Back then it seemed that Australia–China relations were on the rise. But in the years that followed, Australia’s security agencies and mainstream press were convulsed with alarm about a wave of ‘foreign interference’ marked by efforts by the Chinese party-state to pursue its interests through domestic political channels in Australia.
It went from bad to worse under Turnbull’s successor Scott Morrison, who made ‘standing up’ to China a central part of his political brand, attempting to use the issue to wedge Mr Albanese — who led the then-opposition Labor Party — on national security. When Morrison’s foreign minister Marise Payne put Australia at the forefront of calls for an international investigation with ‘weapons inspector-like powers’ into the Chinese origins of COVID-19, it was the tipping point for China and Beijing threw everything at Australia in response. Australian coal, barley, wine, lobsters and other products were sanctioned in various ways, and high-level government-to-government dialogue was frozen.
Australia’s handling of the challenges of the China relationship had been guileless in the years leading up to the application of the ‘trade impediments’ — Canberra officialdom’s euphemism of choice for what were basically economic sanctions. But China’s economic ‘coercion’ (in reality punishment, because Australian policy did not fundamentally change in response) was conducted, if not precisely against the letter, then manifestly contrary to the spirit of its multilateral and bilateral trade commitments.
It was a textbook example of China’s recourse to raw economic power, riding roughshod over mutually-negotiated rules in the process. But Australia also provided a useful example for other countries regarding how to behave in response.
As James Laurenceson writes in this week’s lead article, a ‘critical ingredient in the restoration of trade ties’ that has paved the way for Albanese’s visit to Beijing ‘has been the multilateral trading system, overseen by the World Trade Organization (WTO)’. Recourse to it has ‘blunted the effects of Beijing’s bans on Australia by facilitating the redirection of exports of Australian coal, barley and other commodities, previously destined for China, elsewhere’.
‘Australia’s resisting Beijing’s attempts at economic coercion was undoubtedly right’, but relief from sanctions (as well as the release of Cheng Lei, an Australian citizen charged with spying) should not be read, Laurenceson argues, as a vindication merely of ‘firm Australian resistance’ in the face of bullying. Rather, Australia’s management of the mess was effective insofar as it was marked by restraint — desisting from retaliation of its own and taking China’s trade bans to the WTO.
As members of the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), a workaround to the defunct WTO dispute settlement process, the unwelcome prospect of having to defend itself in this forum gave Beijing incentive to work quietly with Canberra to find offramps. Its use of WTO channels — and, after the election of Albanese’s government, a return to the language of diplomacy — also bought Australia precious time for this adjustment to be made on the Chinese side.
As Laurenceson writes, ‘Beijing had recognised that its campaign of trade disruption was causing more harm to itself than it was shifting Canberra’s foreign policy positions’.
One would hope that in between the discussions about AUKUS nuclear submarines on his recent visit to Washington, Albanese emphasised the critical importance of the multilateral trade system in creating economic and political space for Australia to work its way through an attempt at economic coercion from a vastly more powerful economy, without substantially changing its policy in return.
Australia and middle powers across the Asia-Pacific need more from the United States than semi-credible assurances that it will maintain its military position in Asia indefinitely. A resumption of good faith US engagement in fixing the WTO and participation in the plurilateral negotiation of economic rules and security norms in East Asia, through new or existing platforms centred on ASEAN, will be a much more valued and enduring contribution to peace, autonomy and prosperity throughout the region.
As to the question of what messages Albanese takes to Xi Jinping, the fact that the visit is taking place at all and is being chalked up as a victory by the Australian press shouldn’t lead the Prime Minister and his government to set their expectations for the relationship equally low.
The meeting offers the chance for, if not a reset of the relationship, whatever that means, then at least some joint articulation of common ground between the two governments that can be the basis of mutually beneficial engagement going forward — and which need not be jeopardised by the reality that from Australia’s perspective, some aspects of China’s rise present security risks that any responsible government has to mitigate against, whether Beijing likes it or not.
This would necessarily include a recommitment to the ‘one China’ principle, an understanding of the important role of the trade and investment relationship to both countries’ economic security in the past and into the future, and their shared interest in multilateral cooperation on climate change and the myriad opportunities for bilateral cooperation on this front. Additionally, it requires a pragmatic understanding of non-interference, that neither country seeks to change the nature of the other’s political system, or even could if it wanted to.
Above all, the visit provides the stage on which to acknowledge that the Australia-China trade relationship is not only of huge, direct importance to each country but that its scale and character are of importance in global and regional economic affairs. Both Australia and China therefore bear particular responsibility to conduct the relationship in accordance with their obligations under the multilateral rules-based agreements they have both ratified and work together in strengthening and expanding those rules through regional and global cooperation.
The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.