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Albanese must aim beyond bilateral outcomes on Beijing visit

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Australian Prime Minister Anthony Albanese attends the APEC Leader's Dialogue, Bangkok, Thailand, 18 November 2022 (Photo: Reuters/Sakchai Lalit).

In Brief

Prime Minister Albanese will land in Beijing this week on the anniversary of then Opposition Leader Gough Whitlam’s historic trip in November 1971. A little over a year later, when Whitlam became Prime Minister, Australia and the People’s Republic of China established diplomatic relations with each other.


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From the beginning, diplomatic relations were based on ‘mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs, equality and mutual benefit and peaceful coexistence’. These six principles are anchors of the postwar international order and should continue to guide what has become a very significant relationship between the two countries over the intervening years.

China is by far Australia’s largest trading partner and the largest trading nation in the world. This year Australian exports of goods and services to China topped A$200 billion dollars. Although Australia ranks only 20th in the world in terms of exports, it’s China’s third largest import supplier in 2023 and plays a leading role in the supply of key raw materials and energy to China and the whole Northeast Asian region.

The fundamental complementarity of the relationship between the two countries drives their economic engagement. China is the largest single market for many Australian commodities. And for China, there is simply no country other than Australia with the scale, stability and proximity to reliably meet its needs for key raw materials. Neither country could maintain its standard of living or ensure the sustainability of its growth without doing business with the other.

The Australia–China economic relationship, because of its structure and importance to the Chinese steel industry and in energy use, invests special urgency in both countries to address the critical shared challenge of carbon emissions and their impact on climate change.

As both countries seek to achieve their decarbonisation objectives and work with other countries towards a sustainable future, they will need to manage a major transformation in their trade and investment relationship to achieve energy transition faster and at lower cost. This calls for upping dialogue through business, non-official and government channels to help chart the pathway forward.

With their different political systems, traditions and histories, the two countries have their disagreements, and they will disagree in the future, but the six principles upon which the relationship was built still provide the framework to secure deep economic and political cooperation in the future. Australia’s appeal to those principles and the global trading rules have helped to overcome the recent bilateral ruptures and lift trade blockages.

The relationship is not only of direct importance to each country; its scale and character are of importance in global and regional economic affairs. Both Australia and China bear a responsibility to conduct their relationship in accordance with their obligations under the multilateral rules-based agreements they have both ratified. That global framework and joint commitment to it is central to getting the bilateral economic relationship right.

There will be no stabilisation of the Australia-China relationship unless Australia embraces a global strategic path with these objectives and principles as top priority in its dealings with China and generally.

Mr Albanese began to articulate that strategy when he positioned Australia as a ‘constructive middle power with global interests’ in his final speech in Washington before heading to Beijing. His observation that it’s ‘the responsibility of every nation that has benefited from the stability and prosperity of the international rules-based order … to work together and protect it’ was an important prelude to the expected Summit meeting between President Biden and Xi in San Francisco for APEC, just two weeks after his own visit to Beijing.

Australia was a prominent and active supporter of China’s accession to the WTO and, together with China, commits to the principles of non-discrimination and equality, and the framework of mutual benefit and respect for non-interference in each other’s internal affairs that underpin the WTO.

The multilateral trading system is a critical foundation for the prosperity and security of the Asia Pacific region and the basis for the two countries’ longstanding cooperation in APEC, the G20, the East Asia Summit and broader ASEAN-centred agreements such as the Regional Economic Cooperation Partnership agreement.

China is also seeking to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which requires higher standard trade rules and deeper economic reforms. That won’t be easy, and it will take a long time, but this is the time for Australia to encourage, not discourage, China from that course and work on processes that will make clear the step-by-step progress needed towards it. The challenges of joining CPTPP are many of the same challenges that have to be dealt with in reform of the Chinese economy and the global trading system.

Australia and China also share common interests in the economic development and financial stability of the region. This includes active participation in regional institutions such as the Asian Development Bank and the Asian Infrastructure Investment Bank (of which Australia is a vital and constructive member) and ensuring that global institutions like the IMF and the World Bank are adequate and remain representative of our region.

The Australia–China relationship has been fostered by people to people exchanges and abiding friendships over the years. These exchanges are important to its future. Acknowledging and celebrating them is crucial to the success of the Albanese–Xi meetings in restraining policies and regulations in both countries that unnecessarily restrict openness and confidence in the exchange of people and ideas needed to manage the relationship going forward.

The strength of the education and tourism relationships reinforces these mutual interests. The promotion of business, academic, official, institutional and personal exchanges is critical to the value that both countries have derived from working together on many issues beyond, but central, to the health of the bilateral relationship over the years.

Shiro Armstrong is Director, and Peter Drysdale is Head, of the East Asian Bureau of Economic Research, The Australian National University.

A version of this article was first published here in The Australian Financial Review.


One response to “Albanese must aim beyond bilateral outcomes on Beijing visit”

  1. It appears that in the not to distant future the pipelines being laid to carry gas from Russia to China will give China alternatives to Australian gas. Wheat and other grains will also see Australia having competition. All of this is without taking into account the development of BRICS+ and the SCO looking to develop alternatives to trade in US Dollars due to the unilateral and illegal sanctions imposed on nation states who refuse to comply with Western, predominantly US demands.

    It has also been made clear by China’s FM that Xi’s appearance in San Francisco is not yet a done deal. If Australia’s PM is travelling to Beijing to parrot US talking points due to Xi’s obvious reluctance to speak with Biden, than the opportunity to advance Australian interests will have been squandered and could see no improvement in the bilateral relationship.

    Let’s not forget that the loss of Australian trade with China saw some of those exact same losses filled by the US exporters under the Trump administration.

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