Australia said on Wednesday (April 26) that it would start domestic manufacture of guided missiles by 2025. This is two years sooner than expected. Australia’s announcement is part of a shake-up of its defense arrangements to focus on long-range strike capabilities.

The Labor government on Monday said that it was accepting the recommendations of a defence review. It said that China had launched largest military buildup of any country since the end of Second World War without transparency. The power competition that this might start has a “potential for conflict” in the Indo-Pacific region.

The guided weapons were to be manufactured 2027 onwards but the time frame has been advanced by two years. Australia has now allocated A$ 2.5 billion to the project, according to Defence Minister Richard Marles.

That represents a more than doubling in funding, which is being diverted from cancelled defence projects.

“That does radically shift the timeframe forward in terms of a manufacturing capability,” Marles said in a television interview with Nine on Wednesday.

A further A$1.6 billion will be spent on buying long‑range strike systems from overseas within two years, he said.

The government was already in talks with missile manufacturers Raytheon and Lockheed about establishing production in Australia, Marles added.

Discussions were also being held with Kongsberg, the Norwegian manufacturer of the naval strike missile Australia had already agreed to purchase, he said.

Australia is part of Quad grouping with India, Japan and the US. Though the informal group does not have a military element, it is widely perceived to be a US-led effort to contain rapidly increasing Chinese influence partcularly in the Indo-Pacific region.

Australia is traditionally viewed geographically away from major geopolitical hotspots but in recent times China has been boosting ties with Pacific island nations, thought to be Australia’s backyard. Chinese military ships have also seen making forays into waters near Australian nautical zones.