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  Australia will spend up to $368billion eight nuclear-powered submarines
  and purchasing more from the United States - prompting China to
  issue a chilling warning. 
  
  Prime Minister Anthony Albanese announced the massive spending alongside US President Joe Biden and UK Prime Minister
  Rishi Sunak in San Diego on Tuesday.
  
  It marks the biggest defence investment in Australian history
  with the annual cost amounting to 0.15 per cent of GDP until the mid-2050s.
  
  
  Canberra will acquire three US Virginia-class nuclear submarines - built by weapons manufacturer General
  Dynamics - from the United States from approximately 2033, with an option to buy two more.
  
  
  Afterwards, a new SSN-AUKUS-class hybrid vessel arrives in Australian waters about a decade later, constructed as part of the trilateral alliance with the
  UK and US. 
  
  The SSN-AUKUS will be similar to the existing US Virginia-class submarine given it
  will have an American nuclear reactor.
  
  It will be built in the UK by BAE Systems. 
  
  Australian submariners are already training in nuclear submarine technology in the US, Mr
  Albanese revealed. 
  
  Meanwhile, a new submarine base to house the nuclear-powered-AUKUS fleet will be created along the east coast with Port Kembla,
  in NSW, tipped as the new location.
  
  Chinese president Xi Jinping warned the country would strengthen its
  military in response to the AUKUS plan. 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  Prime Minister Anthony Albanese announced the massive budget as he
  unveiled the AUKUS plan alongside US President Joe Biden and UK Prime Minister Rishi Sunak in San Diego
  on Tuesday
  
  
  
  
  
  
  
  Australia will command a fleet of eight nuclear-powered submarines within the next three decades
  under a fast-tracked plan to deter Chinese aggression in the Indo-Pacific
  
  
  He addressed the National People's Congress on Monday saying the military would be bolstered to create a 'great wall of steel'.
  
  
  
  Xi labelled security the 'bedrock of development' and accused Western powers of 'national humiliation'.
  
  
  'We must fully promote the modernisation of national defence and the armed forces, and build the people's armed forces
  into a great wall of steel that effectively safeguards national sovereignty, security
  and development interests,' he said.
  
  Australia is a major exporter to China of steel and other commodities. 
  
  Mr Albanese said the AUKUS deal strengthens the military relationship with the US and UK.
  
  
  'A friendship built on our shared values, our commitment to democracy and our common vision for a peaceful and a prosperous
  future,' he said.
  
  'This is only the first time in 65 years and only the second time in history that
  the United States has shared its nuclear propulsion technology.
  
  
  
  And we thank you for it.
  
  'This is a genuine trilateral undertaking. All three nations stand ready to
  contribute and all three nations stand ready to benefit.' 
  
  The cost to taxpayers for the nuclear-powered submarines will come in at an eye-watering cost of
  $268-$368billion over the next three decades plus any blowout in costs which are a
  common risk in such projects.
  
  
  
  
  
  
  Mr Albanese stood alongside Mr Biden and Mr Sunak at the US
  naval base in San Diego on Tuesday
  
  
  The spending will take $9 billion from the budget's bottom line across the next four years and
  $50-58 billion over the next decade, at a time when the Reserve Bank is desperately trying
  to curb inflation triggered by public and private sector spending.
  
  
  The annual cost will then be around 0.15 per cent of GDP until the mid-2050s,
  but there are warnings about the exact number
  due to the unpredictability of inflation in three decades'
  time.