AUKUS Submarine Deal: Geopolitical Churn in Southeast Asia

On March 13, 2023, the AUKUS submarine deal was announced in San Diego, California during a tripartite meeting between US President Joe Biden, Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak under which Australia would be provided with a fleet of eight to 12 nuclear-powered submarines over the next three decades for US$368 billion.

The AUKUS partners defended the deal saying it aims to balance the strategic equilibrium of the Indo-Pacific region, and defend and promote a rules-based order.

China vehemently – and predictably – criticised the deal, accusing the three countries of trying to contain it and arguing that this will lead to an arms race and nuclear proliferation in the region. The reaction of Southeast Asian countries has been mixed and nuanced, as they have both deep economic ties with China and close security ties with the United States.

China and the Indo-Pacific

China’s meteoric rise as an economic and military power in the last three decades and its belligerent foreign policy have led to deep concerns in the region. Its relations with Australia have progressively deteriorated in the last few years. It restricted Australian imports, further damaging relations. Beijing actively uses its superior military power to change the status quo in maritime disputes with some of its neighbours in the South China Sea.

In 2016, Philippines won a historic case against Chinese claims in the South China Sea when an international tribunal constituted under the United Nations Convention on the Law of the Sea (UNCLOS) ruled in its favour. China refused to accept the ruling, calling it a farce.

Meanwhile, in 2023, China’s military budget topped $230 billion, the second largest in the world after the United States ($842 billion).

China’s fear that the deal will lead to an arms race is misplaced as it already has six-nuclear power submarines and over 50 non-nuclear submarines. By the time Australia will have its fleet of 12 submarines,  it will have over 70 submarines. Australia’s Foreign Minister Penny Wong said, “Australia as a middle power is not in any arms race but wants to ensure a strategic equilibrium in the region.”

A Divided House

On the other hand, the AUKUS submarine deal has seen mixed reactions in the region from countries that are concerned about being caught in the US-China competition for global supremacy. They want to avoid sharp bipolarity, and they are loath to choose sides.

While the United States has historically shaped the region’s security architecture, China, with its stupendous economic growth and huge market, is deeply integrated with the regional economy. In this context, the countries of the region want peace and stability in the region to continue without estranging either side.

Indonesia and Malaysia were more vocal, stating the deal may lead to an arms race and nuclear proliferation in the region. Indonesia’s foreign ministry said, “We are closely monitoring the situation and hope that all the nations will work together for the peace and stability of the region.” Its Malaysian counterpart said, “All countries should promote transparency and confidence-building and refrain from any provocation that could potentially trigger an arms race or affect peace and security in the region.”

Philippines was vocal in its support of the deal. its Department of Foreign Affairs (DFA) said, “AUKUS is critical for the regional security architecture.” Singapore and Vietnam, with their muted responses, showed tacit support. Thailand has not spoken for or against the deal as it shares good relations with both parties.

 The US Response

To address the concern of the region’s countries, Daniel Kritenbrink, US Assistant Secretary of State for East Asian and Pacific Affairs, said, “Aukus is about promoting peace, stability, security and prosperity across the Indo-Pacific region. It is a modernisation of our existing alliances and partnerships.”

During her Singapore visit after the deal Australian foreign minister Wong said, “We seek to acquire this capability in order to help keep the peace. We want a peaceful, stable, prosperous region, as Singapore, as Malaysia, as Indonesia do.”

China, meanwhile, has intensified its outreach to the region’s governments, cautioning them against bloc formation in the last two weeks. During the visit of the Malaysian and Singapore PMs to China regional peace was a key part of the dialogue. Sun Weidong, China’s vice minister of foreign affairs, visited the Philippines where he had a fractious discussion about the new deal.

All these developments indicate that despite the concerns of the Southeast Asian countries about not wanting to be caught in great power competition, it is increasingly looking like their space for manoeuvre is likely to shrink in the months ahead.