Prime Minister Albanese juggles risks with rewards

Australian Prime Minister Anthony Albanese’s government has overseen a turnaround in Canberra’s relations with Beijing. It hints at a larger scope for other countries to balance business and security in their dealings with China. 

Albanese’s strategy is also enabling Australia to benefit from the diplomatic opportunities presented by China’s economic difficulties.

When he took office last year, Australia-China relations were in bad shape. 

Following former prime minister Scott Morrison’s call in 2020 for an inquiry into the spread of Covid-19 from China, Beijing imposed trade sanctions on AU$25 billion (US$16.58 billion) of Australian exports. 

The Chinese embassy shared an abrasive list of 14 grievances against Canberra, while the former Australian defense minister Peter Dutton made historical comparisons between China today and Nazi Germany and counseled to “prepare for war.”

Australia’s poor reputation in the Pacific arguably helped Beijing to seal a security pact with the Solomon Islands. There were no ministerial meetings for more than two years and there had been no formal leader-level talks since November 2016.

Australian diplomacy

What a difference a year can make. 

Albanese met Chinese President Xi Jinping on the sidelines of the G20 summit in November last year and communication between Australian and Chinese ministers is increasingly routine. 

Beijing has eased its bans on most Australian exports, though restrictions persist on barley, seafood and wine. 

Australian Foreign Minister Penny Wong has reinvigorated Australian diplomacy not only in the Pacific but also in Asia and the wider Indo-Pacific. Canberra’s steady pattern of dialogue with Beijing now aligns with that of its main ally, the United States.

Most notable about the improvement in bilateral ties is that Albanese has not weakened Australia’s position on any of China’s stated grievances. 

Canberra is enhancing its support for the US-led security architecture, through avenues like the AUKUS partnership with the United States and the United Kingdom, and the Quadrilateral Security Dialogue with the US, Japan and India.

Albanese has condemned Beijing’s human rights violations, endorsed the “de-risking” of economic engagement with China and refused to extradite Australia-based democracy activists to Hong Kong. 

To be sure, he has made tactical concessions.

Albanese has not unilaterally sanctioned Chinese officials implicated in abuses in Xinjiang, mainly because such moves are unlikely to change Beijing’s conduct. A part of this shift in fortunes is Beijing’s situation. 

Zero-Covid policy

China’s economy is troubled. 

Growth has barely recovered following the lifting of its zero-Covid policy and is constrained by Beijing’s limited headway in resolving structural problems such as high debt, low productivity, declining demographics and international trade pushback. 

In this context, economic coercion – which has usually been expensive and ineffectual for Beijing – is less attractive, especially after Russia’s invasion of Ukraine elevated the importance of Australia’s commodity supplies.

But the Albanese government deserves substantial credit for taking advantage of this opportunity. 

Key to this has been sensible diplomacy, such as level-headed statements, constructive interactions and strength-building through collective action with like-minded partners.

Australia-China relations would not have stabilized if Albanese had maintained the combative attitude of the previous government.

The next step for him should be to visit China. 

This trip would preserve productive momentum in bilateral ties without diluting Australia’s dedication to a rules-based international order. It would raise the chances of Beijing lifting residual trade controls. 

It would also show regional countries that Canberra recognizes their own needs to coexist with China and reinforce the message of US Cabinet members who have recently traveled to Beijing.

They have made it clear that strategic competition should not veer into conflict or preclude cooperation on global challenges. 

Domestic politics

It would also boost the probability that Australian detainees in China, such as Cheng Lei and Yang Hengjun, can return home.

Calls for Albanese to condition his travel on the prior removal of all trade impediments or the prior release of detainees are understandable, but doing so would unfortunately make these outcomes less likely. 

China has its own domestic politics and his visit would be a diplomatic gesture that makes it easier for Xi to justify the ongoing climbdown from China’s failed coercive diplomacy.

Albanese should use Beijing’s moderating economic policies to press Australian goals. 

Wong’s comment that a visit requires “continued progress” on trade disputes, Trade Minister Don Farrell’s warning that Canberra could resume a World Trade Organization case against Chinese tariffs on Australian barley, and Treasurer Jim Chalmers’ reinforcement of these messages to his counterpart are fitting ways to set expectations of normalized relations with Beijing.

Albanese has not restored the golden era of Australia-China relations – that is neither possible nor the right ambition – he has simply brought some calm. 

This is probably as good as it gets for Australia-China relations in the foreseeable future, meaning regular meetings, firm yet non-belligerent political discourse, open economic exchanges in the vast majority of non-sensitive areas and Canberra working with partners to advance its own priorities. 

A stretch goal could be closer collaboration on transnational concerns like climate change and debt relief if it is free of preconditions.

Bilateral fallout

Yet, the Albanese detente is vulnerable to a US-China crisis or a resurgence in Beijing’s assertive diplomacy. 

Greater volatility is likely and Australia will choose to back itself and the United States in that event. Still, measured rhetoric and coordinated responses would reduce bilateral fallout.

The message for other countries is that strained Chinese economic circumstances present additional space to pursue independent foreign policies while continuing to do business with China. 

But capitalizing on this demands a strategy that is strong in its commitment to self-determination, as well as dialogue, diplomacy, and multilateralism.

Neil Thomas is a Fellow on Chinese Politics at Asia Society Policy Institute’s Center for China Analysis.

This article is republished from East Asia Forum under a Creative Commons license. Read the original article here.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.