Why Australia-China Tensions Are Here To Stay, Despite a Diplomatic Reset

U.S. President Joe Biden isn’t the only world leader seeking an audience with China’s Xi Jinping in Bali this week.

A day after the Biden-Xi talks, Australian Prime Minister Anthony Albanese met the Chinese President on Tuesday amid the G20 summit on the Indonesian resort island. Xi will also use the occasion of the global conference to meet with other U.S. allies like South Korea and France. But the meeting between Albanese and Xi represents an especially important moment for the relationship between two major powers in the Asia-Pacific region, which had soured in recent years.
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Albanese called the discussions “very positive and constructive” in remarks to the media after the meeting. He said the countries still have “big differences to manage” but insisted “we’re always going to be better off when we have dialogue and are able to talk constructively and respectfully, but also honestly, about what those differences are.”

Experts say that Australia had become a global outlier for just how bad its relationship with China had become. Although former Prime Minister Scott Morrison spoke with Xi briefly at the G20 in 2019, no Australian Prime Minister had held formal talks with the Chinese President since Malcolm Turnbull in 2016.

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“It’s notable just how isolated Australia has been, how alone it’s been in the level of lack of access,” says Melissa Conley Tyler, an honorary fellow at the Asia Institute at the University of Melbourne. “If you look at most of Australia’s friends and partners, they do still have meetings with China; they don’t always have happy meetings with China but it’s quite normal to have some conduits, even just to express displeasure,” she says. “It was quite unusual that Australia was in such a diplomatic deep freeze.”

Relations between the two countries have sunk to a decades-low nadir in recent years, particularly under the conservative government of Albanese’s predecessor Morrison, who lost his bid for reelection in May. Shortly before Morrison became Prime Minister in 2018, Australia banned Chinese telecommunications firm Huawei from its 5G network—the first country to do so. In 2020, Morrison called for an investigation into the origins of COVID-19; China responded by imposing official and unofficial trade barriers on items like wine and seafood that have cost Australian exporters billions of dollars. Beijing also banned minister-to-minister contacts. Morrison’s campaign tactics didn’t help either; he put his party’s hawkish stance on China at the forefront of the election earlier this year by painting Albanese as soft on China.

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Re-engagement between China and Australia has already started under Albanese, after his center-left Labor party took power in May: Australia’s defense minister Richard Marles met his Chinese counterpart in Singapore in June. Foreign Minister Penny Wong met China’s foreign minister Wang Yi in September, and the pair had a phone call last week. Albanese also had a brief discussion with Chinese premier Li Keqiang at a regional summit over the weekend.

“The previous government, rather than try to navigate differences in the national interest, tried to exploit them for domestic political gain,” Wong said on Sunday.

There’s good reason to try to repair basic diplomacy and dialogue with China, says Michael Green, the CEO of the U.S. Studies Centre at the University of Sydney. “While investment flows, values, and security interests all put the U.S. at the center of Australian foreign policy,” he says, “the large volume of Australian trade with China means Albanese needs to put a floor under the difficult political relationship with Beijing.”

A “stabilization” not a “reset”

Although some, such as the Business Council of Australia, have hailed the meeting as a “huge foreign policy reset,” such pronouncements are probably overstated. This past weekend, the Australian government laid out a plan for “stabilizing” ties with China, while making it clear that fundamental differences remain and that Australia will continue to promote its own national interests.

Experts say that there has not been a significant shift in Australia’s foreign policy toward China but rather a shift in tone. “The fundamentals remain the same, but the words chosen to express those interests have been different,” says Jennifer Hsu, a research fellow and project director at the Lowy Institute. “It’s about finding common ground or shared interests,” she says, rather than emphasizing “values that bind—i.e. a democracy versus vs. autocracy sort of thing.”

“I have said consistently since before I became Prime Minister, we will cooperate where we can [and] disagree where we must act in the national interest,” Albanese said in his remarks to the press after talking with Xi in Indonesia on Tuesday.

The meeting of the two leaders comes during a time of intense competition over the regional order in the Asia-Pacific. “There’s a lot of angst in Canberra about what a more China-dominated system would look like, so you can expect Australia to continue to promote initiatives like the Quad and AUKUS and provide some balancing to a China dominated region,” says James Laurenceson, the director of the Australia-China Relations Institute at the University of Technology Sydney, referring to the Indo-Pacific strategic security forum and a military pact between the U.S., the U.K., and Australia.

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While jostling between the two nations for influence in the Pacific isn’t likely to subside, the bilateral meeting in Bali is important symbolically, signifying that the diplomatic freeze with China has come to an end. “The immediate effect it’s going to have is to send a very strong signal throughout the Chinese bureaucracy that Australia is out of the doghouse, that you can safely engage with Australian interlocutors again,” says Laurenceson.

In remarks ahead of the meeting, Xi said that China and Australia should “improve, maintain, and develop the relationship.” He also noted that Albanese has dealt with China in a “mature manner,” according to a translation by the Australian Broadcasting Corporation.

To be sure, Laurenceson cautions that “everything won’t be rosy the day after the meeting.” He points out that China continues to detain some Australian citizens, including journalist Cheng Lei.

And although Albanese said Friday that he would ask Xi to lift billions of dollars of trade barriers if the leaders met, no immediate resolution was found on that front. Albanese said he put forward Australia’s position “when it comes to the blockages in our trading relationship,” but he admitted he had low expectations that Xi would change his position then and there. “I believe if people thought that would happen, then that was not realistic,” he said.

“I think the aim of the Australian government is to get the relationship with China back on par with that enjoyed by other U.S allies in the region,” says Laurenceson. “That’s really where Australia’s trying to get back to rather than imagining that we’re going to become best buddies with China.”