Fortnight of 25 March to 7 April 2024

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BCB will go on a short holiday hiatus starting 13 April and will return to its regular programming on 29 April.

More trade relationship repair

Minister for Trade and Tourism Don Farrell speaking to ABC radio on 2 April:

“I think we should be very confident that given everything that’s happened so far that we will very quickly get lobster and that remaining meat abattoirs [sic] back into China.”

Quick take:

After nearly 3.5 years of punishing duties on Australian wine, China announced their removal on 28 March. With the World Trade Organization (WTO) dispute proceedings cut short thanks to a “mutually agreed solution,” the removal of the wine duties prompted beaming positivity from Prime Minister Anthony Albanese and his government. It even elicited upbeat coverage in China’s state-controlled press about the prospects for Australian wine exporters. Doubts were, of course, raised in many quarters about the fortunes of Australian wine even after the removal of China’s duties (here, here, here, and here). But while it remains to be seen how much market share will be regained, the removal of the duties seems to at least set the stage for the end of Beijing’s remaining trade restrictions on lobster and beef in the coming months. Although the lobster industry might be crossing its fingers without holding its breath, these final trade barriers look all but certain to tumble prior to Premier Li Qiang’s expected visit to Australia later this year.

Amidst all this positivity, and in a now familiar pattern for Australia-China ties, this trade relationship repair was served up with a solid side of bilateral argy-bargy. Australia expressed in late March “serious concerns” about China’s actions in both cyberspace and the South China Sea, while Australian military platforms and parliamentarians headed to the South China Sea and Taiwan, respectively, in early April. But while none of these developments pleased Beijing (here, here, here, and here), they were equally not enough to seriously dampen the Chinese government’s overall bilateral optimism (here, here, and here).

China seems to have embraced relationship repair eyes wide open to the panoply of points of tension that will continue to needle both Canberra and Beijing. Even the infamously bombastic Global Times proffered a generally measured assessment of the limitations on bilateral relationship repair, opining on 2 April: “Although China-Australia relations may not any time soon return to the era of Paul Keating and Kevin Rudd, … the two sides have … a good chance to walk out of the cold winter and jointly step into the warm spring.” To be sure, Beijing’s apparent willingness to live with many areas of ongoing disagreement doesn’t mean that the upwards bilateral trajectory is locked in and impervious to all forms of turbulence. But if the first few months of 2024 are anything to go by, repair of the Australia-China relationship looks likely to continue apace this year despite many enduring and emerging points of tension.

Ongoing China policy caution from Australia

China’s Ministry of Foreign Affairs (MFA) Spokesperson Lin Jian speaking on 21 March about Minister of Foreign Affairs Wang Yi’s Australia visit:

“The ups and downs in this bilateral relationship over the past decade have not only left both sides with lessons to learn from, but also accumulated experience worth cherishing. The most fundamental thing is to uphold mutual respect. The most crucial thing is to stay committed to seeking common ground while shelving differences. The most important thing is to pursue mutual benefit and win-win results. The most precious thing is to remain independent.”

Quick take:

The Albanese government certainly doesn’t describe its approach to the Australia-China relationship in these terms. It has its own bilateral mantra that it repeats ad nauseum: “we will cooperate where we can, disagree where we must, and engage in the national interest.” There are obvious rhetorical and substantive differences between that and the MFA’s bilateral lessons. And yet it also seems possible that China’s enduring embrace of relationship repair is partially a result of the Chinese government judging that at least some of the Albanese government’s key China policy decisions broadly conform to Beijing’s preferred bilateral lessons. In other words, Australia in recent years has made a series of choices that China might plausibly see as examples of, among things, upholding mutual respect and shelving differences. If Beijing was looking for evidence that the Albanese government was operating, at least at times, in accordance with its preferred bilateral lessons, it might cite, among other things, Canberra’s decisions to:

• not impose sanctions on Chinese officials and entities implicated in human rights abuses;
• not impose sanctions on Chinese companies in response to their contribution to Russia’s war effort in Ukraine;
• not impose sanctions on Chinese individuals and entities in response to cyber-attacks;
• not remove Confucius Institutes from Australian universities;
• not explicitly reject Chinese or China-linked investments in critical minerals without also concurrently approving Chinese investments in other areas of the mining industry deemed less sensitive;
• not end the 99-years lease of Darwin Port to the Chinese company Landbridge Group; and
• not pursue to their conclusion WTO dispute proceedings with China over duties on barley and wine.

Other developments in recent months might have also looked to Beijing like further evidence of overlap in Australia’s and China’s approaches to bilateral ties. Despite the independence of the Australian Anti-Dumping Commission and regardless of whether the decision to discontinue duties on Chinese wind towers was actually a calculated quid pro quo to get China to remove its duties on wine, the Chinese media and government certainly linked the two cases and implied that Australia had been willing to make the necessary compromises. Beijing’s suggestion that this was a quid pro quo arrangement could be a cynical face-saving exercise. But even if that’s true, the dropping of duties on wine and wind towers less than three weeks apart probably still gave Beijing the impression that Canberra knows how to play ball by at times, to use the MFA’s parlance, seeking mutual benefit and common ground and shelving differences.

To be clear, this is neither to take a position on the wisdom or lack thereof of the Albanese government’s China policy decisions, nor to claim that the above choices are actually consistent with the Chinese government’s rubbery and imprecise bilateral lessons. And it’s certainly not to suggest that these examples of China policy caution and/or compromise are the sole or even the most saliant features of the Albanese government’s approach to Beijing. Continuity with major planks of the previous Coalition government’s China-related policies—from the acquisition of nuclear-powered submarines to stronger language on Taiwan—has also undoubtedly been a central element. Nevertheless, the Albanese government’s willingness to reach compromise solutions (e.g., the decisions on the two WTO cases) and be cautious (e.g., the lack of sanctions) would likely give China reason to believe that Australia isn’t averse to managing ties in ways that on certain issues (though, of course, not all) evince something akin to Beijing’s conception of mutual respect and benefit, common ground, and independence.

Regardless of the rights and wrongs of Canberra’s often-cautious China policies, the Albanese government seems likely to continue down this path in 2024. Not only does the still-incomplete process of bilateral stabilisation count in favour of China policy caution and a willingness at times to compromise, but Prime Minister Albanese and his Cabinet would probably be loath to do anything dramatic to upset ongoing relationship repair in the lead up to the next federal election. That’s especially likely to be the case considering that the Albanese government regularly touts bilateral stabilisation as one of its signature foreign policy achievements and explicitly links revived trade ties with core domestic political priorities like job creation and economic growth (here and here). The Albanese government is unlikely to ever endorse Beijing’s bilateral lessons of mutual respect and benefit, common ground, and independence. And yet the domestic political premium that the Albanese government has placed on relationship repair means that Canberra will likely seek to avoid regularly diverging too dramatically from the spirit of that formulation.

How tough would a future Coalition government’s China policy be?

Senator James Paterson, Shadow Minister for Home Affairs and Cyber Security, speaking to journalists on 26 March about whether Australia should sanction Chinese individuals and entities involved in cyber activities against the United Kingdom:

“As a matter of principle, I think we should do the same to support our allies [by sanctioning Chinese individuals and entities], and it’ll be up to the government to explain if it thinks the bilateral relationship is more important than defending our national security interests.”

Quick take:

With Labor’s lead in the polls narrowing, cost-of-living pressures biting, and the Albanese government’s support for Israel endangering some Labor candidates, a Coalition victory at the next federal election is starting to look more plausible. For Australians becoming accustomed to steadily stabilising trade and political ties with China, the Coalition’s rising electoral prospects might prompt the question: Will Canberra take a much tougher approach to Beijing if the Albanese government exits office after the next federal election?

There’s certainly extensive evidence suggesting that a future Coalition government would be much more forward-leaning on certain areas of China policy. Senior Coalition figures are on the record advocating for, among other things: broader market restrictions on TikTok if the Chinese company ByteDance doesn’t divest; support for Taiwan’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade pact; and sanctions against Chinese individuals and entities in response to both human rights abuses and cyberattacks. It’s admittedly unclear whether these kinds of policy positions would in fact cause China to stall or even reserve ongoing relationship repair. In addition to the many reasons that China had and still has to pursue improved ties with Australia, Beijing might also be reluctant to reverse course on relationship repair now given that it has arguably spent more than two years slowly reheating relations. But leaving aside the imponderable of what Beijing would actually do if the Coalition instituted tougher China policies, one thing is certain: Sanctions against Chinese individuals and entities and broader market restrictions on Chinese companies would be a step change from the Albanese government’s generally cautious China policies and would create more bilateral conflict (even if they didn’t cause the relationship to once again fall apart entirely).

Yet even if Labor loses the next federal election, there’s a good chance that Australia won’t pursue the tougher China policies currently advocated by the Coalition. The Coalition’s decisions when they were last in power to not join sanctions against Chinese individuals and entities, take a wait-and-see approach to Taiwan in the CPTPP, and abandon (under pressure from Beijing) plans for a bilateral free trade agreement with Taipei suggest that they might be more cautious in office than in opposition. Meanwhile, assuming the United States forces ByteDance to divest from TikTok, the Coalition might not have much reason for restricting market access in Australia. Recent generally positive comments about bilateral ties from opposition leader Peter Dutton, the Coalition’s apparent keenness to engage with senior Chinese officials, and their associated appetite for improved relations with Beijing (here, here, and here) also give the impression that a future conservative government might be more cautious on China policy than the Morrison government. So, it seems that there’s a chance Canberra will stick to broadly cautious China policies regardless of whether the next federal election leads to a change of government.

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