China was quick to condemn the Aukus submarine deal as a further step down “a wrong and dangerous road” for the United States, Australia and Britain, warning that it would stimulate an Indo-Pacific arms race. But Beijing stopped short of threatening retaliatory action against any of the parties to the deal and the immediate coverage in the official media was relatively muted.

The submarine deal was announced two years ago and this week’s event in San Diego just filled in the details, including the staggering AUD$368 billion (€229 billion) cost to the Australian taxpayer. More importantly, the latest announcement comes amid a dramatic improvement in China’s relationship with Australia after a sharp deterioration over the past five years.

Xi Jinping and Anthony Albanese met at the G20 summit in Bali a few months after the Australian prime minister’s election last year and China this year lifted a two-year ban on coal imports from Australia. Minister for foreign affairs Penny Wong stressed on Tuesday that Australia wanted the nuclear-powered submarines to “better ensure a strategic equilibrium” as a “middle power” in Asia.

“We seek to acquire this capability in order to help keep the peace. We want a peaceful, stable, prosperous region, as Singapore, as Malaysia, as Indonesia do,” Ms Wong told Channel News Asia.

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Aukus deal likely to create lasting change in security architecture of the Indo-Pacific region

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[ US and allies unveil nuclear submarine deal to counter China ]

Singapore, Malaysia and Indonesia have sought to various degrees to remain neutral in the great power rivalry between the United States and China and all three countries fear the consequences of its escalation. China accounts for almost a third of all Australia’s international trade and both Beijing and Canberra have an interest in better bilateral relations.

The scale of Aukus, its cost and its timeline stretching over decades means, however, that it is likely to effect a lasting change in the security architecture of the Indo-Pacific region. One senior US diplomat described it to Beijing-based reporters on Tuesday as part of “a network of interlocking relationships, a latticework of relationships, so to speak” with countries across the region.

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Australia stresses that although the submarines will be nuclear powered, they will not be nuclear armed and Ms Wong said on Tuesday that her country would never seek to acquire nuclear weapons. But as China watches Japan double its military budget while Australia makes the biggest defence investment in its history, it sees the US’s latticework taking shape all around it.