In a development that could strain already tense diplomatic ties, a new report reveals that tugboats ordered for the Royal Australian Navy (RAN) were secretly constructed at a Chinese shipyard. The revelation, first reported by ABC News, raises fresh concerns over national security, transparency, and Australia’s growing entanglement with the Chinese industrial base—despite its increasing reliance on the United States for military security.
The tugboats, part of a $28 million contract awarded by the Australian Defense Department to the Dutch firm Damen Shipyards, were intended to bolster harbor operations for the Royal Australian Navy. However, according to certification documents reviewed by ABC, the first of the three vessels was completed in December 2024 at Damen’s Changde shipyard in China’s Hunan province and quietly delivered to Australia in early 2025.
This seemingly routine procurement has now turned into a political storm.
Tugboats may not be front-line combat vessels, but their role in naval logistics is vital. They provide critical support for maneuvering large vessels like aircraft carriers, destroyers, and supply ships in constrained harbor environments. These compact but powerful boats can also tow barges, oil platforms, and other non-self-propelled assets, ensuring operational continuity in ports.
While not armed, tugboats have strategic importance—especially in wartime or crisis scenarios, where port efficiency and reliability can make the difference between mission success and failure.
That’s what makes the origin of these vessels particularly troubling for some defense analysts and lawmakers.
Damen had indicated that its construction process would lean on both local and overseas supply chains. But the Australian Defense Department was reportedly not made aware—or was not transparent with the public—about the fact that the core of the shipbuilding effort would take place in China. Damen’s Changde facility, considered one of the most advanced shipyards in the region, completed the first tugboat discreetly.
While Damen claims it informed the Department about the international nature of the supply chain, critics argue that omitting China from the conversation is a glaring oversight—or an intentional act of obfuscation.
Australia’s Defense Department, responding to the backlash, attempted to draw a line between the boats and the military. “These are not Royal Australian Navy vessels,” a spokesperson said, emphasizing that the boats would be operated by a civilian contractor. However, the same spokesperson admitted that the military reserves the right to use them in emergency scenarios—potentially placing Chinese-built vessels at the heart of critical naval operations.
This response has done little to contain the fallout.
The Opposition was quick to react. Andrew Hastie, Shadow Defense Minister, called the revelations disturbing and demanded accountability from Defense Minister Richard Marles. “Did Australia’s Defence Minister give the green light for two Royal Australian Navy vessels to be built in a Chinese shipyard or was he not across his brief?” Hastie asked.
The issue isn’t just about optics. It’s about the coherence of defense policy. The Australian government—Labor and Coalition alike—has for years painted China as its foremost strategic threat. In that context, contracting critical support vessels to be built in China, even indirectly, seems at best contradictory and at worst dangerously negligent.
The timing couldn’t be more politically sensitive. Australia is headed for federal elections in May 2025, and China is a dominant theme in national security discourse. Both major parties have taken a hard line on Beijing, pledging to reclaim control of the Darwin Port from Chinese operators and strengthen maritime deterrence capabilities.
Now, they must explain how Chinese-made tugboats slipped through their net.
To understand how this happened, one must confront an uncomfortable truth: the world depends on Chinese shipyards. The scale and efficiency of China’s shipbuilding industry are unmatched.
The China State Shipbuilding Corporation (CSSC), a state-owned behemoth, now leads the global industry. In less than two decades, it transformed from a regional player into the largest shipbuilder in the world. It produces everything from cargo ships and tankers to advanced naval destroyers and aircraft carriers.
According to a leaked U.S. Naval Intelligence presentation, a single Chinese shipyard has more output capacity than the entire American shipbuilding sector. The commercial arm of China’s shipbuilding industry also directly subsidizes military construction—blurring the lines between civil and defense sectors.
The United States itself is caught in the web. A 2023 report to Congress revealed that several tankers and cargo ships used by the U.S. Department of Defense were Chinese-built. The global shipping industry simply cannot function without Chinese yards—and Australia is no exception.
Yet for a country that is increasingly wary of Chinese intentions in the Pacific, the implications are particularly stark.
Australia’s relationship with China has been deteriorating since 2020, when Beijing imposed trade sanctions in retaliation for Canberra’s call for an independent investigation into the origins of COVID-19. Despite a thaw in trade relations since then, geopolitical distrust has intensified.
The biggest flashpoints lie in the Indo-Pacific, where China’s military expansion is viewed by Australian strategists as the most significant long-term threat. The 2023 Australian Defense Strategic Review explicitly identified China as the top-tier security challenge due to its growing assertiveness in the South China Sea and attempts to gain footholds in the South Pacific.
One particularly alarming development occurred in 2022 when China signed a security agreement with the Solomon Islands. The pact raised the specter of a Chinese military base just 2,000 kilometers from Australia’s coastline.
More recently, in February 2025, a Chinese naval task force conducted live-fire drills near Australian and New Zealand waters without sufficient warning—a move seen by defense experts as a message of dominance.
Amid this backdrop, the revelation that China is building support vessels used by the Royal Australian Navy—even if crewed by civilians—seems almost surreal.
The Defense Department has stressed that the tugboats will not be operated by military personnel under normal circumstances. Still, the distinction between military and civilian assets can blur quickly during conflict or national emergencies.
These vessels may not carry weapons, but they dock warships, assist in fuel transfers, and enable maintenance operations—functions that directly affect military readiness. Should a conflict arise, it is plausible, if not likely, that the RAN would assume control of these tugboats.
This raises a crucial question: could hidden vulnerabilities—technological or otherwise—be embedded in these vessels? Western governments have long raised concerns about potential backdoors in Chinese-made equipment, whether in telecommunications, infrastructure, or software. Ships are no exception.
While there is no evidence to suggest these specific tugboats have been compromised, the procurement process itself has failed to assure the public that due diligence was done.
Australia has been investing heavily in its defense capabilities. The AUKUS agreement with the United States and the United Kingdom promises to equip Australia with nuclear-powered submarines. Billions are being funneled into missile systems, surveillance technologies, and shipbuilding in Adelaide and Perth.
This effort is aimed squarely at countering Chinese military influence in the region. And yet, amid all this, a critical support asset is outsourced to the very country Canberra seeks to deter.
The episode may not be a national security crisis on its own, but it is emblematic of a larger issue: strategic incoherence.
The immediate political fallout is likely to intensify as more details emerge about the procurement process. But the larger question Australia must answer is whether its defense supply chains can be secured without Chinese involvement—and if not, how to mitigate the risks.
Decoupling from China entirely is economically and logistically unrealistic in the short term. But greater transparency, stricter procurement guidelines, and diversified supply chains are essential steps.
If Australia is serious about preparing for a contested Indo-Pacific, it must ensure that every link in its defense infrastructure—from submarines to tugboats—is consistent with its strategic posture.
At the very least, citizens have a right to know when taxpayer-funded military assets are built in a country viewed as a potential adversary.
The tugboat episode may seem minor when compared to the broader geopolitical chessboard, but its implications ripple far beyond harbor operations. It exposes the contradictions at the heart of Australia’s defense planning—a nation caught between its reliance on globalized supply chains and the strategic imperative to secure itself against a rising China.
