China is seeking to place pressure on Australia’s AUKUS agreement with the United States and the United Kingdom, claiming that it breaches international law. The agreement, signed in November 2021, entitles Australia to procure a fleet of nuclear-powered submarines – of either American or British design – and utilises a loophole in the Non-Proliferation of Nuclear Weapons Treaty that allows the transfer of material for non-explosive military use.  

A new joint report – A Dangerous Conspiracy: The Nuclear Proliferation Risk of the Nuclear-powered Submarines Collaboration in the Context of AUKUS – by two Communist Party–aligned think tanks claims that the agreement would constitute an “illegal transfer of weapons-grade nuclear material” to a non-nuclear state, and that this is a “blatant act of nuclear proliferation”. The report also states that the agreement is a precursor to Australia acquiring nuclear weapons itself.

While the assertion that Australia will become a nuclear weapons state is the usual overblown rhetoric expected from organisations attached to the Chinese Communist Party, the report does make a more substantive argument about the precedent that the AUKUS deal may set. Australia will undoubtedly bind itself to the strictest non-proliferation standards, but exploiting the loophole in the non-proliferation treaty may encourage other countries to do so in a less stringent manner.

A nuclear state like Russia can no longer be trusted to adhere to any international rules and obligations, including those concerning nuclear material. So, by seeking defensive mechanisms to enhance regional security in response to China’s dramatic military build-up, Australia might unwittingly be destabilising the international environment.

Jokowi’s power play

The Indonesian president, Joko “Jokowi” Widodo, will this week visit the three north-east Asian economic powerhouses – China, Japan and South Korea – to try to attract greater investment into Indonesia. Jokowi will be looking for ways to leverage Indonesia’s resource wealth and harness the emerging technology competition between the three countries to fuel Indonesia’s own development.

Indonesia is currently the world’s largest nickel producing country and it holds the largest nickel reserves. This presents an enormous opportunity as nickel is an essential element of lithium-ion batteries that are used in consumer electronics and electric vehicles. Currently the production of lithium-ion batteries is dominated by Chinese, South Korean and Japanese companies, yet Indonesia has plans to not just supply raw materials to these companies, but also to become a major battery manufacturer.

To do so, Jakarta requires the assistance of those very same companies it has been supplying. In June this year, South Korean company LG began building two new nickel processing plants in Central Java, while it has also partnered with Hyundai to build an ​​electric vehicle battery plant in West Java. Jokowi’s objective this week is to convince more north-east Asian companies to shift their battery manufacturing to his country, while the long-term strategy is to build the necessary knowledge for Indonesia to become a technology innovator itself.

Japan’s defence plan

Last week, Japan released its annual defence white paper, identifying Russia, China and North Korea as the biggest threats to its national security. The paper paints a grim picture of world affairs, saying the international community is currently facing “its greatest trial since World War II” and that “a large grey cloud hangs over the path towards world peace and security”. Although an annual report, this white paper highlights many of the themes that are likely to be adopted in Japan’s new national security strategy, currently being developed by Fumio Kishida’s government.

Notably, the white paper includes a new section on Russia’s invasion of Ukraine. Although Japan has its own territorial dispute with Russia, the more pressing concern for Tokyo is the lessons Beijing may learn from the invasion. The white paper states that “if Russia’s aggression is tolerated, it may give the wrong impression that unilateral changes in the status quo are allowed in other regions, including Asia”. Naming Taiwan directly, the white paper warns that Japan “must pay close attention to the situation, with an even greater sense of vigilance”.

To promote this vigilance, the paper not only called for reinforcing Japan’s security partnerships – including that with Australia – but also for increasing the country’s defence spending. It highlighted that Japan has the lowest ratio of defence spending to GDP in the G7, comparing it to other wealthy countries like Australia and South Korea. Potentially laying the groundwork for a dramatic increase in expenditure, the paper noted that NATO members have committed to spending 2 per cent of GDP on defence. Matching this would make Japan the second-largest defence spender after the United States and China.