Wait, we have to be a two-fleet nation? Concerns mount as Beijing looks to expand Indian Ocean fleet presence

As an island continent heavily dependent on the unmolested flow of global maritime trade, the introduction of the Two Ocean policy in 1987 was a long time coming and marked a major step change in the nation’s post-Second World War coming of age.

The policy initiated a period of unprecedented infrastructure and force structure recapitalisation and redeployment for the Royal Australian Navy, with the newly redeveloped Fleet Base West, HMAS Stirling becoming the home of the Navy’s Collins Class submarines and an increasing number of surface warships.

This decision in the waning years of the Cold War would ultimately prove prescient, as the global centre of economic, political and strategic power would begin its slow shift away from Europe and the Atlantic towards the vast, oceanic-centric environs of the Indo-Pacific.

As the global balance of power has shifted to Australia’s primary “sphere of influence”, the challenges presented by the newly emerging global and regional powers spearheaded by the People’s Republic of China, flanked by India and other emerging regional powers, including Indonesia, Pakistan, Thailand and others with their own designs and ambitions for the region, have started to impact Australia.

In response, successive Australian governments since arguably 2009, but certainly since 2016, have sought to reinforce the nation’s naval capabilities culminating in the Albanese government’s “short, sharp” Independent Analysis into Navy’s Surface Combatant Fleet, which set out an ambitious plan to transform the Royal Australian Navy.

At the core of this paradigm shift is the efforts to double the size of the Navy’s surface combatant fleet to complement the nation’s future fleet of conventionally-armed, nuclear-powered submarines and better respond to the deterioration in the Indo-Pacific’s security environment.

Yet despite the rhetoric, we have continued to see a steady decline in the nation’s naval capability, with the fleet now the smallest and oldest it has been since the Second World War, leaving major questions about the nation’s capacity to secure its interests independently across the region.

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While much of the emphasis has been on the Pacific Ocean and its “tributary” seas of southeast and east Asia, the Indian Ocean continues to play an immensely important role in the nation’s economic, political and strategic security.

Highlighting this is Australian Strategic Policy Institute researcher Marcus Schultz in a piece titled Australia needs a plan for a Chinese navy presence in the Indian Ocean, in which he established, “Australia’s defence planners should carefully weigh the risks posed to its vital maritime trade connections by a persistent Chinese naval presence in the Indian Ocean. Some precautions must be taken now, as the need to deter harassment of Australia’s critical sea lines of communication (SLOCs) in the Indian Ocean isn’t very improbable or far off.”

An urgent need for more military resources in the region

The core premise of Schultz’s argument is the growing need for an increase in Australia’s already limited existing military resources to focus upon the Indian Ocean as Beijing increases its pursuit of critical infrastructure hubs to support their own economic and strategic imperatives in the region and accordingly, the corresponding increase in Chinese naval forces in the region.

Schultz detailed this, stating, “So far, China has had limited success in acquiring shore-based replenishment capability to support its warships operating east of Somalia. But it could succeed suddenly by gaining access to key logistic bases and dual-use commercial ports in Africa, the Middle East, Southeast Asia and Indian Ocean island countries.

Going further, Schultz unpacked the rapid and accelerating rate of Chinese naval expansion that is set to fundamentally reshape the balance of power in the Indian Ocean region, saying, “Meanwhile, upgrades to the Chinese naval fleet make it increasingly suited to distant operations. Larger, multirole combatants with advanced anti-ship, anti-air and anti-submarine weapons and sensors have replaced obsolescent, generally single-purpose ships. According to a 2020 China Maritime Studies Institute report, China has more than 100 warships and submarines that can operate in the Indian Ocean. This figure is likely to rise as the Chinese navy expands its surface combatant fleet to 435 ships by 2030.”

Yet despite this new reality, Australia appears to still be dragging its feet when it comes to modernising and recapitalising it’s naval capabilities following years of reviews, strategic updates, force structure plans and white papers.

For reference, as it stands, Australia only has three, yes three “Tier One” surface combatants, those being the Hobart Class guided missile destroyers with seven Anzac Class frigates serving in the “Tier Two” surface combatant role.

Adding pressure on these limited platforms is the broader realignment of global and regional power, something Schultz detailed, explaining, “If relations with the United States keep declining and if the US-Indian security relationship continues to improve, China will worry about its sea lines of communication. It could respond by deploying many ships to the Indian Ocean. The same deployment would threaten Australia’s SLOCs.”

Relearning an old lesson

The logical conclusion from such a threat to the nation’s economic prosperity and strategic security seems to be a lesson we have to relearn following the sinking of the HMAS Sydney during the Second World War and requires major recalibration in the way the nation responds to these challenges.

Unfortunately however, little appears to be changing on this front, at least in the materiel context.

For Schultz, diplomacy provides an important mechanism for offsetting our significant lack of naval capability, particularly our relationship with the United States (as is expected) and the burgeoning partnership with India.

Schultz stated, “Some ways of strengthening Australia’s Indian Ocean defence cooperation can be inexpensive ... Opportunities include the placement of more defence attaches in missions in the region – including the Australian high commission in the Republic of Maldives – and establishing relationships between ADF Reserve units and small island states. The US State Partnership Program, which facilitates cooperation on civil-military affairs, could act as a model to inform the structure, shape and role of an Australian initiative.”

Diplomacy isn’t the only mechanism for Australia to enhance its Indian Ocean security, with history providing some unique insights and clues to enhance the nation’s capability in region, something Schultz explained, saying, “Australian military leaders and Defence planners should also look to improve proficiency in shipping protection and, if the work hasn’t been done already, develop a suite of maritime trade routing plans. They can look to successful strategies in Australian history, as discussed during the 2019 Goldrick Seminar on Maritime Trade and its Implications for Australia’s Defence. One example given then was Australia’s experience instituting a convoying regimen during World War II to protect Australian merchant shipping against German surface, air and sub-surface (including mining) attack.”

Despite this, Australia will still need to enhance and increase the scale and scope of the naval capability it can bring to bear in the Indian Ocean, two areas that Schultz overestimates the importance of diplomacy is in the relationship with India and it’s reliability should its interests not be directly impacted. Schultz detailed these factors, saying, “Australia won’t have to meet potential mid-Indian Ocean security concerns alone, thanks to increasing security cooperation with India and Britain and the alliance with the United States.”

Beijing has, despite the history of tensions between the two superpowers, increasingly sought to offset India’s relationship with the West, by working with India to enhance the economic relationship between the two nations within the confines of the Shanghai Cooperation Organisation and BRICS multilateral trading bloc.

Equally, Schultz made a dangerous assumption that the United Kingdom will be able to support maritime security in the Indian Ocean, seemingly without accounting for the now well-known limitations on the Royal Navy or for that matter, more pressing maritime security challenges in the North Atlantic.

While the government’s plan to expand the Royal Australian Navy’s surface fleet is now public knowledge, it remains to be seen when the rubber will actually hit the road and whether or not it is enough to contribute to the nation’s maritime security and unmolested access to critical sea lines of communication upon which our modern standard of living and quality of life depends.

Ultimately, if we don’t turn this ship around (pun massively intended), Australia is going to face some major challenges and impacts to our national security, prosperity and national stability.

Final thoughts

While contemporary Australia has been far removed from the harsh realities of conflict, with many generations never enduring the reality of rationing for food, energy, medical supplies or luxury goods, and even fewer within modern Australia understanding the sociopolitical and economic impact such rationing would have on Australia’s standard and quality of life.

There is no doubt that Australia’s position and responsibilities in the Indo-Pacific region will depend on the nation’s ability to sustain itself economically, strategically, and politically in the face of rising regional and global competition.

At the forefront of this is the nation’s seemingly declining capacity to defend itself both independently and in concert with our regional and global partners, raising an important question worth asking: If we don’t take our own defence seriously, how can we expect anyone else to?

Ultimately, this comes back to the government’s shift away from a “Balanced Force” towards a “Focused Force” as championed in the Defence Strategic Review and the foundational problem that is our lack of clearly defined role and objectives for our own Defence capabilities.

In the maritime domain, this is of paramount importance as identified by David Uren, writing for the Australian Strategic Policy Institute, that “two-thirds of Australia’s exports by value and a little over 40 per cent of its imports by value travelling through the Indonesian archipelago. About 6 per cent of exports go east across the Pacific Ocean to New Zealand, the Pacific islands and North or South America, while about 13 per cent of imports come from the east”.

Uren added, “Only about 4 per cent of Australia’s maritime trade travels west across the Indian Ocean without going through Indonesian waters, bound for India, the Middle East or the Suez Canal. Of the Australian exports that enter Indonesian waters, about 73 per cent are headed for North Asia (principally iron ore and LNG), while 17 per cent have destinations in Southeast Asia, and 10 per cent are en route for India, the Middle East or Europe. Among the imports coming through the Indonesian straits, about 11 per cent come from North Asia, and a little over 40 per cent from each of Southeast Asia and Europe.”

Importantly, no one has said that defending the nation in this era of renewed and increasingly capable great power competition will be cheap or easy and we have to accept that uncomfortable reality, because the alternative outcome is infinitely worse.

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..