Inside Story

Australia–China relations and the Trump factor

Australia was pursuing an independent approach well before the US president upended the strategic order

John Fitzgerald 14 October 2020 3535 words

Neither China under Xi Jinping (above) nor the United States under Donald Trump has been committed to upholding the old order. Damir Sagolj/Reuters

It’s difficult to see any future for Australia that does not involve China in a big way in trade, investment, security, policing, educational and cultural exchanges, and migration. Ensuring a secure and prosperous future for Australia means getting the relationship with China right for the long haul.

For some years now Beijing has been telling Canberra that Australia has got the relationship wrong. Australians engaged in business, government, community, media, think tanks and universities have been debating what went awry and what can be done to set things right.

Emerging from this debate, I believe, is a widespread recognition that it is China that has changed and not Australia. Adjusting our policies to meet a changing China does not mean rejecting trade or engagement on other fronts, but it does mean rethinking relations with that country from the bottom up.

This year we have an additional complicating factor, Covid-19, which has thrown travel, business and public trust into disarray. Alan Dupont is not alone in arguing that the virus “has exposed the fragility of just-in-time supply chains and the folly of relying on a single country for critical goods and infrastructure. Some economic separation is unavoidable and necessary.”

For the past four years a further complicating factor has been president Donald Trump. Making sense of the Trump factor in Australia–China relations is no simple matter.

For Australia, the big-picture challenge is this. We are partly dependent on China for our prosperity and largely dependent on the United States for our military security. But we are more dependent than either of them on the norms and institutions of a stable international order for managing our trade, international relations and security. Neither China under Xi Jinping nor the United States under Donald Trump is committed to upholding the old order. Where does this leave Australia?

This question could lead in many directions, but here I propose to answer by isolating the Trump factor in trilateral relations along three separate bilateral vectors — Australia–China relations, US–China relations and Australia–US relations — and to say a little about a changing China under president Xi Jinping, and where we might go from here.

What went wrong, and when: Australia–China relations

Since the last US presidential election, a number of prominent public figures in Australia have maintained that relations with China have been skewed by Canberra’s efforts to appease Donald Trump. In 2017, the year President Trump took office, eminent economist Peter Drysdale and business leader John Denton wrote in the Australian Financial Review that the Australian government and media were “demonising China” out of anxiety about the US alliance under Trump. Around the same time, former NSW premier Bob Carr made similar claims here and in China. “Some silly people have got it into their heads that Australia impresses Washington by beating up on the Chinese,” he told TV audiences in China. Prime minister Malcolm Turnbull was simply “trying to impress Donald Trump’s America.”

China’s state media and diplomats have come to echo these claims by charging that Australia is a “loyal US attack dog” barking away at China, in the colourful language of the Global Times, or “dancing to the tune of a certain country,” in the more cautious phrasing of China’s foreign ministry.

If we want to isolate the Trump factor in Australia–China relations we need to ask whether Australia’s problems with China arise from excessive toadying to President Trump, as some claim, or spring from other sources. This question can be approached historically, by asking when relations turned sour, and forensically, by asking what appears to have curdled the relationship. Let’s take each approach in turn.

In trying to plot a plausible timeline for souring relations between Australia and China it becomes clear that the later people came to the problem, the more recently they tend to identify the trigger, attribute the cause and lay the blame. This year we’ve heard local radio commentators in Melbourne tracing problems in the relationship to foreign minister Marise Payne’s call five months ago for an international inquiry into the origins of the pandemic. Last year we were told it was because Australia banned Huawei from the national 5G build. In 2018 it seemed the problem stemmed from legislation introduced to underpin the Foreign Influence Transparency Scheme in 2017.

Back further, in 2015 and 2016, deteriorating relations were attributed to a “China panic” in the media over political donations and other shenanigans involving the NSW Labor right. Before that again, in 2014, the chill in relations was attributed to the Abbott government’s expression of concern over China’s declaration of an Air Defence Identification Zone in the East China Sea. It is worth remembering that in December 2013 Chinese foreign minister Wang Yi publicly humiliated foreign minister Julie Bishop on this issue, declaring that Canberra’s position on China’s declaration jeopardised mutual trust. A senior Australian foreign affairs official candidly characterised Wang Yi’s public comments as the rudest public rebuke of an Australian minister he had encountered in thirty years of foreign service. That was 2013.

Between times, we have been told the chill turned to freeze when Canberra spoke out about Beijing’s rejection of the international arbitral decision on China’s claims over the South China Sea in 2016. Australia’s public position on the claims led to speculation in China that Australia was growing increasingly “anti-China” — even racist — and to a strident call in Chinese media for Beijing to exact “revenge.” Something was clearly amiss in bilateral relations before Trump took office in January 2017.

Clarifying this timeline helps us to identify not just when relations turned sour but also what exactly went wrong and why. In my assessment, formal relations started to deteriorate when China declared the Air Defence Identification Zone in 2013 and then progressively occupied and militarised contested islands in the South China Sea and laid claim to waters within its fabulous “nine-dash line.”

It is worth recalling that Beijing’s attempts to infiltrate Australia’s political system and communities were initially directed to the same purpose, supporting its actions in the South China Sea. It was a news conference on that issue that tripped up senator Sam Dastyari. Similarly, disgraced businessman Huang Xiangmo’s threat to withhold a major political donation to Labor hinged on whether Labor changed its public pitch on China’s conduct in the South China Sea. And some of the earliest public alerts over the party’s clandestine United Front operations in Australian community organisations were raised when community associations linked to China’s consulates began pressuring the prime minister, ministers and local politicians over the same issue, and coordinated street protests in support of China’s occupation of the maritime territories.

Some in the media and in independent community organisations raised their concerns. So did the Australian government. This was enough to trigger accusations from Beijing that Canberra was undermining the relationship. The rest arguably flowed from there — public debates in the media, the foreign interference legislation and Foreign Influence Transparency Scheme, the Huawei decision, China’s threatened trade retaliations, and the precipitous decline in Australian popular trust in China revealed in successive Lowy Institute and Pew Research Center surveys. Events cascaded one onto the other, flowing from China’s initial territorial intrusions and its efforts to interfere in Australian domestic politics and silence community and government concern.

From Australia’s perspective, this was textbook independent foreign policy. Most of the apparent triggers for deteriorating relations over the past six or seven years have involved Australian governments acting without external prompting in defence of international order, social cohesion and national sovereignty. Leaving the Covid-19 pandemic aside — an important outlier — each of these initiatives was generated in Australia, by Australians, to deal with a domestic or regional issue affecting Australia’s regional position, domestic security or social cohesion.

Foreign affairs and trade department secretary Frances Adamson explains it this way: “We’ve seen China seeking to assert itself in this region, in the Indo-Pacific and globally, in ways that suit its interests but don’t suit the interests of countries like Australia. We want a peaceful, stable, prosperous region… but when influence builds into interference, that is something we don’t want to see, our government won’t tolerate [it] and I think most Australians are broadly supportive of that.”

In sum, the relationship was heading into troubled waters years before Donald Trump took office because Canberra’s defence of Australian interests and sovereignty in response to Beijing’s assertive behaviour was not welcomed in Beijing.

A proliferation of flashpoints: US–China relations

During President Trump’s term, relations between China and the United States have moved from great-power competition to great-power rivalry and possibly confrontation. This move possibly reflects a long-term shift in the balance of power, but it undoubtedly reflects a new consensus in Washington — reaching well beyond the Trump White House to business, think tanks, universities and media — that the days of partnership and engagement with China are over. In the words of senior Obama administration official Kurt Campbell and co-author Jake Sullivan, “While Washington remains bitterly divided on most issues, there is a growing consensus that the era of engagement with China has come to an unceremonious close. The debate now is over what comes next.”

Significant differences are emerging in this debate. Team Trump is calling for strategic competition. On 20 May, President Trump signed a new document on China policy, “United States Strategic Approach to the People’s Republic of China,” signalling “all-out strategic competition.”

In July, Trump’s executive team spelled out what this means in a series of coordinated speeches on relations with China. These involved major statements by secretary of state Mike Pompeo, attorney-general Bill Barr, defence secretary Mark Esper, FBI director Christopher Wray and national security adviser Robert O’Brien. Following this “full-court press,” China and the world were left in little doubt that the Trump administration regarded China as a strategic and ideological rival.

On the Democratic side we hear a different line of argument emerging, less ideological and more finely attuned to discrete aspects of US–China relations. Samantha Power, a Security Council member in the first Obama administration, told a Lowy Institute seminar in August that a Biden administration could pursue China policy on a number of distinct tracks, with confrontation on one track (over intellectual property, cyber security, the South China Sea and so on), competition on another (around competing national economic interests and leadership of international organisations), and cooperation on a third (on climate change, global health and nuclear non-proliferation). This approach, combining elements of competition and cooperation, marks an emerging consensus on the Democratic side of politics over the past year.

Beyond Washington debating circles, the real-world US–China relationship is not improving. In the judgement of American political scientist Jude Blanchette, the deterioration in US–China relations is more than incremental and amounts to a new paradigm “defined by the proliferation of flashpoints, the downward spiral of hostility, the rise in zero-sum thinking, and the breakdown of mediating and mitigating institutions.”

Managed differences: Australia–US relations

Many Australians appear to have been surprised on reading foreign minister Marise Payne’s blunt remarks, following the AUSMIN bilateral meeting in Washington in July this year, clearly distancing Australia from the United States on relations with China. Minister Payne declined to endorse Secretary Pompeo’s frankly ideological position and distinguished clearly between Australian and US interests and perspectives on China. “The Secretary’s speeches are his own,” she said. “Australia’s positions are our own.” We do share values, she continued, “but most importantly from our perspective, we make our own decisions, our own judgements in the Australian national interest and about upholding our security, our prosperity, and our values… [W]e deal with China in the same way.”

There should have been little cause for surprise. Canberra has been distancing itself from Washington on a range of issues over the term of the Trump presidency. Canberra’s differences with Washington are not just about China policy. They arise from the systemic problem of Australia’s standing as a middle power dependent on international trade and predictable rules. Middle powers fear disruption, and Donald Trump is a disrupter.

Maintaining a rules-based order is recognised as one of the three foreign policy imperatives that all governments assume when they take responsibility for Australia’s international relations. In Allan Gyngell’s account, these are sustaining and developing an international, rules-based order; allying with a strong global partner; and finding a constructive place in the neighbourhood.

With the arrival of Trump the Disrupter, Australia finds itself thrown into a particle accelerator in which these three fundamental principles are colliding with each other — here maintaining a close alliance partnership, there pushing back against disruption to global trade and international organisations, and, back in the neighbourhood, trying to find a welcoming place in a region in which China and America are competing fiercely for influence. Australia is not alone in this tangle. Singaporean prime minister Lee Hsien Loong put the problem succinctly: “The troubled US–Chinese relationship raises profound questions about Asia’s future and the shape of the emerging international order.”

For President Trump the big game is to Make America Great Again. In practice this has come to involve open hostility towards international organisations (the World Health Organization and the World Trade Organization most obviously), indifference towards multilateral frameworks for trade or conflict resolution (including the Trans Pacific Partnership), a disheartening lack of commitment to longstanding alliance partners (including Japan and South Korea in our region and NATO generally), and a propensity to impose tariffs and other arbitrary measures without regard to existing understandings or long-established partnerships.

The Australian government has made its differences with the United States clear on each of these issues. Marise Payne was doing no more than that.

Alliance politics is another matter again. To deal with President Trump, Australian officials have developed a diplomacy suited to his personal style, tailored to avoid an open clash with a petulant president without giving too much away. This is what Australian editor-at-large Paul Kelly calls the new diplomacy that nobody really wants to talk about. It involves pulling all available levers to secure the support of the Trump administration, as an alliance partner, while distancing Canberra from Washington on important issues over which the two sides disagree.

In an interview on his retirement, Australia’s ambassador in Washington, Joe Hockey, offered a few insights into how this new diplomacy works. First, he said, government-to-government relations need to be personalised. Forget about values, principles and institutions. To get through to the president, call Greg Norman.

A second feature of the new diplomacy has been a consistent focus on the two countries’ longstanding military ties with a view to distinguishing Australia from the rest of the pack. The embassy devised a public relations campaign around the theme “100 Years of Mateship” that underscored Australia’s record in military combat alongside US forces in every major war since the Battle of Hamel a century earlier. “The more we spoke with the president and the White House,” Hockey told his interviewer, “the more they realised that Australia was different.”

The new bilateral diplomacy carries a number of risks, including the risk of focusing exclusively on alliance politics when relations are far broader than that. If defence agreements are not supported by public respect in Australia for the United States, its leadership and its people, they will turn out to be worth very little.

Where to from here?

During Donald Trump’s term as president Australia has managed to retain close defence and security ties with the United States while distancing itself from Washington on important issues ranging from multilateral trade to climate change and the role of the WTO, the WHO and other international institutions. This balancing act has involved highlighting the similarities that bind us in order to press home the many policy differences that separate us. Marise Payne made this clear at the 2020 AUSMIN meeting when she said we should be able to articulate “in a mature and sensible way” the points on which we disagree in order to “advance our interests and our values.”

Australia’s actions tend to bring to the surface the differences that divide us from China and then leave us scrambling to find points of similarity. The differences are not trivial and go beyond policy gulfs to values, systems of government, understandings of the rule of law, and cultural differences such as Beijing’s extraordinary sensitivity to public criticism of its foreign and security policies. While the similarities are less obvious, we do have many interests in common and we could, at times, have articulated our differences in a more sensitive way. But relations are unlikely to improve so long as Beijing fails to acknowledge that the source of disagreements lies not in Canberra’s choice of words but in China’s policies of maritime territorial expansion and its covert interference in Australian domestic affairs.

Despite substantial policy differences between Australia and the United States, and despite Australia’s making these differences clear, relations with China appear to be deteriorating at roughly the same pace as US–China relations. Perhaps encouraged by distinguished public figures in Australia who attribute everything to Canberra’s determination to please Trump, authorities in China interpret Australian government conduct as a pale reflection of US government intentions. This is a misunderstanding.

Australian governments do not see Australia as engaged in strategic competition with China. There was a time, before Xi Jinping, when both sides even imagined there was scope for strategic alignment. As recently as 2014, Australia and China agreed to move the relationship forward towards a “comprehensive strategic partnership” that would include an annual leaders’ meeting between the prime minister and the Chinese premier. Existing dialogues were brought together under the new comprehensive strategic partnership.

This was on the cusp of Xi Jinping’s announcing the arrival of his “New Era of Socialism with Chinese Characteristics.” He has since shown what his vision for the New Era holds for China and the world, and Australian governments and communities want little part of it. Ambitious bilateral programs designed to bring the two together in an earlier era are not suited to the present one. In light of these changes in China, former foreign affairs and trade department head Peter Varghese now advises Australia to “quietly abandon the notion that we can have a comprehensive strategic partnership with China for as long as it remains a one-party authoritarian state.”

Still, we would do well to preserve some of those earlier dialogues that were brought under the bilateral umbrella, including dialogues on trade, international security, law enforcement, development cooperation, and climate change. As flashpoints in the relationship proliferate, the two countries will need to maintain a number of mediating talks and institutions to sustain a mutually beneficial relationship.

Whether China’s authorities recognise the value of these high-level dialogues is difficult to gauge. Seen from Beijing, Australia has been a constant irritant since Xi Jinping took office and, judging on past experience, Canberra is likely to continue pushing back on matters affecting its values and interests. Irritating as this may be for Beijing, Australia has never said no to building a mutually beneficial relationship based on a realistic understanding of common interests and differences. Australia is not proposing to follow Trump’s America and engage in all-round strategic competition.

Where does this leave Australia? Early in 2019 Macquarie University’s Bates Gill put forward a new approach to the relationship that he termed “bounded engagement.” This approach assumes that the challenges China presents to Australia’s values and interests are real and pressing, but concedes that Australia has every reason to continue engaging closely with China on many fronts. Almost all areas of Australia–China interaction would become more constrained but not all would be constrained to the same degree.

In September last year a researcher at the Australian Strategic Policy Institute, Charlie Lyons Jones, put forward a similar model for broader application among liberal democracies. He suggested they should approach China not in cold war fashion — as a stark adversary — nor in the style of the past three decades — as a strategic partner in security and development — but rather through a combination of approaches (as adversary, as competitor and as partner) in discrete areas of engagement.

This idea has since gained currency in North America. China specialist Paul Evans, a foremost proponent of Canada’s earlier engagement strategy, wrote in the ANU’s East Asia Forum in July this year that Canada’s engagement with China is now teetering to the point of toppling. Ottawa needs “to come forward with an approach that frames Xi Jinping’s China as some combination of adversary, rival, competitor and partner.” As noted earlier, similar ideas have taken hold this year in Democratic Party circles in the United States. If this emerges as a growing liberal consensus for managing relations with an increasingly authoritarian China, I would like to think that Australian analysts were among the first to come up with the idea — and with Australia in mind rather than Ottawa or Washington. •