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Australia-U.S. submarine deal may prompt China to expand military capabilities


China has denounced a nuclear submarine deal among the U.S., the U.K. and Australia — and tensions in the Indo-Pacific region will likely continue to rise, said an analyst at consultancy firm Eurasia Group.

Ali Wyne (senior analyst, Eurasia Group) says, “Given where the region is located and the security stakes involved in the region,”.

According to him, “I believe that the military balance is going be growing more contested right now,” he said on Monday’s CNBC program “Squawk Box Asia.”

The U.S., U.K. and Australia last week announced a new security partnership that seeks to strengthen stability in the Indo-Pacific region. The deal comes as China expands its military presence and influences in the region.

This deal does make me think the military balance will shift slightly away from Beijing.

Ali Wyne

senior analyst, Eurasia Group

As part of the deal, the U.S. and U.K. will also assist Australia in acquiring nuclear-powered submarines, which will allow the Australian navy to help counter Chinese nuclear-powered vessels in the region.

However, a diplomatic crisis has emerged.

As a result of the agreement with the U.S. and U.K., Australia scrapped another deal to buy conventionally powered submarines from France. The French were angered by the deal and recalled its ambassadors from the U.S. and Australia.

China also denounced the deal.

According to a Reuters Report, Zhao Lijian, spokesperson for China’s Foreign Ministry, criticized the countries as “severely detrimental regional peace and stability,” intensifying an arm race and causing damage to international nuclear nonproliferation efforts.

Wyn claimed that talk had circulated about a narrowing of the military balance in favor Beijing.

He said that he believed the balance of power in the region was “narrowing” towards Beijing.

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The announcement of the security partnership comes as Biden attempts to reframe the United States’ approach to the growing power of China in the wake of the Trump administration’s trade war with the Asian giant, and as the world continues to grapple with the Covid pandemic, which was first discovered in Wuhan, China.

Biden previously said his approach to China would be different from his predecessor’s and that he would work more closely with America’s allies in order to mount pushback against Beijing.

What Beijing might do next

Australia’s new fleet of nuclear-powered submarines will probably only be delivered during the 2030s, Wyne estimated.

According to Wyne, China will continue to improve its military capabilities in the meantime.

Wyne stated that he believes the Chinese will accelerate military modernization and want to counter these efforts.

This will not be an easy task. Everyone is going to need to boost their abilities.

Michael Klare

Professor at Hampshire College

“So the question becomes what will China be able to accomplish in in this decade,” he said. “And what contribution will this new fleet of nuclear powered submarines, contribute to deterrence capacity, starting — let’s say in the early 2030s – going forward.”

Implications for the South China Sea

China claims almost all of the South China Sea, a massive body of water that stretches about 1,200 miles from the Chinese mainland. It covers an enormous 1.4million square miles. Eight nations with approximately 2 billion people are adjacent to it.

The Asian giant has had skirmishes with other countries over their claims over the South China Sea. Brunei and Vietnam are other main claimants to this waterway, which is rich in resources.

While the United States doesn’t claim the South China Sea, it has promoted freedom of navigation by sea and air across the waterway. Washington accuses Beijing of militarizing the area.

Wyne of Eurasia said that there is a low chance of security problems arising in the South China Sea.

But it raises the pressure and increases the chance of miscalculations,” he stated.

Michael Klare of Hampshire College, who is a professor in world and peace security studies, agreed with Wyne. Klare said that the Indo-Pacific Security Partnership between Australia, the U.K., and the U.S. might not bring about stability or peace.

Before this, tensions between the U.S. & China had been rising. There were rising tensions over Taiwan and the South China Sea; there were increased U.S. naval engagements in those areas, China has responded in kind — so you have a build up in military tensions in Asia,” Klare told CNBC’s “Squawk Box Asia” Tuesday.

Everyone will have to be more capable now, it’s going to be chaotic.

CNBC’s Amanda Macias contributed to this report.