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How Australia-China relations hit the ‘lowest decline in decades’

A Chinese police officer makes a gesture
A Chinese officer outside the Australian embassy in Beijing in July

The tensions between Australia and China have recently read as the fringe part of a geopolitical thriller; no one knows exactly where the story is going or how it will end.

“Relations between Australia and China are resolving at a pace that could not have been contemplated just six months ago,”

; academic James Laurenceson recently wrote.

Take the escalation only in the last few weeks. Chinese authorities confirmed that Cheng Lei, an Australian citizen and high-profile host for the Chinese English-language broadcaster CGTN, had been arrested on suspicion of endangering national security.

Soon after, the last two correspondents who worked for the Australian media in China were rushed home on the advice of diplomats. He played stunningly.

On the eve of ABC journalist Bill Birtles’ hastily scheduled departure from Beijing, seven Chinese police officers arrived at his door in the middle of the night. A similar visit was made to Michael Smith of the Australian Financial Review in Shanghai.

Australian journalist Cheng Lei (left) was arrested in China while Bill Birtles (center) and Mike Smith were taken home.
(L-R) Cheng Lei remains detained in China while Bill Birtles and Mike Smith were rushed home

Each took refuge in Australian diplomatic missions but was prevented from leaving China until questioned about vague “national security” issues. Mr. Birtles said he felt like a “pawn in a diplomatic brawl”.

The day after the couple returned home, Chinese state media reported that Australian intelligence agents had questioned several Chinese journalists in June and seized their devices “in violation of legitimate rights.”

Australian media reported that the incident was linked to an investigation by intelligence and police officials into alleged foreign interference. It followed a raid in June on the offices of New South Wales state parliamentarian Shaoquett Moselmane, a staunch supporter from Beijing who later said he was not personally under investigation.

More recently, two Australian academics were barred from entering China – a move one claimed was in retaliation in Canberra revoking visas for two Chinese scholars.

At any other time, one of these incidents might be enough to keep the headlines for some time, but these happened in quick succession.

The dizzying speed had even the closest observers scratching their heads.

The background story

Anger and distrust between countries has been bubbling under the surface for years.

A turning point came in 2017 after the Australian Security Intelligence Organization (Asio) warned of increasing Chinese attempts to influence decision-making in Canberra. Donations from Chinese businessmen to local politicians also emerged.

Late this year, Prime Minister Malcolm Turnbull announced laws aimed at curbing foreign interference. Beijing responded by freezing diplomatic visits.

In 2018, Australia was the first country to publicly ban Chinese tech giant Huawei from being involved in its 5G network, citing national security reasons. Since then there have been numerous other sticking points.

Throughout the turmoil, however, Australia’s business relations with its largest customer largely flourished.

China may have been furious at Australia, but its ever-growing economy has remained starved of Australia’s natural resources. Hence, iron ore, coal and liquefied natural gas continued to flow to China, and Chinese tourists and students and huge export income continued to flow to Australia.

More on Australia and China:

While many economic benefits continue, things have changed dramatically in 2020.

“Politically we are at the lowest point since diplomatic relations were established in 1972,” said Professor Laurenceson, director of the Australia-China Relations Institute at Sydney University of Technology.

The real trigger this year was Australia calling for an investigation into the origins of Covid-19, which was first detected in the Chinese city of Wuhan. Prime Minister Scott Morrison suggested that the World Health Organization needed powerful new “arms inspector” powers.

Interior Minister Peter Dutton cited the US State Department’s comments that “documentation” existed showing how the virus had spread, but noted that he had not seen them. Chinese diplomats responded in highly non-diplomatic language, saying Dutton must have been told to work “with the United States in their propaganda war”.

Professor Laurenceson told the BBC that Beijing’s anger was directed not just at political rhetoric but at Australia’s stance on global power balances.

“China is seeing that Australia is making its choice to side with America in a geopolitical competition,” he said.

At the end of April, the Chinese ambassador in Canberra, Cheng Jingye, threatened that the Chinese could boycott Australian products.

“If the mood is going from bad to worse … Maybe ordinary people will say ‘why should we drink Australian wine? Eat Australian beef?'” He told the Australian Financial Review.

Not long after, China imposed an 80.5% tariff on Australian barley, suspended some imports of Australian beef and launched an anti-dumping investigation into Australian wine imports.

Foreign ministers of India, Japan, Australia and the United States sit around a table during security talks this week
Asia-Pacific allies known as “The Quad”: India, Japan, Australia and the United States met in Tokyo last week

Beijing also warned students and tourists against going to Australia, citing racist incidents in light of Covid-19.

Australian sentiments towards Beijing have also soured in public opinion. This is particularly evident in what many see as China’s attempts to twist its arms with sanctions against sectors of the Australian economy.

“These bullying tactics have hardened attitudes in Australia,” said Natasha Kassam, a researcher at the Lowy Institute think tank. This year he conducted a survey that found that only 23% of Australians trusted China to act responsibly around the world.

Ms Kassam added that every time China attempted to “intimidate” Australia, voices calling for a more assertive policy towards Beijing have increased.

Morrison used harsh language at times, insisting that Australia will not “trade” its values ​​or respond to coercion.

His government has openly criticized the new security law imposed by China on Hong Kong and offered a safe haven for many Hong Kong students and graduates already in Australia. He also suspended the extradition agreement with Hong Kong.

Beijing’s fury with Canberra’s latest stances – particularly the US alignment – isn’t surprising, but the speed and severity of the anger caught even the pundits off guard.

“I am surprised to the extent that for three years we have had a firewall between the political side of the relationship and the economic side,” said Professor Laurenceson. “Now within five months we have China taking or promoting action against barley, beef, students, tourists and wine.”

Chinese wearing masks take a selfie in front of the Sydney Harbor Bridge
Although Australia’s borders remain closed, Beijing has issued additional travel warnings

“What adds to the nervousness at the moment is that it’s not clear where the bottom is.”

Ms Kassam said it is increasingly clear that the acrimony was “structural” and could not be “resolved with better diplomacy”.

“It would never have been possible in this globalized world where China is a great power on the rise,” he said, emphasizing the US alliance of Australia.

The two sides know that with high tensions the stakes are even higher. Last week, one of China’s top diplomats called for an end to the “confrontation and offensive language” between Australia and China.

Fu Ying, China’s former ambassador to Australia and an influential figure in Beijing, called for better communication because the two trading partners needed each other.

The significance of that particular statement was not only in what he said, but to whom he said it: Michael Smith of the Australian Financial Review, one of two reporters who had been taken away from China.

Even amid the tensions and pandemic-led global recession, countries have traded at a steady pace.

‘The economic side of the relationship remains a strong point,’ said Professor Laurenceson. He expected it to coexist with the political relationship “uncomfortably moving forward”.

“You won’t find two countries that have more complementary manufacturing structures than Australia and China. Simply put, China wants what Australia produces and it wants it deeply.”

A clerk grabs a bottle from the Australian wine department in a Beijing bottle shop
China is conducting two surveys on Australian wine exports

This remains a complicated balancing act for both countries.

For Ms Kassam, separating trade from political tensions is a myth that was debunked as both sides increased their rhetoric.

“For 10 years [or so]… Australia and China have been able to maintain the fiction that the co-dependence of their economies could exist in a sphere separate from their political tensions. It was in both sides’ interest to keep that fiction for that period. “

He added that it was difficult to see stability return soon and that, in the future, the relationship would be defined by tension and political conflict.

“I worry a lot,” Ms. Kassam said. “I worry about Australians in China and whether they could potentially be targeted in the decline of bilateral relations.”

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