After the end of the Cold War, it has become increasingly clear that a country's national interests are no longer dominated by ideology and security as it was during the Cold War era. Unlike the Cold War period,the importance of economic interests has risen significantly. As a result, foreign policy and international relations in the 21st century are more volatile and unpredictable than ever before. Whether a country should focus on economic interests or political and security interests has become a headache for politicians and policymakers.
With the advent of the 21st century, two core trends coexisted globally in the first decade, namely the counter-terrorism in sharp contrast to the economic globalization and regionalization. However, the rise of China in the East undoubtedly demonstrates the importance of the economic characteristics of international relations beyond the security interests of the West, which focused on counter-terrorism. This can be seen from the fact that the rise of China's economic power and technological prowess has triggered increasingly intensified strategic tit-for-tat, trade war and chip war between the United States and China since the second decade exemplified in particular during the Biden era. It coupled with the subsequent Russo-Ukraine war, political and security interests once outweighed economic interests. Nevertheless, with the protracted war between Russia and Ukraine and the recent outbreak of the war between Israel and Hamas, economic interests have once again trumped political interests, and diplomacy and international relations have returned to economic fundamentals. The Biden-Xi Jinping San Francisco summit during the APEC is a salient example of this. Economies of both countries are in trouble. Biden is eager to get economic rewards from China for his reelection capital, while Xi is attempting to regain trust from American investors, showing the urgency for China to do more to reverse capital outflows. Another example is that as the President Xi Jinping Summit in San Francisco is about to take place, it is no coincidence that Australia and China have also repaired relations, with the Australian Prime Minister Anthony Albanese visiting Beijing, the first Australian Prime Minister’s China visit in seven years. The main purpose of this essay is to explore in depth. It will begin with the origin of their sour ties, followed by the context of restoring Sino-Australia relations by identifying the driving forces behind the scene, how did Australia and China manage to get out of the low point in their relations, and finally prospects and challenges of the bilateral relationship in the future.
Former Australian Prime Minister Scott Morrison continued the traditional Liberal-National Party (LNP) coalition diplomatic line,focusing on the bilateral relationship between Australia and the United States as the first priority, and adopting a lopsided approach to the United States. In particular, Morrison's public call for an international investigation into the origins of the Covid19 outbreak triggered China’s economic sanctions against Australia. He was aimed at ensuring Washington’s security guarantee. The most obvious example is the signing of the historic AUKUS security agreement between Australia, the United Kingdom and the US in September 2021, in which Australia receives US and UK assistance in building nuclear-powered submarines, sharing advanced defense technology and intelligence, and covering cooperation in artificial intelligence, quantum technology, hypersonic missiles and cybersecurity.
AUKUS is undoubtedly designed to counter China's growing infiltration in South Pacific. At the same time, it also highlights the shift in the focus of US strategic defense in the Indo-Pacific from the First Island and the Second Chain to the Third Island Chain. Despite this diplomatic triumph, the Morrison coalition government failed to anticipate that it would lose the May 2022 general election because of its negligent handling of relations with the Pacific Island nations. The signing of a security agreement between the Solomons and Beijing, which was criticized by the opposition Labor Party as "the biggest diplomatic failure ever since the end of World War II," ended the Conservative government's nine years in power. The Labour Party, led by Anthony Albanese, thus ascents to power.
In retrospect, Morrison's high profile anti-China rhetoric ultimately led to Beijing's trade sanctions that cost Australia dearly. According to a report entitled Standing up to Chinese Economic Coercion: Is Australia a Model of Economic Resilience? by Institute for International Trade (IIT), University of Adelaide, China sanctioned nine Australian products and caused losses of nearly A$60 billion in the past three years from 2020 to 2022.This does not include Australia’s economic loss in the service sectors. Australia's service sector was also hit hard, especially education and tourism. Australia’s service also hit The international education sector was worth $37.5 billion to the Australian economy in 2019-20, with China accounting for $10.5 billion. Education department data shows that while there were 165,149 Chinese student visa holders in Australia in September 2019, this figure has dropped by 53 per cent. Moreover, China was Australia's largest source of tourists. According to figures released by the Australian Bureau of Statistics in mid-2019, more than 1.43 million tourists came to Australia from China in the past year, accounting for 15% of the country's total international tourists. These Chinese tourists spent more than A$12 billion in Australia, accounting for 27% of all consumption. As a result, the cost of living in Australia has fallen to one of the largest income declines in the developed world.
So far, Anthony Albanese has conducted a very quiet, gradual, subtle and skillful diplomacy toward China, despite the domestic headwinds.Thus, Australian Trade and Tourism Minister Don Farrell engaged in meetings and visited various businesses in Beijing in May this year, indicating a momentum towards trade reconciliation with China. Meanwhile, in Sydney, Australian Prime Minister Albanese stressed that both sides had to foster understanding and dialogue. Albanese expressed the commitment to cooperate with China in areas of mutual interest but acknowledged that disagreements may arise due to the importance of acting in the national interest. Furthermore, for alleviating domestic and US concerns about his coming Beijing trip, Albanese deliberately paid a visit to Washington D.C. to reconfirm his commitment to the AUKUS before his trip to Beijing.
Against this background, there were some positive developments of the bilateral relationship, which paved a way for the Albanese trip to Beijing last month. Remarkable ones that showed both sides offering their olive branches to each other in exchange for creating a positive atmosphere for a summit. China's release of an imprisoned Australian journalist Chen Lei, while the Australian government announced that it would not cancel the 99-year lease of Port Darwin by the Australian subsidiary of the Chinese company Landbridge. As for China, Beijing’s changing attitude toward Australia is largely driven by its economic interest in becoming a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP).Of course, the Xi-Albanese summit ahead of the Xi-Biden summit had a function of boosting Xi’s international prestige.
The priorities of interests that countries attach importance to may not necessarily be the same, and their foreign policy goals may not be the same. In other words, different countries have different priorities when it comes to national interest. Traditionally, there are obvious differences in the national interests of China and Australia. China’s foreign policy towards Australia as a rule prioritizes political interests, followed by economic and trade interests, and security interests in third place. On the other hand, Australia's diplomacy with China traditionally puts economic and trade interests first, followed by political interests and security interests. However, Morrison's biggest mistake in his China's diplomacy was to prioritize political values and security interests over economic interests, deviating from Australia’s middle power diplomacy and traditional China policy focusing on economic interest.
What we can learn from the Australian case is that China would not hesitate to impose economic sanctions on those economies that fail to address its concerns. Despite Sino-Australia relationship returns to normal for the time being, it remains to be seen whether this bilateral relationship could be sustainable, with those within Australia who advocate a security-first approach to relations with China disagree with Albanese's trade-focused and politically-low profiled diplomacy with the Communist Party of China (CPC). They will continue to try to gain political support at home by using nationalist or liberal ideologies to condemn Beijing's actions.Just recently, Australia claiming that a Chinese People's Liberation Army (PLA) destroyer used sonar in international waters off the coast of Japan that injured Australian naval divers. Chinese experts in turn refuted Australia’s accusations, questioning Australia’s legitimacy to come to a controversial Sino-Japanese territorial waters and its motivations in addition to saying that the Australian statement is vague and one-sided, and aims to hype the "China threat" theory. Albanese was under attack in Australia for delaying response to China’s “bad behavior”.
Albanese had no choice but to say Chinese navy incident that injured diver was 'dangerous.' In conclusion, Sino-Australia relationship has restored for the time being, but it remains very fragile.
(Adjunct Professor of Diplomacy and Director, Center for WTO Studies, College of International Affairs, National Chengchi University To-hai Liou, PhD)