The future of Australia-China relations

Recently, relations between Beijing and Canberra have been less combative, but the Australian government of Prime Minister Anthony Albanese remains wary of China’s ambitions.

Two leades shake hands
Australian Prime Minister Anthony Albanese and Chinese President Xi Jinping meet on November 15, 2022, at the G20 summit in Bali, Indonesia.
© Getty Images

In a nutshell

  • China responded harshly to Australia’s calls for investigations into Covid’s origins
  • A strong trade relationship exists despite Beijing’s diplomatic and economic sanctions
  • Beyond strong ties with Washington and London, Australia seeks regional partners

Australia changed governments in May, moving from the center-right leadership of Scott Morrison to the center-left one of Anthony Albanese. Like many governments, the Albanese administration faced multiple challenges, from the ongoing fallout over Covid-19 to Russia’s invasion of Ukraine and inflation.

But Australia, with only 26 million people, has another problem all of its own: A strained political and economic relationship with the giant in the Asia-Pacific neighborhood­­­­­: China.

Prime Minister Albanese may have initially thought he could take a more open and conciliatory approach, but China’s aggressive foreign policy has made it unpopular with Australians. Beijing’s use of diplomatic and economic coercion to punish Australia for leading the call for an investigation of the Covid-19 origins turned more Australians against China. While mutual economic sanctions and low public opinion persist, the relationship has been relatively quiet in the seven months since the Albanese government took office. Some of this was due to  Beijing’s own interest in keeping its foreign affairs quiet in the lead-up to an important congress of the Chinese Communist Party in October. With that event over, tensions could resume.

The prime minister and Chinese President Xi Jinping met for 30 minutes on November 15, 2022, at the G20 summit in Bali, Indonesia. Both leaders described the talks as cordial and frank while calling for improved relations. The Albanese government is trying to strike a balance between supporting the United States and Western countries in their stricter approach to China while also trying to show it has agency in partnering with middle powers.

Recent tensions

Relations between Australia and China have deteriorated in recent years. China is a significant trading partner for Australia. And much like the shift in sentiment against China seen in the U.S. during the Trump administration, Australia’s foreign policy toward China became more critical as well. In a 2017 Foreign Policy White Paper, the Australian government began to define its view of China as an economic powerhouse. The report highlights the increasing competition between the U.S. and China and the need for Australia to balance this friction with the economic interconnectedness of the Indo-Pacific region and China’s military modernization.

When the Morrison government came to power in 2018, it shared a lot of the same sentiment as the Trump administration that China is an increasing threat to the international system, making cooperation less likely. Australia-China relations took a nasty turn in 2020 when the Morrison government called for an international investigation into the origins of Covid-19. Beijing’s response was to restrict Chinese travel to Australia and impose restrictions on importing Australian barley, meat, wine and various other agriculture and goods.

The Albanese government is working to build relationships and partnerships with Pacific Island nations, Japan, India and other middle powers in the Indo-Pacific.

In late 2020, Beijing sent a list of 14 grievances to Canberra. Among them: siding with the U.S. on various issues, unfriendly reporting about China in Australia’s national media and interference in Hong Kong and Taiwan issues.

Unsurprisingly, Australia-China relations continued to worsen from there. Polls show Australians have some of the most critical sentiments toward China in Asia-Pacific, and only Japan viewed the relationship with China more unfavorably. According to the Lowy Institute, an Australia-based think tank, by 2021, more Australians held the view that China was more of a security threat than an economic partner. In a separate poll, 75 percent of those now see China as a military threat, compared to just 39 percent in 2016.

Recent reports suggest that economic sanctions by Beijing on Australia have not worked, given China’s high demand for some Australian products. Beijing has been forced to live with an Australia that is increasingly critical but also a valued trade partner.

Albanese government

Before taking office, there were concerns that an Albanese government would dramatically change the course of Australia-China relations. Some saw his government as potentially less critical of China. But the administration has more or less adopted a similar tone on China as the Morrison government. Australia’s Foreign Minister Penny Wong has already made several comments about how Australia is willing to work with China, but that much of the deterioration in Australian-China relations is also the fault of Beijing.

The Albanese government is continuing many of the same bilateral and multilateral efforts carried over from the Morrison government. These include: working with the U.S., Japan and India as a part of the Quadrilateral Strategic Dialogue, or Quad for short; working with India and Japan on supply chain resiliency; continuing a new security pact with the U.S. and the United Kingdom on nuclear submarine development; launching a new security agreement with Japan; and engaging deeply with Pacific islands such as Fiji, Samoa and Tonga. More than ever, the Albanese government is working to build relationships and partnerships with Pacific Island nations, Japan, India and other middle powers in the Indo-Pacific.

Relationship with the U.S.

Australia and the U.S. share a long defense history, and both are members of the intelligence-sharing alliance called The Five Eyes, a collective defense arrangement. However, public sentiment in Australia toward the U.S. also turned sour during the Trump administration. While the negative view of China is at an all-time high in Australia, positive sentiment toward the U.S. is some of the lowest in the Asia-Pacific region.

It is unlikely that Beijing will take softer foreign and diplomatic policies during President Xi Jinping’s unprecedented third term.

Australians see countries like Japan, the U.K. and France as more responsible world actors. It seems, however, that Australia-U.S. relations are improving under U.S. President Joe Biden. The Albanese government takes a similar tone as the Biden administration on its foreign and China policies – looking to find new global partnerships and willing to work with China on issues like climate change but also ready to be more critical of China’s growing economic and military influence.

Quad leaders meet
The leaders of the four-nation security group known as the Quad meet on May 24, 2022, in Tokyo. From left: Australian Prime Minister Anthony Albanese, U.S. President Joe Biden, Japanese Prime Minister Fumio Kishida and Indian Prime Minister Narendra Modi. © Getty Images


Negative sentiment toward China remains high in Australia

Whether the public view of China will improve is up to Beijing. But it is unlikely that Beijing will take softer foreign and diplomatic policies during President Xi Jinping’s unprecedented third term.

The Albanese government is investing in agency

Besides its rocky relationship with Beijing, the Albanese government is trying to show it has more to offer the region. Many countries do not want to be caught between the U.S. and China and are striking their own deals on such issues as supply chains and digitalization. Australia will continue to look for middle-power partnerships and seek new opportunities in all areas with countries like Japan, India, the U.K., Canada, France and Germany.

The Albanese government has more in common with the Biden administration

While Australian sentiment toward the U.S. took a turn for the worse during the Trump administration, it is still an important alliance. Now that there are similar political leaders in Canberra and Washington, it may be easier for Australia-U.S. cooperation. There is also a shared sentiment in Canberra and Washington toward China – wariness over Beijing’s military and economic activity while also looking out for areas of cooperation, such as climate change.

Seeking results from the Quad

 The Quad is one of the most important security partnerships for the U.S., Australia, Japan and India. It has expanded well beyond its origins as a vehicle for military and humanitarian relief efforts. Now Quad members will look at ways to produce more concrete outcomes on issues such as climate change, supply chains, digital, maritime and more.

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