The Squiz

Japan could be the first country to join the AUKUS security pact since Oz, the UK and the US kicked things off in 2021. Reports say defence ministers from those 3 countries will meet today to go over the benefits of expanding the pact which is designed to counteract Chinese aggression in the Indo-Pacific region – and Japan’s addition is top of the agenda. The move was foreshadowed by Rahm Emanuel, the US Ambassador in Tokyo, who said on Friday that Japan was “about to become the first additional pillar 2 partner” in AUKUS.

What does that mean?

You can’t mention AUKUS without submarines metaphorically surfacing, and this time is no different… When the big new security agreement was launched, a key part was to get nuclear-powered submarines built for Australia to bolster defence efforts in the region. That was ‘pillar 1’ and despite delays in the production of those subs, it’s in train. So they’re onto ‘pillar 2’, which is all about developing cutting-edge defence technology – think quantum computing, undersea AI, and new cyber tech. As for where Japan fits in, it’s well-placed to contribute in that regard. Japanese PM Fumio Kishida is headed to Washington this week and he might squeeze in some time to talk to US President Joe Biden about it there. 

And how’s our relationship with China tracking…?

It’s on the up with China lifting the last of its COVID-era tariffs on Aussie wine last week. But research from KPMG Australia/the University of Sydney (paywall) shows Chinese investment in Australia has continued its downward trend, falling 36% in 2023 to $1.3 billion. KPMG’s Helen Zhi Dent says the “trend is unlikely to rebound soon”, with Chinese companies tightening their purse strings as they deal with a worsening local economy. And despite China’s continued military moves to strengthen its hand in the region, the US reckons their relationship with China is also improving… US Treasury Secretary Janet Yellen says things are on “a more stable footing” thanks to more open communication. Sometimes you just gotta pick up the phone…