Snakes and Ballistic Missiles in China’s Backyard: An Analysis of AUKUS

Jay Ramesh

Money can’t buy happiness, but it sure can buy you nuclear-powered submarines and ballistic missiles.

One month after US president Joe Biden withdrew from Afghanistan, the US signed a three-way defense pact with the United Kingdom and Australia. Dubbed “AUKUS”, the pact allows for the sharing of weapons and technology, ranging from AI to missile technologies.

China, of course, did not enjoy waking up to see AUKUS grinning smugly down on it. The South Pacific is essentially China’s backyard, and equipping a regional rival with nuclear submarines, ballistic missiles, advanced technology, and weapons isn’t exactly the most neighborly thing one can do. China angrily denounced the pact as an “outdated Cold War zero-sum mentality” that could “intensify a regional arms race”.

In signing the pact, Australia also cancelled a multi-billion dollar deal for submarines it had made with France. Enraged, France promptly withdrew its ambassadors from the US, a bold move for one of America’s oldest allies.

So, what can we make of all this?

The move is an eerie warning of things to come: a return to a balance-of-power international system, and maybe even a new policy of containment. Historically, China uses the old foot-in-the-door tactic to pressure states into aligning with itself, as seen in the 25-year cooperation agreement with Iran earlier this year and billions of investments into countries containing strategic resources, such as Ghana.
It’s a sound strategy backed by game theory: the more you cooperate with another party, the more you become deterred from acts of aggression against said party. When it comes to smaller states cooperating with large and powerful ones, the smaller states become reliant on the economic security and diplomatic backing of larger ones. The game theory between two partners thus turns into a game of compliance, in which the junior partner is punished via withdrawing rewards, such as infrastructure deals and financial backing, for falling out of line.

This means that trade, especially with smaller, poorer nations, is a euphemism for leverage. As two nations become closer trade partners, the new status-quo that emerges means that both countries become reliant and dependent on one another. Deviation and aggression become not just dangerous, but unprofitable. As smaller states often can’t afford to rapidly develop the infrastructure needed to kick-start their economies, they become reliant on foreign powers and foreign loans to do so.

China is a master of the art of using trade, money, and infrastructure as geopolitical tools. It’s the key to its infamous Belt-and-Road Initiative (BRI), a policy that seeks to connect China to much of Asia and Africa via infrastructure deals, pipelines, and export networks. The more that countries are economically tied to and dependent on China, the less ability they have to deviate from China’s geopolitical goals. The tradeoff here is that refusing to participate means also missing out on much-needed economic opportunities. It’s simply a deal with strings attached.

That’s why AUKUS is so important. Before the covid-19 pandemic, Australia and China were key trade partners, and cooperation manifested itself in formalized resource channels and thousands of Chinese students studying in Australia. However, after Australia deviated from cooperation with China by supporting an inquiry into the origins of the covid-19 virus, a development that could hurt China’s public image and prestige, relations between the two countries soured significantly.

AUKUS brings back Cold War memories of the Warsaw Pact capitalizing on nations falling out of favor with NATO, and vice versa. The pact not only signals a clear US-China rivalry in the Pacific: it also signals that Australia, a former partner of China, has drifted towards the other camp. 

Game theory only holds up if deviation is constantly met with punishment. If Australia can effectively change sides and receive billions in weapons and technology doing so, other states may begin to do the same, and soon the whole house of cards comes crashing down. That’s why AUKUS poses such a threat to China. It’s not just about threatening Chinese interests in the South Pacific: it sends a dangerous message that weakens Chinese financial leverage throughout the world.

At the end of the day China is absolutely right. The move does indeed have a Cold War zero-sum mentality that can intensify a regional arms race. But if the US takes the initiative by setting that arms race in motion, China will have to drag its feet and keep up if it wants to continue to project power in the region. 

Nobody likes snakes and ballistic missiles in their backyard, but now that they’re here, will China be forced out of the neighborhood?