The first four decades of diplomatic relations between Australia and the People’s Republic of China (PRC) proceeded largely along an upward trajectory. Increasing institutional, economic, cultural and other links drew the two countries and peoples closer together. There have been times of friction, including a period of several years following the killing of pro-democracy protesters on the streets of Beijing in 1989. But these have generally been followed by periods of rebuilding: Deng Xiaoping’s reaffirmation of the economic reforms in 1992 led to an economic resurgence that saw Australian exports of iron ore to China boom, and with them, Australian goodwill towards the PRC. The thrust of the most recent decade, however, has been downwards.
Decade of Deterioration
Marking the fortieth anniversary of diplomatic relations in 2012, the Australian Embassy in Beijing declared the relationship with China to be one of its most important. According to the official statement by the Australian government, the bilateral relationship was ‘based on shared interests and mutual respect, an approach which offers the best prospects to maximise shared economic interests, advance Australia’s political and strategic interests, and manage differences in a sensible and practical way.’ Two years later, in 2014, the relationship was looking stronger than ever. Then-prime minister Tony Abbott even invited China’s new leader Xi Jinping to address the Australian parliament. Together, they witnessed the signing of a declaration of intent for a Free Trade Agreement between the two countries; other bilateral agreements signed at the same time enhanced Australian-Chinese cooperation in Antarctica, agreed to establish a renminbi clearing bank in Sydney and boosted cooperation in investment and education. The leaders upgraded the relationship to a ‘comprehensive strategic partnership’.
Within four years, the bilateral relationship had turned tense. Canberra, still under Coalition government, had come to perceive China’s rise as a threat. Acting on ASIO advice, in 2018, it passed nine laws intended to prevent of foreign interference; though China was not explicitly named, it was no secret that concerns about the PRC prompted the bills’ hurried drafting. That same year, Canberra banned Huawei from Australia’s 5G networks.
Beijing was openly displeased, and relations grew sour. After the Morrison government made its unilateral demand for an independent investigation of COVID-19’s origins in early 2020, which Beijing characterised as Australia playing ‘political games’, the relationship began a rapid downward slide. Beijing applied de facto trade sanctions against selected Australian exports. It also suspended high-level official contacts. Towards the end of the year, Beijing presented a list of fourteen ‘grievances’ it had with Australia to a journalist from Channel 9. Predictably, these included unhappiness with the Huawei ban, the call for an inquiry into COVID-19’s origins, the foreign interference laws, limits on foreign investment and Canberra’s criticism of human rights abuses in Xinjiang. The list also cited ‘unfriendly or antagonistic’ media reports about China that it claimed were poisoning relations.
Its own officials, meanwhile, threw fuel on the fire by responding to the official inquiry into possible Australian war crimes in Afghanistan by tweeting out a mocked-up picture of an Australian soldier slitting the throat of an Afghan child. Attitudes towards the PRC hardened among politicians and the public at large. The following year, Canberra signed up to the AUKUS security pact with the US and UK.
The AUKUS pact, under which the Australian navy will acquire nuclear submarines, went far beyond the ANZUS treaty of 1951. That had served as a general assurance against the possibility of a militaristically resurgent Japan as well as any Communist threat from the North. The AUKUS pact was created specifically (if never explicitly) against the perceived threat from a rising and assertive China. In joining AUKUS, Australia not only compromised its long-held stance against nuclear proliferation, but also tied itself more firmly to the US war chariot. By integrating Australian troops with British and US forces to ‘move beyond interoperability to interchangeability’, the arrangement potentially subjects Australian forces, the navy at least, to the command of US-led military operations in the future.
What’s more, by ditching its original deal with France to build conventional submarines in favour of nuclear ones, Canberra not only incurred French fury, but provoked anxieties amongst regional neighbours, including its closest partner New Zealand, which pursues a nuclear-free policy. The lengths Canberra has gone to secure the AUKUS pact point to Canberra’s assessment of the threat posed to Australian national security by China’s growing power.
Antecedents and Precedents
Laws and regulations to prevent foreign influence have plenty of historical precedents on both sides. These include Australia’s Immigration Restriction Act of 1901 — the “White Australia Policy”. Imperial China also imposed closed-door and self-seclusion policies including ones aimed at shutting ports 海禁 or closing passes in the Great Wall 闭关自守to ward off ‘barbarian’ infiltration.
Both Australia and the PRC had previously suspended bilateral political contacts. Canberra cancelled official exchanges in response to the June 4th crackdown of 1989 and Beijing called off high-level visits to protest what it regarded as ‘unfriendly acts’ by the Howard administration in 1996 — including increasingly close alignment with the US, which it suspected of wanting to ‘contain’ China’s rise.[1] Howard’s assurances towards the end of 1996 that Australia’s China policy had not changed as a result of the alliance defused those tensions, and soon the rhetoric cooled down. Beijing again suspended high-level visits over irritation with various actions of the Rudd government. Yet towards the end of 2009, then vice-premier Li Keqiang 李克强 visited Australia and the two sides signed a joint statement affirming their desire for an increasingly comprehensive and cooperative relationship based on mutual benefit and respect. Those mutual benefits were obvious. Two years earlier, 2007, China had become Australia’s single largest trading partner (relegating Japan to third place).
Beijing’s trade punishments of 2020 were the first major sanctions since 1971, when the PRC suspended wheat imports from Australia to register its displeasure with the McMahon government’s refusal to normalise relations.
Ingrained in History
Fear of their surroundings was a central part of the experience of European settlers of Australia in the 18th century. This was true for the alien land they found themselves in, with its unfamiliar flora and fauna, harsh environment, and the First Nations people whose languages, laws and customs they didn’t understand (or respect).
It was also true of the broader region. The 19th century Gold Rush saw the China-born population of Australia swell to over 38,000 by 1861, or 3.3 percent of the total population, sparking fears of being overrun by ‘Mongol hordes’. Yet it was not an uninflected story, with such figures as the Guangzhou-born tea trader Quong Tart becoming a leading businessman and society figure in Sydney in the late 19th century.
Australia stationed a trade commissioner in China from 1921 to 1922, and in 1934, Deputy Prime Minister JG Latham led a trade mission there. Two years earlier, Chinese residents of Australia founded a lecture series named for the Australian China correspondent George E. Morrison that aimed to further cultural understanding of China in Australia (a series, based in the Australian National University, is still going ninety years later).
Australia first came into focus for especially southern Chinese of the late Qing dynasty as ‘New Gold Mountain’ 新金山 (San Francisco being ‘Old Gold Mountain’ 旧金山). Despite the racist exclusionary laws of the 20th century, Melbourne hosted a Chinese Consul-General in 1909, and in 1930, China’s soon-to-be president Lin Sen 林森, visited Australia.
In 1941, Australia appointed its first official envoy to the Nationalist government in its wartime capital of Chongqing, three years after the Japanese invaded China. The Department of External Affairs argued that establishing a legation ‘at a most unfavourable time and when few reciprocal material benefits can result, will probably create a profound impression on Chinese minds, and have incalculable consequences in our future relations.’ Frederic Eggleston, the first envoy, maintained that China ‘held the key’ to peace in the Pacific.[2]
The Communist victory in the Cold War changed everything. The historical fear of the ‘Yellow Peril’ that had inspired the White Australia Policy evolved into terror of the ‘Red Menace’ of Communism. Australian soldiers followed the Americans into the Korean War. Canberra maintained formal relations with the Nationalists, who had relocated the Republic of China to Taiwan after 1949.
Then, while still in opposition, Gough Whitlam led a delegation to China, where he met with Mao; in 1972, as Prime Minister, normalised relations with the PRC.
During the first two decades following normalisation of diplomatic relations, and especially following Deng Xiaoping’s determination to modernise, reform and open China’s doors to the world, business, academic and cultural communities of both nations responded with enthusiasm to the opportunities for exchange and engagement, including in the economic sphere. Trade and investment grew. Deng Xiaoping’s reform and open-door policies gave some in Australia and elsewhere in the West (misplaced) hope that the CPC was also heading down the path to liberal democracy. The violent crushing of the pro-democracy protests of 1989 dashed this hope.
Several years later, after Deng made it clear that China would not reverse the course of reforms and expanded the role of the market within it, China’s economy boomed. Its need for massive amounts of iron ore gave the Australian economy a huge boost as well.
The old anxieties never entirely went away. When asked in 2015 by Angela Merkel to sum up Australia-China relations, then prime minister Tony Abbott famously responded: ‘fear and greed’. Yet there was still great cooperation and perceived opportunity on both sides: in 2016, Australia became a founding member of China’s Asian Infrastructure Investment Bank, though the US and Japan declined to join.
Soon, fear would trump greed. By the middle of the 2010s, it was more than clear that China’s economic take-off would not be accompanied by political liberalisation. Unease grew with Beijing’s increasing assertiveness in the region, including the Pacific, which Australia had grown used to thinking of, paternalistically, as its ‘backyard’ and natural sphere of influence. The unease was fed too by the rapid modernisation and empowerment of the People’s Liberation Army, and the fact that Australia’s economic health had grown increasingly dependent on trade and investment with China.
Recent Baggage
Not long after Donald Trump was elected US President in 2016, Washington launched a virtual trade war with China. As Prime Minister of Australia, Malcolm Turnbull banned Huawei and introduced the foreign interference laws. After Beijing once more suspended high-level contacts with Canberra in protest, Turnbull tried to mend fences without much success. His successor Scott Morrison, who took office in 2018, had several opportunities to restore direct dialogue with Beijing. He met with Premier Li Keqiang in Singapore during the ASEAN summit in November 2018 and again in Bangkok on the sidelines of the East Asia Summit in November 2019. He also met with Vice-President Wang Qishan in Jakarta at President Joko Widodo’s inauguration in October 2019. But the distrust between the two sides was so deep that no progress was made. Former Penny Wong staffer Allan Behm wrote in No Enemies, No Friends that Australia’s leaders had long been given to so much ‘hysteria and hyperventilation’ that they’d ‘squandered our diplomatic capital’ — and not just with China, but the region more generally.
After the outbreak of the Covid pandemic, the bilateral relationship worsened when Beijing took offence at Canberra’s call for an international inquiry into the origins of the pandemic and imposed its de-facto trade sanctions. Canberra hardened its stance and the AUKUS pact was born.
Present reality: glimmer of hope?
In January 2022, a new Chinese ambassador, Xiao Qian 肖千, arrived in Canberra and made clear that Beijing was ready to ‘actively develop friendship and cooperation with Australia’ and ‘willing to work with Australia to meet each other halfway.’ Morrison refused Xiao’s offer of a meeting — a stance supported by then Opposition leader Anthony Albanese.
With a federal election looming, the Coalition government stressed the issue of national security, including the threat posed by China. Defence Minister Peter Dutton fronted the press a week before the election in May 2022 to make an issue of a sighting of PLA Navy vessel Haiwangxing 250 nautical miles off the coast of Western Australia.
By the time the prime ministerial baton was passed to Anthony Albanese in May 2022, Australia’s political relationship with the PRC had reached its lowest point in fifty years of diplomatic relations. Premier Li Keqiang sent Albanese a congratulatory message along with a wish for ‘sound and steady’ relations with Australia. The Albanese government, with Penny Wong as Foreign Minister, had a similar goal of stabilising relations. It set a different tone in its rhetoric towards China: firm on principle but minus the aggressive edge.
At the same time, Albanese insisted there would be no reset of relations without Beijing ending its trade punishments. Before long, significant meetings were taking place. In June, Australian Defence Minister Richard Marles met with his Chinese counterpart Wei Fenghe at the Shangrila Dialogue in Singapore. In July, Foreign Minister Penny Wong met her counterpart Wang Yi 王毅 at the G20 Foreign Ministers’ Meeting in Bali. Penny Wong described the meeting as ‘an important first step’.
In August, Ambassador Xiao Qian addressed the National Press Club in Canberra, calling for a reset in the relationship based on a return to mutually beneficial economic relations and less argument over values — or as Katharine Murphy summed it up in the Guardian: ‘more trade and less trash talk’. He warned Australia not to pick sides between the US and the PRC, and to stay out of the Taiwan issue.
In November, Xi Jinping met Anthony Albanese met on the sidelines of the G20 summit in Bali, the first such high-level meeting in six years. No great announcements followed, but that wasn’t the point. Albanese himself said: ‘There are many steps yet to take. We will co-operate where we can, disagree where we must, and engage in our national interest.’ As Laura Tingle wrote in the Australian Financial Review, ‘the most important thing to be said about the meeting was that it took place at all’.
In December, Penny Wong travelled to Beijing for the 50th anniversary of relations, where she and her counterpart Wang Yi met for 90 minutes and agreed to reopen structured, regular dialogue on issues ranging from trade to consular affairs, climate change, defence and regional affairs, and maintain ‘high-level engagement’. Wong remarked: ‘the ice thaws, but slowly’.
While politicians took first steps, business made strides. In September, Australia’s mining giant Rio Tinto and China’s largest steel-maker Baowu 宝武 Steel announced a A$2 billion joint venture to develop the Western Range iron ore project in the Pilbara region of Western Australia. With Rio owning 54 percent and Baowu 46 percent, the joint venture would begin construction in 2023 and produce around 275 million tonnes of iron ore over thirteen years, generating 1,600 jobs in Australia. Once both governments approved, the project would cement long-term cooperation in this key sector.
From the time of the imposition of the trade punishments in 2020, Australian businesses worked hard to diversity their customer base to reduce dependency on the Chinese market. Chinese enterprises similarly strove to reduce their own dependency on Australian goods and inputs and increase their bargaining power regarding key commodities. Two months before its joint venture with Rio Tinto was announced, Baowu had joined with other major Chinese steel producers, including Ansteel, Minmetals and Shougang, to form the China Mineral Resources Group 中国矿产资源集团. Headquartered in the Xiong’an New Area 雄安新区 about 100 kms southwest of Beijing, this supersized new entity, with 20 billion yuan in registered capital, is being closely watched by Australian mining companies, which regard it as an attempt to centralise China’s iron ore purchasing. The impact of this will soon be apparent.
Looking Ahead
At the time of writing, diplomats of both countries are working towards the resumption of regular high-level dialogue between Canberra and Beijing and stabilised relations. How future relations pan out will depend on several key factors.
One is the international environment, and in particular Sino-American relations. Australia’s historical alliance with the US, plus the Quad and the AUKUS pact, will continue to complicate Canberra’s interactions with Beijing. A recent case in point was the fallout from US Congresswoman Nancy Pelosi’s visit to Taiwan in August. When Beijing responded angrily to Pelosi’s visit by conducting military exercises around Taiwan, Australian Foreign Minister Penny Wong criticised Beijing’s response as ‘disproportionate and destabilising’. Not surprisingly, such criticism received a strong rebuttal from the Chinese side, which warned that such ‘unfair judgement’ risked causing new trouble for the bilateral relationship. As with the Morrison government’s call for an international inquiry into the origins of Covid-19, Beijing viewed Wong’s criticism as part of an orchestrated Western campaign to contain China. In the absence of a fundamental shift of US policy towards China, Australia-China relations is unlikely to recover the warmth with which they began fifty years ago.
A more independent foreign policy, one that didn’t involve automatically following the US into each of its quarrels, including with China, but rather arose out of an assessment of Australia’s own interests, would afford Australian leaders more freedom to manoeuvre between Washington and Beijing. In fact, from Bob Hawke to John Howard, a succession of Australian prime ministers have been able to play a useful mediatory role between the two great powers.
A second factor involves public perception. Chinese officials like Foreign Ministry spokesman Zhao Lijian and media including the Global Times, have not done Beijing many favours with the ‘wolf warrior’ rhetoric of recent years, including comparing Australia to ‘gum stuck on China’s shoes’ and a ‘paper kitten’ (vs the US as ‘paper tiger’). Beijing’s imprisonment of the Australians Yang Hengjun and Cheng Lei on vague and disputed charges, the threats towards and expulsion of Australian and other journalists, widely reported human rights abuses in Xinjiang and elsewhere, and incidents such as the one in June in which a Chinese military aircraft directly endangered an Australian maritime patrol plane by suddenly cutting across its path and releasing metal chaff into the Australian plane’s engines, have further influenced public opinion against the PRC.
Lowy Institute polling in 2022 revealed that only 12 percent of those surveyed said they trusted China ‘somewhat’ or a great deal, a forty-point decrease since 2018. The same surveys, interestingly, revealed that a decreasing percentage of Australians aged eighteen to forty-four believe Australia should support the US in a conflict between the US and China, and an increasing percentage of that same cohort believed Australia should remain neutral.
There has been argument among China watchers about the extent to which the language used by media, particularly translations of Chinese official statements, has affected Australian attitudes towards China. The list of fourteen grievances presented in 2020, for example, was typically characterised by the media as fourteen ‘demands’. Media reports also typically used the word ‘demands’ in translating the four ‘points for consideration’, or ‘suggestions’ 四点建议 of Chinese Foreign Minister Wang Yi to Penny Wong in July 2022.[3] Another, widely discussed example related to Xiao Qian’s address to the National Press Club. Some observers, including former ambassador and China scholar Stephen Fitzgerald, criticised reporters for focusing not on what Fitzgerald characterised as ‘a friendly, conciliatory and constructive’ speech, but on the ambassador’s answers to journalists’ questions on Taiwan: Xiao had said that the Chinese would need to ‘educate’ the Taiwanese once the island was reunified with the mainland. Others argued that those answers were the most newsworthy aspect of the otherwise platitudinous speech.
The Way Ahead: Back to Basics
Some thirty-six universities across China have Australian Studies Centres. By contrast only twenty-odd tertiary institutions in Australia offer Chinese studies of one kind or another, and this number includes universities where the only courses on China or the Chinese language are taught by Confucius Institutes (organs of Chinese ‘soft power’, answerable to the Chinese government).[4] In 2019, then Opposition frontbencher Chris Bowen claimed that there are only around 130 people in Australia of non-Chinese background who spoke Mandarin well enough to do business in China. The ABC fact-checked his claim and concluded that it was a reasonable guess. The point is that whatever the exact number, there is a very small pool of non-Chinese Australians who can read, write and speak Mandarin proficiently. In China, hundreds of millions of people study English, and it’s estimated that at least ten million are conversant in it. If knowledge is power, there is here a power imbalance. Unlike those that arise out of geopolitical or economic circumstances, however, it should not be that hard for Australia to remedy. Cultivating greater China expertise in Australia isn’t a magic pill that will solve the substantial and ongoing issues in the relationship. But it can help in the search for solutions.
[1] See Yi Wang, ‘Australia-China Relations: The Larrikin and the Rising Giant’, in Europa Publications ed., The Far East and Australasia 2022, London: Routledge, 2021.
[2] William Sima, China & ANU: Diplomats, Adventurers, Scholars, Australian Centre on China in the World, Canberra: Australian National University Press, 2015, p. 32.
[3] The 4 points: ‘First, stick to regarding China as a partner rather than a rival. Second, stick to the way we get along with each other, which features seeking common ground while reserving differences. Third, stick to not targeting any third party or being controlled by any third party. Fourth, stick to building positive and pragmatic social foundations and public support.’ For a detailed analysis of Australian media distortion of Wang’s four points, see Wanning Sun, ‘Misconstruing China’s ‘demands’, Australian media beat the drums of war’, Crikey, 13 July 2022, online at: https://www.crikey.com.au/2022/07/13/australian-media-china-demands/.
[4] See ‘Australian Studies Centres in China’, Australian Embassy, China, online at https://china.embassy.gov.au/bjng/studycenter.html and ‘Chinese Studies in Australia’, Chinese Studies Association of Australia, online at https://www.csaa.org.au/chinese-studies-in-australia/
