CANBERRA, Australia — Australia has canceled a contract with France for conventional submarines and instead will build nuclear-powered submarines using U.S. technology because of changing strategic conditions in the region, Prime Minister Scott Morrison said Thursday.
President Joe Biden announced on Wednesday a new U.S. security alliance with Australia and Britain that will help equip Australia with a nuclear submarine fleet.
The agreement would make Australia the first country without nuclear weapons to obtain nuclear-powered submarines.
Morrison said U.S. nuclear submarine technology wasn't available to Australia in 2016 when it entered a 56 billion Australian dollar ($43 billion) deal with France to build 12 of the world's largest conventional diesel-electric submarines. The United States has previously only shared the technology with Britain.
Biden did not mention China by name in announcing the new security alliance, but it is likely to be seen as a provocative move by Beijing, whose military strength and influence have grown rapidly.
Peter Jennings, head of the Australian Strategic Policy Institute think tank, said Australia's decision to acquire nuclear submarines was a response to China's increasing military might, aggressive bullying of Australia and intimidation of Japan and Taiwan.
"We should call the first submarine in this new category the 'Xi Jinping,' because no person is more responsible for Australia going down this track than the current leader of the Chinese Communist Party," Jennings said.
Australian Defense Force chief Gen. Angus Campbell welcomed the shift to nuclear submarines.
"Our strategic environment has deteriorated," Campbell said. "That challenging environment is becoming more challenging and is set to do so into the future at an accelerated pace."
Australia s Prime Minister Scott Morrison, center, appears on stage with video links to Britain s Prime Minister Boris Johnson, left, and U.S. President Joe Biden at a joint press conference at Parliament House in Canberra, Thursday, Sept. 16, 2021. (Mick Tsikas/AAP Image via AP)
Unlike nuclear-powered submarines, conventional subs that are traveling long distances must spend time on the surface, where they are most vulnerable, using their diesel engines while they recharge their batteries. The batteries propel them underwater.
Morrison said he expects the first of the nuclear subs, which are to be constructed in the Australian city of Adelaide, will be built by 2040.
He said Australia hasn't decided which class of nuclear submarines it will select and does not know how much the fleet of at least eight submarines will cost. But the country's defense budget will grow above the current 2.2% of gross domestic product, he said.
Morrison said he told French President Emanuel Macron in June that there were "very real issues about whether a conventional submarine capability" would address Australia's strategic security needs in the Indo-Pacific.
"Of course they're disappointed," Morrison said. "They've been good partners. This is about our strategic interest, our strategic capability requirements and a changed strategic environment and we've had to take that decision."
Australia notified France that it will end its contract with DCNS, a majority state-owned company, to build the conventional submarines. Australia has spent AU$2.4 billion ($1.8 billion) on the project since 2016. The first of the French-designed submarines were to have been delivered in 2027.
French Foreign Minister Jean-Yves Le Drian expressed "total incomprehension" at the decision and criticized both Australia and the United States.
"It was really a stab in the back. We built a relationship of trust with Australia, and this trust was betrayed," Le Drian said Thursday on France-Info radio.
British Prime Minister Boris Johnson told Parliament on Thursday that the alliance with Australia and the U.S. is a "new pillar of a strategy demonstrating Britain's generational commitment to the security of the Indo-Pacific."
Stressing Britain's long-standing close relationship with Australia, he said the alliance also shows "how we can help one of our oldest friends to preserve regional stability."
Paul Keating, a former Australian prime minister from the opposition Labor Party and an adviser to the state-owned China Development Bank, slammed the new nuclear alliance, saying "materiel dependency on the United States robbed Australia of any freedom or choice in any engagement Australia may deem appropriate."
Left out of the new alliance is Australia's South Pacific neighbor New Zealand, which enacted policies in the 1980s to ensure it remains nuclear-free. That includes a ban on nuclear-powered ships entering New Zealand ports, a stance which has seen it clash at times with the U.S.
Prime Minister Jacinda Ardern said Thursday that New Zealand wasn't asked to be part of the alliance and wouldn't have expected an invitation.
"The centerpiece, the anchor of this arrangement are nuclear-powered submarines," Ardern said. "And it will be very clear to all New Zealanders, and to Australia, why New Zealand would not wish to be a part of that project."
Ardern said the new alliance doesn't diminish its close ties to the U.S., Britain and Australia.
Morrison said Ardern was the first foreign leader he called to explain the new alliance. He later called the leaders of Japan and India, which together with the United States and Australia form the Quad security dialogue.
"She was my first call because of the strength of our relationship and the relationship between our countries," Morrison said. "All in the region will benefit from the peace and the stability and security that this partnership will add to our region."
The Chinese government has long suspended minister-to-minister contact with Australia because of soured bilateral relations. But Morrison said he was willing to discuss the new alliance with President Xi Jinping.
"There's an open invitation for President Xi to discuss these and many other matters," Morrison said.
"I believe and hope we would both share the same objective of a peaceful Indo-Pacific where the sovereignty and independence of nations is understood and respected and that enables their own citizens to flourish," he said.
Chinese Ministry of Foreign Affairs spokesperson Zhao Lijian said it was "highly irresponsible" for the U.S. and Britain to export the nuclear technology, and that Australia was to blame for a breakdown in bilateral relations.
"The most urgent task is for Australia to correctly recognize the reasons for the setbacks in the relations between the two countries, and think carefully whether to treat China as a partner or a threat," Zhao said.