~ Alan Dupont. Originally published in The Australian on 2 February, 2024.

Awakened from a long, peace-induced slumber, Western countries are scrambling to address their naval ­deficiencies in the face of China’s unprecedented peacetime naval build-up, Russia’s illegal invasion of Ukraine and the Houthis’ attacks on shipping in the Red Sea.

But they are starting from a long way back.

Australia is no exception. Our navy’s capabilities have deteriorated alarmingly at a time when the need for sea power has never been greater. More on this later.

The Houthis’ targeting of ships that carried nearly 15 per cent of world trade through the Red Sea last year is the latest example of the growing threat to seaborne trade.

Trade volume going through the Suez Canal has fallen by 42 per cent in the past two months because of the Houthis’ attacks. Eighty-five per cent of global trade and about two thirds of the world’s oil and gas is moved by 105,000 container ships and tankers. “Sea-based trade is not just an element of globalisation, it’s the core of it,” says Bruce Jones, director of the Project on International Order and Strategy at the Brookings Institute.

But what lies under the oceans is every bit as important as the vessels they carry. From fish and manganese nodules rich in minerals, to ­cables that carry 98 per cent of global internet traffic and $US10 trillion worth of financial transactions, subsea resources and critical infrastructure are increasingly at risk from over-exploitation and sabotage. Unknown saboteurs were responsible for blowing up the Nord Stream gas pipelines running through the Baltic Sea from Russia to Germany in 2022. A year later, Chinese vessels cut two subsea ­cables to Taiwan.

“Disorder looms on the high seas,” The Economist asserts in a deep dive on the “profound shift taking place on the planet’s oceans”.

Asia is experiencing the largest build-up in naval power since World War II. The Black Sea bordered by Ukraine, Russia and Turkey is filling up with mines and crippled warships. The law of the sea is in decline. There are more rogue actors. China ignores tribunal rulings to which it objects. Ten per cent of tankers are part of a shadow fleet operating outside established rules and conventions as Western sanctions trigger a smuggling boom.

The really bad news for democracies is that the US Navy – which once ruled the high seas, enforcing the Western-crafted international order – is in danger of losing its maritime supremacy to a Chinese fleet that has expanded dramatically in size and capability.

China’s navy already has more battleforce ships than the US Navy – 370 to 291. This numerical superiority is set to increase and is more pronounced in our region, where China has a home-ground advantage over a dispersed US navy still forced to play the role of global cop. By 2030, China is expected to add another 65 ships while the US Navy stagnates at its current numbers.

Western navies are in precipitate decline. The Royal Navy has a meagre 16 frigates and destroyers. European navies shed 32 per cent of their frigates and destroyers and 20 per cent of their submarines in the 20 years to 2018, according to The Economist.

One bright spot is that the US has more advanced submarines than China. Even so, China is rapidly closing the gap. Its newest submarines are much quieter and harder to detect. The Chinese submarine fleet is expected to increase to 80 submarines by 2035 while the US submarine fleet will shrink to 57 boats in 2030 before slowly starting to grow again. When firepower is added to its stealth capabilities, a single submarine can make a numerically stronger adversary think twice before launching an attack, completely changing the dynamics of a naval operation. America’s Ohio-class submarines, for example, carry up to 154 cruise missiles, 26 per cent more than America’s best armed surface ship.

“The threat of a no-notice attack can keep ships or other submarines in harbour or unable to go where they desire,” says former navy chief, retired vice-admiral David Shackleton. Argentina found this out to its cost in May 1982, when the cruiser Belgrano was torpedoed by a Royal Navy submarine during the Falklands War in the most significant naval battle of the past 40 years. That’s why Australia needs to have advanced AUKUS submarines.

Naval alliances and strategic partnerships with like-minded countries are crucial to rebuilding the West’s diminished naval strength. As strategic competition for control of the world’s oceans ­escalates, the threat of war at sea has moved from a low probability to a distinct possibility.

The biggest problem is that China has a vice-like hold over shipbuilding, which has been a cornerstone of national power since the ancient Greeks vanquished the Persian fleet at the Battle of Salamis in 480BC.

China has 232 times the shipbuilding capacity of the US, and Chinese shipyards produce more than half of all ships built, according to the US Office of Naval Intelligence. The number of US shipyards capable of building large ocean-going commercial and military vessels declined from 30 to just six between 1953 and 2016.

In an analysis for War on the Rocks, Choi Kang and Peter Lee found that China had 50.3 per cent of the market for building large ocean-going ships in 2022 (1794 ship orders), followed by South Korea with 29 per cent and Japan with 15.1 per cent. In that year the US built just five ships. Excluding Japan and South Korea, democracies have only 4 per cent of global shipyard capacity.

On virtually every metric that matters, China is outspending and outbuilding everyone else – from shipyards and naval and merchant ships, to the fishing vessels and coast guard fleets that form the paramilitary trident of China’s sea power. Beijing has been able to turn the South China Sea into a Chinese lake and deny the competing territorial claims of neighbouring states by dominating the sea with hundreds of patrolling naval and paramilitary ships.

Unless the West’s sclerotic shipbuilding capacity and defence industrial base is revitalised, we won’t prevail in an extended maritime conflict. In wars of attrition, mass, scale and the ability to replace lost ships faster than adversaries trump technological and operational ­excellence.

Don’t think Australia is going to sail to the rescue. Our navy has even more serious problems than comparable Western counterparts. And our shipbuilding industry is in disarray. This is inexcusable for a self-declared maritime nation.

Three modern air warfare destroyers and eight ageing Anzac-class frigates form the core of our minuscule, poorly structured surface fleet tasked with protecting 20 per cent of the world’s oceans. Along with six vintage Collins-class submarines, they house most of the guns, missiles and torpedoes that constitute the navy’s strike power.

These ships and submarines are the first line of defence against threats to our island continent and the maritime highways critical to our security and economy. But years of underinvestment has hollowed out our ailing fleet, raising concerns about the navy’s ability to operate and survive in the battlefields of today. Australia is the world’s 12th-largest economy. But we have the 47th-ranked navy, largely due to a dramatic reduction in its firepower over the past three decades. In 1995, the navy had 368 vertical launch system missile cells on its major surface combatants, compared with 208 in 2020 – a ­reduction of 43 per cent.

In recent months, a steady drip of bad news has turned into a flood, revealing a navy struggling to crew its vessels and keep its ships on station. The oldest Anzac-class frigate is nearly 30 years old. One has been mothballed. Two more may be taken offline because of crew shortages. Plans to extend the operational life of all eight frigates are on hold. A lack of combat system operators is reportedly impacting on the availability of the air warfare destroyers, our most potent ships.

More worrying is the ability of our fleet to survive attacks from the proliferating anti-ship weapons available to terrorists and ragtag militias – let alone well-armed ­nation states.

Surviving modern warfare requires ships with abundant firepower and the capacity to defend themselves, including against swarms of lethal drones, both above and under the sea.

Our ships are outgunned and outmatched by the latest generation of Chinese destroyers, which carry 64 missile cells. Their larger cruisers have 112. Our frigates carry eight and our destroyers 48.

To make matters worse, the mooted replacement for the eight Anzacs, the Hunter-class frigates, are too heavy, expensive and undergunned.

Shackleton says “all other navies in our region are muscling up, while we’re going the other way”.

In a 2022 report for the Australian Strategic Policy Institute, he wrote: “Having only 32 missile cells, the Hunter frigate is fundamentally underarmed for almost any operation in which hostilities are to be expected. Warships go in harm’s way, and they should be equipped to do so.

“If the evolution of the Hunter design won’t allow it to embark at least 96 (missile) cells, then its ­viability must be questioned.”

Shackleton is not the only critic of the failure of successive governments to deliver a fit-for-purpose navy. Last September in The Australian Financial Review, former Fleet Commander and retired rear admiral Rowan Moffitt wrote: “At a time when the Defence Strategic Review told us Australia faces the greatest strategic risk in 80 years, our navy remains unfit to deliver the maritime defence strategy the government proposes. It is older, has less firepower, is less reliable, and has fewer ships available than a generation ago.”

The navy’s vulnerabilities are not the only problem. Australia’s merchant fleet has declined from about 100 ships to just 15 over the past 30 years. Merchant ships would provide essential back-up to the navy during emergencies and conflicts at sea. The Albanese government has committed to building a strategic merchant fleet of 12 Australian-flagged vessels. But the timelines are uncertain and a dozen ships may not be enough.

Our shipbuilding industry remains in a parlous state because of continuing uncertainty about the government’s commitment to naval shipbuilding in Australia.

And there are well-founded doubts about whether the US will provide five nuclear-powered Virginia-class submarines to replace the Collins before their successor AUKUS-class submarines are delivered in the early 2040s.

The navy’s plight has been many years in the making and reflects multiple failings. Among them are complacency, poor decision-making, a broken defence procurement system, bureaucratic inertia, a lack of political leadership and an unwillingness to build a ­viable shipbuilding industry or to properly fund a modern navy.

Will Anthony Albanese provide the leadership to begin the long process of remediation and renewal? The Prime Minister says he will, vowing to take an active role in fast-tracking a promised boost to Australia’s defence assets. Treasurer Jim Chalmers has confirmed that defence spending will be a budget priority. But without a substantial down payment in the May budget, these promises will be justifiably castigated as more empty rhetoric and another disappointing failure of political leadership.

The government has a generational opportunity to fix some of the navy’s problems with the imminent release of the much-anticipated review of the surface fleet. Last year’s DSR recommended that the government direct an independent analysis of “Navy’s surface combatant fleet capability to ensure its size, structure and composition complement the capabilities provided by the forthcoming conventionally armed, nuclear-powered submarines”.

It’s vital that this review gets it right by restructuring the navy for high-intensity warfare.

This means a fleet with greater strike power and survivability.

Albanese also needs a new narrative that publicly explains the imperative for a strong navy.

He could start by pointing out that we are highly dependent on the sea for our survival and prosperity. Australia has more to lose than most other countries should the law of the sea be ignored, or seaborne commerce and freedom of navigation be contested.

We could be economically coerced or strangled should the navy lose control of the maritime approaches to Australia.

Imagine what would happen if subsea cables or the offshore wind turbines and oil and gas pipelines essential to our energy security were to be cut or sabotaged.

The Prime Minister should tell Australians that a long period of peace and tranquillity on the world’s oceans is coming to an end as geopolitical rivalries worsen and play out at sea.

Maritime conflicts are fragmenting already stressed supply chains, disrupting international trade and driving up costs. Hence, the importance of protecting the sea lanes that carry most of the world’s commerce and energy.

If Albanese and Defence Minister Richard Marles want to address these challenges, they need to do four things.

First, get serious about naval shipbuilding by laying the foundations of a sustainable domestic industry so that there are no more “valleys of death”. This will require bipartisan support, a 15 to 20-year ­financial commitment and incentives for Australian shipbuilders. If South Korea can do it, so can we.

Second, boost the navy’s firepower through automation by speeding up the introduction of surface and underwater drones, strengthening the navy’s ability to target and strike adversaries while alleviating crew shortages.

Third, redouble efforts to work with friends and allies to address common weaknesses and vulnerabilities. No country, not even the US, can match China’s capacity to build ships. But together we can level the playing field. This will require sustained, high-level political pressure on the US to reduce the myriad legislative, legal and regulatory obstacles to defence technology sharing.

Fourth, commit to a substantial increase in defence funding in the May federal budget. Without more money, the navy’s problems will only get worse.

Marles should nail this list to his door and ask himself every day whether progress is being made.

And if not, why not?