By Zhou Chao*
Since the deterioration of Australia-China relations during the Morrison administration in 2020, China has implemented a series of sanctions against Australia, no longer importing Australian coal, lobster, and its other major exports to China. Accounting for 40% of Australia’s total exports, China has been Australia’s largest export destination, hence these sanctions have had a significant impact on the Australian economy.
With the current Prime Minister Anthony Albanese taking office, Australia has been striving to restore and develop its economic and trade ties with China. The Australian Labor Party government, which governs the country since May 2022, has sent positive signals regarding the bilateral relations with China.
However, when it comes to the question remains whether the revival of economic and trade relations will lead to a return to the previously friendly stage of Australia-China relations, the answer is likely negative. Regardless of how the economic and trade relations between the two countries rebound, the confrontational aspect of it will remain dominant and it would be difficult to change that in the long term.
Firstly, in analyzing the future development trend of the relations, it is crucial to understand Australia’s strategic positioning. Australia is a key member of the Five Eyes intelligence alliance and an important member of AUKUS, the trilateral security cooperation partnership, as well as the Quadrilateral Security Dialogue (QUAD) with the U.S., the U.K., and Japan. In terms of cultural, linguistic, military, and geopolitical strategy, Australia has extremely close alliance and cooperation relationships with the United States and the United Kingdom. It is worth noting that in order to obtain U.S.-made nuclear submarines, Australia did not hesitate to cancel its contract to purchase conventional diesel submarines from France. This shows that even among Western allies, the status of the U.S. and the U.K. from Australia’s point of view is weightier than that of France. As it stands, Australia is an important pillar of the Indo-Pacific strategy of the U.S. in the South Pacific region and carries great strategic significance. However, given that the primary target of the Indo-Pacific strategy is undoubtedly China, it is impossible for Australia to exclude itself from such a basic framework of confrontation against China, and this will become increasingly apparent.
Secondly, in terms of Australia’s own strategic direction, the current government is working to restore economic and trade relations with China while still maintaining its stance of confrontation against the country. Just before Australia resumed coal shipments to China, Australian Foreign Minister Penny Wong stated during a visit to the U.K. that she would work with the U.K. to jointly confront China’s economic coercion. On February 9 of this year, Australia, the U.K., and the U.S. held joint air force exercises with China as the hypothetical enemy. In early February, Australia officially announced that it would remove all security monitoring equipment produced by Chinese companies installed in government departments. At the end of February, it also expressed its expectation to join the U.S.-Philippines joint patrol in the South Sea with Japan. Australia also eased its relationship with France by jointly producing shells for Ukraine, which laid a foundation for bringing France into the Indo-Pacific strategic framework. At the same time, the AUKUS tripartite agreement to build nuclear submarines was officially finalized on March 13, and Australia is expected to purchase five nuclear submarines. Before these submarines are delivered, Australia’s defense requirements are likely to be met through deepening cooperation with the U.S. military, which means its confrontational stance against China will be strengthened as well.
Thirdly, under the circumstances of deteriorating political relations, developing economic and trade relations can sometimes backfire. In the last century, the important driving force for the easing of U.S.-China relations was the global expansion of the Soviet Union and the continuous deterioration of Soviet-China relations. The political-military demand for jointly confronting the Soviet Union pushed China and the U.S. to approach and normalize their relations, and the deepening of economic and trade relations was the next step. Based on ideological and geopolitical factors, even during a smoother development phase of U.S.-China relations, there was still questioning and resistance from the U.S. political circles, with calls to bash China. The same is true for Australia-China relations. Since the end of last year, there has been a slight recovery in the economic and trade ties between the two countries, but the Australian strategic community has been questioning it. The latest analysis from the Australian Strategic Policy Institute (ASPI) indicates that over the past three years, Australia has been the biggest target of China’s economic and diplomatic coercion worldwide. At the end of last year, the Lowy Institute released a research report emphasizing that the construction of Australia’s Indo-Pacific strategic framework must be based on Australia’s own interests, but it also considers free and democratic values as an important premise. This is actually still insisting on the dominance of ideology, and China’s prominent position in economic and trade relations will only be regarded as a major threat to Australian national security and a weakness that needs to be overcome rather than a driving force for improving relations.
Fourthly, Australia is also actively pursuing diversification in its economic and trade relationships. Prime Minister Albanese embarked on a visit to India on March 8, with issues such as economic and cultural cooperation taking on a prominent role. In 2021, the bilateral trade volume between India and Australia was USD 27.5 billion, and India expressed its expectation to double the bilateral trade volume within 5 years to over USD 50 billion based on the Economic Cooperation and Trade Agreement reached between the two countries. Thus, while promoting the restoration of economic and trade relations with China, Australia is also striving to diversify its own economic and trade pattern, with the goal of reducing its dependence on China as much as possible. Therefore, it is reasonable to believe that the move to restore economic and trade relations with China is focused on short-term benefits, while the long-term goal is still to reduce dependence on China’s economy and gradually strengthen confrontation with China.
Regarding future Australia-China relations, there will still be cooperation space between the two countries, in areas such as global climate change issues and rising sea levels in South Pacific island countries. The bilateral cooperation is also expected to be maintained and further deepened in the common efforts to address ethnic conflicts and counter-terrorism in the South Asian region. However, the overall confrontational policy towards China will become increasingly prominent and solidified. Australia will further integrate into the U.S. Indo-Pacific strategic system and stand in opposition to China, with increasing involvement in Taiwan affairs. On March 7, the Sydney Morning Herald and The Age emphasized in separate articles that once China initiates a military takeover of Taiwan, Australia is highly likely to be involved. Although such views have caused considerable controversy and debate within Australia, the development trend it represents cannot be underestimated. With the comprehensive strengthening of foreign interference laws in Australia, Chinese social organizations in Australia will face more restrictions and pressures, and the pragmatic faction in Australia’s political circle will also be constrained. While economic and trade relations are still expected to develop during a certain period, as the Australian political circle does not completely reject this trend, yet this will hardly bring political benefits. Instead, such relations will be facing interference from political factors and full of twists and turns.
Final analysis conclusion:
ANBOUND previously pointed out in its analysis of U.S.-China relations that the relationship between the two countries involves both politics and economics, but the development of economic and trade ties has not led to an improvement in political relations. The basic development logic of the China-Australia relationship is determined by the U.S.-China relationship. Therefore, the warming of economic and trade relations between Australia and China is unlikely to bring about a fundamental improvement in their political relationship.
*Zhou Chao is a researcher at ANBOUND