Thaw or cold war: will Labor succeed in unfreezing Australia-China relations?

After the end of a two-year diplomatic freeze between China and Australia, the new Albanese government is embarking on a grand experiment: is a different tone enough to get the relationship on a better footing?

Gone are Peter Dutton’s blunt declarations that Beijing wants to turn countries like Australia into tributary states, as is the prediction Australia would almost certainly join any US-led military action to defend Taiwan against invasion.

Anthony Albanese’s government has reverted to Australia’s long-standing bipartisan position against any unilateral changes to the status quo.

At the same time, the new Labor government has reinforced its support for the Quad and Aukus – both of which are denounced by Beijing as “anti-China” groupings – and continues to demand an end to trade sanctions against Australian export sectors, while insisting it won’t shy away from raising human rights concerns.

Richard Maude, a former senior Australian intelligence and foreign affairs official, says the “big unanswered question” is whether adopting a different tone while maintaining a broad continuity on all the policies China opposes is “going to be enough to sustain a relationship in which the high level political dialogue resumes and trade coercion ends”.

“I don’t think the government is under any illusions about how hard that might be,” Maude says.

The deep freeze

An awkward elbow bump between the new defence minister, Richard Marles, and his Chinese counterpart, Wei Fenghe, marked a significant step in the two countries’ relationship. The meeting on the sidelines of a security summit in Singapore last Sunday was the first time the Chinese and Australian defence ministers had met in person since November 2019, prior to the pandemic, when Linda Reynolds greeted Wei at a regional meeting in Thailand.

China had not allowed phone calls or meetings between Australian ministers and their direct counterparts since early 2020, when already frosty ties worsened, in part because of the Australian government’s early advocacy for an independent international investigation into the origins of Covid-19.

Beijing then introduced steep tariffs, unofficial bans and higher screening requirements on Australian exports such as barley, beef, wine and coal, leading both sides of Australian politics to denounce “economic coercion”.

There was no obvious off-ramp.

Chinese officials had repeatedly argued Canberra must take steps to foster a “better mood” as a precondition for high-level dialogue resuming. Scott Morrison’s government took that to mean unacceptable compromises on issues identified in China’s now-infamous 14-point list of grievances. But in recent months, the new Chinese ambassador to Australia, Xiao Qian, and other Chinese officials have made several overtures for dialogue and suggested the post-election period would provide “a good opportunity” to build bridges.

Albanese’s team – fending off pre-election accusations from Morrison and Dutton that Labor would “appease” China – promised to stand up for Australian interests and values in what would remain a difficult relationship, but with one specific change: not politicising issues for domestic political purposes.

It’s this approach that will now be tested. Marles visited Tokyo this week to reinforce the message that Australia would continue to expand its defence cooperation with Japan (“the very best of friends”) regardless of any rapprochement with China.

While there was a change of tone from the new Australian government, Marles told reporters, there was “absolutely no change in the substance of Australia’s national interests” – including freedom of navigation and overflight in the South and East China Seas.

Ball is in China’s court

Albanese declared this week that he wanted Beijing to remove the “trade sanctions” against Australian exporters as the next vital step towards improving the relationship.

But the trade minister, Don Farrell, could not secure a meeting with China’s commerce minister, Wang Wentao, on the sidelines of a World Trade Organization conference they were both attending in Geneva this week.

Maude, now a senior fellow at the Asia Society Policy Institute, says it “would be a mistake to look like we were in too much of a hurry” for another meeting.

He led the whole-of-government taskforce behind Australia’s 2017 foreign policy white paper, which warned of “an increasingly complex and contested Indo–Pacific”.

Maude says a change in tone by the Australian government could be helpful, but there remain “many challenges”.

“After Donald Trump left, there was really nobody left in the world who talked about China in quite the way Australia did, so a shift in tone would not at all put us out of step with our close partners,” he says.

But he wonders how far that change of tone might get Australia, given that China had “dug itself in very firmly” into its position and he doesn’t believe Australia should concede anything substantial on the key points of disagreement.

When asked whether there is a small gesture that Australia could offer China in the weeks or months ahead, other than adopting a different tone, Maude pauses for some time. “Not really,” he eventually responds.

Climate, health are both possible first steps

Maude predicts both sides are “likely to feel their way forward in a fairly careful, cautious way and look for a step-by-step process that builds confidence”.

Significant concessions on either side are “highly unlikely”. Maude says a better way to frame the task is to find an agenda “that is positive in nature and advances the interests of both countries” such as climate change and health security. Tropical medicine, cancer research and development cooperation are other options.

Hayley Channer, a senior policy fellow with the Perth USAsia Centre, says the bilateral relationship “took a hammering in the lead-up to the federal election” so China’s willingness to return to high-level talks immediately afterwards is “very welcome and positive”.

“These differences can’t be reconciled in the short term but high-level meetings do allow the opportunity to clarify positions – which at least removes some ambiguity, which can lead to bad decision making in the defence space,” Channer says.

Channer suggests the foreign minister, Penny Wong, could make an Australian foreign policy speech to clearly outline the new government’s position on China and the region.

That would follow the lead of the US secretary of state, Antony Blinken, who said in a speech last month that Joe Biden’s administration would vigorously defend “an open and inclusive international system” but would not seek a “cold war” with China.

Broader diplomatic outreach

Wong has moved quickly since the election to deepen ties with Pacific island nations amid an intensifying contest with China for influence in the region.

On Friday, Wong visited Solomon Islands – the fourth Pacific island country on her itinerary since being sworn in – and welcomed personal assurances by the prime minister, Manasseh Sogavare, “that there will not be a military base, nor a persistent foreign military presence here in Solomon Islands”.

“We may not have been perfect, but we are family,” Wong told reporters in the capital, Honiara. “Your security and our security are interlinked.”

Marles used the meeting with Wei last Sunday to argue against putting the Pacific in “a position of increased militarisation”.

Marles also raised his concerns about a Chinese fighter plane’s dangerous interception of a Royal Australian Air Force’s P-8 surveillance aircraft over the South China Sea region on 26 May. The Australian government says the incident occurred in international airspace – and that the Chinese J-16 aircraft had released “a bundle of chaff which contains small pieces of aluminium, some of which were ingested into the engine of the P-8 aircraft”.

But the Chinese ministry of national defence said the Australian aircraft had “entered the airspace near China’s Xisha Islands” – a disputed area also known as the Paracel Islands – and “seriously threatened China’s sovereignty and security”.

‘Negotiating table, not the battlefield’

Former Australian Army intelligence analyst Clinton Fernandes, who is a professor of international and political studies at UNSW Canberra, says the disagreement between China and Australia stems from ambiguity in the UN convention on the law of the sea.

Fernandes explains that Australian aircraft and vessels are not in the South China Sea region for “sightseeing”.

China’s concerns about intelligence operations and power projection within other countries’ exclusive economic zones (EEZs) have the backing of significant other countries in the region, he says.

“India protested in April 2021 when the United States conducted a freedom of navigation operation 130 nautical miles west of the Lakshadweep Islands, inside India’s exclusive economic zone,” Fernandes says.

“Indonesia and the Philippines quietly agree with this position.”

China has begun to conduct intelligence gathering and presence operations in other countries’ EEZs, including in Australia’s, and “justifying its behaviour by saying it wouldn’t do so if Australia adopted its own position on the sovereignty of EEZs”.

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While Australian politicians continue to declare that Australia is upholding freedom of navigation and overflight, Fernandes says the Australian public has “a right to know what is actually at stake”.

“This is precisely what international law is ambiguous about. What needs to be sorted out at the negotiating table not on the battlefield is: do we want to have the exclusive economic zones as legitimate areas for power projection and intelligence gathering?”

This is not a difference that is likely to be easily resolved in a single meeting.


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