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Australia Defense Outlays to Jump 81% as China Tensions Rise

  • Nation's defense spending to nearly double over next decade
  • White Paper says U.S. to remain dominant military power

Australia will boost defense spending by more than 81 percent over the next decade, including increasing naval capacity as concern over Chinese militarization in the South China Sea intensifies.

The U.S. will remain the pre-eminent global military power over the next two decades and will stay Australia’s most strategic partner, according to the 2016 Defense White Paper released by Prime Minister Malcolm Turnbull in Canberra on Thursday. The strategic blueprint, which will see the defense budget surge from A$32. 4 billion in 2016-17 to A$58.7 billion in 2025-26, called on China to be more transparent about its defense policies.

“While China will not match the global strategic weight of the U.S., the growth of China’s national power, including its military modernization, means China’s policies and actions will have a major impact on the stability of the Indo-Pacific,” the paper said.

Tensions in the western Pacific are increasing as the U.S. ramps up patrols amid signs China is militarizing artificial islands it’s building in busy shipping and fishing areas claimed by other nations. That’s created a headache for Australia, which hosts U.S. Marines and military exercises in its remote northern regions, even as it seeks stronger economic ties with China, its largest trading partner.

“While major conflict between the U.S. and China is unlikely, there are a number of points of friction in the region in which differences between the U.S. and China could generate rising tensions,” the paper says. These include the “East and South China Seas, the airspace above those seas, and in the rules that govern international behavior, particularly in the cyber and space domains,” it said.

The paper commits about 25 percent of the A$195 billion investment forecast for defense over the next decade to maritime capabilities in what it describes as “the most comprehensive regeneration of our Navy since the Second World War.”

The government is committing to 12 new submarines as part of its Future Fleet Program, nine new anti-submarine frigates and 12 offshore patrol vessels.

A winner among the Japanese, German and French bidders for the submarine program will be selected this year, with the new craft likely to enter service in the early 2030s, the paper said. The program will cost A$50 billion to evaluate, design and construct, before ongoing maintenance costs are considered, it said.

“If you have a look at where the money’s going, which is the ultimate test, it’s going to a significant upgrade in Australia’s maritime capabilities,” Andrew Davies, defense analyst for the Australian Strategic Policy Institute, said after reading the report. “Even if the paper doesn’t explicitly say our biggest security worry is the behavior of China, when you look at where the hardware is going, that’s what we’re hedging against.”

Australia’s expansion of its navy is being driven by the realization that maritime assets in the region are expanding, Turnbull told reporters in Canberra. Half the world’s submarines will be based in the Indo-Pacific region by 2035, according to the paper.

“We are a maritime power,” Turnbull said. “An island nation needs a strong navy. It particularly needs a strong navy in this environment.”

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