China has only one threat: the US presence in the western Pacific. Every problem it has stems solely from that.
To put this as kindly as I can, I strongly urge you to broaden your horizons when considering the kind of power projection China requires to win a Pacific war. If China is fighting in the Taiwan Strait and the Yellow Sea, something has gone terribly wrong. It should be fighting at a sustained high intensity near Guam and regularly punching Hawaii. If your ceiling is so low that you think China's concern should be the Strait and Yellow Sea, it's no wonder you don't see the urgency in having a vast and capable nuclear submarine force. Even a pissant like Australia sees the utility of having an SSN force (and is delusional enough to think it can get one) and you think the Strait and Yellow Sea is China's limit. We aren't in 2003.
Don't wait for the problem to come to your doorstop, go deal with the problem in its own home.
Chinese SSNs are going to be crucial in locking down the Second Island Chain the way the First is locked down. SSKs simply do not and will never have the speed, range, and endurance to conduct operations that far from home ports. Without a large fleet of first-rate SSNs, China won't be able to sail its navy beyond the cover of its ASW umbrella in the FIC because US subs will always be able to pick off PLAN surface ships. It would be like walking through a minefield. Conversely, the USN would be able to sail throughout the SIC without a care if PLAN SSNs are a non-factor as they are today. Capable SSNs would allow China to 1) Clear out the minefield the US put in the SIC in the form of its SSNs, and 2) Set up a minefield of its own.
So important is the Type 09-V strategically that I would place it above the H-20 in importance and priority, second only to China's strategic nuclear arsenal.
Yeah, this is, like, the opposite of reality. Did you not notice that China just built the largest nuclear submarine yard on the face of the Earth? Do you think it did it to look at it? To think China didn't build a lot of world-class SSNs because it doesn't need them is a silly cope. It didn't build them (and still doesn't) because it couldn't.
Australia is corrupt and dumb af, their procurement is driven by interests groups and needs to send kickbacks to USA. Why tf would China take a single inspiration from their procurement priorities? It'd be like USA looking at Belarus for an example of what to procure, because thats pretty much what Australia is, an American Belarus.
Youre the delusional one if you think China has no need to operate in the straits around Taiwan island and the yellow sea. SSKs completely dominate in that environment, so up until now they have been the priority.
If US invades, yes China will probe into Guam and towards the Phillipines, but likewise USA will probe into east Taiwan waters and the SCS. And if SK attacks NK, you bet SK will mobilize subs into the yellow sea. China is not the only one capable of attacking. When US SSNs are forced to go close into the first island chain, they face more stealthy SSKs that are already waiting for them, along with air and drone ASW cover, thus annulling American ability to attack key Chinese shipping. And US does need to attack fast, because speed is key in a Taiwan/SCS invasion scenario. Allowing China to keep bombing limited US Asia basing as well as wiping out the ROC rebels and then consolidating the island means failure for Washington.
Therefore the most important priority of the PLA is to gain first the ability to project watertight defense over Chinese territory and waters (all that encompasses the first island chain), which is more boosted by VLO platforms, newer missiles etc.
As for the last part, apparently you didn't read what I wrote:
"The new facilities is a step towards changing that, but the actual contract for the subs don't come until later compared with the yard construction"
Because China has secured relative safety at home territories, I predict that we will see a major SSN investment starting with this new boat on the new facilities. And because China kept its tech alive by making incremental SSN designs, we will most likely have a very good payoff once mass production starts.