China Syndrome: Japan Sells Subs to Australia?

Next stop for Soryu-class Japanese subs? The Land of Oz.

Whoa, another security-related post after the previous one on China's fisher militia. You'd think the IPE Zone is turning into Jane's Defense Weekly, but no. Simply put, security matters affect commerce and vice-versa. A particularly interesting thing for the Asia-Pacific is the simultaneous economic outreach of China as it expands its military; the former funds the latter. This phenomenon has led to all sorts of interesting tensions. While China's neighbors have benefited from it opening up to the rest of the world and, I grudgingly admit, providing lower-cost consumer goods, its rise has been accompanied by greater belligerence. Or, at least, the capacity for it.
Australia provides a useful case in point. The Land Down Under's largest trading partner is now China as the Middle Kingdom seeks raw materials to supply its mighty industrial machine. Yet, at the same time, it is aligned with the United States militarily. Therefore, it too has been alarmed by recent Chinese incursions into nearby waters. With the development of longer-range sub-launched missiles, China will have the capability of hitting the territory of Australian ally the United States:

A Chinese nuclear submarine was spotted in the Indian Ocean for the first time last December. A conventional Chinese sub was also sighted there in September. This was a game changer for Japan, the U.S. and Australia. It was a given that Chinese submarines were lurking in the East and South China seas, but now, they have to consider their presence in the Indian Ocean, a crucial shipping lane.

The possibility of even a single Chinese submarine there means more subs and antisubmarine surveillance aircraft have to accompany military vessels passing through the waters, according to Japanese and U.S. defense officials.

Some analyses suggest the Chinese military will put into service its first submarine capable of carrying ballistic missiles with a range of more than 7,500km as soon as the end of the year. This will give China an ability to launch a nuclear attack on the U.S. mainland from under the sea. Such capability could threaten the U.S. "nuclear umbrella" and impact on national security issues in Japan and Australia as well.

This all plays into the hands of that other American ally, Japan. As a manufacturer of advanced diesel-powered submarines, Australia is a putative customer for submarine technology as China advances its military reach:

Japan and the U.S. are considering increasing military cooperation with Australia by sharing submarine technology...Canberra is interested in Japanese technology. Japan's diesel-electric submarines are respected, in particular because of the quietness of the screw and engine -- crucial requirements for military submarines.

For weapons systems, such as torpedoes and cruise missiles, Australia has turned to the U.S...Japan and Australia agreed to jointly develop military equipment, including submarines, at a Nov. 12 summit between Prime Minister Shinzo Abe and his counterpart, Tony Abbott. "The hurdle for cooperating with another country in anything related to submarines is high," Japanese officials noted. "It is on a different level to cooperation on fighter jets and warships."

Submarines are the most closely guarded military secrets among countries that own them. Their ability to move undetected can sway military balance. Even between Japan and the U.S., only a fraction of the information collected by submarines is shared. The two countries do not share any information on their submarines' current locations or capabilities.

There is thus a commercial element to accompany the security element as the US urges its regional partners to pick up some of the slack patrolling Asia-Pacific waters amid current limits to significant increases in US defense spending. The notable thing is that submarine technology is not widely shared for obvious reasons, but will be among the US, Japan and Australia more out of necessity than anything. In other words, distributing burden-sharing amid Chinese maritime adventurism has led to the Yanks telling Japan to share these technologies with the Aussies:

But budgetary issues limit how much the U.S. Navy can do in the Asia-Pacific region. It is also unfeasible for Japanese submarines to frequently monitor the Indian Ocean on behalf of the U.S...Australia, which directly faces the Indian Ocean, is also located conveniently for monitoring the South China Sea. With enhanced submarine capabilities, Australia will be able to keep a close eye on those waters.

"Following technical cooperation in submarines, Japan, the U.S. and Australia will likely start working together in the operational arena," said Satoshi Morimoto, who served as defense minister under Prime Minister Yoshihiko Noda. "Australia will be in charge of the Indian Ocean and the South China Sea," he added. "Japan will mainly handle the East China Sea. With the U.S. participating in and leading trilateral cooperation, it will be possible to effectively respond to movements of Chinese submarines."

With the stridently militaristic Shinzo Abe as Japan's PM, I am sure he needs little encouragement from the US to help the Australia anyway in trying to put China in its place. Thanks to business with China among other things, Australia has quite a lot to spend on military hardware like F-35s and submarines. Therefore, by virtue of doing business with each other, both China and Australia are able to improve their strategic capabilities against each other.

Actually, Abe has already lifted restrictions on arms exports to friendly countries. With Australia's domestic submarine designs being rather, ah, subpar, the match is ideal. What's more, with Japan running consistent trade deficits, arms exports are certainly welcome in whatever quantity. There is, however, domestic protectionism to deal with at home:

Two companies, Mitsubishi Heavy Industries and Kawasaki Shipbuilding, each maintain active shipyards and produce Soryus on an alternating basis. Representatives of Kawasaki were among those Japanese officials that went to Australia to make the recent sales pitch, so it’s possible Kawasaki could produce Australian submarines while Mitsubishi could continue building boats for the Maritime Self Defense Force. Dividing the work would make any modifications requested by Australia, particularly ergonomic ones, easier to accommodate.

By all accounts, Australia will be getting a good deal. At roughly $1.87 billion dollars each, the Soryu-class submarines are a bargain against [Australia's] Future Submarine Program projections of $3 to $5 billion each. Yet the decision to buy Japanese is a politically risky one for the government of Prime Minister Tony Abbott. A survey by the Australian Industry Group estimated a next generation submarine program would employ “about 5,000 workers and 1,000 Australian businesses”...

The Australian-Japanese submarine deal will be good for both governments, and bad for Australian shipbuilders, the Japanese Left and China. You can’t please everyone. At least this time Australia will be getting what it’s looking for—reliable submarines—at a good price.

Geopolitics are weird but interesting, and the arms trade falls into the same category as an offshoot.