ABC Listen. Podcasts, radio, news, music and more. Three Chinese warships, and quite possibly a submarine as well, have been steadily tracking their way around the Australian coastline, conducting exercises, raising anxieties. and creating political headaches for the Albanese government on the eve of an election.
There's been plenty of political argy-bargy about the presence of this Chinese task group and particularly who knew what and when about the live fire exercises conducted in the Tasman Sea which forced some commercial flights to divert course. Bottom line, gaps have been exposed in the ability...
to even properly monitor these exercises. The bigger question, though, is why is China doing this at all right now? Here's what the Defence Secretary told the Senate Estimates hearing this week. The Chinese are signalling. They are practising and rehearsing and they are collecting. Practising and rehearsing for what? And collecting what?
Well, China denies this show of force has anything to do with the upcoming Australian election, but it clearly wants to demonstrate the capability of its blue water navy, as it's called, its power to project force right around our coastline. So how should we interpret all of this? What does it tell us about the threat?
posed from China at a time when US allies like Australia are wondering about the reliability of the US under Donald Trump. That's what I'm keen to explore. I'm David Spears on Ngunnawal Country at Parliament House in Canberra. Welcome to Insiders on Background. Bye.
Well, Richard McGregor is a senior fellow for East Asia at the Lowy Institute. He is a highly respected analyst on this relationship with China and joins me now. Richard, good to talk to you. Thanks very much for joining us. Hi, David. So why? is China doing this right now?
Well, I guess, as Greg Moriarty, the Secretary of Defence, says, they're analysing and collecting. But, you know, they're also trying to send a message to Australia about the reach of their navy, about the power of their navy. Remember, they've sent one of...
their most lethal surface combatants. It's not just any ship that's leading this flotilla. Tell us about that. This is the cruiser that's one of the three vessels. Yes, I think it's a Renai class is what it's called. It's the sort of destroyer that... designed to protect their growing flotilla or a number of aircraft carriers and the like and it is loaded up with all manner of weapons uh which you know have far more firepower than anything the australian navy
has in its fleet. Yeah, I read twice as much firepower than even our most powerful vessel. Is that right? Yeah, so that of itself is a message. I think it's also, you know, Australia sails in the South China Sea. We sailed recently with the New Zealanders, by the way.
This is a message to both countries through the Taiwan Strait. And I think they're telling us that they don't like that and they're going to respond with patrols around Australia of their own. And I think really it's the new normal. And the Chinese ambassador was quite clear about this. We're going to see more.
of such Chinese patrols. And by the way, I think many people in Australia probably think the US is the biggest, most powerful military in the world, and it is in a way, but China now has a bigger navy than the United States.
states and remember its navy is largely focused regionally and when you add on top of that the chinese coast guard which includes some boats which are bigger than destroyers and the chinese coast guard is under the command of the chinese military They have absolutely massive naval power at their fingertips, and I think they're starting to display it.
much more and directing it at countries like Australia and New Zealand. So to pick up on a couple of the points you made there, I think it's around 400 vessels now. There might be an argument about whether the US is still more powerful in tonnage and so on. but the Chinese do now have the biggest in terms of ship numbers, the biggest Navy in the world.
Yeah, it's the biggest navy in the world in terms of shit numbers. If you look at tonnage in recent years, they've built much more than the quad countries, India, Japan, America, Australia are together. Really? Yeah, and they're not as advanced, of course. Technically, as the Americans, they have less warfighting experience. They're not as integrated command. But there's an old quote from Stalin, I think.
and that is quantity has a quality all of its own. Exactly. In other words... Speaking of that... Yeah, the bigger fleet wins. You mentioned the Chinese ambassador. I think we've got a bit of that here. He has said that this is very normal for a regional power like this. As a major power in this region... As a country that has so many things to look after, it is normal for China to send their vessels to different parts of the region to conduct various kinds of activities.
So you're suggesting this means get used to it. Australia is going to see this sort of, what, circumnavigation of our continent more often? Yeah, whether it be circumnavigation. I think the circumnavigation point is interesting, though, because, in other words, around Western Australia. Now, before the previous federal election, there were Chinese surveillance ships. of Western Australia. This is something different. But remember that in one or two years we're going to have a...
we are going to have a permanent rotating presence of American nuclear-powered submarines at Stirling in Western Australia. So China wants to keep an eye on that as well. It wants to make a point. that it's noticed that and is going to push back. So that's another reason why it's the new normal. There's one visiting, isn't there, at the Sterling base at the moment, isn't there, a US Virginia class sub? Yeah, I think there is, but in the future there'll be one permanently there.
And, you know, by the way, people say, well, why now? I don't think it's anything to do with the timing of our federal election. I mean, David, you're the expert. You don't know when it's going to be called. I don't think Beijing does, but I think it's more like... to do with the longer-term point about our patrols through the South China Sea and the Taiwan Strait, and also possibly...
The visit to Australia last week by Admiral Paparo, the head of Indo-Paccom, I think China tracks that sort of thing pretty closely as well. Does it have anything to do with Donald Trump, with allies like Australia wondering how reliable he is at the moment? I think it's a longer-term thing than that. I think there's other ways of turning up the wick on that. And, of course, China doesn't really need to.
underline the unreliability or unpredictability of Trump. Trump does that himself. He's doing that himself. So this is more about tit for tat. We're sick of you patrolling through the South China Sea. we're going to show you what we can do in your neck of the woods. Yeah, they want to put pressure on Australia and other countries. Now, by the way, to give you an example of that, and every country is different.
There's Chinese live-fire exercises off Taiwan at the moment, which the Taiwanese have objected to. There's also Chinese live-fire exercises being conducted off Vietnam after Vietnam unveiled a new sort of... offshore sort of sovereignty line or claim line there.
And, you know, Vietnam, Taiwan, Australia are all very different. But there is something sort of which ties them together, which is, you know, pushing back against China and China in turn pushing back against them. And, of course, China these days. compared to five years ago, ten years ago, has the capability to do that. And what we're seeing...
is that capability in the form of a blue-water navy. Yeah, I mean, we're not alone, I suppose. This projection of force is happening in other parts of the region, as you say, and Japan has to put up with a fair bit of this. in its waters as well. What about the live fire exercise element of this? Because a lot of the political focus went to what notification was or wasn't given, whether the Australian Defence Force knew early enough or whether it was far too late.
What did you make of all of that? Well, it was very messy and very messy in a very worrying way, I would say. Now, I don't know the technicalities of it, and I think the Defence Department officials tried to explain that before Senate estimates this week. But, you know, you would hope... that Defence Force, along with New Zealand, which is in theory tracking this flotilla. closely would know about any live fire exercises before a commercial airliner pilot did.
It seemed by the end of the week that Richard Miles, when he was interviewed on Radio National, was suggesting that he wasn't sure that had even taken place. So I think that, you know, the gaps in... various people being notified, the Australian government understanding what was going on. Yeah, I mean, it was very messy. It looks like a gap in at least monitoring and even just monitoring the ships, let alone the question of how we might respond if this was more than...
Just an exercise, right? Yeah, I mean, in theory, we had the capacity along with New Zealand to do it. The flotilla was being closely tracked. So it didn't seem to be a, you know, we hadn't lost track of them at all. Maybe we should have also tracked them from the air as well. I'm not sure. But, you know, we didn't really seem to know what was going on in a timely fashion. And the Prime Minister...
wasn't informed in a timely fashion. And coming back to Greg Moriarty, the Defence Secretary's comments that the Chinese are practising, rehearsing and collecting. I mean, practising and rehearsing, I suppose, for... I mean, let's be blunt, is that what they're practising and rehearsing for ultimately? Well, I don't think they're practising and rehearsing for an invasion of Australia or anything like that.
they might want to practice and rehearse if there were to be a conflict in the South China Sea or around Taiwan to display their firepower off the coast of Australia to keep us out of any such conflict or to keep us... Thinking about it, obviously the control of the sea lanes in the South China Sea is a prime focus of the Chinese military. Ten years ago, they didn't have the ability to track everything in the South China Sea. Now they absolutely do. to track and challenge it.
They would like to stretch out our resources so they're deployed down near our own shores and not in the South China Sea in other areas. So I think you can see it on multiple levels in that respect. And collecting? Is this an intelligence gathering exercise as well? I think it would always be an intelligence gathering exercise and the Chinese have already been doing that.
off the coast of Western Australia previously. I think we've had Chinese surveillance ships when the Australian military, with its partners and allies, have conducted... exercises, there's always one or two Chinese surveillance ships there. Yes, absolutely. If this is in part about practicing for...
potentially keeping Australia thinking about its own coastline and so on. I mean, it brings us to the question of how we should respond to this. Obviously, we need to think about what defence assets we have, what's available, whether we're... spending enough doing enough uh how vulnerable we are are we left exposed
There doesn't seem to be any doubt about that, but I guess it does depend on two things. To what extent our military is there to defend Australia, to what extent it's there to project power beyond our shores, and certainly Orca. is about that. AUKUS is about having a long-range capability. The trouble is, you know, we're in what the Strategic Defence Review said a couple of years ago, which was initiated by the new Labour government.
in a period now, in an era where we don't have much notice of potential conflicts. There's no 10-year horizon. But our entire defence re-equipment exercise, you know, is way over the horizon. And of course, like everything that's built in Australia, we strictly struggle with the industrial capacity. to execute our plans and that's not even talking about AUKUS that's talking about
building a new set of frigates and destroyers. But they're some years away. If what you're saying and what the Chinese ambassador signalled, we're going to see more of this. We're going to see more of these Chinese warships coming around our coastline, our southern reaches.
Do you think a defence plan is going to have to think more about keeping more of Australia's resources around our neck of the woods to monitor them, to follow them, shadow them, rather than sending ships up to the South China Sea? Is that part of the... the motivation here too? Well, I guess it is, but, you know, we should have a sufficient force to do both. You know, I don't think we want to get into a situation where there's an either or.
But we don't have enough ships to do both, do we? Well, no, we don't at the moment, but hopefully we will in the future. But I don't think we want to sort of go into a hut, you know, sort of... a hunch. Let me rephrase that. I don't think we need to sort of, you know, go into a crouch and sort of pull all our sources back from all the sorts of things they do in North Asia and Southeast Asia.
No, but it will create some deep thinking, I'm sure, won't it, about what resources we are going to need in our immediate surrounds. Yeah, I think... I think we've done the deep thinking as far as I can see. It's about executing the deep thinking and executing the policy and executing it. at greater speed. But it's not just about building ships. I mean, the Australian military, just like militaries in the UK, in Japan, in the United States, is struggling to recruit enough people.
expanding militaries then you have to train them. They have to be trained up to a certain level of skill. It's not something you can flick a switch and just fix. And we're sort of, that's what's catching us short at the moment. So, I mean, that's a very good point to raise because I want to talk about defence spending and it's easy to talk about short. We lift spending. It's harder to find the money to do that and find the people.
to man the ships and submarines and other kit that the spending would go towards. But what do you make of the debate and where it's at at the moment? Because it seems a couple of things are happening. You've got this incident with the Chinese warships raising...
levels of concern in Australia. You've got Donald Trump making it very clear to allies as well that they're going to need to increase spending. The Treasury Secretary, Scott Besson, said this directly to Jim Chalmers and an Australian audience in Washington this week. So where is this debate at, do you think, right now on defence spending? Are we inevitably heading towards a need to increase?
Yes, in theory, the government argues we are increasing, and I think it's around 2% now. It goes up to 2.4, 2.5 in a few years. Well, yeah, nearly a decade. I think it's 2033, 34, it's meant to hit 2.4%. So that's another eight or nine years away. Yeah, well, if the European levels of defence spending aren't enough, if Japanese levels of defence spending, which are going up to 2% of GDP, aren't enough, then certainly the same applies to Australia.
as well. So yes, I expect we are coming under or will come under greater pressure to increase defence spending. Then it becomes a domestic political issue in Australia on a number of levels. AUKUS is going to be an exception. Exceptionally expensive enterprise, but to build AUKUS, you kind of have to divest to invest. In other words...
other arms of the armed services and other arms of the Navy, sort of a slim down to play for AUKUS, which of course is way off into the never-never as far as timing goes. So there's that issue. Then there's the issue of persuading the Australian public that you need to spend more and to build your forces much more quickly than they're being built at the moment. And is that happening? Do you think that persuasion task, which would be critical to have, you need public support.
do this right um is that there is it is it starting to move well i don't see it um you know i guess the you know the current government's policy on china for example you know if you wanted to boil it down is do more say less and I don't think in any respects they've been you know quote-unquote weak on China just look at what's happened in the Pacific we've done
deals with Nauru, Tuvalu, Papua New Guinea, even the Solomons, Fiji, Vanuatu, often in a very sort of Trump-like transactional fashion, a fashion where we support them, but we get security. in return. So we're doing a lot diplomatically in that respect. And we do talk about that. Penny Wong said we're in permanent competition with China. But elsewhere, we're doing patrols with the Philippines, for example, with Japan and the United States in a show of support for the Philippines in its dispute.
with China, but I think we're quite muted otherwise. The government really has, by and large, sold AUKUS as industrial policy. you know what the americans called you know union jobs or what we call sort of you know well-paid uh manufacturing jobs but we don't seem to sell it uh we don't want to um you know i guess sort of um because of how the china debate was conducted previously they don't want to
want to go much beyond that. Well, we've only just extricated ourselves from these tariffs, right? Well, exactly. But if that's what we think, sooner or later we have to talk about it or find a way to talk about it. greater clarity not in a sort of warmongering sense you know
But if you go to China, for example, Xi Jinping talks about war all the time in his public pronouncements. He talks about war to get his military ready. He talks about war to prepare his population for high-intensity conflict over time. They don't want to fight a war, but it's there. It's possible. You're saying it's probably a good idea, to be frank with people.
You know, maybe not as over the top in the war talk, but to point out to people more forcefully why we're doing these things with AUKUS. I think you have to eventually, and it's very difficult here, but when people in... government in the previous government and this government do talk about those things. They often get sort of beaten down as warmongers and the like, but we have to find a way to talk about it to increase public awareness about the difficult choices.
that lay in front of us for many, many years. It's no easy task for government. It's not popular to do that. If you're spending more on the military, that probably means you're spending less on something else. We already have projected deficits for many years into the future.
Yeah, I think we need to have a mini revolution in that respect. And what about Donald Trump? To come to something we touched on a little earlier, questions about how reliable he is. Obviously, European allies have been aghast. the last week or two at what he's been saying and doing in relation to Ukraine. You know, there is a school of thought that this is all about allowing the US to focus more heavily on China and on this region, and maybe that's a good thing.
But should we as allies be nervous about how well defended we are likely to be by our main ally? Well, yes. Everybody's nervous, and that's by design. Trump wants you to be nervous. He wants you to be off balance. He makes a virtue of his unpredictability. But, you know, that can only go so far without it sort of degrading the sorts of alliances and partnerships which have been so valuable to us and to the United States for many years. I mean, take Taiwan as one example. I think Xi Jinping...
would be very happy to see what's happening with Russia. Once he looked at the... Russia's war with Ukraine and he was freaked out by it, not because he thought it was wrong, but because he thought Russia might lose. Now he looks at it and sees... that possibly Russia is going to prevail. Everything Putin said, you know, that we can outlast the West and the like.
is turning out to be true, and he'll apply that sort of theory to Taiwan and might be emboldened there. I'm not saying anything's about to happen, but I think that dividing the world into spheres of influence and the like...
is great for Xi Jinping, a disengaged or an America which only sees value in... uh in alliance as a kind of insurance company you pay us money and we might protect you that's great for china um you know look at you know it's early days trump is unpredictable that means he can go either way trump did destabilised China in his first term. Because of that, they couldn't handle him. But I think this is not somebody who believes in Pax Americana.
And that potentially will make life very difficult for us. And as we're seeing with Ukraine, a president who is transactional, who's willing to strike a deal, who clearly wants a financial benefit of critical minerals in relation to Ukraine.
Is that something we're going to have to think about as well? Are we going to have to cough up at some point to maintain that U.S. security blanket? Yeah, some people suggest that, that maybe he'll turn to us and say, well, yeah, I'll... do a similar deal with you but i i suspect
that that's going to be a commercial arrangement. We already have a number of agreements about that. But it's an interesting point, though, because critical minerals, for example, an area industries dominated at every point in the supply chain by China.
And China has been able and can continue to dominate that by basically manipulating the price, which is what they do. And that's certainly the view of the Australian government, that China is manipulating that market. So in other words, to make... the industry viable here you have to have sort of a price floor in other words subsidies
So the Japanese, I think, are willing to do that. They've been way out in front in that respect. The South Koreans possibly as well, even though they want a slice of it. Will the American companies agree to price support agreements to support the rare earth industry?
It all comes at a cost if they're going to do that. That's right. And Trump might say, well, no, we won't do that. You should produce them for us. Anything is possible. I suppose the difficulty with all of this too, or the risk with all of this, is that... What Trump says and does risks undermining support in countries like Australia for the alliance and for pumping the billions that we're going to pump into there.
submarine industrial base under the AUKUS deal as well. Australians might scratch their heads and think, you know, should we really be sticking with this plan? Is there a risk to AUKUS here, do you think? I don't yet see a risk. risk to AUKUS in this respect. Two respects. Both the Coalition and Labor support it as much as the Greens deride it and the Teals are a bit wary of it, first thing. Second thing, Australia does have, as you know, a good argument.
with the United States. In other words, not only do we say that you've got the best submarines and not only are we buying them but we are investing in your industrial base. as well. So, you know, and then, of course, we run a trade deficit with Trump, which is his sweet spot. So, you know, we've got a pretty strong argument in AUKUS. With AUKUS, anything is possible. But to stick with it, we need some assurances, don't we?
from Trump, that he's going to stick by us? Well, he's going to stick by, well, the ANZUS Treaty, I guess, that's what you mean, and stick by AUKUS, yes. And as far as I can see... any pronouncements which have come from the White House so far or the new US administration have been favourable to Walker. So I don't think we need to panic about that yet. I mean, he might not have known the name. I'm not sure if he saw that when he was asked.
in the Oval Office, whether he'd be talking to Keir Starmer, the British PM, about August, and he said, what's that? But look, he then went on to, when it was explained to him, he said, yes, yes, yes, and said nice things about Australia and the relationship there. So look, he didn't exactly dump on it as a bad Biden deal.
that he's going to... No. He does sound genuinely on board. I did watch that press conference and he actually singled out Australia for praise on about three occasions. So I don't want to take the spin of the government and the opposition if he'd muffed up a sort of...
AUKUS. Yeah. Yeah, I didn't take too much out of that. No. All right. We can take some heart out of that. Look, Richard McGregor, really good to talk to you. Thank you so much for walking us through this evolving geopolitical landscape. that we've been witnessing this week. Good to talk. Thank you very much, David.
And thank you for listening. And do drop us a line if you have any thoughts on this conversation. Insiders at abc.net.au. We'll have more on this on Insiders on Sunday morning. I'll be talking to the Shadow Home Affairs Minister James Patterson. He's been the one asking a lot of questions in Senate.
estimates this week about the Chinese warships. So we'll put some questions to him. So I hope you can join us for Insiders Sunday morning on ABC TV at 9am. Bye for now. You're making us all feel very excited about being here.