Any hope of an Australia-China reset in the new Tiger Year?

Feb 9, 2022

A new year, a new Chinese ambassador, half a century since diplomatic relations were established in 1972. Is there any hope of a reset?

As we enter the Tiger Year, Beijing is hosting the Winter Olympics while the Morrison government could be a matter of months from its end. China has sent a new ambassador Xiao Qian who, in his first public utterance, called for “mutual respect, equality, inclusiveness and mutual learning”.

The short answer is that there is a chance of a reset, but I don’t see the signs of it in the short term and I’m not holding my breath.

The context is very striking. February 2022 marks the 50th anniversary of the famous visit by the US president Richard Nixon to China. He called it a “week that changed the world” and he was right in the sense that the visit introduced a period of Sino-American relations in which the US dropped its embargo on China and accepted it as a major partner in the world economy, with trade, investment, and large-scale educational and technological exchange. Whitlam had already decided on the same direction and Australia had never been quite as exclusivist as the US anyway, but when Gough Whitlam got to government at the end of 1972 his policy towards China was very enthusiastic.

Disagreements occurred, but this basic cooperation continued, to the enormous benefit of all concerned. In particular, China became Australia’s largest trading partner and source of international students. Although relations soured, especially from about 2017 on, both the American and Australian economies became tightly enough interconnected with the Chinese that decoupling became very difficult, if not impossible. In other words, although Australia has well and truly turned its back on China, and the atmosphere is not much better than in the worst days of the 1960s, the relationship is much better than then in all sorts of ways, economically, culturally and in the Chinese students, scholars, businesspeople and others, who live and work in Australia on a long term basis.

In trade, Australian exports to China have fallen over the last few months, mainly due to problems over tariffs on wine, beef and a few other commodities. Australia remains furious over tariff increases and regards itself as subject to economic coercion, though a major beneficiary of shortfalls with China is the United States. This friend and ally does not hesitate to benefit from our embarrassment, while pretending to support us.

However, Australian imports from China have risen quite substantially, being worth $10 billion in November 2021, as opposed to $8 billion in October, a 25 per cent increase, with another, albeit smaller, increase in December. Commodities include electronic equipment like laptop computers and mobile phones, and manufactured goods such as refrigerators, and furniture.

In terms of two-way trade, China remains by far Australia’s largest partner. However, tourism from China does not look set for an early recovery, and the number of students from China, once our biggest source of international students, may be only slow to get back to anywhere near the point when Covid struck early in 2020.

David Sharma, Liberal Member for Wentworth (the seat formerly held by Malcolm Turnbull), opined that Xiao Qian’s arrival signalled a turning away from wolf warrior diplomacy by China. He’s not an expert on China, but may well be right on this. He said Australia wanted good relations too, but there is not much sign of any plan to implement any change in current developments.

Meanwhile, in his speech to the National Press Club on January 25, Anthony Albanese praised China for dragging hundreds of millions of people out of absolute poverty. Doesn’t seem controversial! But some on the government side did indeed criticise, saying it showed he was “soft on China”. It would be a real throw-back to the dark days of yesteryear to make China into an election issue. But although popular opinion is much less positive on China than it used to be, I doubt there would be much traction in making it an election issue.

In the Chinese zodiac, the tiger is noted for its courage and determination. The opening ceremony of the Beijing Winter Olympic Games was on February 4, three days after the new year. Unfortunately, Australia followed the United States in a diplomatic boycott based on China’s human rights abuses, especially in Xinjiang. The Global Times noted how few countries had followed the American diplomatic boycott, including not a single Muslim-majority country. Some 30 world leaders did show up for the opening ceremony, including Vladimir Putin, who held a major meeting with Xi Jinping, issuing a long joint statement.

This meeting proved quite productive. It was probably no surprise that the friendship between Russia and China is strengthening, considering both are being attacked so strongly by the US and other Western countries. Among their joint views was condemnation of AUKUS, which the two leaders thought would “increase the danger of an arms race in the region”.

Some of the issues dividing Australia and China, including the “Chinese threat”, tennis star Peng Shuai, Xinjiang, Ukraine and Taiwan, have been covered by recent articles in Pearls & Irritations, and need no further canvassing here. I think Australia might have benefited a bit if it had chosen to be more gracious about the Winter Olympics. It lost an opportunity to engage by petulantly following the American boycott, itself unjust and mean-spirited.

As we enter the Tiger Year, Scott Morrison seems in a somewhat more precarious position than Xi Jinping. He must have an election in the next few months, with his re-election anything but assured. His Minister for Defence Peter Dutton delights in making combative and unnecessary statements about China, and he has to be careful not to get too many of the Chinese community off-side. Meanwhile, Xi is exulting in what looks like a successful Winter Olympics — even Time was quite complimentary about the Opening Ceremony on February 4 — including productive meetings not only with Putin but also various other international leaders.

I doubt anything remotely like trust can be re-established under Morrison. There is more hope under Albanese. He’s not especially far-sighted on China and seems to me lacking in charisma. But at least he would be new and might be able to create a better atmosphere in Australia’s relations with China.

It can be argued that Australia and China are both getting used to being estranged from one another and trade is doing quite well. Does the relationship matter anyway? I think it certainly does. Whether we like it or not, China is getting more powerful and richer. It is possible India will overtake it in terms of population, but China will very likely soon be the world’s largest economy. It is all very well for Dutton to sneer at China, but there is a chance he won’t be defence minister for much longer. Good relations with China remain as important as ever. Australia’s turning away from China is as dangerous and short-sighted as it has always been!

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