive China-backed iron ore project in Guinea, on Africa’s west coast, may now be lumbering forward after many years mired in corruption scandals – but this will take time.
For now, China relies on Australia but it is a somewhat uneasy trading relationship, one in which the power balance is constantly being measured.
War threatens microchip crisis
Elsewhere, across the Yellow Sea lies South Korea, another important global manufacturing powerhouse, and beyond that Japan.
And of course to the south, the potential flashpoint: the Switzerland-sized island of Taiwan, just 80 miles across the water from the Chinese mainland.
Taiwan is where the old Republic of China (ROC) government fled to in 1949 after the rise of the communist People’s Republic. Beijing refuses to acknowledge Taiwan’s independence, but it is a practical fact.
Taiwan is nowadays a tremendously important place. This is primarily because of its huge semiconductor industry.
In money terms only 20pc of the global chipmaking industry is in Taiwan, but this takes no account of the decoupling that has taken place between chip design and manufacture.
Taiwan is far and away the world leader in actual fabrication of semiconductors. It makes around 50pc of the global supply, no matter that the lucrative design work may well have been done somewhere else – quite likely in the UK, given the popularity of designs from Cambridge-based Arm.
Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s biggest player in chip foundries and makes huge numbers of Arm chips, to the great benefit of the UK economy (the other world foundry giant is Samsung of Korea: again, a short sea trip from China.)
Taiwan is particularly important to the People’s Republic. Much as everyone has grown accustomed to seeing “made in China” stamped on electronic goods, the People’s Republic cannot make the chips inside the hardware.
It’s generally estimated that China has to import 80pc of the chips it needs. Even Chinese factories that do make chips import the machinery needed for manufacturing.
Some observers have gone so far as to say there is a “Silicon Shield” in place: China would not dare to invade Taiwan in case the vital chip factories were damaged or destroyed, thus crippling China’s own lucrative manufacturing.
That argument has not been heard so much lately, especially since the US placed a fairly damaging stranglehold on chip supplies to China as part of the ongoing trade war. The US has done this by insisting that anyone using US technologies cannot do business with Chinese firms.
The effect is often felt in places like Taiwan and Korea, where a chip factory is prevented from selling US-designed chips, or chips made using US machinery, to China.
It would seem that Xi Jinping may be thinking of seizing the means of production intact. Even if an invasion does damage TSMC’s output, this would hurt the West at least as much as China. The semiconductor supply crisis we have seen from 2020 onwards would be minor by comparison.
A battle for democracy
Vladimir Putin’s aggression in Ukraine has broken the taboo and made it clear that invasion is an option.
Fear of economic disruption from any invasion of Taiwan is one reason for the Aukus pact: a good, if selfish, reason.
Yet there is also a moral issue: democracy must be defended.
Taiwan started out as a one-party totalitarian state like the People’s Republic, but in the 1980s a transition to democracy began, with elections and opposition parties.
In 2016 the opposition finally won control of the legislature from the incumbent KMT party. This, and judicial reform, caused analysts at The Economist to upgrade Taiwan in their grading system from a “flawed democracy” to a “full democracy”.
Ironically they dropped the USA from “full” to “flawed” the same year. Meanwhile, the UK and Australia are both “full democracies” like Taiwan. The People’s Republic is “Authoritarian”, the lowest possible grade democracy-wise.
Two realms – democracy and authoritarianism – are clearly defined. Neither side will tolerate incursion into the other.
In simple terms, Taiwan and Aukus are the good guys, if occasionally flawed. Xi Jinping’s regime – though not the Chinese people themselves – are the bad guys.
It’s worth being clear on that, as there is often a fatal temptation to make friends with the People’s Republic for the purpose of doing business with China: and not just in Taiwan or Australia either.
If China should attempt to invade Taiwan, this would be something every bit as worthy of fighting against as Putin’s invasion of Ukraine, perhaps even more so given the vital importance to Britain of Taiwanese semiconductors. Aukus should stand ready to repel a Chinese invasion of Taiwan.
Against today’s background of war in Ukraine and sabre rattling in Beijing, the Aukus deal might seem a little slow-moving. The central element of it, the nuclear-powered submarines for the Australian navy, will not even start to arrive until the 2030s.
But the truth is that Beijing, despite its posturing, will not be ready to invade Taiwan until then – if so soon. Right now, for instance, it’s hard to imagine any invasion scenario which would not see Australia cut off supplies of iron ore: that on its own would be a body blow for China.
It would hurt Australia too, but much of the pain would be passed on to the largely overseas owners of Australian iron mines. In this context it’s pleasing to note that the largest single shareholder in Rio Tinto, biggest mining operator in Australia, is actually the Chinese government.
Are Xi’s forces ready for war?
Even if Xi doesn’t care about Australian ore, or coal or wheat or beef either, China would need to be able to move troops across the Taiwan Strait safely. This would require at least partial control of the sea and the sky above it.
This is unlikely to be a matter of warships, at least in the Strait itself, and at first it may not be a matter of aircraft either. Both the People’s Republic and Taiwan have substantial armouries of long-ranging missiles.
To give just one example, as far back as 2008 Taiwan was putting its own Hsiung Feng 2E cruise missiles into sustained production. HF-2Es can strike targets hundreds of miles into mainland China, and Taiwan has at least hundreds – possibly more than a thousand – of them.
The new Yun Feng supersonic cruise missile is probably operational in small numbers by this point: it could hit targets across most of China’s developed regions, including Beijing. Taiwan also has hundreds of anti-shipping missiles threatening the Strait.
Not many countries can produce this kind of high-tech weaponry themselves: but Taiwan, as we have seen, is in some respects more advanced than leading Western nations. Its missiles probably work just as well as theirs.
Any invasion campaign would likely commence with a massive missile bombardment, with Beijing seeking to knock out Taiwan’s missiles and air bases.
However, the bulk of Taiwan’s weapons are mounted on mobile launchers which are kept parked in hardened facilities. This would be no simple matter.
Are Xi’s forces truly ready for this sort of thing?
The People’s Republic has put its armed services through many reorganisations and modernisations over the decades, transforming them from the enormous peasant army of the early days.
But it was only in 2015 that the air force and navy stopped being subordinate departments of the army: Western analysts still tend to speak of the People’s Liberation Army (Navy), Plan, and the People’s Liberation Army (Air Force), Plaaf.
The communist structure has only recently started to seriously get its head around the idea that a huge land war against Russia or Vietnam is not the primary scenario.
Shortly after the military shake-up, which acknowledged the importance of sea and air power, a further change saw the Chinese heavy missile force become a branch in its own right, like the new independent navy and air force. This is the PLA Rocket Force, or Plarf.
Plarf controls China’s small force of land-based intercontinental nuclear missiles. More to the point for invading Taiwan, it also has around 2,000 conventionally armed weapons: not so many as to offer a really crushing superiority over the Taiwanese arsenal, especially as many are based on old Soviet technology.
It seems fairly unlikely that today’s Plarf alone will be able to fully suppress Taiwan’s mobile ship-killer batteries and make a crossing of the Strait practical.
China’s air force will need to play its part here. Will it be able to win control of the skies above Taiwan and the Strait, as Russia’s air force has not been able to above Ukraine?
On paper it should be able to, with almost 3,000 combat aircraft against Taiwan’s 470-odd. A dozen or two of these are the vaunted Chengdu J-20s, claimed to be a genuine fifth-generation stealth fighter like those of America. There are larger numbers of supposedly dangerous fourth-gen Russian Sukhois and Chinese licence- built versions of them.
Far too many of China’s planes, though, are licence-built Mig-21s: 1950s technology. China’s air force, then, mostly has no better equipment than Russia’s and often has worse.
Aukus could tip the balance of power
It seems likely that, as with Russia, China’s air force is not yet capable of complex combined-air-ops fighting of the sort that has let US-led alliances to dominate the skies above Iraq and Libya.
It was only in 2019 that the Plaaf started to get serious about advanced pilot training, setting up dedicated Top Gun-style academy units rather than carrying out all operational training in front line squadrons. The Plaaf itself says its current transformation will not be complete until 2035.
Taiwan’s air force is a lot, lot better than Ukraine’s. It has a mixed force of decent US-supplied F-16 Falcons and indigenous Ching Kuo jets and proper US-supplied radar planes. It has a force of US-supplied maritime surveillance P-3s, a vital capability for an island nation.
Many of these planes are kept in largely invulnerable bases dug into the sides of mountains: it will be very hard to knock them out on the ground. China may well damage air base runways, but runways are easy to repair quickly and all military air bases have specialist teams dedicated to that job.
Taiwan also has hundreds of high-end US Patriot surface-to-air missiles, which would take a fearsome toll of Plaaf aircraft and might even knock down inbound Chinese ballistic missiles. Then there are many hundreds more American Sparrows, not as advanced but still very dangerous.
If Russia couldn’t dominate Ukrainian skies, it’s very clear that China has little chance of dominating Taiwanese ones: not yet, anyway. It’s very unlikely that China would be able to make the Strait safe enough to mount an amphibious crossing – today. And this is before we even consider US intervention.
That’s why Aukus is all about the future. The day may very well come in the 2030s when China’s missile and air forces will be strong enough to reach out and dominate Taiwan and the seas around it. China may well establish its own iron mines in Africa and a blue-water navy able not only to take control of the South China Sea but the waters around Korea, Japan and even Australia.
But by then, there will be a new base at Perth with Aukus nuclear-propelled submarines operating from it.
Nuclear propulsion is critical. Conventionally powered submarines are almost useless if radar-equipped enemies are operating against them. Conventional subs must run on the surface to move at any speed, but this means they are easily detected and sunk.
Standard diesel-electric subs must extend “snort” air-intake masts above the surface to cover any distance while submerged. This slows them down even more and makes them almost as easily detected as if they hadn’t bothered to go under.
There are various “air independent” conventional propulsion options which offer some fully submerged range, but they too mean very slow travel and troublesome topping up with exotic fuels after any prolonged use.
First-rank navies don’t bother with conventional subs: in the age of radar they are of very limited usefulness.
A nuclear sub is a completely different beast. It can stay fully submerged for months, going as fast as a speedy surface ship the whole time.
The Aukus nuclear subs of the future will be a terrible problem for the possible advanced Plan and Plaaf of the future. To be safe from them, any Chinese naval task force will need to move inside an expensive, advanced bubble of anti-submarine escorts and aircraft: even in China’s own waters, let alone on blue-water operations.
Such a bubble would need to be extended over the Strait in the event of any Taiwan invasion: yet another huge, expensive capability for the now-faltering Chinese economy to pay for.
Without this support, unseen Aukus subs might suddenly launch weapons from almost any piece of sea at almost any target ashore or afloat, anywhere across the Asia-Pacific region.
Aukus doesn’t totally transform the picture, but it does tip the balance of power in the region back towards the West and its democratic allies in Taiwan, South Korea and Japan.
It will let Australia trade with China from a stronger position, reassured that the possible future blue-water Chinese navy will not have things all its own way.
And Aukus will push the possibility of a Taiwan invasion even further into the future. At any rate, it will be avoided altogether.
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