Ferry-building firm unwitting pawn in China?s military game

It looked like a textbook win-win deal when Australian high-speed ferry designer AMD Marine Consulting formed a joint venture in 1993 with the engineering arm of a state-owned Chinese shipbuilder.

The joint venture partner, Guangzhou Marine Engineering Corp, a subsidiary of the giant China State Shipbuilding Corp, gained access to state-of-the-art technology in wave-piercing, aluminum-hull designs.

For AMD, a private Sydney-based company, the payoff was a foothold in China?s maritime market during a period of rapid growth.

The joint venture, Seabus International Co, began designing high-speed aluminum catamaran ferries and sea rescue vessels for China?s inland and coastal waters, according to the company?s Web site.

That was when a third winner emerged.

Attracted to the performance of these fast, stable and relatively cheap vessels, the Chinese military adopted the technology as it began replacing its aging missile boats that had been derived from an obsolete Soviet design.

The new fleet of missile boats are part of a naval buildup that backs up China?s claims to islets and reefs in the South China Sea, waters rich in oil and gas and which half the world?s ship tonnage passes through each year.

This growing military muscle has prompted the US to make a strategic shift toward Asia.

US Secretary of Defense Leon Panetta, on his first visit to the region since announcing that shift in January, was scheduled to brief allies about it over the weekend, beginning with ?The Shangri-La Dialogue.? The event brings together senior civilian and military chiefs from nearly 30 Asia-Pacific states to foster security cooperation and takes its name from the host Singapore hotel.

Since 2004, the People?s Liberation Army Navy (PLAN) has deployed a rapidly expanding fleet of heavily armed, Houbei class fast-attack missile boats based on AMD?s advanced catamaran hull.

In a clear demonstration of the value of foreign dual-use technology in China?s rapid military buildup, the Houbei class or Type-022 as it is also known, appears to be adapted from the AMD 350 patrol boat design, Chinese and Western analysts say.

However, AMD?s technical director, Allan Soars, said the Australian company was not involved in the design of the missile craft.

He said after the joint venture company Seabus International had designed some fast ferries it appeared the PLAN had decided the company?s wave piercing technology would make a good platform for a military vessel.

?I have no knowledge of the mechanisms at play, but it would appear that Seabus International was co-opted by the PLAN to design the vessel platform,? Soars said. This was not done at the Seabus International offices, but at a military establishment.

?The whole process was carried out in secrecy and under strict confidentiality agreements directly with the Seabus International staff who are all Chinese nationals,? he added.

In its annual report on the Chinese military, the Pentagon said last month the Chinese navy had deployed about 60 of the Houbei class patrol craft.

?These boats have increased the PLA Navy?s littoral warfare capabilities,? the Pentagon said.

The US is also beefing up its littoral warfare capabilities in the region. The USS Freedom, the first in a new class of combat ships, will be sent to Singapore next year.

The smaller, shallow-draft ships are intended for operations close to shore and capable of deploying quickly in a crisis. Singapore has discussed hosting up to four such US ?Littoral Combat Ships? on a rotational basis at its naval facilities.

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