China and Australia’s New Government

In the aftermath of the military onslaught of June 4, 1989 in Beijing, a Taiwanese-born man in his early 30s came through the gates of the Australian Embassy. The city had been ravaged by tanks and soldiers. Thousands had been killed or injured by the People's Liberation Army’s brutal crackdown on the unarmed residents of Beijing.

The man stayed in the Australian Embassy for 73 days. His presence was felt but never seen except by those who had special access to the second floor room above the embassy's administrative departments. Every day, a member of the security team walked by the downstairs offices carrying a fully laden meal tray. He then disappeared through the door at the end of the hall and up the stairs, coming back down empty-handed. No one spoke of it, but everyone knew.

The embassy's gates, always open during daytime hours, were now closed at all times. Black cars with tinted windows and Chinese government license plates were often seen parked outside.

The man was Hou Dejian, a controversial figure in both China and Taiwan. Hou, a singer and songwriter, had defected from Taiwan to the mainland, a rare event. As the demonstrations that began in April 1989 in Tiananmen Square intensified, Hou became a voice of the moment. As it became evident on the night of June 3 that the PLA was probably coming in, Hou later claimed that it was he who organized the evacuation of the square.

After the massacre, Hou was a wanted man – and he was given sanctuary in the Australian Embassy shortly thereafter. Australia’s protection of a dissident who had openly challenged the Chinese Communist Party became a defining point in Canberra’s larger relationship with China.

On the Australian side, the relationship has since veered from servile and sycophantic to suspicious, and back. China has benefited from Australia's steady exports of iron ore and other mined commodities and from a relationship with a mostly eager-to-do-business nation nearly the land-size of China but with only 2 percent of its population. The idea that Australia – a magnet for Chinese students and tourists – could one day be Sinicized to nearly satellite state status has long held sway in some Chinese minds.

One wouldn’t have thought that the relationship could be more tried, tested, and tense than during a period in which the Australian Embassy in China gave sanctuary to a protester who had advocated bringing down the Chinese government. But as of early 2022, Australia-China relations are in divorce court.

The Trials and Tribulations of Australia-China Relations

The timeline of the collapse of the relationship between Beijing and Canberra is stunning for both its ferocity as well as for the velocity of the fall.

In December 2015, the China-Australia Free Trade Agreement (ChAFTA) went into effect. This should have been the start of a long and mutually profitable period between the two nations. Indeed, in 2015, 25 percent of Australia's exports already went to China. That same year, Australia joined the Asian Infrastructure and Investment Bank, a Chinese initiative viewed with great suspicion by Washington, as a founding member.

As it turned out, these would be the last two major pieces of good news for the relationship. Highlights of the deterioration over the last five years, as listed by Geopolitical Monitor, include the following.

In 2018, Australia banned Chinese companies Huawei and ZTE from the buildout of its 5G networks. Most critically, the Foreign Influence Transparency Scheme went into effect in December 2018, tacitly tackling the Chinese Communist Party’s influence-peddling in Australian politics. The law requires everyone lobbying and making payments in Australia on behalf of a foreign principal to publicly register that activity with the government.

In April 2020, then-Prime Minister Scott Morrison gave his endorsement for an independent investigation into the origins of COVID-19, suggesting that the World Health Organization “needed tough, ‘weapons inspector’ powers to investigate the cause of the outbreak.” The Chinese government and media went apoplectic with rage. According to Australia's ABC News, the editor of state-run mouthpiece Global Times described Australia as “chewing gum stuck on the sole of China's shoes” and commented that “sometimes you have to find a stone to rub it off.”

The relationship went into free fall from there, with China imposing an over 80 percent tariff on Australian barley, warning Chinese students of racism in Australia, formally recommending Chinese not to travel to Australia, holding up processing of Australian coal exports at Chinese ports, and unofficially but effectively banning import of Australian cotton, copper, sugar, wine, and lobster, among other goods. Wine came under particular attack, with more anti-dumping claims and tariffs of over 100 percent.

For its part, Australia declared to the United Nations that it rejects the legal basis of China's territorial claims in the South China Sea. Australia also signed a landmark defense deal with Japan, with each side granting the other reciprocal access to military bases. It was only the second such defense arrangement held by Japan, with the first being, of course, with the United States (Tokyo announced moves toward a third, with the United Kingdom, earlier this year).

By the end of 2020, China had delivered a list of 14 grievances to the Australian government.  This was followed up by threats to Australia if they dared to engage in freedom of navigation operations in the South China Sea. By the fourth quarter of 2020, China had effectively banned Australian coal (although iron ore imports from Australia soared).

Then came 2021, which saw Australia cancel a Belt and Road Initiative deal signed by the state government in Victoria, and put the lease of Darwin Port to a Chinese company under review. China, for its part, suspended the strategic economic dialogue indefinitely.

Also in 2021, Australia entered into the AUKUS agreement, bringing Australia, the U.K., and the U.S. into a new trilateral security paradigm. Australia also made moves to enter into a free trade deal with India and joined the United States in a diplomatic boycott of the 2022 Olympic Games in Beijing.

A Change in the Winds?

With a new prime minister having been sworn in on May 23, Australia’s complex relationship with China will be put to the test. A host of issues is putting pressure on both governments to at least restore the dialogue that was unilaterally severed by China in 2020.

Among the roadblocks are the question of exports to China of Australian iron ore, minerals, energy, and agriculture; the recently-signed security agreement between Solomon Islands and China; the AUKUS alliance; the nuclear-powered submarine technology that AUKUS will deliver to Australia; internal interference in Australia by the Chinese Communist Party; and the origins of COVID-19 in China.

The Australia-China Relations Institute, in its analysis of policies set forth by both major political parties, found that the outgoing Coalition government of Scott Morrison and the incoming Labor-led government headed by Albanese coalesce on almost all major points related to Australia’s relations with China, with particular emphasis on national security and trade. On paper, this should mean that there will be a smooth and cohesive transition from one government to the next on the content and concepts underpinning Australia’s relations with China.

Not everyone thinks it will be that straightforward.

Australian corporate executive David Evans, who has followed first-hand Australia’s business relationship with China, said, “The Labor Party is much more amenable toward China… from time to time scandals have been causing the resignations of senior figures.” As an example, he pointed to a controversial deal signed at the state level with China: “Like the USA, Australia is a federation of states with states able to run their own laws and policies in certain areas. The most left-wing state we have, Victoria… signed a billion dollar Belt and Road agreement with China.”

“The federal government passed laws and stepped in to cancel the deal,” Evans added.

“Until recently the Liberals have also been asleep at the wheel when it comes to China allowing the sale of vital Australian assets, farmland and properly to CCP and CCP surrogates as well as most egregiously leasing the Port of Darwin to a Chinese company,” Evans said.

Going Forward

Aside from domestic sentiment that does not necessarily favor a reinstatement of the close and dynamic relationship that Australia and China had in the past, Albanese may find himself under friendly but firm pressure from the Biden administration to continue countering China’s military and security expansion in the Asia-Pacific region.

China has not only militarized manmade and disputed islands in the South China Sea but has also negotiated a security agreement with Solomon Islands. That accord could allow China to build a military base just 1,000 miles from the coast of Queensland in northeast Australia.

In the end, Albanese and Morrison’s differences on China policy may come largely down to style. An Albanese government is likelier to engage in discussions with China but unlikely to be pressured into changing core policies.

In his first statement on China after having been sworn in, Albenese said as much.

“What I have said, and we maintain, is that the relationship with China will remain a difficult one,” he told reporters moments after being sworn in as Australia’s 31st prime minister.

“I said that before the election. That has not changed. It is China that has changed, not Australia and Australia should always stand up for our values and we will in a Government that I lead.”

Albanese will have to answer the core question facing the new government, as well as the people of Australia: Does Canberra really need to “fix” the relationship with Beijing? After all, it was China that unilaterally severed political dialogue. Australia may be better served by shifting its focus to strengthening partnerships with equally important but more reliable nations that more closely reflect Australian values and ideals.

Prime Minister Bob Hawke and his Australian Labor Party had the courage to protect a dissident in Beijing in 1989, as well as to give over 42,000 Chinese students in Australia at the time an offer of asylum. It remains to be seen if his Labor Party successor can stand as firmly in his principles as Hawke did in his, only this time facing a new and arguably much more dangerous set of China issues.