Essay by Eric Worrall
“Australia must ditch its distrust and collaborate” – and not purchase any US nuclear submarines.
I’ve seen the energy future and it’s in China, and Australia must ditch its distrust and collaborate
Caroline Wang
Jun 18, 2025I’ve seen the energy future, and it’s in China.
On a recent delegation, I saw the futuristic factory of solar giant Longi in Jiaxing, with its omnipresent robots, combining automation, big data, AI and 5G to flexibly customise solar module components for diverse application scenarios and customers, revolutionising advanced manufacturing at massive scale.
This is not an isolated case. China leads the world by a huge and growing margin across almost all of the frontiers of our decarbonised future, from sophisticated clean tech manufacturing to domestic renewable energy installations to foreign direct investment into the energy transition.
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As John Grimes, CEO of peak industry body the Smart Energy Council said on our recent delegation, “It is the Australia-China relationship that gives the world a fighting chance in addressing climate change”.
However, as Grimes acknowledges, a crude geostrategic lens continues to dominate the Australian government’s thinking on partnership with China.
…
As Dr Cao Yu, Executive Director of CMBI Capital Management, commented: “The Australian side of the relationship is not stable”, referring to Australia’s partnership in AUKUS, a China containment strategy costing $368bn and now under review by the Trump Administration – funding that could be spent on renewable energy to help solve the world’s largest threat: climate change.
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Read more: https://reneweconomy.com.au/ive-seen-the-energy-future-and-its-in-china-and-australia-must-ditch-its-distrust-and-collaborate/
AUKUS, among other things, is a deal for Australia to purchase three US nuclear powered Virginia class submarines. Such submarines would present a grave strategic threat towards any Chinese aggression in the South Pacific, where depending on the target of that aggression, maritime military supplies would potentially have to be transported through thousands of miles of open ocean.
But this US / Australia / UK submarine deal is under threat, because of Australia’s public hostility towards some US foreign policy positions, and Australia’s outright rejection of Trump’s request for Australia to spend more on defence. All of this appears to be undermining US confidence in Australia’s reliability as a US ally.
China would love for Australia to align more closely with China. Australia refused China’s recent appeal to “join hands” to oppose US tariffs, an international embarrassment which likely shocked China’s leadership. As Australia’s largest trading partner, the market for over 30% of Australia’s exports, China may have assumed Australia was already part of their sphere of influence.
China may have underestimated how much they upset Aussie voters, by conducting unannounced live fire exercises near the Australian coast in March this year. This anger over China’s infringement on Australia’s sovereignty makes it politically difficult for Australian leaders to appear too friendly towards China.
There is another problem. Paying for AUKUS commitments AND Prime Minister Albanese’s green energy promises would really stretch Australia’s finances.
Something has to give. I don’t know the intentions of the Albanese government, but if the AUKUS submarine deal was to collapse, and if the majority of Aussie voters believed President Trump was to blame for the collapse of the deal, there would be no significant Aussie electoral backlash for going soft on China. The $386 billion currently earmarked for purchasing the US nuclear submarines could instead be diverted to attempting to fulfil the Albanese government’s renewable energy electoral promises.
Achieving Net Zero is a major goal of Australia’s left wing Albanese government, but they are struggling to attract investment and enthusiasm – in fact the entire Australian economy is showing signs of a slump in productivity. Part of the reason for this lack of renewable investment enthusiasm might be the threat a future coalition government could cancel renewable subsidies. But if subsidised green industries could be grown sufficiently to become a major employer of Aussie voters, it would be much costlier in terms of political capital for a future coalition government to cancel those subsidies.
The Albanese government would also be able to use some of that cancelled submarine money to kickstart their “Future made in Australia” programme, a key election promise to revive Australian manufacturing through subsidised investment in green manufacturing industries.
Perhaps China senses an opportunity in this ongoing Australian political and fiscal turmoil.
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