Chinese President Xi Jinping and Australian Prime Minister Anthony Albanese held a meeting on the sidelines of the 19th G-20 Summit in Rio de Janeiro on November 18. After the meeting, Albanese said in a post on X (formerly Twitter) that “Stabilizing Australia’s relationship with China is in the interests of both our countries.” He added, “Dialogue is critical, and we’ve made encouraging progress… It is important that we have direct discussions on the issues that matter to us, and to the stability and prosperity of our region.” Albanese also pointed to progress on trade, which he said is “flowing more freely,” with “benefits to both countries and to people and businesses on both sides.”
During the meeting, Xi said that “China-Australia relations have achieved a turnaround and are maintaining a positive momentum of development.” He expressed that Beijing was prepared to work with Canberra “to build a more mature, stable, and fruitful comprehensive strategic partnership” between both countries. Xi noted that “there is no fundamental conflict of interests between China and Australia,” adding that “China-Australia relations will surely develop well” provided that “the two sides adhere to mutual respect, treat each other as equals and seek common ground while shelving differences.”
This third meeting between Albanese and Xi came at a very crucial time, as U.S. President-elect Donald Trump has promised to slap 60 percent tariffs on all imports coming from China. Amid these growing geoeconomic tensions between Washington and Beijing, it is tough for Canberra to sail through the tussle between the two superpowers given its close ally relationship with the United States and its comprehensive strategic partnership with China. However, Trump’s heavy tariff pledge against China seems to be out of step with Australia’s policy toward China. When asked about Trump’s promise, Albanese responded that he would not get involved in bilateral relations between Washington and Beijing, highlighting that Canberra’s position on any of the differences with Beijing remains unchanged.
This clearly shows that Australia wants to move ahead with its relations with China while maintaining its status quo with the U.S. vis-à-vis security affairs. Canberra is one of the closest allies of the United States; both are part of the Five Eyes intelligence alliance, the Quad partnership, and the AUKUS alliance. All these are widely seen as anti-China groupings, despite denials from the governments involved.
According to former Australian Prime Minister Kevin Rudd, the Quad poses a great threat to China’s ambitions: “The Quad is uniquely problematic for China’s strategy because its aim of unifying a multilateral coalition of resistance has the potential to stiffen spines across the whole of the Indo-Pacific — and possibly beyond,” Rudd argued. AUKUS is explicitly a security pact in the Asia-Pacific, but it is considered a latent attempt to counterweight Beijing’s growing influence in the region. China also sees the Five Eyes Alliance as a U.S.-led anti-China alliance.
Australia does not have any territorial disputes with China. But, as per Tim Marshall, China’s greater interests in the region along with its ambitions to increase its influence and expand its territory do not align with Australia’s vision for the Indo-Pacific. However, Canberra must walk a difficult line when it comes to Beijing, balancing defense strategy, economic interests, and diplomacy. China is Australia’s biggest trading partner and purchases almost a third of its agricultural production. Besides this, China is also a major market for Australian gold, gas, iron ore, and coal. Australia’s businesses make the most of lower tariffs because of the China-Australia Free Trade Agreement (ChAFTA), which entered into force in 2015.
Despite the strong economic relations between the two, there was a rough patch in bilateral relations in the recent past, which was a result of mistrust and anger bubbling under the surface for years. Tensions began to mount in 2017, when the Australian Security Intelligence Organization (ASIO) warned about Beijing’s attempts to influence Canberra’s decision-making. It also brought to light the donations received by local politicians from Chinese businessmen. As a result, Australia announced laws to curtail foreign interference and China responded by freezing diplomatic visits.
During the following year, Australia was the first country to ban Huawei, a Chinese tech giant, from being part of its 5G network on grounds of national security. Since then, there have been various other flashpoints between the two including former Australian Prime Minister Scott Morrison’s call for an investigation into the origins of the COVID-19 virus. Consequently, China imposed tariffs and import bans on Australian commodities and agricultural products.
This diplomatic rift came to an end last year after Albanese visited China – the first visit by an Australian leader after seven years. His visit proved to be effective in thawing bilateral relations. Both countries underlined the significance of dialogue and agreed that both could do more together in the areas of trade, climate change, and people-to-people ties. After the visit, Australia and China have made encouraging progress in various areas including trade. Relations seem to be on a positive trajectory, and the recent meeting between the leaders of both countries manifested that.
For its economic as well as political interests, Australia will have to maintain a balanced approach toward the growing geoeconomic rivalry between China and the United States. On the one hand, it will have to maintain strong economic relations through dialogue with Beijing. Despite many differences, both China and Australia need each other. On the other hand, it will have to strengthen its security and political ties with Washington. However, Canberra’s best course of action would be to isolate itself from the China-U.S. rivalry to secure its national interests.
Adding to the uncertainty, Australians will head to the polls in 2025. Should Albanese and the Labor government be voted out of office, the return of the Liberal-National Coalition to power could mark the beginning of yet another downward slide in Australia-China relations.