The decision by the United States to share nuclear submarine technology with Australia, a privilege previously accorded only to the United Kingdom, is vastly significant on two counts and represents two trends that have been under way for some time. The submarine deal was a key part of Aukus, the trilateral security partnership agreement between the US, UK and Australia announced last Wednesday.

First, it is another indication of a seismic shift in the post-Cold War strategic environment driven by a more transactional America and a more aggressive China.

Second, it is another step towards a new kind of balance of power in the Indo-Pacific.

The US is no longer willing to generously bear any burden or pay any price to uphold international order. Around the world, America's international engagements are being recalibrated.

In the Middle East and eventually in Europe too, the US is generally moving from direct intervention or deployment of ground forces, to being an offshore balancer, a posture that it adopted in the Indo-Pacific after the Vietnam War, with South Korea as a partial exception that will inevitably draw down over time. Whatever the other vagaries American foreign policy has undergone, it has been remarkably consistent as an Indo-Pacific offshore balancer ever since.

US President Joe Biden uses the rhetoric of common values and contrasts "democracy" with "authoritarianism". But as France has been rudely reminded, the US does not consider all "democracies" as being of equal utility. A month ago, Nato was taken aback by America's decision to cut the Gordian Knot and abruptly disengage from a futile "war against terror" in Afghanistan to focus on more fundamental challenges.

Asean and parameters

Henceforth, the nature of US engagements will be decided on the basis of cold calculations of American national interests more narrowly defined. Allies, partners and friends will be expected to contribute more to the burdens of meeting common challenges, primarily, although not exclusively, with regard to China. Europe and the Middle East are only beginning to understand these new realities.

Mr Biden is more polite than his predecessor Donald Trump, but he is no less transactional. Mr Biden is also probably going to be more reasonable - or at least more consultative - about what he expects allies, partners and friends to do.

As the Australia nuclear submarine deal indicates, he is prepared to go further than any previous administration to provide them with the tools to meet common challenges. But this does not in any way diminish American expectations. Japan under former prime minister Abe Shinzo was the first to recognise and act on this new reality by expanding the scope of defence and security cooperation with the US.

If Asean wants to remain "central" in more than rhetoric, it has to be clear about the parameters of what it is and, equally important, is not prepared to do, with the US and its allies as well as China.

Asean plays no irreplaceable role to an offshore balancer. As an organisation of member countries, it is a convenience, not a necessity.

US engagement with Asean will increasingly be about defining parameters of cooperation. Asean members must understand they are not going to be consulted just because of good looks or natural charm.

Thailand, a formal US ally, has been bypassed twice, by Secretary of Defence Lloyd Austin and Vice-President Kamala Harris, whereas Singapore and Vietnam, neither of which is a formal US ally, were visited by both. The Philippines, another US ally, was visited by Mr Austin to seal the renewal of a status of forces agreement.

Singapore defined the parameters of its cooperation with the US by the 1990 Memorandum of Understanding (renewed in 2019) allowing US forces to use some of its facilities; and the 2005 Strategic Framework Agreement, which recognised Singapore as a major security cooperation partner of the US.

Unless Bangkok moves quickly to set new parameters for its alliance with the US, it will be bypassed again. The next Asean member to receive a high-level US visit will be Indonesia, which is still key to South-east Asia in a way Thailand is no longer key.

China's image change

It is now evident that the abandonment of former Chinese leader Deng Xiaoping's sage approach of hiding light and biding time was a strategic mistake.

Chinese President Xi Jinping has instructed Communist Party of China (CPC) officials to project an image of a "credible, lovable and respectable China" in order to "make friends, unite and win over the majority, and constantly expand the circle of friends".

This is in effect an implicit admission at the highest level that Chinese foreign policy has been a failure. No country anywhere can ever ignore China. Still, aggressive Chinese actions in the South and East China Seas, the Taiwan Strait, and the Himalayas, as well as mercantilist Chinese economic behaviour, have evoked concerns in many countries across the world, including all Group of Seven economies and in Asean.

Despite Mr Xi's instructions to make China "lovable", it will not be easy for Beijing to change its approach. The behaviour that other countries have found alarming is inherent in the nature of a Leninist state in which the CPC's interests override all other interests - economic as well as political; diplomatic as well as domestic. Such behaviour and China's territorial claims also flow from the revanchist ethno-nationalist historical narrative of "humiliation", "rejuvenation" and the realisation of the "China dream" by which the CPC legitimises its rule and which it cannot modify without looking weak to its own people.

Neither can an open international order be led by an economy in which CPC control is being more insistently and unpredictably asserted over many sectors to the chagrin of international investors.

Everyone needs China as a partner, but it is not a viable alternative to the US. On the contrary, secure and strong ties with the US are the necessary condition for maintaining a close relationship with China without surrendering autonomy.

Despite the strong initial French response to the nuclear submarine deal - understandable as it was a serious blow to the French defence industry - US-French ties will quickly recover for the simple reason that France cannot single-handedly maintain access to its Pacific territories against China's will without the US Seventh Fleet. Eventually, as China's blue water navy grows, this will be true of French territories in the Indian Ocean too.

Singapore has never been shy about describing the US as a vital and irreplaceable component of the balance of power that underlies Asia's stability and growth. The sharp contrast between the strong - almost hysterical - Indonesian and Malaysian reaction to Singapore's 1990 MOU and the lack of reaction to its 2019 renewal and the 2005 Strategic Framework Agreement, indicates that there is now greater understanding that this is a strategic reality and not just an eccentric Singaporean attitude.

Nuclear umbrella

What is less understood in Asean is that the overarching structure of this balance of power and the foundation of Asian stability enjoyed is extended US nuclear deterrence. The American nuclear umbrella was initially deployed against the former Soviet Union, but increasingly after 1964, when China first successfully tested a nuclear device, against China too. Without the US nuclear umbrella, the American alliance system will gradually loosen and may eventually drift apart. The resulting instability will affect us all, formal allies or not.

The core of stable nuclear deterrence is a credible second-strike capability; the ability to absorb a nuclear attack and still have sufficient nuclear weapons surviving to impose an unacceptable level of destruction on your adversary. Until recently, China did not have a very credible second-strike capability. But China is rapidly modernising its nuclear arsenal, in particular its submarine-launched ballistic missiles, the most difficult to detect and target of all nuclear weapon platforms.

There is nothing sinister in this effort. In fact, it would be irresponsible for a nuclear weapon state not to improve its second-strike capability. But it does pose some fundamental issues for future regional stability. It is not China's modernisation of its nuclear forces per se that arouses concerns, but aggressive Chinese behaviour in pursuit of revanchist China dreams. The ultimate restraint on these ambitions is extended American nuclear deterrence.

The credibility of the American nuclear umbrella over Japan and South Korea was already shaken by North Korea's development of nuclear weapons and ballistic missiles. But compared with China, North Korea is a relatively limited issue.

As China's second-strike capability improves, two existential questions arise. Will New York or San Francisco be sacrificed to save Tokyo or Seoul or Canberra? Can a nuclear weapon state be deterred by conventional means?

Both questions arose in Europe more than 70 years ago when the Soviet Union developed nuclear weapons. The answer to both questions in Europe was resoundingly "no". Whether it be China or North Korea, the inherent logic of the situation will not make answers to these questions in the Indo-Pacific any different. The result in Europe was the development of independent nuclear deterrents by the UK and France within the overall framework of the US alliance system. This preserved the cohesion of that system despite the deep shadow Soviet nuclear weapons cast over Europe.

Independent deterrents

As early as the 1970s, similar thoughts about independent nuclear deterrents arose in South Korea, Australia and Taiwan, only to be quickly and decisively squashed by the US.

But the changes in the overall strategic environment should not lead us to take a similar US response for granted today. In 2016, the South Korean National Assembly debated the acquisition of a domestic nuclear weapon capability. I am not aware of any negative official US response.

More tellingly, the US-Japan Nuclear Cooperation agreement that dates from the late 1960s is unique in that since its 1988 extension, it has been the only US nuclear cooperation agreement that gives automatic approval for the reprocessing of US-origin nuclear material. The same provision was retained when the agreement was renewed again in 2018.

The greatest difficulty for any country seeking nuclear weapons is the acquisition of fissionable material. Japan already has stocks of plutonium that could be used for nuclear weapons if the Japanese government so decided.

For more than 30 years, the US has thus arguably acquiesced in the possibility of a nuclear-armed Japan as a contingency to boost confidence in the US-Japan alliance against the day when China acquires a credible second-strike capability and erodes the credibility of the American nuclear umbrella. Without Japan as a firm anchor, the US alliance system in Asia is unstable.

The 2008 US civilian nuclear deal with India, concluded despite India's acquisition of nuclear weapons, and the blind eye the US has turned towards Israel's undeclared nuclear weapon capability, both of which are serious derogations of the Non-Proliferation Treaty regime, are further indications that concrete strategic calculations, not abstract pious concerns about non-proliferation, are what drive nuclear strategy for all countries.

Australia's submarine deal

This is the broader context of the US decision to share nuclear submarine technology with Australia.

Operating nuclear submarines and acquiring nuclear weapons are not the same thing. But they are certainly steps in the same direction.

It is a fact that the only six countries which now operate nuclear submarines - the US, Russia, China, the UK, France and India - are all nuclear weapon states.

Australian Prime Minister Scott Morrison has said that his country does not intend to acquire nuclear weapons. Given the serious domestic political complications of doing so, there is no reason not to believe him. Nor will it be a politically easy decision for Japan or South Korea to acquire nuclear weapons.

I do not think that any of these countries is eager to become nuclear weapon states. But changes in the strategic environment and in particular Chinese behaviour are pointing them in that direction. It is unnecessary for any of them to explicitly state that strategic calculations are always contingent on circumstances.

I cannot predict a timeframe, but unless there is a fundamental change in Chinese behaviour, the Indo-Pacific is on a trajectory that will eventually lead to an eight-way balance of mutually assured destruction between the US, China, Russia, India, North Korea, Japan, South Korea and Australia.