The United States Navy awarded the most expensive shipbuilding contract in all of American history on Monday. It agreed to pay $22.2 billion for a fleet of nine new nuclear powered Virginia class attack submarines. This historic deal was made with an eye affixed directly on America’s most potent military, diplomatic and economic rival on the world’s stage: China.

“Our submarine force is fundamental to the power and reach of our integrated naval force,” said acting Secretary of the Navy Thomas B. Modly. “Today’s announcement affirms our commitment to the future strength of our nation, undersea and around the world.”

In recent years, a broad modernization and expansion effort has shifted China’s long-troubled People’s Liberation Army into a formidable regional force with far reaching aspirations. Its rapid expansion in the Pacific, particularly throughout the heavily contested South China Sea, has placed China at odds with a number of Pacific and global powers, as its unlawful annexation of island chains threatens not only the region’s stability, but the stability of the global economic system. Nearly a third of all the world’s commerce passes through the South China Sea; and as China extends its claimed sovereignty thousands of miles from its own shores, the potential for conflict continues to grow.

China’s navy, in particular, has been the scene of some of its most rapid and lofty expansion efforts. From new destroyers said to be able to stand toe to toe with America’s Arleigh Burke class vessels, to new carriers being launched and built as we speak and broad economic programs like the Belt and Road initiative working to establish China-friendly ports all around the globe, China is rapidly moving away from being a regional power and toward true blue-water naval operations the likes of which few nations on the planet can conduct.

“The PLA-N [Chinese Navy] is getting better and larger so the U.S. Navy has to respond,” said Carl Schuster, a former director of operations at the U.S. Pacific Command’s Joint Intelligence Center. “It doesn’t make China an enemy, but China’s actions do bear watching.”

While the U.S. Navy already operates a sizeable fleet of Virginia Class attack subs, these new Block V submarines will represent a significant upgrade in systems and capabilities. The Block V subs will be quite a bit larger than their predecessors, displacing 10,200 tons as compared to 7,800 tons displaced by existing models. That increased displacement is the result of a hull that’s 83-feet longer (at a total of 460 feet) and the addition of far more firepower. Current Virginia Class attack subs carry a compliment of 12 Tomahawk cruise missile launchers: the new Block Vs will have 40.

“These next generation submarines provide our forces with a distinct national security advantage. They are an unmatched tool for deterrence,” Sen. Jack Reed, D-Rhode Island and the ranking member of the Senate Armed Services Committee, said of the contract.

Despite this landmark contract, the overall number of submarines operated by the U.S. Navy may not actually change all that much, as older Los Angeles class subs will continue to age out of service.

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