Australian Defense Minister Peter Dutton has defended the AUKUS deal. Photo: AFP / Mandel Ngan

The agreement among Australia, the UK and the US for the latter two to supply nuclear-powered-submarine and underwater-drone technology to Australia (AUKUS) has shaken and stirred international relations. It will also fundamentally alter the strategic dynamic in the South China Sea because a major purpose of these submarines will be to prevent China from controlling it.

The South China Sea is one of the most dangerous places on the planet in terms of the potential for war between great powers. General Mark Milley, chairman of the Joint Chiefs of Staff, explained that his controversial reassurances to Beijing during the administration of former president Donald Trump were necessary because China was afraid the US would attack it there under the guise of its military exercises with aircraft-carrier strike groups.

Defending the AUKUS decision, Australian Defense Minister Peter Dutton said the intent of the arrangement was “to develop Australia’s capability to protect its territories as well as that of friends in the region.” 

But former Australian prime minister Kevin Rudd asked if the agreement meant that the submarines will be “interoperable with the Americans in the Taiwan Strait, the South China Sea or even the East China Sea in China’s unresolved territorial disputes with its neighbors? If so, this is indeed a slippery slope to a pre-commitment to becoming an active belligerent against China in a future war….”

When they come online, the nuclear-powered submarines will enable Australia to patrol the South China Sea stealthily and detect, track and, if necessary, target China’s nuclear-powered and -armed submarines based in Yulin, Hainan. The West calls this “deterrence”; China sees it as an existential “threat.”

The probability that Australia will use these submarines to patrol the South China Sea is particularly threatening to China because one of its military weaknesses is anti-submarine warfare. As former US deputy national security adviser Matt Pottinger put it, “underwater warfare capabilities have been Beijing’s Achilles’ heel.”

For China, the South China Sea is a “natural shield for its national security.” That body of water hosts its vital sea lanes of communication that it believes the US could and would disrupt in a conflict.

But even more important, it provides relative “sanctuary” for its second-strike nuclear submarines that are its insurance against a first strike against it – something the US, unlike China, has not disavowed.  

To China, these deployments would mean that the US and its allies want to deny it the defensive buffer of the South China Sea. This is not just a tactical move by the US and Australia but an existential threat to China. It also means that the US can bully China with the threat of a nuclear attack because it may have no response.

Chinese Foreign Ministry spokesman Zhao Lijian was spot-on when he said the agreement would “seriously damage peace and stability [and] exacerbate an arms race.” Obviously China will try to improve the stealth of submarines as well as its anti-submarine warfare capabilities.

China is already trying to catch up in drone capabilities and has made dramatic progress in recent years. Advances are most evident in unmanned aerial vehicles, but Beijing is also accelerating its development of unmanned underwater vehicles, and this has already caused controversy in the region. 

The AUKUS agreement also stresses Australia’s relations with South China Sea littoral countries. Malaysia is concerned that the agreement could lead to more conflict in the region. But it is the reaction of its immediate large northern neighbor that Australia should be worried about.

Indonesia may present a significant potential complication to the use of Australian nuclear-powered submarines and underwater drones to patrol the South China Sea. To get there and back from their likely bases in Australia, the shortest and most convenient route is through Indonesia’s straits and archipelagic sea lanes.

Indeed, Indonesia has good grounds to be concerned about the future deployment of submarines and drones through its waters. The use of Indonesian waters for such missions in the South China Sea would undermine Jakarta’s carefully constructed “dynamic equilibrium” foreign policy.

With the announcement of AUKUS, it has again expressed deep concern “over the continuing arms race and power projection in the region” and called on Australia to comply with the UN Convention on the Law of the Sea. Unlike the US, both are parties to UNCLOS. 

Indonesia may not like being in the middle of a possible US-Australia-China military dust-up. Besides that, it is very sensitive about military vessels in or under its waters and has its own view of the relevant UNCLOS provisions and what constitutes infractions thereof. Also, allowing the passage of the submarines and drones could provoke domestic protests in Indonesia that could in turn even disturb relations with Australia and the US.

The US has offered Indonesia military cooperation in the maritime sphere, specifically maritime domain awareness (MDA). But will the US share knowledge of its – and now Australia’s – operations in, over and under Indonesian waters, including passage of nuclear submarines and drones transiting to and from the South China Sea?

Although this “deal” is among Australia, the UK and the US, it has far-reaching ramifications for strategic planning and international relations in the region. It has thrust – or dragged – Australia into the forefront of the US-China struggle for regional dominance and rattled its relations with its neighbors. It is not clear that this is what Canberra wanted or expected.

Mark Valencia is a non-resident senior research fellow at the Huayang Institute for Maritime Cooperation and Ocean Governance.