Did Aukus just torpedo Europe’s ‘united front’ to contain China?
- The uproar over Australia’s nuclear submarine deal threatens the relationship between the EU and the US, and could push France and Germany into softer positions on China
- How France and Germany align will hinge on newly elected Olaf Scholz, and may come down to the Germans making a choice between Washington and Beijing
James Bond, embodied by Daniel Craig, pouted his way down the red carpet in London on Tuesday for the premiere of his final adventure as Britain’s favourite secret agent. The Bond film series has transformed many times over its 50-year run, adapting with the times.
Bond films have ranged from camp comedy with David Niven and Roger Moore, to brutal, Cold-War-tinged super-spy thrillers with Sean Connery and George Lazenby in the role, to gritty and modern action with Pierce Brosnan – and Timothy Dalton’s romp to fight Soviet arms dealers alongside Afghan freedom fighters in The Living Daylights falling somewhere strange in between. As Commander Craig hands back his blanks-firing Walther PPK and heads for his favourite pub in Shropshire, we are left wondering: who will be the next “Bond, James Bond”, and where will the source of villains be drawn from?
Given the events of the past few weeks and the tantrums from the French, I’m wondering if Port Antonio in Jamaica gets swapped for something nearer to Bond’s home – perhaps Boulogne – and the screenwriters write in a new French villain we’d love to hate. Perhaps with some heinous scheme to make the world’s stocks of fish and shellfish radioactive.
To my mind, all large, ocean-going vessels, whether they float or submerge, should be nuclear, as you don’t have to keep filling the filthy things up with diesel – or worse still, heavy oil. And I must say I think the Chinese may have missed a trick here by not immediately offering the Australians a cheaper alternative to American reactors. China seems to be quite good at building nuclear power stations around the world adapted from Western technology and has a very capable Navy with its own nuclear-propelled vessels.
NO TIME TO SINK
I am wondering if the united front is no longer as united as it was, and if this parting of ways benefits China in Europe at a time when it is arguably being progressively shut out. Why the French were, or acted, so surprised over the cancellation of contracts, is something of a mystery. Canberra said it warned it was coming.
UNDER THE SEA
As relationships in the Asia-Pacific deteriorated in the wake of the force and speed of Chinese maritime assertiveness, Canberra apparently decided that the French design was no longer adequate. Simply put, the Australians in 2021 feel the need to travel further and for longer than they did in 2016, and there are not many places to stop for a tank of fuel. If everyone stayed coastal just to protect their fish and trade, then there would be no need for such range – but they haven’t.
The Australians have clearly gotten more nervous about the Chinese presence around them, which has been partly their own fault by leasing off the Port of Darwin to China and then, quicker than a frightened Sebastian can scuttle under a rock, the Chinese reveal plans for a maritime products industrial park on other side of the Torres Strait in Papua New Guinea.
STARTING TO FLOUNDER
Over the past year there has been murmuring that suggests not all of Europe’s countries are keen to fall in line behind the US in its staunch opposition to China. Does this sub debacle perhaps mean that China will have at least one more sympathetic ear in Europe; France, despite all that has happened? Perhaps.
Also, does it mean the relationship between Britain and France deteriorates further? I’d say it’s hardly about to get much better, but given that the French are – dare I say it – prone to emotional outbursts, they will probably come around in the long term. I’m still not quite sure why the French are so upset with the Brits over this.
How France and Germany align on China, however, is important. This hinges on how the newly elected Chancellor Olaf Scholz leads the country, and it may unfortunately come down to the Germans making a choice between the US and China, and splitting Europe on the matter.
So, as I settle into my seat in the cinema to enjoy Bond’s latest escapade – the early reviews are very encouraging – hopefully I can have an icy-cold beer and a bucket of popcorn, which was denied me when I last went to Palace IFC cinema more than a year ago and I’ll shut out the real world for a while. At some point though, the very real question returns of who actually was the villain in scuppering the submarine deal and how do we deal with the consequences?
Right now, I really have no idea. But somehow, I find it all very fishy.
Neil Newman is a thematic portfolio strategist focused on pan-Asian equity markets