China relations show signs of a thaw but there’s still plenty of fire and ice

The weekend meeting between Defence Minister Richard Marles and his Chinese counterpart General Wei Fenghe is a welcome resumption of top level contact between the two governments after almost three years of freeze amid continuing trade sanctions by China on billions of dollars worth of Australian exports.

It took place at the Shangri-La Dialogue, an annual summit of defence ministers and senior military leaders from the Indo-Pacific as well as others from Europe and elsewhere run by the UK’s International Institute for Strategic Studies with the Singaporean government. This year’s meeting was the first since 2019 due to the COVID pandemic.

The meeting may have been a sign of a thaw but it is important not to overstate its importance. Such meetings may have been possible under the Coalition government but it had doubled down and rejected China’s overture by former deputy ambassador Wang Xining at the National Press Club in August 2020.

The Coalition’s pushback on China included the bizarre decision by former prime minister Scott Morrison to not meet the new Chinese ambassador and for Peter Dutton to beat the drums of war,

Even The Australian’s often bellicose foreign commentator Greg Sheridan thought that “Morrison and former defence minister Peter Dutton frequently overdid the rhetoric on China for obvious political reasons. It is particularly foolish to talk frequently and needlessly of war. Other nations have problems with Beijing just like Australia does, but they don’t go in for this silly, exaggerated rhetoric.”

Only three weeks into their jobs, Prime Minister Anthony Albanese, Foreign Affairs Minister Penny Wong and Marles have shown that diplomacy and regular outreach to our neighbours and trading partners are back on the agenda and appear to be at least offering the “better mood” that China has asked for. But it’s also clear that Australia’s stance on China remains unchanged, and economically the two countries need each other — at least for now.

“The truth is that Australia is a great democracy,” Albanese said. “The demands which were placed by China are entirely inappropriate. We reject all of them. We will determine our own values. We will determine Australia’s future direction.”

China’s position also remains the same and was outlined by ambassador Xiao Qian in a speech in Perth on June 11: “During the past five decades, China has always been looking at the bilateral relations from a strategic and long-term perspective, and committed to friendly exchanges and cooperation with Australia in the spirit of mutual respect and mutual benefit. This policy remains unchanged.”

Yet he added that bilateral ties were at a “new juncture” with some new opportunities.

In truth China was always going to try and talk to the new government and started with a note from Premier Li Keqiang, Albanese’s equal in the Chinese hierarchy (PM rather than head of state).

“The Chinese side is ready to work with the Australian side,” Li wrote, to “uphold the principle of mutual respect and mutual benefit” — effectively opening the door for dialogue, at least.

China was always going to test Australia as well. And that may well be what the May 26 incident when a Chinese air force plane “buzzed” an RAAF surveillance plane on an entirely routine flight in international airspace over the South China Sea, an area China claims. There has been a war of words and blame on each side over an incident Albanese described as “a dangerous act”.

It is likely to be a slow road for the Albanese government. Australia needs to accept a rising China and its concomitant increased influence in the Indo-Pacific while continuing to work on military deterrents including the AUKUS and Quad alliances as it tries to loosen China’s sanctions on Australian imports.

​​”We do not seek confrontation or conflict,” Marles said. “And we do not seek a new Cold War, an Asian NATO, or a region split into hostile blocs … Great powers should be models of transparency and communication. So we’re working closely with both our competitors and our friends to strengthen the guardrails against conflict. That includes fully open lines of communication with China’s defence leaders to ensure that we can avoid any miscalculations. These are deeply, deeply important conversations.”

The phrase increasingly being used by the US, Australia and their allies with regard to China is “competition without catastrophe”.

China’s increasing aggression in the region both strategically and economically must be taken as a given. The two are being knitted together in their approach to the Solomon Islands, for instance, and are really straight from the US postwar playbook in Latin America and elsewhere.

For any real signs of change, we must look to a loosening of trade sanctions that China amusingly says are not political.

The other major sticking points are the continued detentions of writer Yang Hengjun and journalist Cheng Lei detained in 2019 and 2020 respectively. Resuming diplomatic access would be the best way to start.

But the major immediate impediment for China to give way is internal. President Xi Jinping is under unexpected pressure in a year that was meant to end in his securing an unprecedented third term as CPP secretary-general. 

The Chinese economy is a mess and getting worse in part due to Xi’s insistence on his zero-COVID policy which, in turn, has opened the eyes of Chinese citizens to the cruelty of the party after decades of it providing increasing wealth for so many. We are seeing dissent on a scale not seen, perhaps, since 1988.

And many believe Xi fluffed the response to Russia’s invasion of China, bringing its global standing down a peg as European countries and others reassess Xi’s regime. Many believe these issues may lead to a new team emerging from the party Congress in October or November with tighter controls on Xi.

So it’s now a waiting game, the temperature has been turned down and communication lines are open. But it will be a horrendously difficult relationship for Albanese and his team to navigate.