Australia has signed a A$1bn (US$717m) contract with South Korean defence company Hanwha that will strengthen ties between two US allies but risks sparking China’s opposition.
The agreement to buy 30 self-propelled howitzers and 15 armoured ammunition resupply vehicles, is the biggest defence contract sealed between Australia and an Asian country. It was announced during President Moon Jae-in’s state visit to Australia, the first visit by a foreign leader to the country since the onset of the coronavirus pandemic.
“Our Comprehensive Strategic Partnership with the Republic of Korea is underpinned by our joint commitment to defence and security co-operation,” Scott Morrison, Australia’s prime minister, said on Monday.
“The contract with Hanwha demonstrates the value of industrial collaboration in supporting our countries in addressing mutual security challenges.”
The two leaders also announced deals on clean energy and critical minerals, bolstering their countries’ efforts to secure supply chains in sectors including batteries and magnets.
Analysts said that South Korea’s willingness to upgrade its relationship with Australia to a “Comprehensive Strategic Partnership” at a time of acute tension between Canberra and Beijing was uncharacteristically bold.
Seoul has been reluctant to take sides openly in the intensifying competition between the US, its principal security ally, and China, its most important trading partner. It has avoided seeking membership in the “Quad”, a US-led grouping that also includes Australia, India and Japan.
Australia drew a fierce backlash from China in September when it announced a new military partnership known as Aukus to build nuclear submarines with the US and the UK. The pact was designed to counter Beijing’s military assertiveness in the Asia-Pacific region.
Canberra also recently declared that it would join a US-led diplomatic boycott of the Beijing Winter Olympics in February over human rights concerns.
“This deal brings South Korea a step towards closer defence relations with Australia, which in turn could signal that it is becoming more closely integrated with America’s strategy in the Indo-Pacific — namely, containment of China,” said Go Myong-hyun, a senior fellow at the Asan Institute of Policy Studies think-tank in Seoul.
Moon, however, stressed his commitment to good relations with Beijing.
“South Korea is focused on the steadfast alliance with the US and also with China,” Moon said. “We want a harmonised relationship.”
Go said that “no matter how strongly Seoul tries to argue that it is equidistant from the US and China, deals like this will raise the perception in Beijing that is drifting inexorably towards Washington”.
Australia has also signed several recent defence deals intended to address a more assertive China, including the latest, announced last week, that it would discard its European-made military helicopters for American aircraft.
Rory Medcalf, head of the National Security College at the Australian National University in Canberra, said Moon’s visit would help dispel impressions that Australia was prioritising the “Anglosphere” over relations with its Asian allies.
“The visit by President Moon is a refreshing reminder that Australia has a more nuanced and diversified set of partners than simply Aukus or the Quad,” said Medcalf.
“It’s also a pragmatic signal from South Korea that they recognise growing convergence with Australia as a partner. We are both middle powers, we are both struggling with Chinese coercion and we’re both broadly comfortable with the US alliance system and want to influence it.”