Li Qiang comes to town: what to expect?

Jun 12, 2024
Chinese Premier Li Qiang (L) and South Korean President Yoon Suk Yeol shake hands in Seoul on May 26, 2024. (Pool photo) (Kyodo)==Kyodo Photo via Credit: Newscom/Alamy Live News

Premier Li Qiang is the second most powerful person in China, after President Xi Jinping. He is expected to visit Australia and New Zealand in the next few days. Meetings in Canberra will present an opportunity for leaders to set the seal of approval on tentative measures already under way for stabilisation of the bilateral relationship, and, hopefully, to find ways of developing that relationship further despite economic and strategic problems for both sides.

Li Qiang has been Premier for a year and has not travelled widely overseas in that capacity. His first trip after China lifted restrictions imposed during Covid was to Europe in January this year, and he also attended the recent Japan-Korea-China summit. It is a mark of the importance attached to Australia that his next visit is to Australasia. He will be bringing a large business delegation and will include Perth in his itinerary, thus acknowledging the importance of Western Australia’s minerals and energy sector.

It would be wrong to assume that Li Qiang is merely a mouthpiece for President Xi. He is proud of his ties with his native place, Wenzhou, Zhejiang province, a city with a national reputation for entrepreneurial skill. Prior to his appointment as Premier, he served as Party Secretary of Shanghai, China’s greatest commercial centre. It was Li who negotiated with Elon Musk for the establishment of the Tesla factory in that city. He can be expected to take a keen interest in the economic potential of greater interaction between Australia and China in industry and commerce. He also has an interesting personal connection with Australia since, according to his Brookings Institute biography, his daughter studied in Australia.

Government leaders are expected to travel internationally and to engage in face-to-face diplomacy, but they must accord priority to national politics. In China the big issue in domestic affairs is the scheduling of the Third Party Plenum, which will set the agenda for the development of the economy. China observers have been speculating about the reasons why the Plenum has been delayed. Is it because of accumulating economic problems that are impossible to resolve?

The Chinese economy is experiencing some difficulties: the population is ageing (as it is in most parts of East Asia), there are barriers to overseas investment, a shaky stock market, and a property bubble. Xi has made it clear that the solution to these problems is development of high-tech industries. This has brought China into direct competition with the United States, and this is where Australia faces the dilemma of which side to support. This is the question that will be on Li Qiang’s mind when he meets our Prime Minister and state and federal ministers. Expect a decision on the date of the Plenum after his return to Beijing.

Seven years have passed since the last high-level visit from a Chinese leader. Ministerial contacts and exchanges were broken during a period when relations sank to near rock bottom. Former Prime Minister Turnbull banned China’s leading telecommunications company Huawei from operating in Australia. Former Prime Minister Morrison called unilaterally for an investigation into the origin of the Covid pandemic. China imposed trade sanctions and Australia responded in a tit-for-tat struggle. Morrison signed us up for the anti-China AUKUS and cosied up in the Quad to India and Japan, both of which have complicated relations with China.

Since the election of the present Labor government, anti-China rhetoric has moderated. Foreign Minister Penny Wong emphasises the need for better relations. At the Australia-China Foreign and Strategic Dialogue in Canberra on 20 March this year, she told Chinese Foreign Minister Wang Yi, “Together you and I have made progress in stabilising the relationship between our countries in the interests of our nations, our people, and the peace and security of our region. There is more to be done.” Despite this, we have engaged with the Philippines in joint naval exercises and sent our ships and planes close to the China coast, pushing the definition of freedom of navigation and international waters in provocative fashion. Response by China has been clear but restrained. This visit is an indication that neither Li nor Xi wish to see any escalation.

National leaders do not travel when there are domestic crises. China’s economy is not about to collapse. Growth is slower but there is still momentum. If the economy were in shambles, they would not find the time or have the incentive to spruik their wares to foreign audiences. The politics of leader visits are complex. For both sides there are local, national and international factors that come into play. In Australia, state and federal governments are faced with the problems of budgeting for increased defence spending and rising welfare costs. Albanese’s solution of a National Reconstruction Fund to rebuild our industrial base might be simply a pipedream or might present a welcome opportunity to re-engage with China as a partner in technology, for the benefit of both sides.

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