Abhishek G BhayaA new twist in Australia’s naval procurement has triggered a flurry of geopolitical discourse, after revelations surfaced that a fleet of tugboats ordered for the Royal Australian Navy was secretly constructed in a Chinese shipyard—despite the $28 million contract being awarded to Dutch shipbuilder Damen last year.
The Australian Broadcasting Corporation (ABC) reported on Thursday that the first of three "harbour tugs" was completed in late December at Damen's state-of-the-art Changde facility in China’s Hunan province, before being delivered to Darwin earlier this year.
It also noted that the second Azimuth Stern Drive (ASD) 2111 tugboat was scheduled to arrive in Australia by May, with a third vessel confirmed for delivery before the end of 2025.
These revelations come at a time of heightened strategic sensitivity, with China-Australia relations navigating turbulent waters and the United States ramping up maritime trade restrictions targeting Beijing.
The disclosures have sparked alarm within Australia’s security circles, with the Opposition raising concerns about transparency and oversight.
Digby James Wren, an Australian geopolitical analyst and external relations adviser to Royal Academy of Cambodia, noted that the outrage over the tugboats' origins is misplaced and largely political theatre. "I'm not surprised," Wren told TRT World.
“Much of the global civilian and commercial fleet is built in China, South Korea and Japan. China's shipbuilding capacity is unrivaled in both scale and cost-effectiveness. So, unless explicitly stated in a contract, subcontracting to Chinese facilities is not inherently suspicious—it’s actually standard practice,” he said from Phnom Penh.
While the timing of the revelation may stir public concern, Wren said that it is vital to contextualise the development within the broader realities of global supply chains and maritime industry dynamics. “This is more about oversight—or lack thereof—than any grand security concern."
Trump’s new maritime push, marked by port fees on Chinese-built vessels, seeks to revive America’s shipbuilding industry and curb Beijing’s dominance—but critics warn it’s more politics than policy, with global trade implications.
A misplaced security panic?
Australia’s Defence Department also confirmed that the tugboats are being built in China, with a subsequent "fit-out" taking place in Vietnam. However, it emphasised that the vessels are not part of the Royal Australian Navy and will be operated and crewed by a civilian vessel operator.
The report has sparked concern within Australia’s security circles, with the Opposition raising the alarm and stating that Defence Minister Richard Marles has “serious questions to answer” — including what he knew about the vessels being built in China and what security measures, if any, have been considered.
Wren, however, dismissed national security concerns linked to the Chinese-built tugboats. "From a security standpoint, this doesn’t rank high," he asserts. “It's being used for political points. The authorities should have scrutinised the contract more closely, but this won’t alter Australia’s defence calculus.”
His reasoning is grounded in some basic facts: China commands nearly 60 percent of global shipbuilding output and offers unmatched economies of scale. With expansive shipyards, cheap steel, and a skilled labor force, China is simply the world’s most efficient builder of commercial vessels. For European shipbuilders like Damen, outsourcing to Chinese facilities isn't a deviation but an industry norm.
Tugboats in troubled waters
The tugboat controversy emerges against a backdrop of rising military tensions in the Indo-Pacific. Chinese warships have recently circumnavigated the Australian coastline, conducting live-fire drills in proximity to both Australia and New Zealand, prompting concern in Canberra. Wren, however, warned against overreaction.
While acknowledging that the Chinese exercises are a demonstration of power, he views them as part of a broader strategy to assert China's maritime presence, particularly in response to US-led alliances such as AUKUS and the QUAD.
He emphasised that the Chinese maneuvers adhered to international maritime law. “China’s naval operations were in line with the United Nations Convention on the Law of the Sea (UNCLOS),” he stated, adding that both Australia and China are signatories of the convention, unlike the United States.
Wren also argued that given Australia’s defence alignment with the US through arrangements like AUKUS and the hosting of US submarines – evidently to contain China’s growing influence in the Indo-Pacific – Australia has little cause for genuine concern.
The defence minister of Australia has earlier said China has not answered its warships firing into airspace off the Australian Coast.
Navigating China-US standoff
The real geopolitical earthquake, Wren suggests, lies not in Chinese-built tugboats, but in America’s attempt to curb China’s shipbuilding supremacy.
Earlier this month, the Donald Trump administration imposed sweeping trade restrictions, aimed squarely at China’s maritime, logistics, and shipbuilding sectors in a bid to revitalise its own ailing shipbuilding industry. The numbers, however, are stark: the US builds around five ships annually; China produces over 1,700.
Wren is critical of what he sees as a “protectionist gambit” unlikely to succeed. “The United States is attempting to revive an industry it has systematically neglected for decades. The sheer scale and efficiency of China’s shipbuilding cannot be matched overnight through tariffs alone. This move is more symbolic than structural,” he argued.
Wren remarked that Trump’s rhetoric masks a retreat. On Tuesday, Trump told reporters at the Oval Office the astronomical tariffs on Chinese goods will “come down substantially.” He even promised to eschew hardball tactics, vowing to be “very nice” at the negotiating table and pledged not to mention the origins of the Covid-19 pandemic.
“Trump and his advisors essentially waved the white flag on their confrontation. The tariffs won’t hit 145% as initially feared. We’re looking at 10–20%, maybe. There will be negotiations. The US simply can’t compete—commercially or industrially—at China's scale.”
He further suggested that Australia should be cautious in aligning too closely with American industrial anxieties. “Australia's interests are not always synonymous with Washington's insecurities. We need to resist being drawn into a zero-sum framing of China’s rise.”
‘It’s a ripple, not a tsunami’
As a key member of both QUAD and AUKUS, Australia finds itself navigating a diplomatic tightrope. Its military and intelligence ties with the US are deeply entrenched, yet China remains its largest trading partner. In an increasingly polarised world, can Australia strike the right balance?
Wren remains cautiously optimistic, suggesting that Australia and China are likely to develop a more balanced relationship. "Australia will likely focus more on ASEAN, India, and other partners if possible, but the core relationship with China will improve," he said. "It’s essential for Australia, especially with the current economic pressures—rising debt and falling living standards."
Wren advocates for a pragmatic approach rather than one driven by fear. "It’s not about choosing between Washington and Beijing, but ensuring transparency in contracts, respecting alliances, and acknowledging economic realities."
Ultimately, he concludes, “This tugboat story? It’s a ripple, not a tsunami.”
