UK, US and Australia defence alliance seek to keep China in check

it was recently announced that the UK, the US and Australia have announced a new defence partnership to keep a check on China’s growing power in the Indo-Pacific.

Prime Minister Boris Johnson, US President Joe Biden and Australian Prime Minister Scott Morrison confirmed the creation of a “new trilateral defence partnership” in a joint statement. 

The alliance, known by its acronym Aukus, would work “hand-in-glove to preserve security and stability in the Indo-Pacific”, the UK's PM said making a frequent reference to the changing situation in the region.

''The UK will embark on this project alongside our allies, making the world safer and generating jobs across the United Kingdom,'' the PM said.

Mr Johnson added, “I’m delighted to join President Biden and Prime Minister Morrison to announce that the United Kingdom, Australia and the United States are creating a new trilateral defence partnership, known as Aukus, with the aim of working hand-in-glove to preserve security and stability in the Indo-Pacific. We are opening a new chapter in our friendship.''

“This is about investing in our greatest source of strength, our alliances and updating them to better meet the threats of today and tomorrow,” US President Joe Biden said. “AUKUS — it sounds strange, all these acronyms, but it's a good one.”

Meanwhile, the US continues to build partnerships with other nations that serve as a bulwark against China. One such group is known as the Quad, comprised of the US, Japan, Australia, and India. 

''Formed in its current iteration in 2017, the four-nation grouping is cautious about explicitly saying that its economic, technological, and military cooperation is about thwarting Beijing’s aims, but analysts say the Quad wouldn’t be as robust today if it weren’t for China’s continued aggressions,'' Politico reported.

On Sept 24, all four Quad-nation heads will meet at the White House for the first-ever in-person, leader-level gathering of the group.

Market implications

The cold war is heating up although it is not affecting markets at the moment. 

However, the trade war between China and Australia has worsened relations between the countries and that has had an impact on the Australian dollar ever since April 2020 when Prime Minister Scott Morrison asked for an inquiry into the origins of Covid-19.

''So far, this has cost the two nations roughly $4 billion,'' Politico reported, adding that Josh Frydenberg, Australia’s treasurer, this month accused Beijing of trying to exert “political pressure” with penalties on Australian products.