The Australian government has given its strongest indication to date that it will end the protracted debate over replacement submarines for the navy by purchasing off-the-shelf Japanese vessels rather than pursuing the construction of an Australian-designed submarine.

While the choice is being presented in economic terms, such a decision would have far-reaching geo-political ramifications, tying Japan and Australia more closely together strategically as part of the US military build-up in Asia directed against China.

Prime Minister Tony Abbott told the media on Monday that the priority was getting “the best and more capable submarines at a reasonable price.” He added: “We should make decisions here based on defence requirements, not on the basis of industry policy.” Industry Minister Ian Macfarlane reinforced the message yesterday, saying that while no decision had been made, the government would prioritise “value for money.”

South Australian Premier Jay Weatherill was quick to point out that the axing of Australian built submarines would destroy thousands of jobs in his state, where the project is centred. The cost of designing and building 12 submarines is estimated to be about $A40 billion, roughly double the price of buying Japanese Soryu class vessels, or European alternatives.

Over the past month, a spate of articles in the Australian press has strongly suggested that the government and defence establishment were veering toward buying Japanese submarines. Defence Minister David Johnston, who visited Japan and inspected the Soryu submarine in June, declared it to be “extremely impressive.” It is the largest diesel powered submarine in the world, with a far longer range than its European rivals.

The Wall Street Journal reported yesterday that “several senior [Australian] defence officials said that a decision on the Japanese vessels gained momentum after Japanese Prime Minister Shinzo Abe’s July visit to Canberra, aimed at strengthening military ties amid China’s regional muscle-flexing.”

“The exact details haven’t been finalised, but it’s very close—before the end of this year. The Japanese are the strong favourites,” one defence official told the newspaper. The article indicates the close attention being paid in Washington to the decision.

The Obama administration pressed the previous Labor government to buy nuclear-powered submarines, an option that was rejected on the grounds that Australia lacked the necessary nuclear infrastructure to support the vessels.

Washington, however, has strongly backed the Australian purchase of the Soryu vessels. US Admiral Stuart Munsch, the chief US undersea naval officer in Asia, said last month such cooperation between Australia and Japan was “a national decision for them to make with each other, but we would certainly be welcoming of that partnership.”

The comments underline the geo-political calculations involved. The US has encouraged and supported the drive by Prime Minister Abe to remilitarise Japan, including his government’s contentious constitutional “reinterpretation” in July to allow for “collective self-defence.” As a result, Abe has ended restrictions on Japan forging alliances, waging war in concert with the US and also selling arms abroad.

If the $20 billion Australia-Japan submarine deal is finalised, it would turn Japan into a weapons exporter for the first time since the end of World War II and provide a boost to the Japanese armaments industry. Moreover, it would more closely integrate Japan, Australia and the US, because the submarines are expected to be equipped with American weapons systems.

More broadly, the arms deal would further consolidate Japan and Australia as the linchpins of the Obama administration’s “pivot to Asia”—an aggressive strategy aimed at undermining Chinese influence and encircling it militarily.

No one is in any doubt that the new Australian submarines would be integrated into the Pentagon’s war planning against China, including for an economic and naval blockade. The Australian Strategic Policy Institute (ASPI) released a report yesterday based on a top-level conference in April entitled “The Submarine Choice” that reviewed Australian submarine options in detail.

ASPI analyst Benjamin Scheer bluntly explained that a key consideration for Australia’s future submarine (FSM) was its potential US alliance contribution. “Any debate about the FSM and US coalition operations needs to recognise that the US military regards China’s People’s Liberation Army (PLA) as the most serious long-term strategic challenge in the Asia-Pacific region and beyond.”

Fellow analyst Mark Thomson warned in an article in July that the purchase of Japanese submarines was “laden with geopolitical consequences.” He continued: “The export of Japanese submarines to Australia would represent a much more rapid normalisation of Japan’s defence posture than anyone has anticipated so far. It would alarm China and heighten Beijing’s fears of containment by the United States and its US allies. Those are serious first-order strategic considerations not to be dismissed lightly or as somehow secondary to the reasons for acquiring submarines in the first place.”

The fact that Canberra and Tokyo, with Washington’s support, appear to be finalising a submarine deal is another sign of the escalating US-led confrontation with China. By 2020, the Pentagon plans to have 60 percent of its naval and air assets in the Asia Pacific. The undersea component will include 30 fast attack nuclear submarines, 8 ballistic missile nuclear submarines and 2 cruise missile nuclear submarines, as well as 11,000 submariners.

Scheer noted: “In contrast, the PLA Navy is still in the very early stages of operating nuclear submarines, its conventional boats are relatively easy to detect, and its antisubmarine warfare capabilities remain limited.”

Within the Australian political establishment, the opposition Labor Party and the trade unions have denounced the purchase of Japanese submarines in reactionary nationalist terms. Addressing Australian Submarine Corporation workers in South Australia yesterday, Labor leader Bill Shorten accused the government of “contracting out” national security and branded Japanese submarines as inferior “home brand” products that threaten Australia’s security and jobs.

Far from opposing Australia’s integration into US preparations for war against China, the Labor Party unequivocally supports it. The previous Labor government turned over the Australian parliament to Obama in November 2011 to formally announce his “pivot to Asia” and signed an agreement to open up Australian military bases to American forces—a process that has been expanded under the present Coalition government. As for defending jobs, the Labor Party and unions have presided over the devastation of manufacturing in Australia, including most recently the foreshadowed closure of the entire auto industry.