Ties between Australia and China have improved faster than many expected since Prime Minister Anthony Albanese took power last year. Beijing’s reaction to Canberra’s plans for a new submarine may show whether the goodwill can last.
(Bloomberg) — Ties between Australia and China have improved faster than many expected since Prime Minister Anthony Albanese took power last year. Beijing’s reaction to Canberra’s plans for a new submarine may show whether the goodwill can last.
Albanese is expected to travel to Washington in mid-March to unveil the design for a fleet of nuclear-powered submarines to be built with the help of the US and the UK. The joint announcement with President Joe Biden and Prime Minister Rishi Sunak would represent a key milestone in the 18-month-old Aukus partnership intended to counter growing Chinese naval might in the Asia-Pacific region.
The reset with Beijing has Canberra once again navigating the rivalry between the US — Australia’s most powerful ally — and China — its biggest trading partner. That’s only getting more difficult, as demonstrated by the recent breakdown between Beijing and Washington. Although Chinese Commerce Minister Wang Wentao told his Australian counterpart this month that the “freeze is over,” the chill could quickly return.
“There’s a willingness on China’s side to talk to Australia in ways they haven’t for four or five years,” said Richard McGregor, author of Asia’s Reckoning: China, Japan and the Fate of US Power in the Pacific Century . While the improvement in relations between Canberra and Beijing has been significant, “I think it has its limits,” said McGregor, who’s a senior fellow for East Asia at the Sydney-based Lowy Institute.
Canberra’s ties with Beijing unraveled in early 2020 after then-Prime Minister Scott Morrison called for an international investigation into the origins of Covid-19, which China viewed as part of a US-led effort to blame it for the pandemic. Beijing undertook a series of punitive trade actions on Australian products including barley, coal and wine, although it denied that moves were retaliatory.
Australia’s recent thaw with China has similarly coincided with a broader push by President Xi Jinping to ease tensions with the West as the pandemic subsides and he focuses on rebuilding the economy. But the fraught exchanges between Secretary of State Antony Blinken and State Councilor Wang Yi last weekend over the Chinese balloon shot down by the US earlier this month shows how such efforts can go awry.
Yun Jiang, China matters fellow at the Australian Institute of International Affairs, said that repairing ties between Canberra and Beijing would be difficult “in the current geostrategic environment,” even though both parties appeared to want it.
Few issues underscore the suspicions between the two sides as much as Aukus, which will would give China several more stealthy submarines to worry about in any potential conflict over Taiwan. China has made clear its opposition to the three-way pact, attempting to persuade the International Atomic Energy Agency that the transfer of nuclear-propulsion technology represents a breach of non-proliferation treaties.
“Aukus is essentially about fueling military confrontation through military collaboration,” Chinese Foreign Ministry spokeswoman Mao Ning told a regular news briefing in Beijing on Feb. 1. “It is apparently driven by Cold War thinking. It creates additional nuclear-proliferation risks, exacerbates the arms race in the Asia-Pacific and hurts regional peace and stability.”
The potential for disputes extends to trade, despite China’s vast need for Australian natural resources like coal and iron ore. China wants Australia to relax foreign-investment restrictions and its ambassador to Australia, Xiao Qian, last month mentioned lithium — highly sought for its use in high-tech manufacturing — as one area of possible cooperation.
However, the Albanese government can’t afford to stray from the hard line taken by its conservative predecessors amid widespread voter unease about China. Treasurer Jim Chalmers has called for greater scrutiny of foreign investment in critical minerals.
Shadow Foreign Minister Simon Birmingham said that while it was important for Australia to welcome overseas investment to help “grow our economy,” the “national interest” must be protected.
“We have to be mindful of what is in our interest to preserve — critical infrastructure, essential services, sensitive security assets — and also to ensure that sectors, such as rare earths, develop in a way that enhances competition in the world,” Birmingham said.
Australian Trade Minister Don Farrell told Bloomberg last week that rebuilding the relationship with Beijing was “hard work” and acknowledged there would be “hiccups along the way.” Still, he said it was in Australia’s interests to “stabilize” relations with the world’s second-largest economy.
“We’ll have to make decisions which the Chinese don’t like and I guess they’ll make decisions that we don’t like — that’s the way it works,” Farrell said. “But I think on balance everything’s heading in the right direction.”
–With assistance from Garfield Reynolds.
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