February 2021

On the Australia-China Relationship

On this occasion of the lunar new year, the Chinese new year, it's worth reflecting a little bit on our relationship with China, which undoubtedly has become a more difficult one to manage over the last year or two. I sometimes find some of the criticism of Australia's management of that relationship a little frustrating. It tends to fall into one of two categories. The first category suggests that we should just turn back the clock and that if we were able to easily manage the relationship in the 1990s and 2000s then there's no reason that we shouldn't be able to do it now. The other common chorus, if you like, is for Australia to bite its tongue, not only in terms of the criticism we might offer the People's Republic of China, but also in terms of standing up for the values that we consider to be universal, be they human rights, political liberty or our own sovereignty and freedoms. Both of these criticisms are ill-founded because they neglect a few fundamental structural shifts in the relationship. The most important of those is that the People's Republic of China has changed. It has changed quite considerably.

In the year 2000, China as an economy was about four per cent of global GDP. Currently, it's about 18 per cent of global GDP. So, during that time, China's economy has become a much bigger actor in the global economy. China has also become a much more powerful actor. It has, increasingly, a bluewater navy capability. It has a space program. It has capabilities like anti-ship ballistic missiles. It is spreading its culture and values through institutes like the Confucius Institute but also through other active cultural diplomacy programs. It is also expanding its trade and networks of economic integration through the Belt and Road Initiative, the Chinese development banks and things like that. So, in real terms, China's power as an international actor has increased.

But what has also changed is its doctrine—that is, its intent. We've gone from the strategic concept of Deng Xiaoping, which was 'to hide your strength and to bide your time', for China to focus on its internal developmental challenges and to largely keep the world at bay and not pick fights unnecessarily, to, under Hu Jintao, a concept of a harmonious world and a peaceful rise, which reassured many nations, including Australia, that China intended to become a fully paid-up member of the international order and a stakeholder in that order, to what Xi Jinping now characterises as the 'Chinese dream'. I think we can date a lot of the shift in China's doctrine to Xi's assumption of the leadership of China in 2012. We've gone from what has been historically, at least since Deng's passing, a model of collective leadership to not only a one-party state but a one-man state, where decision-making is much more centralised, in what was already a centralised political system, where political rivals are purged, or dealt with in other ways, and where decision-making resides within one individual.

If you take all of these things together, we have a much more powerful China, we have a much more assertive China and we have a China that's much more ambitious about staking its own place in the international order. We shouldn't find it surprising that we are finding this a more difficult relationship to manage. Of course, we are not alone in that fact. There is a tendency in Australia to think that we are the only country that's having relationship difficulties with China. Of course, the United States—not only under the Trump administration; it will be under the Biden administration too—and countries that we generally speaking consider to be friendly and well-disposed countries, like Canada, Norway, Sweden, France and Germany, have all had quite difficult relationships with China over the past few years.

It's important when we consider this that we resist the two extremes of the debate here. The first is straight appeasement, accepting that China is the largest actor in our neighbourhood and just finding a way to get along with it. I don't think any Australian would sign up to such a policy and I don't think any elected government could get away with such a policy. But we should also not necessarily swing the other way and say that we need to institute a new cold war with China. China is a fact of life—certainly within our neighbourhood it's a fact of life—and overwhelmingly China's development and rise has been a positive for Australians and has helped raise our living standards. It has been a positive for the world. It has helped lift several hundreds of millions of people out of poverty in China itself. So, generally speaking, China's development and rise has been a good thing for the world. We need to recognise that. But we also need to recognise that China is much more deeply integrated into our global economy than the Soviet Union and its allies were at any time during the Cold War. So I think decoupling is a completely unrealistic scenario, but so is anything that really smacks of containment. China is too big an actor to be contained, and China, as a large power, as a great power, deserves a place in the international order and deserves a say in how the world is constructed and the principles by which it runs. The challenge for us is not to deny China that role but to help define that role.

Australia is a particular focus of China's diplomacy right now. There are a number of reasons for that. We are probably the most economically integrated with China of any Western country. China, it's no secret here, is our largest export market and is a source of considerable wealth and prosperity. But we also have a significant Chinese Australian community, not only those who have made their homes here but also those who are residents or students residing here.

Our assertiveness in standing up for our own interests—be it pushing for an independent investigation into the origins of the COVID-19 pandemic at the World Health Assembly, be it passing our foreign interference act, be it clamping down on cyberactivities and cyberespionage in particular—has irritated the People's Republic of China, quite frankly, and there is a sense of them wanting to make an example of us and ensuring that other nations don't follow our path. That's why it's particularly important that, whilst not being gratuitous, not seeking to pick fights unnecessarily and not being offensive or personal, we make sure we continue to show resolve in standing up for fundamental Australian interests—be it our own political system and taking steps to ensure that our political system is free from foreign interference or foreign coercion, be it speaking up for values abroad, be it the people of Hong Kong or the people of Taiwan, be it the Uighurs in the Western provinces of China—and in speaking up for values that we consider to be universal, such as human rights.

It's important that we continue to do this. We saw the 14 demands of the Chinese embassy here that were leaked to Fairfax Media a number of months ago. In my view, the demands they make certainly go much more beyond optics and language; they really go to the heart of Australia's character as a liberal democracy and the nature of the role that we've played historically in the world. It's important that we continue to speak out for that.

In doing so, though, we need to be frank with the Australian public about some of the challenges that are in this relationship. I've been encouraged by the level of sophistication of the conversation that we are now having in Australia, avoiding some sort of binary alternatives or approaches or cheap criticism, about how we can handle this relationship. The truth is that there is no simple reset on offer in this relationship. There is certainly a way ahead, but we shouldn't sell false promises of a simple reset or the idea that if we change one piece of legislation or apologise over one particular act things will be back to normal.

Importantly—and I think this is critical—as I touched on at the start, when I spoke about the lunar new year, we need to make sure that we see our Chinese communities as assets. That means not only do we need to protect them from allegations that might go to the heart of their own patriotism or loyalty and make sure we stand up for them against such criticisms; we also need to harness them and make sure that they can help us play a role in navigating this new order. I have been troubled to hear a number of very talented Chinese Australians have had a hard time getting security clearances within our security agencies or getting them renewed, particularly native Mandarin and Cantonese speakers. We need these people working for our government. We need them helping us to understand the challenges ahead.

We need to start building new coalitions in defence of the liberal world order. I've been pleased that what started off as a G7-plus-three configuration, where Australia has now been invited to a number of G7 meetings, now seems to be becoming institutionalised. We're doing more with the Quad—that's the countries of the United States, Japan, India and Australia. We're doing more with Europe in defence of shared values, and countries like Germany, France, the United Kingdom and Canada are increasingly recognising that we need to stand up and defend the liberal world order if we wish to preserve it.

Finally—and I think this is important—we need to show patience and resolve. This relationship is too important to be allowed to fail, but it does need to reach a new equilibrium and we need to make sure it does so on the basis of some realities and fundamental interests of ours that are not negotiable.