China could well be a problem for Australia

After China’s Olympic celebration becomes a memory we will be increasingly influenced by some of China’s major policies regarding energy security, new naval weapons and use of soft power in East Timor. They may amount to threats or at least possible problems for Australia.

Growth in China’s energy sector will comprehensively cancel out the benefit of any Australian emission reductions resulting from the Rudd Government’s planned carbon tax scheme. China relies on locally mined coal for 70 per cent of its energy needs and is building at least 500 coal-fired power stations in the next decade. China pursues energy security and rapid growth of energy use for regime stability. It will not slow down because small Western countries like Australia have adopted largely symbolic carbon schemes.

China sees the local availability of its massive coal reserves as enhancing energy security whatever the pollution downsides. Energy alternatives such as oil, gas and uranium involve long sea or international land routes that need to be established and in some cases protected. China recognises that, at present, its defence forces are unable to protect energy routes in the way the Americans do.

For the short to medium term China is shaping its military around largely defensive land-based operations. Internal security appears to be the Chinese military’s major mission. Dramatic reports that China’s military power is growing quickly have recently been moderated by milder estimates from the US Defence Department.

China’s navy remains weak compared to its US, Russian and Japanese competitors in the Pacific. For example China’s aircraft carrier program to date boils down to China slowly refitting just one 23-year-old ex Russian carrier (the Varyag). China currently has neither the larger ships nor aircraft for significant power projection overseas. Taiwan is China’s most immediate naval power projection concern for which small vessels are considered adequate.

An eventual Chinese “blue water” (open ocean) navy could obviously be a potential threat to Australia. Once, or if, Taiwan is occupied China is likely to build such a navy for energy security. A large navy in conjunction with the chain of naval bases China is building from Pakistan to home waters could eventually protect the oil routes from the Middle East and Africa that are vital to China. The US Navy’s currently dubious arguments that its (now) 11 super-carrier force is necessary to contain China will then, at last, be vindicated.

To make up for China’s deficiencies in conventional arms it relies to a limited extent on long range nuclear missiles based on land and sea. These present a potential, though unlikely, threat to Australia. The submarine launched ballistic missiles are based around two known Type 094 ballistic missile submarines.

These submarines are still probably partial solutions to China’s needs not the final designs China will rely on for decades. Some analysts consider it highly likely that the 094’s are noisy, hence easy to detect, and carry less than half the warheads mounted on the missiles of modern Russian, US, French and British nuclear submarines.

Relevant to Australia is a massive naval base China is constructing at China’s southernmost point, near the resort of Sanya, on Hainan Island. In a setting and plot worthy of James Bond’s The Spy Who Loved Me China appears to be building huge tunnels in hillsides at the base which could be capable of hiding 20 nuclear submarines. China moved one of its Type 094 submarines to the naval base in December 2007. The 094’s JL-2 missiles have a range of at least 8,000km. As Darwin is only 5,200km from Sanya and Brisbane 7,000km this puts these Australian cities in range without a 094 having to leave Chinese waters.

All these military details obscure the reality that China usually applies the concept of “soft power” to meet its economic and strategic goals. “Soft power” means non-military foreign policies, including international trade and investment, development assistance, cultural influence, humanitarian aid, travel and tourism. China’s growing economy allows it to buy influence among small countries rather than spending much large sums on its military “hard” power.

China’s growing aid budget means that it may someday be able to outbid Australia in its own backyard. In East Timor and other small nations China appears to be building up an influential diplomatic lodgement through aid. Their small size mean that their votes at international fora, particularly the UN, can be more or less bought cheaply.

Use of soft power in East Timor largely for China’s energy security and strategic reach may have long term implications for Australia. In terms of China’s energy security goal its state-dominated companies are involved in oil and gas exploration in East Timor. China was also responsible for compiling a geological survey of that country.