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In this photo provided by U.S. Navy, the Virginia-class fast-attack submarine USS Illinois (SSN 786) returns home to Joint Base Pearl Harbor-Hickam from a deployment in the 7th Fleet area of responsibility on Sept. 13, 2021. Australia decided to invest in U.S. nuclear-powered submarines and dump its contract with France to build diesel-electric submarines because of a changed strategic environment, Prime Minister Scott Morrison said on Thursday.

Petty Officer 1st Class Michael B Zingaro/The Associated Press

The United States, Britain and Australia announced a new security partnership for the Indo-Pacific in a move hailed by regional allies but denounced by China as intensifying an arms race in the region.

Under the partnership, announced by President Joe Biden, British Prime Minister Boris Johnson and Australian Prime Minister Scott Morrison, the United States and Britain will provide Australia with the technology and capability to deploy nuclear-powered submarines.

The United States and its allies are looking for ways to push back against China’s growing power and influence, particularly its military buildup, pressure on Taiwan and deployments in the contested South China Sea.

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The three leaders did not mention China by name in Wednesday’s announcement and senior Biden administration officials who briefed reporters ahead of time said the partnership was not aimed at countering Beijing.

However, Chinese foreign ministry spokesman Zhao Lijian said the trio were “severely damaging regional peace and stability, intensifying an arms race, and damaging international nuclear non-proliferation efforts.”

Countries should not build partnerships that target third countries, he told a regular briefing in Beijing on Thursday.

“China will closely watch the situation’s development.”

NUCLEAR POWER, NOT NUCLEAR WEAPONS

In a three-way virtual announcement, the leaders stressed Australia will not be fielding nuclear weapons but using nuclear propulsion systems for the vessels, to guard against threats.

“We all recognize the imperative of ensuring peace and stability in the Indo-Pacific over the long term,” said Biden.

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“We need to be able to address both the current strategic environment in the region, and how it may evolve because the future of each of our nations and indeed the world depends on a free and open Indo-Pacific enduring and flourishing in the decades ahead,” he said.

Morrison said the submarines would be built in the city of Adelaide and Australia would meet all of its nuclear non-proliferation obligations.

James Clapper a former director of U.S. national intelligence, told CNN it was a bold step by Australia given its economy’s dependence on China, adding: “Clearly the Chinese will view this as provocative.”

Republican Senator Ben Sasse said the agreement “sends a clear message of strength to Chairman Xi.”

A U.S. official briefing before the announcement said Biden had not mentioned the plans “in any specific terms” to Chinese leader Xi Jinping in a call last Thursday, but did “underscore our determination to play a strong role in the Indo-Pacific.”

U.S. officials said nuclear propulsion would allow the Australian navy to operate more quietly, for longer periods, and provide deterrence across the Indo-Pacific.

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The officials said the partnership, dubbed AUKUS, would also involve cooperation in areas including artificial intelligence and quantum technology.

FRANCE SIDELINED

The partnership ends Australia’s 2016 deal with French shipbuilder Naval Group to build it a new submarine fleet worth $40 billion to replace its more than two-decades-old Collins submarines, a spokesperson for Morrison told Reuters.

Naval Group said in a statement that Australia’s decision was a major disappointment and that the company would analyze the consequences of the decision.

French Foreign Minister Jean-Yves Le Drian and Defense Minister Florence Parly said the decision to exclude France showed a lack of coherence at a time the two allies are facing common challenges in the Indo-Pacific region.

Biden said the governments would now launch an 18-month consultation period “to determine every element of this program, from workforce, to training requirements, to production timelines” and to ensure full compliance with non-proliferation commitments.

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The pact should be a boon for the U.S. defense industry and among the firms that could benefit are General Dynamics Corp and Huntington Ingalls Industries Inc.

General Dynamics’ Electric Boat business does much of the design work for U.S. submarines, but critical subsystems such as electronics and nuclear power plants are made by BWX Technologies Inc

U.S. officials did not give a time frame for when Australia would deploy a nuclear-powered submarine, or how many would be built. They said that since Australia does not have any nuclear infrastructure, it would require a sustained effort over years.

ONE-OFF TECHNOLOGY SWAP

One U.S. official said the announcement was the result of months of engagements by military and political leaders, during which Britain - which recently sent an aircraft carrier to Asia - had indicated it wanted to do more in the region.

“What we’ve heard in all those conversations is a desire for Great Britain to substantially step up its game in the Indo-Pacific,” the official said.

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The U.S. official said Washington had shared nuclear propulsion technology only once before - with Britain in 1958 - and added: “This is frankly an exception to our policy in many respects, I do not anticipate that this will be undertaken in other circumstances ... We view this as a one-off.”

He said the United States planned to forge stronger ties with long-term allies Japan, South Korea, Thailand and the Philippines, and engage more with new partners like India and Vietnam.

The announcement came just over a week before Biden hosts a first in-person meeting of leaders of the “Quad” - Australia, India, Japan and the United States.

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