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Australias Strategic Outlook: Submission to the 2013 Defence White Paper Carlyle A. Thayer* February 28, 2013

Chinese Naval Modernisation and the Increased Salience of Southeast Asias Maritime Domain Chinas 2010 Defence White Paper enumerated four national defence objectives including accelerating the modernization of national defence and the armed forces. Chinas military strategy to achieve these objectives is encapsulated in National Military Strategic Guidelines for the New Period that propounded an operational doctrine termed Active Defence. Chinas Peoples Liberation Army Navy (PLAN) is tasked with three essential missions: defeating invasion from the sea, defending territorial sovereignty, and protecting maritime rights. With respect to Chinas maritime domain, China pursues a defence doctrine known as Offshore Defence or Near Seas Defence. The Near Seas include the Yellow Sea, East China Sea and South China Sea and are a PLAN priority. Export-orientated trade has driven Chinas phenomenal economic growth. This has increased Chinas dependency on maritime routes to export goods and to import natural resources. China has an interest in protecting vital sea lines of communication or SLOCs. Chinas economic growth also has fueled a rising demand for resources and energy. The PLAN is tasked with developing the capability to conduct six offensive/defensive maritime campaigns: blockade, anti-sea line of communication (SLOC), maritime-land attack, anti-ship, protection of maritime

Emeritus Professor, The University of New South Wales at the Australian Defence Force Academy, Canberra.

2 transportation, and naval base defence within its near seas, including the South China Sea. Five points may be drawn from the above discussion: First, Chinas economic rise has provided the basis for increased defence spending that in turn has led to the transformation and modernization of all military services, including the PLAN. Second, China places highest priority on Taiwan and national reunification. China is seeking to forestall any future intervention by U.S. naval forces in a Taiwan contingency by extending the PLANs reach beyond the first to the second island chain and developing what the Pentagon terms anti-access/area-denial capabilities. Third, Chinas rise has raised the salience of protecting its major SLOCs from the Gulf of Arabia through the South China Sea to its eastern seaboard. Fourth, Chinese resource nationalism has raised the importance of the South China Sea with respect to oil, gas and mineral resources and sovereignty claims. Increasingly Chinese naval operations have extended into the South China Sea with a particular focus on the waters adjacent to the Philippines. Fifth, as China becomes a global power with widespread economic and political interests, it will develop a blue water navy to protect its interests much further afield. There are nine main elements to Chinas current naval modernization program: anti ship ballistic missiles, anti-ship cruise missiles, submarines (conventional and nuclear), air craft carriers, surface combatants, amphibious ships, land-based aircraft and unmanned aerial vehicles, nuclear and electromagnetic pulse weapons and maritime surveillance and targeting systems. These elements of PLAN modernization are of particular significance to the South Sea Fleet. Chinas naval modernization is more than defensive. China has developed power projection capabilities out to the first island chain (Taiwan) and is now seeking to extend their range to the second island chain with a focus on Guam. In sum, Chinas naval modernisation is focused on challenging the U.S. Navy in the Western Pacific.

3 Several of the factors promoting Chinas military modernization intersect with respect to Southeast Asias maritime domain. China has accorded the South Sea Fleet new priority. This is most evident in the construction of a major naval base on Hainan Island on the northern reaches of the South China Sea and the modernization of the South Sea Fleet. The PLAN has redeployed its newest nuclear attack

submarines from their traditional port of Qingdao to Hainan Island. Many of the newest destroyers, frigates, and submarines are based in the South China Sea. This force posture is designed to assert greater sea control over the South China Sea. For example, eight destroyers are currently deployed with the South Sea Fleet including the Luyang- and Luyang II-class. Forty-four frigates of all types are currently deployed with the East Sea and South Sea Fleets. Of Chinas twenty-eight amphibious ships, 26 are currently deployed with the East Sea and South Sea Fleets. The South Sea Fleet also is home of the largest marine battalion, amphibious platforms and Chinas largest hospital ship. The South Sea Fleet, headquartered at Zhanjing, Guangdong province, forms the central hub of a major complex of strategic space and tactical long-range radars and communications systems to support operations in the South China Sea. These electronic systems link Woody Island, Fiery Cross Reef and other Chinese-occupied features with local and fleet commanders. Also, they are augmented by the combat and other electronic systems of PLAN warships, aircraft and paramilitary vessels. The PLAN stations several major surface combatants, amphibious landing craft, and conventional and nuclear submarines at Yalong Naval Base. Continued construction indicates that Yalong will be able to accommodate larger advanced surface combatants such as assault ships, attack and ballistic missile submarines, and eventually one or more aircraft carriers. The development of the Yalong Naval Base raises important questions about Chinas strategic intent. Continued construction at Yalong Naval Base suggests that it will provide China with the capacity to surge expeditionary forces into the South China Sea and beyond. The development of a naval base in Yalong Bay has strategic implications for the balance of power in the Asia-Pacific. Analysis of construction activities indicates Yalong Naval Base will be capable of housing nuclear submarines capable of launching intercontinental ballistic missiles. Portions of the base are being built

4 underground to provide facilities that cannot be easily monitored. When these facilities are completed they will provide China with the potential capability to station a substantial proportion of its submarine-based nuclear deterrent force there. The deployment of nuclear submarines, including ballistic missile submarines, will introduce a new geo-strategic dimension to the regional balance of power. In sum, China has developed an enhanced capability to exercise its sovereignty claims over Southeast Asias maritime domain and surge expeditionary forces into the South China Sea. By extension, China will also have the capacity to interdict the same SLOCs on which Japan, Taiwan and South Korea are dependent. These developments portend a greater Chinese capacity to assert regional influence and to challenge U.S. naval supremacy. In conclusion, the future security environment of the South China Sea region will be influenced by five major overlapping trends. These trends contain both stabilizing and destabilizing elements. The five trends are:

U.S.-China strategic rivalry Regional force modernization Increased regional maritime enforcement capabilities Evolution of the regional security architecture China-ASEAN discussions on the South China Sea

In the short-term, strategic mistrust between China and the United States will continue to influence their bilateral relations. Major power relations are set to reflect contention and cooperation over the next half decade and longer. Regional force modernization programs, coupled with the increase in Chinese maritime enforcement capabilities, represent a potentially destabilising trend. The most disturbing development is Chinas increased reliance on citizen fishing fleets and state paramilitary forces to concentrate in a disputed area in order to assert Chinese jurisdiction. This raises the possibility of an accidental mishap. Chinas growing naval power will only serve to heighten Southeast Asias security dilemma. It is unlikely that the evolving regional security architecture will be able to effectively manage challenges to maritime security. The ASEAN-centric regional security architecture is an inchoate mixture of multilateral mechanisms with overlapping

5 responsibilities. The ASEAN Defence Ministers Meeting Plus process shows some signs of progress, but it is proceeding at too slow a pace. Since the East Asia Summit works on the basis of consensus, it will take some time before heads of government reach agreement on whether or how to streamline the regions existing multilateral security institutions. Strategic distrust between China and the United States is likely to hamstring regional multilateral institutions and prevent them from taking effective action. Finally, ASEAN-China discussions on a Code of Conduct appear as elusive as ever, particularly in light of the Philippines claim for the establishment of an Arbitral Tribunal under the UN Convention on Law of the Sea. ASEAN and China have yet to initiate a single confidence-building project, and even if they do, there is no guarantee that confidence-building measures will spill over an effect practical measures to address maritime security issues. Rising Chinese domestic nationalism has become particularly jingoistic and is likely to scuttle any diplomatic effort that is perceived as undermining Chinas indisputable sovereignty over the South China Sea. In sum, maritime Southeast Asia is ripe for rivalry - but not necessarily armed conflict - due to strategic mistrust between a rising and increasingly militarily powerful China and a United States committed to maintaining the present balance of power. These two powers will continue both to cooperate and contend. Tensions in their relations will be transmitted to Southeast Asia. The security environment in Southeast Asia will continue to be characterised by intractable sovereignty disputes in the South China Sea, rising resource nationalism, and potentially destabilizing regional force modernization programs. As a result, the maritime domain in Australias strategic neighbourhood is set to become increasingly volatile.

Suggested citation: Carlyle A. Thayer, Chinese Naval Modernisation and the Increased Salience of Southeast Asias Maritime Domain , Australias Strategic Outlook: Submission to the 2013 Defence White Paper, February 28, 2013. All background briefs are posted on Scribd.com (search for Thayer). To remove yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key.

6 Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. Thayer Consultancy was officially registered as a small business in Australia in 2002.

From: O'Bryan, Karin MS <karin.obryan@defence.gov.au>; on behalf of; Shoebridge, Michael MR <michael.shoebridge@defence.gov.au> To; 'carlthayer@webone.com.au' Sent: Mon 3/06/2013 4:31 PM Subject: Thank you for your submission to the 2013 Defence White Paper [SEC=UNCLASSIFIED]
UNCLASSIFIED Dear Carl I am writing on behalf of the Minister for Defence, the Hon Stephen Smith MP, to thank you for your submission to the 2013 Defence White Paper and to advise you of the public release of the Defence White Paper. The Prime Minister and the Minister for Defence launched the 2013 Defence White Paper in Canberra on 3 May. This Defence White Paper complements the Governments National Security Strategy and Australia in the Asian Century White Paper, with the common theme across them being that Australias future security is tied to the stability and prosperity of our region. This White Paper sustains the major Defence modernisation program the Government initiated in 2009. It maintains a highly skilled and capable Australian Defence Force (ADF) as the ADF transitions from a decade of major deployments and also provides the Governments response to the Australian Defence Force Posture Review. All submissions received during the public submissions processes for the 2013 Defence White Paper and the Australian Defence Force Posture Review were carefully considered during the development of the White Paper. Further information about the 2013 Defence White Paper, including media releases, FAQs and imagery, is available at: http://www.defence.gov.au/whitepaper2013 Thank you again for your interest in Australias defence policy and your participation in the development of the White Paper. Yours sincerely,

Michael Shoebridge First Assistant Secretary Strategic Policy 3 June 2013

Karin O'Bryan| Executive Officer|Strategic Policy Division | Department of Defence |

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